In this essay, need to describe the strategy of the organization first, which is the main point of understanding about the organisation that the organisation is having what kind of planning regarding the political, economic, social and technological situations. "Strategy is the direction and scope of an organisation over long-term." Nowadays this is the competitive business environment in which we need to do planning in a large scale. The firm should be engaged in strategic planning which defines the objectives, progress and implementation of strategy and should make adjustments as to stay on track. The selected organization "McDonalds" has the strategy to provide fast food to their customers and satisfy them by providing high quality food and good clean environment to enjoy it.
The SWOT analysis is an extremely useful tool for analysing and understanding all sorts of business and organization's terms and situations. The SWOT analysis stands for Strengths, Weaknesses, Opportunities and Threats. The SWOT analysis provide the framework to review the strategy, direction and position of the company or an organization, or any other idea. The SWOT analysis can be use for the business strategy, business planning, marketing, competitor's evaluation, business and product development and research reports. The first two factors, Strength and Weaknesses are the internal factors and concerned with the organization and the other two factors, Opportunities and Threats are the external factors which are largely identified by the PESTEL analysis.
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The PESTEL analysis measures the business's market according to the external factors; Political, Economical, Social and Technological, Environmental and Legal. The PESTEL analysis is more helpful and external factor as compare to the SWOT analysis. The PESTEL analysis is a useful measurement tool for understanding the external environment of the company and market growth or decline which shows the direction of the business whether it is growing or declining.
A commonly used and a valuable technique of research is PESTEL analysis which divides the overall environment of an organization into four areas such as political, economical, social and technological. It provides the environmental factors to tackle the problems through public relations techniques which effecting the organization. This analysis helps to find out or identify the issues which affect the organization's political, economic, social and environmental angles.
The PESTEL analysis is the brainstorming technique. Brainstorming is the group of the people which is the powerful technique. It creates the new ideas, motivates and solves problems; it gets a team working together. In this case, the group of people decide and define the objective and agree on the issue then they put their brainstorming ideas and suggestions on it in a time limit. Afterwards, they categorise and combine their ideas. They focus their efforts in achieving best results whether their ideas will b successful and beneficial for their organization or not.
The brainstorming group of people access and analyse effects and suppose the results on the basis or their decision. They first allocate the options for running the organization and rank the list as it is appropriate. They first demonstrate the prior options to get the best results step by step. The brainstorming group agree the options and timescale in which they have to do their tasks and activities.
Brainstorming enables the people to suggest their ideas randomly and the people should encourage everyone to participate and prevent others to contribute in the mission or goal. During the random collection of ideas the facilitator must record all suggestion on the flip chart. All the participant agree the actions and take decision what the next action should be. They agree a timescale and who's responsible. After the session they monitor all the task and at the end give feedback.
The organizations do not exist in the hidden thing. They operate within a competitive business environment. In the organization, the business related people analyse its competitors not only enable the organization to identify the strengths, weakness .opportunities and threats of their own organization to compare their organization with their competitors to compete and analyse the situation of the business. SWOT analysis is the systematic analysis of these factors and the strategy to contrast and analysing.
In this essay, analysing these principals in relation to core competence of McDonalds, one of the largest food chain companies in the world. First, describing the strengths and the positive aspects which define the performance of the company.
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McDonalds is the no. 1 fast food chain stores. There are 40 million customers are visiting it per day. It has over 30,000 branches in 120 countries. Its 80% of the revenues get from the eight countries like Canada, Brazil, Germany, France, Japan, UK, Australia and US. The greatest image of this food chain was creating the concept of fast food in the world. The core strengths of the McDonalds are the speed, customer care and cleanliness. They created a highly successful quality of food and services to the customers and created a logo and advertised their brand image to the millions of the customers. Two main competitors of McDonalds are the Burger King and KFC. Its marketing strategy is concerned with internal and external resources and environment. The main concentration of the company is to satisfy their customers by providing the good quality food and fast service.
There are some factors which are consider as the strengths of the company but they also become the weaknesses of the company if we observe overall performance of the company.
Customer trends change and their choices also change. So McDonalds try to advertise and promote the new types of brands every month. The new promotions are for the time being and for the limited time period. Moreover they maintain their standard by providing the good service the huge quality fast food. When there is the lack of quality service in one store it affects the whole brand of McDonalds.
The secret of any marketing strategy is to reach the target. And the target audience for McDonalds has been chosen very carefully. In the case of McDonalds the targeted audience are the kids. Here , the health conscious women and the senior people should be preferable to concern about the target audience but the target was kids and kids grown up to become adults so the most preferable and helpful target was kids. This helped in the popularity of the McDonalds but the major change related to health related product was on the demand of the customers as required the needs of today's trend so that is why, it has decreased the popularity of McDonalds. These all factors point out the external strengths and the weaknesses of the company. There are also the internal factors which affect the performance of the organization all the benefits of the company. McDonalds at one stage concentrated the growth of the business at the higher level to make a position in the market to b stable and the main focus of the company was maintenance, growth and Research and Development (R&D).
One major threat of the McDonalds is the relationship with the management and franchise dealers which can be difficult for the organization as a whole and the organization's strengths help out to overcome the strength because the strength is the back bone of organization if it goes down the whole system will collapse. But McDonalds is recovering from all the weaknesses because is brand manager can easily communicate, compare and improve their services through the latest technologies like internet to motivate, compare and improve their store's performance. The more weaknesses and strengths can be observed by further improvement of the company.
Companies that develop strategies to result in the financial and strategic performance are said to have a competitive advantage. Competitive advantage can be defined as a firm's ability that creates more economic value in the market. There are large numbers of companies that are competitively dominant in the world.
A modal which usually mentioned in the literature is the 'national diamond' which is proposed by Michael Porter (1990), the national diamond identifies the four sets of characteristics. These characteristics are to achieve global competitive advantage in their own business. The four factors of this modal are demand conditions, related and supporting industries, firm strategy and structure.
Porter's modal has the significance contribution to understand how the national competitive analysis shapes the competitive strength of the companies in the world. Porter's work is influenced by differences in economic and business environment among countries. Particularly, this modal is based on the premise that government can play an active and constructive role to maximize the level and growth of the nation's living standard. In which economic role of the company is idealistic. This national characteristic divide into two factors macro-level and micro-level. Macro-level factors are institutions such as the political, legal and market systems, and government policies to support businesses. Micro-level factors involve the ability of nation's companies to build up and get the knowledge of competencies and competitive strategies that how can make a strategy to achieve their goal successfully. The company's best strategy and planning make the company successful and role model in the business world. This model has the significance effect on the business market. This framework helps the company to make the best plan and strategy to get better result to make a position in the market.
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The nature of competition in an industry is strongly affected by the Porter's diamond four factors. However, these factors are not the ones that determine how the firm in an industry will compete unless the structure of the company will also not play the affective and important role in the market. The whole framework is based on an economic theory known as "Structure-Conduct-Performance" (SCP) model: the structure of an industry determines organizations competitive behaviour or conduct which determines their profitability or performance. In the organization, according to this modal, would be expected to compete and make higher profits. However, as the researchers resulted that the histories and cultures of the firm in the industry also play a very important role in shaping competitive behaviour, and the predictions of the SCP modal.
The Porter's diamond model is a simple tool that supports strategic understanding. The power of the business lies in a business situation and this modal help to analyse the strength of a firm' current competitive position and the strength position of the organization which the company desire to achieve that goal.
Porter's modal also identify new products, services or business which have to b profitable. However, it also may help to understanding the balance of power in other situations. It is important to be aware that this modal has limitations in market environment or relatively market structure. This strategic framework helps for the SWOT and PESTEL analysis. This approach can be used for every business modal. Some issues of this modal are very important for the organization to build long-term business strategy during implementation of this modal.
As the world has changed the requirement and the taste of the customer also change so the McDonalds policy changes as the demand of people. Because the same brand every year or every month may fed up their customers so their company decided to change their brand and introduce new innovations to develop the interest of the customers in their company.
Now, analysing the sustainable competitive advantages (SCA). SCA is the advantage of the company which is difficult or impossible for the companies to break it. The advantage can be the brand, customer care and cost structure. Other three aspects of advantage that help in SCA are:
The managerial and organizational process should be good interrelated and coordinated. The common goal should be strong. The organization should learn and bring the new innovations and changes as per the demand of the customer considering the environmental changes and the customer trends, legal or government restriction and developments in the technology. Now, McDonalds is concentrating on this advantage by concentrating on the organizational behaviour and the expertise of the management system. Previously this advantage was ignored but when they observe the weaknesses and suffered a loss then they protect themselves by these weaknesses and overcome on these.
Structure, technology and financial assets of the company should be excellent market position which helps in the SCA. McDonalds no doubt is having these aspects like structure, technology and finance. After 2003 the company has really started to concentrate on the advantages which are so helpful for them.
The company start their mission with an aim and the determination of achieving their goal. Same McDonalds started with the aim of helping the people to get fast food who had very little time to cook and those who are busy to get into a proper restaurant. So the vision was to provide fast food, quick service, cheap products and quality satisfaction.
In summary, SCA means implementing the best value based strategy using all the advantages which are helpful for the organization and cannot be copied by the other companies or competitors. The importance of the SCA is investment portfolio in the business environment.
Today no organization is best enough to handle all sort of work. Moreover concentrating on every detail is not possible especially like McDonalds. But the great concentration should be core competencies of this company. The general advantages of McDonalds are cheap service, knowledge of markets core competencies, flexible resources, quick service and low cost. Recently, McDonalds has tested the drive through order facility where they make sure that the order placed with the outlet is accurate and these order sent to the home restaurant where they can see the order on the display system and can ready their food within the minutes and serve quickly. These call canters has a digital camera which clicks the vehicle you drive through and the delivery man back home can ready the food and the person place it to the car whom order is.
Although, McDonalds faced a lot of risks and difficulties in past and also face competitors. But the term which makes it still strong and ranked among the business are its core competencies and the sustainable competitive advantages both internal and external.
A complete and comprehensive analysis of McDonald's corporation in which the company operates is the PEST framework analysis of the company. The analysis of the company includes all the history and framework of business segments, the analysis on the geographical situation and analysis of the company's major competitors.
There is no particular competitive strategy to achieve success at all times. Because sometimes the company have to face a lot of problems and competitors in the market. Risk attitudes also change and vary by business situations and environmental uncertainty and several internal and external conditions which may weak the business situations.
Thus the "four P's" of marketing (product, price, place and promotion) provide a good starting point for considering the requirement of strategy implementation in the market.
The marketing decisions are based on the careful identification of the consumers needs because the marketing function is consumers. On this basis they make a strategy to meet those needs. The distribution system brings the product or services where these all customer needs meet. Because many products require support from distribution channels in the form of service, order processing like choice of distributors, wholesalers and jobbers which is extremely important.
Promotion is more important than advertising. The business strategy defines the location, size and nature of markets which guide promotion and decisions and suggest the promotion material as well.
Pricing is the complex issue because it is related with the cost, volume and tradeoffs. Pricing policy changes to get the competitors response which is usually hard for all the participants.
Marketing has received a greater attention in the competitive business since modern era and marketing has concentrated on the modern types of strategy to promote their product selling. The old concepts carried out for the product and considered marketing to selling and promotion according to new style and demand of the customers to satisfy their customers and seek to earn more profit through customer satisfaction.