McDonald's is one of the chief international retailers in providing foodservices to its customers. There are more than 30,000 local restaurants which cater nearly about 52 million people every day by providing world class fast-food in more than 100 countries. McDonald’s chain is spread all over the world. 70 % restaurants of Mc Donald’s are local and independent franchisee which own and operate globally. McDonald’s holds a major part of the share in the globally popular restaurant industry in approximately all the countries where it is operating its services (About McDonald’s, 2006).
McDonald holds a strong market place in the global environment. Its brand equity, uniformity of its successful products, etc. provides it a different identity in the market (Arndt, M. (2007).
Along with the strengths, there are some weaknesses that could turn out the winning plan of McDonald. Limited product development, declining market share and dissatisfied franchisee adds up to the weakness of a firm.
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McDonalds is currently serving only 1 % of the population. This shows that there is enough area for it to expand. Moreover, the dining-out population is continuously increasing which provides more opportunities to the firm.
The increasing competition in the fast food industry presents threats to the firm. Moreover, consumers are increasingly becoming more health conscious, and this would adversely affect the demand of McDonald’s products. As it operates at the international level, fluctuations in the exchange rates add up to the threats for the company.
Identification and Analysis of main strategic choices of McDonald’s
McDonald’s has joined the list of Fortune 500 corporations. The strategic planning for marketing needs to be very effective. McDonald’s provide its menu in other countries according to the culture of different regions. For example, in India, the non-vegetarian list of food includes chicken and fish items only. Beef is not included in the menu because in India it is believed to be as sacred. McDonald’s also incorporates social responsibility in its strategy.
Lot of its products have an exclusive and distinctive packaging designs to provide insulation, help in making sure that the food is safe, and making them easy to carryout. This gives them a lot of continuing opportunities to reduce the impacts of their packaging on environment and to provide industry leadership in natural resource protection. It also considers pollution prevention in its strategy as a chief issue and also takes various steps to protect the environment from the harmful waste and the use of paper in packaging. McDonald’s have been working on several aspects to integrate environmentally responsible fiber procurement practices into the packaging supply chain. (Products: Responsible Purchasing Managing our Packaging Impacts, 2006)
At McDonald’s, managers know that the employees are the most valuable resource of the organization and they employ various techniques to train them and providing them with adequate skills to handle the customers, retain them and most importantly make new ones.
McDonald’s opens its branches mainly in shopping malls, multiplexes, theatres, in areas which are located at the heart of city, shopping hubs and places where people come to look for some entertainment. It offers unique and world-class products of international quality and taste. It caters to the several countries all over the world. The new strategies of McDonalds include leveraging brand equity. Goop pricing plays a greater role in retaining the customers and making them come back to eat. Thus, they effectively price their products and keep on giving discounts and attractive combo’s like happy meal and economy meal. They also give toys to children at free of cost, and other gifts with their meals. It also offers a facility of delivery at homes and easy availability to its customers.
Product Development Strategy
Its new product development strategy focuses on core business. It includes dealing with the major issues of quality and taste and also to ensure that the customers get assured nutrition and hygiene in the food. It focuses on the delivery methods to the customers and tries to make them easy and quickly accessible to the customers. By providing more of family value meals and happy meals, it could improve upon its revenues. Also, by giving something more and extra, like MBX (McDonalds Big Extra).
Strategy Related to Supplier’s Diversity
Always on Time
Marked to Standard
McDonalds has adopted the supplier diversity strategy which is a pro-active process which gives equal access to all the competent suppliers. This industry of quick service restaurant has now identified the significance of laying stress on women, minority, and also on experienced persons, who are disabled, as a part of their strategic alliance in the supply chain.
Yes, McDonald’s would definitely grow in the world market as their choice and planning of strategies in different countries and markets are very much effective and efficient.
Comparison between the Growth Strategies of McDonald's and Wal-Mart
A pure global strategy was adopted by McDonalds as it was not worried about the pros and cons of the risk associated with the country. It had expanded its market globally in the same manner as it had expanded itself in the United States. McDonald has started its franchisee internationally in the mid 90’s. As for example- when McDonalds opened its first branch in Kuwait in the year 1994 and the people became very much excited to have an opportunity to order a burger. Here also, their strategies had worked. But they (McDonald) have made some changes in their strategies in some countries according to that country’s cultural environment like in Germany; they served beer along with the fast food. By this way, McDonalds had expanded its market share with their growth effective strategies (Gogoi, Arndt & Moiduddin, 2006).
Wal-Mart is a public corporation in America. Large chain of department stores is run by this corporation all over the world. It operates its different countries or market with different names. Due to excessive foreign product sourcing and low rates of employee health insurance enrollment, Wal-Mart was criticized by some community groups (Bianco, Der, Hovanesian, Young & Gogoi, 2007). It had expanded its market globally with same layouts, organizational structure and flares as that of in the United States. In the international market, Wal-Mart has achieved huge success due to its ability and effective strategies to transport its effective retailing and distinctive cultural concepts in each new country or market. In order to adapt local culture of a particular country, the divisional area of the company had made a concentrated effort. The associates of the company responded well to fulfill the needs of the customers and local suppliers and also to the merchandise preferences. By this way, Wal-Mart had expanded its market worldwide.
- About McDonald’s, (2006). April 26, 2008, from http://www.mcdonalds.com/corp/about.html
- Arndt, M. (2007, February 5). McDonald’s 24/7; by focusing on the hours between traditional mealtimes, the fast-food giant is sizzling. Business Week, New York (4020): 64.
- Bianco, A., Der, B., Hovanesian, M., Young, L., & Gogoi, P. (2007, April 30). Wal-Mart's Midlife Crisis; Declining growth, increasing competition, and not an easy fix in site. Business Week, New York (4032): 46.
- Gogoi, P., Arndt, M., & Moiduddin, A. (2006, May 15). MICKEY D'S MAKEOVER. Business Week, New York (3984): 42.
- Products: Responsible Purchasing Managing our Packaging Impacts, (2006). Retrieved April 26, 2008, from http://www.mcdonalds.com/corp/values/purchasing/packaging.html
- Taylor, S., (2007, February 7). A Link between Marketing Strategies and Organizational Structure. Retrieved April 26, 2008, from http://www.associatedcontent.com/article/132661/a_link_between_marketing_strategies.html