The vision of McDonald’s Corporation is the establishment of its franchises by expanding its operations throughout the United States and other parts of the world.
The mission of the organization is to satisfy each customer through their world’s best quality services.
The main goals and objectives of this company are to attract customers by providing quality food, convincing customers to buy their products more often through their quick services to save time, increasing brand loyalty by offering value for the customer’s money, and lastly to make more profit.
1. Key Elements of McDonald’s Corporate Strategy
The company’s corporate strategy has been to expand its operations since the 1960s. They had plans to establish McDonald’s restaurants in every part of the world. For this reason, the company had to come up with an adaptation strategy and make adjustments to its menu in several locations such as Israel, Arab countries, and India where the menu is strictly vegetarian. The target market strategy is to invest in areas where there is potential profit. When it comes to the target population, mothers, children, and young adults form the main consumers of McDonald’s products.
2. McDonald’s Business Strategy
MacDonald’s ensures that its customers for their money by lowering its prices but still provide quality food. The company’s main focus is also to give the customers the best services by making sure that they are served quickly in a clean environment. This has been made possible by eliminating certain food items from the menu and focus on the traditional menu items. MacDonald’s has changed its business strategy due to concerns by consumers about health and consider MacDonald’s food as unfit for consumption due to the health risks that they pose. The company dealt with this issue by increasing consumer trust by providing healthy food options such as salad, ice tea, coffee, and other low-calorie food. Another very important strategy for Macdonald is digital marketing whereby marketing is done online through social media networks. The company has been known to lead in technological advances since 1987 by using microwaves and be a step ahead of its competitors. The introduction of an expanded breakfast menu is a strategy that has proven to be successful. It accounts for the largest proportion of company sales; about 30%.
3. McDonald’s Culture
A company should have a successful corporate culture to improve the quality of services offered by the employees and increase productivity. Corporate culture improves the brand identity and image of the company. A company that has a culture of retaining its employee by providing a friendly working environment, having favorable employment policies, and financial ways of motivating them will record a high productivity rate which will lead to satisfied clients. McDonald’s Company has its principles set for operations. Its main aim is to give quality products to its customers and deliver quick services to avoid delays and save time. It also focuses on working in a clean environment and make sure clients get value for their money. The company also believes in brand loyalty, it is committed to making sure that the company retains its glory that it acquired over the years.
Quick Service Restaurant Industry Analysis
- Bargaining Power of Buyers
The customers who prefer to eat out and opt for high-quality food but at the same time are sensitive to the food prices. The fast-food companies have an obligation to satisfy their customers by providing high-quality food at reasonable prices and retaining them.
2. Bargaining Power of Suppliers
This is when the restaurants purchase food (raw) from external sources. For the suppliers to offer healthier menus and fresh products the supply cost has to increase. This can be caused by drought conditions which force the farmers to turn to more expensive irrigation. Fuel cost is also a contributing factor to the increased in agricultural products. This is a challenge to this industry because despite the high supply cost they still have the responsibility to provide quality healthier menus at favorable prices.
3. Threat of New Entrants
The threat of new entrants in this industry is extremely high. There are fast food companies such as burger king, Wendy’s, and taco bell that were introduced after McDonald’s. These companies pose a threat to the McDonalds Corporation because each one of them has outperformed the company before.
3. Threats of Substitutes
This is about the products and the prices. The competitors of McDonald’s Company offer a variety of items in their menu and have different innovations as they strive to offer quality services too. This is also an important factor to consider in the fast-food industry because it keeps McDonald’s Company on its toes in providing quality services to its customers.
4. Rivalry Among Existing Players
The rivalry is expected when the companies are offering the same products and services hence competing for the same customers. McDonald’s competitors such as burger king launched an attack on the company in 2015. A good example is an advertisement that burger king made to call for peace day which was spurned by McDonald’s who chose pride over peace.
Company Situation Analysis
- The brand image of the company highly contributes to its success; it was strongly built since the 1940s. This has really helped the company in retaining customers.
- The expansion of the company to various parts of the world that have high potential in profit-making has proofed to be successful.
- The company makes huge returns from the breakfast and lunch packages. Annually the sales from the franchise are about $1.7 million with a profit of around $150,000.
- The company has low flexibility to market variation.
- Increased complaints about health concerns about the products offered by the company.
- The company has limited and delayed innovations.
- The McDonalds Company has an opportunity in global expansion and diversification of its products.
- There is also an opportunity in attracting more millennial populations by revising their strategy of attracting customers.
- There is a threat in terms of competition with other fast-food companies that may destabilize the company’s position.
- The company faces the loss of customers due to an identity crisis.
In summary according to the analysis, as much as the company has built its brand image, it faces problems in the diversification of products and process flexibility. Once the company finds solutions to these problems it will create opportunities for business expansion and have an advantage over competitors
The company should come up with a diversification strategy. This involves product and business expansion to other markets for growth and is at par with its competitors in this industry. This strategy will minimize the weakness in low product variation and deal with the threat of aggressive competition.
Rothaermel, F., & Arthaud-day, M. (2015). Strategic management: concepts.