Executive Summary
The success of McDonald’s has become a transient and impermanent aspect of the corporate world due to the brutal competition introduced by ever-emerging rivals. After an outstanding performance in 2011, the achievement of the company has sneaked away to competitors leaving the restaurants to suffer a major impediment to the food industry. To challenge the bitter rivalry in the market, it has become fundamental obligatory for McDonald’s company to analyze its external environment; hence, continue innovating and evolving about the ever-changing customer moods for its growth and survival. In any circumstance it fails, unluckily, there will be no future for the company. Conversely, the current analysis has provided evidence of the establishment and growth of numerous food stores in the country that have introduced multiple food brands. For that reason, competitors have capitalized and made the most of the market, as well as mounting opposition to McDonald’s stores. It is obvious that the better and bigger a business gets, the greater the problems and obstacles become. Therefore, it becomes mandatory and crucial for the company to improve continuously and challenge the way it runs the business. The evaluation of the market has provided a superior platform for the firm to magnetize the majority of their clients and attract new clientele; accordingly, it will support and utilize the storage capacity of the food company and propel its prosperity beyond the reaching of the adversaries. A contentious battle for the top spot has energized McDonald’s to innovate continuously. For it to sustain its previous dominance successfully, it must relentlessly innovate and have the guts to smack their position in the market.
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Introduction
Trading or doing business in the current commercial environment is nothing less than rivalry; for that reason, success and victory are short-lived. McDonald’s restaurants have encountered strong opposition from competitors, their struggle to maintain a position in the clients’ minds is a continuous war where grasping away of triumph by adversaries happen within the blink of an eye. The continued battle by McDonald’s for the top spot has driven other companies in the related industry to innovate persistently. However, the company has struggled to preserve its dominance in the market, attacks from Burger Kings and Wendy’s have heated the performance of the food stores causing a decline in the output of McDonald’s. To contest the main competition, there are powerful strategies that the company can use to restore their past reputation and monopolize the market.
First, the business can seek to introduce new products in the market, for instance, salads, and chicken nuggets. The approach can help break the old rules by introducing unusual things with original standards; as a result, create a sea transformation in the way a customer conducts his daily activities. To summarize the point, a target in motion is harder to strike than a static one. Second, the business can introduce advanced technologies in their operations, for example, the use of microwaves to attain operational gains over its challengers. Technological advances increase effectiveness and efficiency, as well as maintaining the quality of foods before their time of consumption. Third, instead of providing only fries, burgers, and drinks alone, the company can evolve, expand, and optimize its menu. The latter strategy can introduce full menus, for instance, full breakfast foods, as well as modernize the client experience. As well, it can expand access to the available or offered brands. Considerably, the three methods if employed and evaluated against specific parameters would rationalize the best recommendations to thwart the antagonism in the market. Currently, McDonald’s Company should gear up for the challenge that rivals will bring forth.
The Current Situation
Competitive Environmental Assessment
The declining trends in the competency of McDonald’s are a result of its current fierce competitors who provide similar quick services to the customers. Examples of restaurants that have haunted the performance of the company include Burger King, Wendy’s, and the three brands of Yum! The immediate biggest global challenger of the enterprise is the combined brands of the Yum, which is approximately half the size of McDonald’s Company though with larger stores. Conversely, the business is in command of almost half of the hamburger market in the United States, which is greater than thrice larger the shares held by both Burger King and Wendy’s venture. Nevertheless, in 2012, every one of these rivals’ stock superseded the performance of McDonald’s business enterprise, a worrying and perturbing tendency for the company’s future.
Wendy’s has surged a significant competition against McDonald’s by offering an enlarged menu entailing full breakfast and involving stronger and better promotion campaigns. In its efforts to foster competition in larger stores, Wendy’s restaurants have blown to supersede Burger King as the second-largest burger chain in the US. In an attempt to differentiate itself from its opponents, the enterprise has redesigned its stores and remodeled its collections, hence, provided a significant challenge to McDonald’s in recent times.
As the third-largest restaurant in the United States, Burger King has posed strong rivalry as well to McDonald’s success. The company has established positive changes that have propelled it to challenge the strengths of McDonald’s and other competitors in the market. The outlets of Burger King have grown significantly and concentrated its restaurants in the United States; as a result, attacking aggressively the market share of McDonald’s company.
The divisions of the Yum trademark as well have played great responsibility in the turndown of McDonald’s shares. Taco Bell brand is the famously recognized division of the trade name and has provided quick services as well in its restaurants. The company has experienced a significant increase and has doubled its revenues making it sort of fast service challenger in McDonald’s domination. Its presence in the market as well as neutralized the authority and supremacy of the first rival that is why McDonald’s has to reevaluate its strategies to win its customers back.
Another challenger has been Subway, which is famous for providing healthier items in its menus and preparing its foods using fresh ingredients. It has surpassed McDonald’s in recent times in the entirety of restaurants. The restaurant has provided lunchtime services for many United States citizens, who treasure convenience and do not want to expose their health to danger. Consequently, its comfortable atmosphere and its high-quality foods have given it a definite edge over its adversaries in the market. Since the restaurants have created an optimistic and encouraging mind in the customers, it has belligerently attacked the dominance of McDonald’s in the food industry.
The involvement of McDonald in trading the specialty drinks such as coffee means it has joined the fight for the market against traditional coffee shops like Dunkin’ Donuts and Starbucks. Since Starbucks has established itself as the best Seattle brand in most of the quick service restaurants such as Subway and Burger King, it has significantly snatched away customers from McDonald’s Company. Also, its strategy of adding new foods to its menus has again challenged the client capacity of its top rival.
Dunkin’ Donuts, on the other hand, has established itself in serving coffee for more than six decades thereby building a reputation that threatens the success of McDonald’s business. The restaurant has expanded its wings and created thousands of shops that offer warm breakfast alternatives. Significantly, it has sold more foods and dispensed specialty coffees making rivalry in this distinct market division more intense. As a result, companies like McDonald’s have realized a fall in the populace of their clientele.
McDonald’s’s Competitive Advantages and Core Competence Assessment
Being the biggest fast food store in the globe, the restaurants benefit from significant sales, which accumulate from serving a vast population of over sixty-nine customers per day in one hundred and nineteen countries. Besides, McDonald’s has a high brand recognition value of forty million US dollars and the R. McDonald clown makes it well known. Conversely, the enterprise has a competitive advantage against its top rivals due to its enormous advertisement budget that promotes it beyond the limits of other companies in the industry. Its ability to operate in a variety of cultures where preferences and tastes for food are extremely divergent also demonstrated its core competence. What’s more, the company has collaborated with the best brands, and so it offers famous and fashionable brands in its shops, for example, Dannon yogurt, Coca-cola, Heinz ketchup, among others. Since more of its restaurants’ ownership belongs to franchisees, the company can focus much on streamlining its serving structure and marketing promotions.
The Prospective Situation
Assessment of viability
McDonald’s has demonstrated a significant ability to expand demand for more healthy foods by introducing healthier choices in its menu and overturn its flaws into strengths. On the same note, the company tries to clutch such an opportunity and grab arrangements to start vegetarian outlets in India merely. As well, McDonald’s has the ability for home meal delivery in which it could take advantage of food delivery to homes and inflate its reach to clients. The viability of the company to adapt to new practices has remodeled the shops to realize greater than average market growth. On that point, the business should strive to finish modernizing its restaurants and acclimatize the great practices in them sooner than later.
Prospective changes
The process of combating the competition challenge in the market calls for a change in the clientele habits and formulation of new client groups. Such modification of practices will represent new wants, which the business must meet. Apparently, the company would introduce new brand restaurants that meet the constantly modifying client habits and the preferences of the priory untapped customer groupings.
Proposed implementation
A variety of approaches can help McDonald company unstuck itself from the challenging market patterns. The company can improve its sales and restore its reputation in the market by introducing new products that align with the changing tastes and preferences of the customers. The method would help smash the old rules by bringing fresh products with the originality of standards. Concisely, an introduction of the new products amounts to targeting an object in motion, which is harder to hit than a stationary one. Another method that businesses can apply to rehabilitate their status in the competition is the introduction of advanced technologies in their day-to-day running; for example, using microwaves to attain operational benefits over strong challengers. Such technological advances will increase efficacy and competence, as well as sustaining the quality of foods before their time of use. Moreover, instead of providing only fries, burgers, and drinks, McDonald should evolve, expand, and optimize its menu. Through this approach, the company should introduce full menus, for instance, full breakfast foods, as well as modernize the client experience. Lastly, the company should expand convenience to the obtainable brands. If the proposed methodologies materialize adequately, and before implantation is evaluated against specific parameters, which rationalize the recommendations, McDonald’s Company will attain its maximum realization and monopolize the market once again.
Conclusion
In summary, McDonald’s long-term growth and market dominance in the food industry depends on the brand and economic significance. For the company to drive noteworthy growth, it must aim for core menu enhancements, improve its product innovation, invest in its Image Activation program, steer its global expansion, and use mobile technology. The goals might appear over-ambitious, but they may be achievable if McDonald’s wants to rescue itself from the dramatic competition.
Work Cited
Mcdonald’s (in 2013): How to Win (again)?McGraw-Hill Education, n.d.
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