Marketing Strategy: McDonalds | SWOT
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McDonald was introduced by Dick and McDonald of Manchester, New Hampshire in San Bernardino, California. It was further expanded by business partner, Ray Kroc, of Illinois, who then together found the concept of McDonalds Corporation. The McDonald brothers had been in the restaurant business since 1937. It was the idea of Kroc to franchise their restaurants throughout the world. In 1956 McDonalds brothers had licensed the franchise rights for cook country. In 1959, Kroc opened 67 new restaurants, over new 101 locations in various countries. Like this they started expanding their business all over the world and proved to be best fast food restaurant.
McDonald Corporation is one of the largest chains of fast food restaurant with 500,000 of employees serving nearly millions of customers daily. After a very careful study McDonald has given its company the trademark of happy clown character known as Ronald MacDonald. McDonald put great emphasizes is always on youngsters and children's. They are following the analyzer type of business strategy with bureaucratic nature. McDonald success is hiding in its simplicity and strategic formulation of being strictly quality control, more hygienic and making cost effective production by hiring cheap and young workers trained properly under high supervision of managers. Human resource policies of McDonald are tightly and strictly under control
The McDonald's Corporation is the largest worldwide franchised food service organization. In the 1960's, Ray Kroc franchised restaurants for the low sum of $950, demanding 1.9% of sales. McDonald's are able to overcome cultural barriers that have previously hindered other organizations. Because the local people immediately translate both the product and service, there is little hint of what may be construed as US brand culture. McDonald's is simultaneously global and local. Clearly, an increase in the number of franchised restaurants leads to the direct effect of an increase in McDonalds' revenues. McDonald's can also boast that it is the largest retail property owner in the world.
Organizational structure gives a relationship between the tasks performed by the members of the company in the form of different department, following rules and regulation, and coordination and control mechanism. The structure either at the corporate level or at the franchising level, both have a great effect on business strategy followed by the McDonalds.
McDonalds has mechanistic structure because tasks performed in the organization are highly repetitive at every local shop. There is a extreme division of labor, with relatively simple and small work activities.
McDonalds has rigid and hierarchical management structure. They possess vertical communication within the organization flowing from top to bottom. Decision-making is highly centralized with the top management. So strategy planning could take place within this structure but it has to effectively communicate with the members to have its affectivity.
SWOT analysis helps in understanding the internal and external factors affecting to the company. For identifying strategic option of a company it is compulsory to know the various strength and weaknesses.
Strengths of McDonald's:
Mcdonald is socially responsible, community oriented company. They have easily adapted themselves to the global restaurant with different culture. Approximately 80% restaurant of McDonald are owned and operated by franchisees. The world wide restaurant of McDonald are provided with duplicate and systematic food preparation process. Macdonald are very serious about their consumers health, and there is proper checking of food and moreover all food items are bought from certified suppliers only. They are playing a great role socially by introducing "Ronald McDonald house" for the children. Mcdonald was the first food restaurant to provide the information to its customers about nutritional facts.
Considering the weakness of the McDonald, it has got high-turn over employee. The main weakness they are having is lack of innovation in the industry. The main target of Mcdonald over advertisement is the children.
There are many opportunities in front of McDonald by creating new product offerings. They can be more socially responsible by the use of sustainable packaging and use of green energy. At the same time they can open some of its franchises at the luxurious places to attract the major customers in the market.
The major competitors of McDonald are burger king and KFC which has included a variety of foods in their menu with fewer prices as compared to McDonald which has become a threat to the company. As the McDonald has largest part of their menu as fast food so the health awareness of the people has been also a issue to the McDonald. This recession period has also let down the revenue of the McDonald to a great extent.
So considering the major threats and opportunities of the McDonald the strategic option for this organization could be:
Emphasis on Local Management
Have to be flexible
As some years back McDonald had already gone through a loss in brand image due to the issues related to the health problems by consuming food of the MacDonald. So today also there is some perception in people's mind about that issues which could affect a lot to McDonald. So they need to make more of the positive reputation nationally or internationally, and tried to give environmental friendly services.
Mcdonald has gained the global acceptance by hiring local management. Their main emphasises is to think globally and act local.
Mcdonald should try to adapt itself to the constantly changing market. The market is dynamic. They have to make themselves much flexible so that they can adapt more better to the changing scenario.
Task 1 c
For adapting themselves to the changing environment McDonald need to focus on optimizing their speed, maximize service, minimize the cost of the product and emphasize reliability. They need to focus more geographically and psycho graphically research so as to find out the actual customers of the McDonald. As McDonald has already established them globally so they should focus on product development to stay in the market. They should introduce more of the healthier product to their menu in order to attract more of the health-conscious people. To do this they need to adapt strategies to gain competitors customers by giving more good options than others, including discount, introducing more packages to their menu, and lowering down the price of some of the food to make it affordable for the general consumer also.
For the implementation of the strategy part it is necessary to keep the various social responsibilities of McDonald in mind. They are highly focusing on reducing the weight of the packaging by not affecting the quality and quantity of food. They have added healthier food to their menu. McDonald is doing reusable material to maintain the sustainability. They pay a great attention towards the happy meal toy used by the millions of children, not to be made by lead. They have also involved in various charities doing social working.
McDonald's mission is to serve people with best quick service, good quality food at low cost.
Its vision is to dominate the global food-service industry in order to become the customer's favorite place to eat. They want the Global dominance in sense of setting the performance standard for customer satisfaction and increases share in the market and profitability through successfully implementing our convenience, value and execution strategies.
Most of all the greatest advantage is the vision or the dream with which the company was started. Sustaining this dream over the years is any companies' greatest advantage. A brand usually revolves around this vision sustaining this vision and working in lieu with it is a great SCA. McDonalds was started out to help people who had very little time to cook or was too busy to get into a proper restaurant. The vision was to provide quick service, cheap products and quality satisfaction. Keeping this vision in mind the company which slackened a bit because of incompetent franchise holders is being weeded and new and better people are put in this place as the torch bearers of the company sustaining and living the vision.
For the implementation part of the strategy first of all there should be a clear picture of the strategy to be adopted in the mind of every person in the organization. As there is a change in culture need to bring in McDonald so three points have to keep in mind which is: leadership style, turning strategy into action and performance management. In any organization for the implication of any strategy a real leadership is always required which bring the effective growth. Leadership is the main thread to run the entire process of the translation of strategy into results. To start the strategy plan there should be a proper chart made consisting of all the various activities to be done during the project. During this work several questions need to be answered like what is the intent behind the strategy, what important issues need to be solved during the project, how that will be done and how much time will it take. Lastly how they will be succeeded. The work of performance management is to align the whole organization and make them work better to reach the highest point. They make sure that the strategy is communicated properly, measures the performance at every step, and always make an emotional contracting with the staff members to keep them motivated for the work to be done.
Project management techniques are the process used to gather the information, and get the work done more efficiently and effectively. There are many tools for the implementation of the plan like critical path flow analysis diagram, Gantt chart, brain storming method. I will be using Gantt chart so as to design the time table for the implementation of the strategy. Gantt chart is extremely useful for communication, budgeting, scheduling of the plan. It keeps all the record of task taking place.
According to this scheduled plan the strategy will be completed in 2013 by going through all the necessary stages.
For the implementation of the strategy it is compulsory for all the members of the organization to coordinate. The top level of management makes all the relevant decision of giving work to the staff members and making sure to give them a timeline for the end of the work. In the organization first of all a board meeting is held to make the strategic planning and decide how to achieve it. Then specific goal and objectives are set according to the strategy planned. For the start of the project budget is made looking at the financial position of the company and all resources are being taken required for the completion. The manager should see that the strategic plan is simple, clear, based on real current situation, have enough time to settle. A time table is made to note the various roles and responsibilities of the members and making the time line for the responsible person.
Monitoring and controlling are the major portion as it assures the efforts made for the plan. It helps in keeping a regular check over the accomplishment of the task. It helps in measuring the corrective action. If something is going in a wrong way it could help in recognizing that and improving that .for example if there is change in environment so there has to bring a change in forecasting. There should be a continuous monitoring of performance of the project because that helps in predetermining targets and representing most important aspect of that. So the top management should make sure in doing the sales or market share analysis during the project time period.
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