- The external environment of the McDonald’s Company faces stiff market competition that prevents it from attaining its business objectives. Whereas the company’s major rivals, such as Wendy’s, Taco Bell, and Burger King are thriving on operational efficiency and the delivery of quality and value to their customers, McDonald’s rates the lowest in the industry. To ensure that it gains a competitive edge over the competitors, McDonald’s should implement an effective pricing strategy that is competitive and sensitive to the capabilities of the overall clientele (Im et al. 89). Therefore, the pricing approach would enable the restaurant to manage the rivalry from its major competitors and attract clients who are keen on products pricing.
Secondly, the company should significantly focus on improving quality and value of its products to align with customers’ needs. The company can take advantage of its steady supply chain to promote quality and value, and hence attract more customers to the restaurant. Thirdly, health is an essential focus on customers in a fast food restaurant. To gain a competitive advantage in the industry, the McDonald’s should improve its health campaigns and promote healthy practices within its menus and services ranging from food storage, preparation models, and services offered by the waiters. The initiative will reduce the growing concerns of childhood obesity linked to fast food restaurants where the company operates.
- McDonald’s Company positions itself through operational efficiency and technological advancement, which improve its effectiveness and efficiency within its operations, leading to competitive advantage against its principal rivals. McDonald’s seeks to develop more profound insights into the market while attempting to manage local competition, through employing or training local staff within its franchises across the globe. Given that the majority of the McDonald’s competitors are fast food restaurants, the company positions itself as a global brand to gain competitive advantage through the application of technological advancement in its operation. The computer-based equipment at the McDonald’s gives it an advantage of reduced operational cost by maintaining a lean staff without compromising on quality and efficiency.
In addition, the menu at the company and food recipe are computer guided, leading to high-value products at relatively reduced prices. For example, the hamburger-automated devices make it easy by allowing the raw ingredients into one section while a complete and custom-made burger come out at the other end. Employers can deliver products at home in their record timing due to the technology-enabled systems adopted in their production line. McDonald’s strategy on healthy living through its campaigns features the advertisement of healthy foods, such as salads and white meat. Likewise, the remodeling of its restaurant provides an improved customer experience as a positioning strategy, giving it a competitive advantage in the local market.
- McDonald’s employs a market development strategy that facilitates its strategic expansion to other global destinations. The company also utilizes a differentiation strategy to provide a broader range of services and products to the customers (Piercy 132). For example, the products on McCafe division are supplied under the generic strategy of differentiation to appeal to clients who try new products. More importantly, the development strategy employed by the company gives it a competitive advantage by improving business prospects through a broader market across various countries. The market development strategy that seeks to tap into the opportunities provided in the new non-served areas is effective for the growth and development of the organization (Spyropoulou et al. 5). Accordingly, the company benefits from market awareness in the industry through differentiated products as it builds the customer allegiance. The growth strategy has enabled the company to penetrate the market as it positions itself as a leading supplier of burger in the U.S. Therefore, the market development strategy works for the company through improved product awareness and market access.
- MacDonald’s employs an international franchise strategy for its global business units. The units are accessed through an effective model controlled by the company’s former CEO, Ray Kroc. Worth noting is that the rapid expansion model enables the company to gain a universal presence with almost 70% of restaurants operating on a global platform (Hoffman, Munemo, and Watson 4). The effectiveness of the business franchise strategy is that it improves market penetrations across the globe and leads to product development through the provision of a traditional company’s menu and the differentiated local cuisines.
On the other hand, the franchise strategy also gives the company a competitive advantage through improved bargaining power over suppliers due to its abilities to negotiate on behalf of the several global franchises. McDonald’s Corporation supports the franchise model with products development initiatives. In addition, the strategy assists the global franchising arrangements through the introduction of local foods into the major menu served at the traditional McDonald’s diet. For instance, Chinese and Indian franchises have added their traditional dishes into the list of the company’s products to appreciate the local clientele. Through the strategy, the company places itself both as a local and international provider of customized cuisines.
Works Cited
Hoffman, Richard C., Jonathan Munemo, and Sharon Watson. “International Franchise Expansion: The Role of Institutions and Transaction Costs.” Journal of International Management vol. 22, no. 2, 2016, pp. 101-114.
Im, Subin, et al. “How Knowledge Management Capabilities Help Leverage Knowledge Resources and Strategic Orientation For New Product Advantages In B-To-B High-Technology Firms.” Journal of Business-to-Business Marketing vol. 23, no. 2, 2016, pp. 87-110.
Piercy, Nigel F. Market-Led Strategic Change: Transforming The Process of Going to Market. (5th ed.). Routledge, 2016, pp. 121-151.
Spyropoulou, Stavroula, et al. “Strategic goal accomplishment in export ventures: the role of capabilities, knowledge, and environment.” Journal of the Academy of Marketing Science vol. 46, no. 1, 2018, pp. 109-129.