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McDonalds is among the highly successful chain of the world, in restaurant business worldwide. The right use of strategic management decisions and the expansion strategy at global level helped the company to jump into new markets on a continuous basis. The company is able to extend its services to the market all across in their fast food business. This makes the need to understand all the arenas of the strategic management operations of the company. The study here would thus aim to find out the strength and weaknesses areas of McDonalds, to carry out its strategic decisions.
Strategic management has always been an important aspect for organizational success (Dess et al., 2009). Keeping in mind this point, we have discussed in this report the importance of strategic management for McDonalds. This study would start with a brief about the company. We will discuss the history of the company as well. We will consider the strategic decisions taken by the company at certain instances. The focus is also laid on the global position of the company in relation to others, and the expected outcomes for the company in this highly competitive market. The scope of the report would here cover all success as well as challenges faced by the company on a global extent.
McDonalds is known as the big brand, serving world. Its variety of products in fast food range makes the brand a different choice for individuals. The company is believed to consider people as most important for them. They compete with the whole world in their industry. The company gives due care to consider the growth of its employees and complete satisfaction of their employees. This helps the organization attain its employees right set of environment to work upon. Even the company helps good number of people who belong to minority groups in USA (Mujtaba, 2007). The organization is committed towards its tasks. The employees too are helped in their education programs. We can take an example of the company's operations at Hong Kong. They offer their employees programs to continue their business related courses along with their job, and they do similar programs in Argentina as well (Mujtaba, 2007). Thus, the organization believes on the long term success by making their human resources as efficient as they can. On an average, McDonalds at UK gives spends around 1800 USDs on each of the employees for investment in programs such as education and learning, sports and arts, and, or training programs (Beck, 2005). The company also invests its good share on training programs to renew continuously the knowledge of their employees. This helps the company attain better results for strategic success.
The company is serving its customers worldwide since the year 1995, however the company launched exactly in the year 1973 (McDonalds, 2010). However, the inception of the company occurred since long- long ago. The McDonalds name came into existence in the year 1940 with the opening of its Bar-B-Que restaurant in the streets of California (McDonalds, 2010). Since then, the company continuously worked towards its expansion and extension programs, to grab the market at a greater pace. Numerous strategic decisions have helped the company grow at such a greater pace to attain the position it has at present. This entails the success of the organization at a global extent. The senior management of the company, including Turner, conducted number of training and career development programs, with a special focus on women, Hispanics and the African- Americans (Dowling, 2005).
There are only some of the companies from the list of fortune 1000 companies, who have worked towards the improvement of their workforce belonging to Hispanics and minorities, some of which include Dell computers, General Mills, Bank of America, and the McDonalds of course (Mujtaba, 2007). Hispanic Association on Corporate Responsibility covers these programs in their studies for employment (US Wire, 2002). This shows that the strategies of the company well contributed to the success of individuals as well.
Human resource Management
One of the most important strategic tasks is to make the optimal use of the human resource assets of an organization. Human resource management practices are very common in all the organizations. It has become the significant aspect for any type of organization. It refers to the high performance and high commitment of people in the organization. The HR practices include the employee empowerment, employee development, training and development, organizational incentive plans and many more. The HRM has great impact on the organization's people as well as success of an organization (Alberto Bayo-Moriones and Javier Merino-Diaz de Cerio, 2002). The people are the assets of an organization and considered as one of the factors to determine the progress of individuals as well as organization. The three factors: quality, attitude and behaviour play a vital role in establishing the company' image. Human resource management is taken as the pool of human capital in the direct employment relationship. It provides the firm the power to gain competitive advantage while competing with the rivalries (Wright, McMahan and McWilliams, 1994).
The McDonalds has been working well to make use of its human resource. The continuous training programs help the individuals work in a better manner. The organization also supports its employees at various instances, this raising the level of loyalty that the employees have for the organization. This involves the people into business & they are considered as the productive additions to the organizations. It is the responsibility of human resource management to develop and match the availability of employees with the firm's needs. Human resource management is like a balance sheet. On one side, the qualified employees are hired who are best suited according to the organization's need. At another hand, training and development are necessary to meet the organization's overall need. The organization thus not only recruits talented pool of people, but also manages to retain them as well by continuous motivational programs to support the employees work in a better manner. The organization thus enjoys outcomes for the efforts put by them.
Strategy for Global Success
McDonalds has been operating to be a success at a global extent. The company, since its inception, started to expand all across at a good pace. The company first worked towards brand creation in the country where it was formed, US. They worked more and more on advertising of their products targeting to the citizens of middle and upper classes. The company also has strong hold over other countries, where the per capita income is not much high, such as China and India. The company basically targets middle class people in these countries. However, the retail chain also covers the lower class people. The company made various marketing strategies for globalization of their brand. The efforts made by the company to customize its products based on the country, and regions are appreciable. There is always the chances that the taste of individuals changes from one region to another. The company considered this also in their plan to produce the strategies, which result in success at this level.
The company had done lots of researches on various regions, prior to covering the market. The parameters covered in the scope to design the product included the political, economical, technological, social and cultural factors. The company's success mainly lies on the fact that company believes to "Think global, act local" (Saloner et al., 2008). Thus, the company is able to attract good attention of people all over the world. The people are well attracted towards the brand. Thus, the company is able to operate its restaurants worldwide.
One of the major sources of revenues for the organization is India, due to its large population (Mujtaba, 2007). On looking at the market of India, we can note that the market is toughest for any corporate to enter thereon. This is due to the norms designed by the government thereon. In addition, the variation of the taste of people is quite notable in the country. There is the large variation seen when one moves from one part of the country to the other. McDonalds is able to grab the good market share even in that country as well. The strategy of company included non usage of beef in the country, as it is believed to be against the local religion thereon (Mujtaba, 2007). This makes the situation favourable for locals to accept the products of their taste.
There are number of challenges that the company had faced. However, the effect was quite notably noticed in the year 2001, when the people had started giving thrust on the healthy food habits. This was noted mainly in the US (Mujtaba, 2007). The company has thus faced a lot of barriers though, but has managed to reach to the outcomes. On looking at the figures of the year 2004, the company was found to note the increase in its share by 11- 12 percentage, for instance, its operations in Australia McCafe to its customers to make the operations a success (Economist.com, 2004).
New market Adoption strategy
The company had continued to grow at a global level. The company, when enters into the new markets, they conduct through research and analysis of the market. This help them understand the taste of the local market, and therefore, the company is able to attain success until now. Thus, the company designs new products to enter into various local markets. These products are designed in accordance with the taste of the local people. The company had even started their retail stores for clothing, with a special focus on children only, in the countries such as USA, China, and various European countries (People's Daily, 2004).
Satisfaction of customers is of utmost importance. For any company to retain the customers there is the need that the company satisfies them. Thus, the company follows strategy to retain its customers at an appreciable rate. However, Beck (2005) suggests that the companies shall not just limit themselves to satisfying their customers only. There is the need that mangers understand the value adding characteristics for the customers. Based on that, the companies shall formulate further strategies for success. This culture can help the corporate run for the long run. McDonalds thus makes use of their managers' strategic decisions, to understand the value adding features for the customers of their products.
There are a number of strategic choices available at hand for any corporate. However, the present market is highly competitive. This suggests the use of strategic decisions in the right manner to make the company into a success. Therefore, McDonalds shall increasingly work towards its employee retention, which is the most important instance for them, as talented pool of people are usually prone to change their job on a continuous basis, because of their thirst for more and more pay.
McDonalds can therefore grab a good market share by making continuous use of their global expansion strategy. The idea of the company to jump into new markets by the proper research of the local market helps them in grabbing the market share at a greater pace. It even help them being accepted in the new markets, which might have lots of barriers attached with them for new entrant.
The success of the company shall not stop hereon, and they shall continue serving the people on bulk. As at present, the company achieves good economies of scale by serving large pool of people worldwide. The coverage of the company does not restrict to middle and upper class only, but for lower class as well. This is quite a n appreciable approach for the company. This raises the chances of the company to survive in this competitive market for long term. The success will thereon be achieved by the company, by its talented pool of people who are regularly trained for more and more success.