Learners will research and analyse an organization of their choice and is designed for you to apply the concepts learned in the course (modules 1-4), and involves the application of:
Overview of McDonalds
McDonalds is basically a franchisor which operates with store franchisees where more than 90% of the stores are owned by the company itself and are looked after by franchise partners. Operating in more than 120 countries, this brand serves value meals and beverages with superior taste and quality. Due to excellent business strategies implemented in local as well as international level, McDonalds have grown highly competitive in past few years (McDonald's, 2018). Nevertheless, few competitors like Subway and KFC who serves in similar kind of products that gives tough competition to McDonalds for which the company offers food menu that are more based on geographical grounds like home-grown taste and community preference (Meyer, 2018).
McDonalds market are based on demographic factors like lifestyle and age. The key targeted customers of the company are teenagers and adults between 8-45 aged especially in urban areas, but the most targeted segment remains children for whom the company offer various promotions also. Lifestyle factors include targeting professional workers in occupational field and students who look for cost effective and time efficient products (Dudovskiy, 2016).
The mission statement of McDonalds is “to be our customers’ favourite place and way to eat and drink” (McDonalds, 2018). This mission statement is supported by the company by highlighting the position given to its customers and maintaining customers loyalty through superior food quality and excellent service. McDonalds places its customers on top priority as they believe their existence is only because of its customers. McDonalds corporate value includes providing strong commitment to its customers that can foster and drive high customer engagement level for continued success. The company operates after considering ethics and CSR to conduct superior quality of business comprising integrity, fairness and honesty. Being a strong market leader in food and beverage industry and publicly traded company, McDonalds corporate culture provides its stakeholders with sustainable growth opportunities by employing evolution and innovation in its business operations (McDonald's, 2018).
McDonalds vision statement is “to move with velocity to drive profitable growth and become an even better McDonald’s serving more customers delicious food each day around the world” (Meyer, 2018). The vision statement of the company shows that it aims in expanding its operations in more locations by improving organisational efficiency. After looking at its corporate vision, the company’s expected growth and overall expansion can be predicted in upcoming years also (Meyer, 2018).
Corporate level strategies of McDonalds focus aggressively on expanding into new and emerging markets. These efforts of the company are established through successful implementation of franchising model where presently company operates in major developed and developing countries globally. However, McDonalds still believes in focussing to enter into fresh markets to position itself amongst top companies dealing in food and beverage industry. This strategy is fulfilled by company via reaching its customers through marketing campaigns, promotional offers and advertisements made physically and in social media to foster its marketing in new areas (Sinclair, 2015). McDonalds corporate strategy also resembles proximity to monopolistic competition as food served in its chain of restaurants are featured by diversified product offering as well as excellent pricing techniques that further attracts its customers (Andino, 2015).
Target Market of McDonalds
The business level strategy followed by McDonalds shows that the company follows cost leadership strategy by delivering superior quality food and service at cost effective prices. In McDonalds store, it can be seen that innovation and technology is used in its core activities as well as in its product manufacturing which makes it superior than other competitors in similar industry. Brand differentiation strategy can also be associated with McDonalds case as the company uses different branding according to the community and market force. For example, in China the store of McDonalds is labelled in Chinese names due to political and legal criteria followed there. McDonalds business level strategy is also supported by other operational strategies followed by the company in its functional areas like food processing and cooking, purchasing raw material, supply chain and assembly line for food making along with automated methods used to deal with its customers. This low cost and brand differentiation strategy of McDonalds have built strong brand loyalty that is very necessary for sustainable growth within an industry along with gaining competitive position at an international level (Han, 2008).
McDonalds maintains a strong position in global fast food industry through strategies that addresses external and internal factors of company’s SWOT analysis. This framework identifies most of the relevant environmental factors of the company that determines McDonalds success. With implementation of variety of strategies and internationalisation of operations, McDonalds deals with every constraint as well as favourable prospects concerning factors stated in SWOT analysis framework of the company. McDonalds faces many issues also that are majorly based on emerging conditions of global markets, however, with strategic capabilities and sound management policies McDonalds surpasses them tactfully (Dalavagas, 2015).
The strengths of McDonalds include brand recognition and brand value that has been developed by the company over the years under strong leadership control of Ray Croc formerly and Steve Easterbrook presently (McDonald's, 2018). The human resource and company’s employees’ policies also reveals one of the best recognised and renowned globally which adds to the fact that McDonalds make constant effort in providing unique opportunities to its employees, as acclaimed by CEO and human resource officers of the company. Apart from people and brand recognition, the world-wide distribution networking and cost leadership strategy adds to McDonalds strengths (Han, 2008).
McDonalds lapses in few of its services area along with terms in providing customer satisfaction in few of its stores, that may be due to giving more emphasis on speed and volume in sales. Standardisation and customisation differences further makes the company strive for gaining standardisation in its marketing mix as it becomes very difficult to be achieved and managed in highly volatile food and beverage industry. Along with it, the lawsuits that have been filed against few of its stores have affected company’s reputation severely (Dalavagas, 2015).
Opportunities for McDonalds lies in its expansion strategy where the company can introduce more stores with diversified products pertaining food and beverages like freshly cooked food and fresh juices. Bargaining power of suppliers as well as buyers also seems weak for McDonalds that can assist company in focusing on its pricing structure along with product turnover rather than focussing merely on cost differentiation of products and delivery services (Dalavagas, 2015).
The most significant threat that lays in front of fast food and beverage industries is growing concern among people towards health and hygiene where most of the people are considering in consuming products that contain low fat and obesity substances in them. Furthermore, the highly competitive market with new entrants of substitute products remains a constant threat to the company. Few threats are been faced by McDonalds due to its internal management also where the company faces constant pressure from its workforce, as seen in numerous strikes that have taken place in past few years to increase labour wages. Remonstration for labour remunerations have increased alarmingly in past few decades especially in food and beverage industry that also impacts McDonalds and its other employees’ relationships (Andino, 2015).
Conclusion
The above report has made an analysis and evaluation of McDonalds Corporation that reflects upon major factors influencing the company’s management, environmental constraints on management, leadership and planning along with strategic management in business and corporate level. The report has collected sufficient data from company’s website along with other relevant sources to evaluate core values, customers base, vision and mission of McDonalds along with identifying core strategies adopted by the company while operating in global food and beverage industry. After making a detailed SWOT analysis, this report recommends McDonalds to consider health related issue in its products and enhanced labour wages to remain ahead of the game.
References
Andino, R. (2015). McDonald's Strategic Analysis. Retrieved from https://www.academia.edu/12017539/McDonalds_Strategic_Analysis
Dalavagas, I. (2015). McDonald’s Corp.: A Short SWOT Analysis. Retrieved from https://www.valueline.com/Stocks/Highlights/McDonalds_Corp___A_Short_SWOT_Analysis.aspx#.W8SDnGgzbIV
Dudovskiy, J. (2016). McDonalds Segmentation, Targeting and Positioning. Retrieved from https://research-methodology.net/mcdonalds-segmentation-targeting-and-positioning/
Han, J. (2008). The Business Strategy of Mcdonald’s. International Journal of Business and Management, 03(11), 72-74.
McDonald's. (2018). McDonalds annual Reports. Retrieved from https://corporate.mcdonalds.com/content/corpmcd/investors-relations/financial-information/annual-reports.html
McDonalds. (2018). McDonalds: Mission and Vision. Retrieved from https://www.mcdonalds.com.my/company/mission-vision
McDonald's. (2018). Mission & Values. Retrieved from https://corporate.mcdonalds.com/mcd/our_company-old/mission_and_values.html
Meyer, P. (2018). McDonald’s Mission Statement & Vision Statement (An Analysis). Retrieved from https://panmore.com/mcdonalds-vision-statement-mission-statement-analysis
Sinclair, L. (2015). McDonald’s launches digital marketing push. Retrieved from https://www.theaustralian.com.au/business/media/marketing/mcdonalds-launches-digital-marketing-push/news-story/94d0c7a757e83884c0c06c4e9bcba8b4
