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Angry Birds and McDonald's

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Corey Hock

on 2 April 2013

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Transcript of Angry Birds and McDonald's

Mcdonald's & Rovio's Angry Birds A Strategic Alliance Any Questions? Increase / add features to Angry Bird content exclusively available at McDonalds & in-store promotions

Customize food based on Angry Bird characters  kids meals Opportunities Costs of marketing campaign may increase
1/1500 stores have slingshot display
What if all stores have/want one?
In-store displays
Furniture and store decorations
Plush Toys
Slower turnover times
Disappointment due to lack of new content
Reduction in repeat customers
Constant need to update content Problems Potential for new customers
Increased market penetration in China for both companies
Increased consumption time may lead to increased purchases
Loyalty programs
VIP cards
Increased Brand Awareness
Outdoor displays Benefits Games are becoming increasingly more important as a media for brands
Bridging the gap between the physical and digital worlds
Bring customers better and more engaging experiences Reasons for McDonald’s The campaign was created by a marketing company called TBWA/Shanghai
The marketing company created a TV spot, online advertising and in-store promotions
Rovio designed the Angry Birds mobile game & desktop/online versions McDonald's and Angry Birds Partnership Offer location-based Angry Birds games inside the fast food restaurant
Customers will also be given the opportunity to vote on the location that will feature a real slingshot on its golden arches
The campaign spanned from 10 September to 18 December, 2012 McDonald's and Rovio Rovio is an entertainment media company founded in 2003
Angry Birds is a puzzle game available for download on Apple iTunes for for $0.99 USD and Google Play for free
The game is suitable for all audiences
Way it works: use unique powers of Angry Birds in order to destroy greedy pigs’ defenses
Recognitions: #1 iPhone paid game in many countries
Over 100 million downloads from Google Play Rovio – Angry Birds McDonald’s opened in China in 1990
KFC is currently beating McDonald’s in terms of revenue growth and expansion in China
Less that 1% of McDonald’s are franchised vs. 9% of KFC’s are franchised
McDonald’s operates self-operated stores vs. KFC’s franchising
McDonald's is the world's largest distributor of toys, with one included in 20% of all sales McDonald’s International cooperative strategy:
Canada & US
May need new terms of agreement in different locations

Open McDonald’s / Angry Birds PlayPlace / activity parks for children in McDonalds locations around China (test market  expand) Future Recommendations Partners may choose to act opportunistically
Impose new products that are not connected to deal on new customers
Partners end-goal may not be aligned
Partners competencies may be mis-represented
May not gain as much value from partner
Partner may fail to commit resources to venture
Partners may have different investment goals
Investing specifically in the alliance vs. elsewhere
Potential problem of promoting violence/”anger” to a younger (children) generation Problems Information sharing
Leverage each others resources
Increased brand equity
Solidify strong brand reputation
Better and more engaging experience for players and customers of Angry Birds and McDonald’s
Bridge gap between physical and digital worlds for Rovio
New product offering for McDonald's Benefits 1. To boost sales
2. To become the leading position

Complementary Strategic Alliances (CSA)
Firms share some of their resources and capabilities in complementary ways to develop competitive advantages Shared objectives Angry Birds:
Top 3 games
Succeed in other products, such as toys, cell phone decorations and customs
Service points for children and family Partner selections Increased focus on the Chinese market
To be the leading entertainment brand in China
To achieve the same amount of recognition and influence as Disney characters. Reasons for Angry Birds Growing China Market
200M Mobile users in 2012
500M expected users (i.e. 2 times US market) by the end of 2013 Reasons of Strategic Alliance Horizontal cooperative strategic alliance – Angry Birds and McDonald’s are both interested in improving their marketing and sales / promotion. Value Chain Non-equity strategic alliance
Two+ firms develop a contractual relationship to share some of their unique resources and capabilities to create a competitive advantage
Operating in fast-cycle markets: Games are not shielded from imitation and aren’t sustainable long-term  hypercompetitive
Collaboration mindset
Need collaboration to survive in entertainment industry Partnership 40 million people have downloaded Angry Birds in China  expected to reach 100 M by the end of the year
Manufacturers have created toys, cell phone decorations, shoes, pendants, costumes, glasses, candy and many more items based on this game
Search for Angry Birds on taobao.com will produce over 170 000 results  popularity in China
Problems with authentic products / intellectual property infringement Angry Birds in China McDonalds currently has over 2000 locations in China (McDonalds is black) Question 1 What are Mcdonald's and Rovio's reasons for a strategic alliance? Question 2 What are some main criteria you believe are important in order to evaluate a potential partner? Question 3 What are 3 benefits you believe gain be gained from this partnership? Question 4 What are 3 potential problems you believe may emerge from this partnership?
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