McDonald's Strategic Analysis

The provided assignment content is a comprehensive analysis of McDonald's business using various frameworks such as SWOT analysis and Porter's generic model. The report highlights the company's strengths, weaknesses, opportunities, and threats in the market. It also discusses how McDonald's has made changes to its menu card by adding healthy options like Apple Pie and Big Mac Burger. Additionally, it emphasizes the importance of technological advancements, legal aspects, and environmental considerations in shaping the company's performance. Furthermore, it uses SWOT analysis to identify internal factors that affect the business, such as global brand image, diversified network, increased market share, and social responsibility. The report also discusses Porter's generic model, which suggests using differentiation strategy to differentiate McDonald's products from those of its rivals.

Marketing Management
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Marketing Management
This marketing plan has been written for McDonald's
McDonald's
Introduction : McDonald's is termed as the largest chain of hamburgers fast food restaurant
all over the world. Further it has more than 35000 outlets in 119 countries of the world. The
brand was founded in the year 1940 in America and during its initial stage was a barbecue
restaurant. The brand is really growing well in almost all the markets where it is operating. It
has an workforce around 1.7 million people.
TASK 1: Analyse the marketing environment and restaurant chain
Audit tools used to analyse McDonald's
1) SWOT Analysis
Being a global brand, McDonald's has been operating business in effectual manner
which is the major strength of the business and which can be used to diminish threats of the
food chain. The market share of the brand has been increasing; therefore a range of new
products can be added to existing to the existing product line so that opportunities can be
augmented (Buckley, 2002). The brand is socially responsible and that can also augment
growth opportunities for the business. The weakness (lack of innovative aspect) can be
improved through employing skilled people iin the business. Further, McDonald's has the
opportunity to focus more on digital marketing; thus through this, customer base of the food
chain can be augmented (Brooks and Simkin, 2012). Threat of the business can be managed
if business activities will focus on needs of the customers. Competition may increase anytime
in the market; therefore it is essential for McDonald's to use all the opportunities so that
business can retain its position in external market place.
2) PESTLE Analysis
Political forces have been posing influence in McDonald's as the food chain in facing
issues related to child obesity. The concern of people towards health has been increasing
which leads McDonald's to emphasize more on social aspects. Economic factors are useful
for the business because it aids people to buy the products repeatedly (Chimhanzi, 2004).
Technological aspects have been using widely in the food chain and this can be used in major
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business areas so that customer base can be increased. Moreover, concern towards such thing
could underpin strengths of the business. Legal forces have been influencing the company
which sometimes also increases operational cost of McDonald's. The brand has been deriving
social support; thus it can give the opportunity to survive at market place for longer period
(Clarke-Hill, Comfort and Hillier, 2008). The external environment of McDonald's seems to
be supportive from several grounds; thus much changes are not required in business
processes.
3) Porter's Generic Model
McDonald's has been using such model so as to generate the opportunities of deriving
competitive advantage over the competitors. The strategy is useful for McDonald's since
through this, business can differentiate itself from competitors and other industry players.
McDonald's is able to augment its strengths and capabilities because the products of food
chain are highly different with that to the competitors (Cravens, 2010). McDonald's is also
suggested to adopt focus strategy so that the entity can emphasize only on a specific market
place. The brand image of the food chain is managed in such a way so that lot of customers
can be persuaded towards the food products (Handlechner, 2008). As per the model,
McDonald's has been using low cost pricing strategy so that customer base can be increased
and this also enhances the opportunities of sustainable market share.
4) Differentiation Model
McDonald's is required to pay more emphasis on selection on offerings. With this
aspect, company can give special attention to different product range and select contrasting
product for various markets. To differentiate the products and services, McDonald's has been
emphasizing on needs and demands of clients which also aids in declining the ratio of health
issues. Several new products are added in the existing product line so that customers can be
retained for longer span (Dann and et. al., 2007). Thus, it can be said that, the company is
using this aspect for facilitating innovation and creativity in business processes.
Key issues that the restaurant chain faces
From the aforementioned marketing audit which involves, Pest and swot analysis
various key issues faced by company are identified (Brooks and Simkin, 2012). The major
key issues faced by company are as follows:
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 Increasing health consciousness among public- There is increasing health
consciousness among public because of which people prefer healthy products more.
The food products of McDonald's are regarded as unhealthy.
 The negative image of company due to legal actions- Company was accused for
exploiting its employees which resulted into negative image of brand in market. This
lead to high employee turnover and increased legal actions against the company.
 Threat of competition- McDonald's is facing tough competition from brands like,
Burger king, Pizza hut and Subway etc. with the growing consumer of Fast food, the
competition of among the restaurants is also increasing day by day. The threat of
competition for McDonalds is also very high.
 Diversified network- It is tough and challenging for company to manage its
diversified network. The network of company is very broad therefore it is difficult to
control and manage everything.
 Economic recession- The economic recession is also causing negative impact on
company as business is suffering loss due to foreign currency fluctuations; the
demand of costly food products is also decreasing.
Hence, it is required for company to focus on its key issues and take effective steps
that will assist McDonald's in minimizing the issues and run business smoothly (Chimhanzi,
2004). For this aspect, healthy products should be offered to customers, new promotional
strategies must be used and employees should be paid more and treated fairly.
TASK 3: Provide marketing objectives (SMART)
TASK 3: Provide marketing objectives (SMART)
The marketing objectives of company help in providing direction to organization.
This further helps business in attaining overall goals and ensures maximum satisfaction to
customers. Therefore, it is important for company to frame new objectives that will help
organization in increasing its productivity and profitability (The Importance of Marketing for
the Success of a Business, 2014). With the help of SMART objectives McDonald's can frame
specific, measurable, attainable, realistic and time bound goals for its company. The objective
of business enterprise is as follows:
In order to deal with the issue of rise in competition level in the market firm has
developed SMART objectives with the help of which it is possible to carry out overall
operations in appropriate manner. Main aim of enterprise is to become leader in the market
by dealing with the challenge of rise in competition level.
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Specific: The specific objective set by business to deal with the condition of rise in
competition level in the market and for the same large number of strategies have been
employed so as to operate efficiently (Clarke-Hill, Comfort and Hillier, 2008).
Measurable: In order to measure the progress of achievement of this gaol McDonald will
analyse its sales volume and in case if sales of enterprise is higher than its competitors. Then
it can be said that objective of business has been accomplished.
Achievable: In order to achieve this objective company will employ promotional tools and
entire range of its marketing activities will be modified so that business can easily deal with
the issue of rising competition in the market.
Realistic: The objective set by business is realistic for firm as organization is highly efficient
and its range of products offered can assist firm in dealing with its major competitors in the
market (Cravens, 2010).
Timely: The time frame allocate for accomplishing this objective is of 1 year and this time is
appropriate enough to enhance market share of company which will be more than
competitors of firm.
TASK 4: Discuss and critically evaluate Segmentation, Targeting and Positioning (STP)
Segmentation variables (& why):
 Company have segmented the market to fulfill the needs of customers in better
manner (Dann and et. al., 2007). For this aspect, firm have developed customized
menu card to serve food items that meet the regional tastes. Therefore, McDonald's
have introduced dishes made of rice in India because it is a staple food of country.
 Also, company is providing more vegetarian products in India as most of the
population of country is vegetarian. Therefore, segmentation process of McDonald's
is highly based on demographics, Pscyhographic and Behavioral aspects and
according to the market segment; the chain has segmented the products by
emphasizing on kids, students and family members. The products are not segmented
on the needs of adults because the chains have not started anything related to
breakfast in the existing outlet. Company like McDonald segments its market on the
basis of demography such as age, income and other requirement of target market.
Further, behaviour along with psychographic segmentation has also been considered
where taste, attitude along with lifestyle of target market is considered so as to
provide them full support. Therefore, the proposed segmentation criteria is
appropriate for the business and in turn has supported in accomplishing desired aims
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along with objectives.
 As per demographics segmentation, McDonald's has been offering happy meals which
include a free toy for kids and for families, it has made different outlets and meals
which are suitable for takeaways and drive-thru. Further, under pyschographic
segmentation, McDonald's has adopted itself according to the convenience and
lifestyle of Indian customers. Thus, to chiefly focus on vegetarian food, McDonald's
came up with new product (Mc Veggie burger and Mc Aloo tikki Burger). Under
Behavioral segmentation, McDonald's should introduce new as well as modified
products which contain low cholesterol content in it.
Detailed description of target group(s) (& why):
Positioning (& why):
It is important for McDonald's to develop different products for various markets. The
company can use different positioning strategies in various markets. India is not facing
obesity in its children therefore as preventive measure for company can provide healthy
products at cheap price. However, to entertain the needs of high income level customers
expensive products can be offered too.
Positioning:
McDonald's should go for new positioning techniques so as to create a new image in
the mind of consumers. Thus for that, the restaurant chain should place itself with healthy
variants. McDonald's should observe its present approach (way of promoting things with
advertisements) and according to that, changes can be executed to the business practices. This
can be done by adding a more organized and expertise team which can work on healthy
mindful advertisements. The advertisements should contain all the benefits and healthy
qualities about McDonald's products. McDonald's could also target youngsters because they
can pay for quality and variety of food products. This will help McDonald's to be most
recognizable brand in India for people of all ages. The positioning strategy adopted by
McDonald is on the basis of product attributes where all the unique features are highlighted
in front of target market and this assist business in meeting with the need of customers in
appropriate manner. Positioning can be done on the basis of product attributes and kind of
features present in the market. Through this McDonald is able to enhance its market share in
the market where large number of opportunities exists and through this business has gained
competitive advantage in every possible manner. Further, time to time positioning strategy of
business is modified so that customers can be easily attracted and this in turn has acted as
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development tool for the company.
Task 4: Discuss and justify proposed branding
Tool/framework for brand identity
MCDonald has developed its branding strategy in appropriate manner and through
this it has become possible for business to highlight how its product range is different from
those of target market. Effective branding strategy has allowed company to create unique
position in the market and all its objectives can be accomplished easily and in effective
manner. McDonald as a brand is well known in the entire market and majority of the
customers prefer to consume products of the company rather than its competitors in the
market. With the help of effective branding strategy organization is able to survive in the
competitive market for longer period of time and has enhanced overall performance in the
market.
Brand identity for Mc Donalds :
Brand identify is termed as the overall look of a brands communication. The brands
identify for Mc Donalds is its unique logo and colour combination of the same. It makes the
brand different from the other market players. The brand has always taken care of its identity
by promoting its logo though advertisement and other marketing campaigns.
Recommendations for increasing brand equity are:
Hence, with the help, of segmenting, targeting and positioning company can cater the
needs of new market and increase the customer base (Hall, Jones and Raffo, 2007). Also, the
company can use differential pricing strategy which enables use of high prices in developed
country while low prices in developing nations. This will help the brand in positioning in
various sectors and building its brand image in those segments. Furthermore, focus can also
be made on branding aspects as McDonald's can increase the brand value of business through
expanding in different countries. Improvements are also required in elements of products
where in new items should be included so that customers can find changes in the product.
McDonald's can encourage consumer experience through focusing on quality aspects; thus
products should be healthy enough for the consumers. Since, consumer consumes products of
McDonald's on regular basis; therefore the food items should be cholesterol free as that can
also raise demand. Hence, the above recommendations will help company in achieving its
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overall target. They will further improve the customer satisfaction as company will provide
product which are healthy and affordable.
Task 5: Detailed recommendations for three out of the seven marketing mix elements
Marketing mix elements
Product: Company provide food and beverage product to its customers (Handlechner, 2008).
The product offered by business enterprise are, hamburgers, salads, snacks, beverage, ice
cream and chicken etc. It also provides breakfast meals and combo packs. However, the
products of brand are regarded as unhealthy. Therefore, it is recommended that company
should add products which are nutritional.
Justification: This will improve the image of organization and reduce the issues of child
obesity. With this customer experience will be enhanced as they will get healthy and tasty
food.
Price: The product of McDonald's is regarded as expensive by low income level customers
(Hastings and Saperstein, 2007). Therefore, the company should offer products which can be
easily afforded by low income level customers. Thereafter, company can adopt psychological
pricing strategy reflects the prices of brand are more affordable. For instance, brand can keep
(£)_.99 rather than rounding it off to the closest decimal.
Justification: The company can also provide high priced products for high income and status
conscious customers who don't like eating cheap products.
Promotion: The promotion strategy helps the customers in marketing its products in different
markets. With the effective promotion company can retain its brand loving customers and
attract new consumers. For this aspect, McDonald's can use advertising in television, use
sales promotion, personal and direct selling (Henry, 2008). However, the company is using
the traditional channels to promote its products. Therefore, it is recommended that brand
should adopt new and innovative ways to attract customers. The social networking sites such
as Facebook and Twitter are most effective platform that can be used to attract wide range
of customers. McDonald's can promote its new offerings of healthy products on the social
sites like, Facebook, Twitter etc.
Justification: It is essential for McDonald's to emphasize chiefly on promotional aspects
where in new strategies needs to be adopted to promote the products effectively to new
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market entities. In order to promote food products among kids, McDonald's need to
emphasize on using cartoon and other characters as that persuades them towards the products.
While promoting the products, McDonald's has to make sure that only ethical and accurate
information have been included in the advertisements. In order to deal with the issue of rise
in competition level, economic recession etc it is required for company to employ effective
marketing strategies as through this it is possible for company to enhance sales volume of its
business and this can be effective enough to deal with challenge of rise in competition level
in the market. Further, it can provide base to business in serving its customers and in turn can
act as development tool for the entire organization. Further, digital marketing is also
appropriate for firm where entire product range of business can be promoted with the social
media tools and other techniques which are quite effective. So, this can allow business to
perform easily in the competitive market for longer period of time and can act as
development tool.
Task 6: Critically evaluate Corporate Social Responsibility (CSR)
Current CSR approach =McDonalds has expanded into global markets and provide
services to different markets. Therefore, the corporate social responsibility of company is also
increased. The business organizations get resources from society so it is important for
company to take care of the needs of society. Therefore, being a responsible company
McDonalds take effective steps which leads the sustainable development of economy. The
CSR of company is as follows:
Advantages and disadvantages of current CSR are:
 Reduce the carbon footprints: The aim of company is to reduce the carbon
footprints to 50% by 2020 (Homburg and et. al., 2009). Therefore, in this direction
company is planning a partnership with UAE government which will help in
achieving the objective of company.
 No to plastic: The objective of company is to avoid the use of plastic by using paper
and poly bags as through that, the concern towards the environment can also be
depicted. The use of plastic bags should be stopped sternly as that is highly integrated
with public health.
 Use of solar energy: McDonalds must make use of solar energy so that natural
resources can be best utilized by the food service provider. Furthermore, it is also
essential for McDonalds to use renewable energy (Kotler, 2006).
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Along with environmental protection, the company is also liable towards stakeholders
where in all the stakeholders should be involved in decision making process. Interest of all
the stakeholders needs to be protected by the company and their part of dividend should be
provided to them. Corporate Responsibility of McDonald's directs the restaurant chain to get
involved into eco-friendly practices. The restaurant chain is also required to emphasize on
environmental protection; therefore all the practices should be socially and environmentally
concerned. Under Corporate Social Responsibility, McDonald's considers the interest of all
the stakeholders and the business also tries to develop trust in them.
McDonald's use low energy LED light bulbs and energy saving equipment so that
resources can be properly utilized by reducing the amount of wastage. McDonald's is also
committed to be protective about the society; thus all the practices of restaurant chain are
socially integrated. The business entity conducts all the practices in ethical manner and
McDonald's also believes in complete transparency. All the information about the restaurant
chain is disclosed among the stakeholders. McDonald's is also committed to treat the entire
internal and external stakeholders with respect and dignity.
However, the current CSR activities of McDonald do not cover large areas in order to
promote its business in an effectual manner. It is because employees are paid very less and
also they render their services for long working hours. It created problem for them to manage
their life in an effectual manner. Also, the working conditions of corporation are also not
appropriate which has negative impact on the employees.
Recommendations for enhancing CSR activities are:
Articulating the research, it is evident that McDonald's has its brand value because of
spectrum of food products it has in the product line. The ethical concern of the business helps
all the stakeholders to invest resources in different projects. From the discussion, it can be
said that McDonald's has been implementing different changes in the business practices and
this leads the food chain to maximize customer base. Thus, in terms of conclusion, it can be
said that marketing practices and strategies of McDonald's should be entirely associated with
needs and preferences of customers. In order to improve its CSR approach the organization
is required to re-frame its entire structure regarding pay and incentives. Being such a big
brand, it is required to pay fair wages to all its workers which should be on behalf the work
done by them. Further proper working conditions are also required to be provided by the
brand. McDonald's should also look forward for activities such as charities and donations. It
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is also required to promote the concept of women empowerment. It should adopt more
sustainable practises in its operations in order to accomplish its corporate social
responsibility. The brand also needs to increases the activities regarding social cause and
development of society.
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REFERENCES
Books and Journals
Brooks, N. and Simkin, L., 2012. Judging marketing mix effectiveness. Marketing
Intelligence & Planning. 30(5). pp.494 – 514.
Buckley, P., 2002. International Business versus International Marketing. International
Marketing Review. 19(1). pp. 16-20.
Chimhanzi, J., 2004. The impact of marketing/HR interactions on marketing strategy
implementation. European Journal of Marketing. 38. pp.73-98.
Clarke-Hill, C., Comfort, D. and Hillier, D., 2008. Marketing and sustainability. Marketing
Intelligence & Planning. 26(2). pp.123 – 130.
Cravens, K., 2010. Strategic Marketing. 8th ed. Tata McGraw-Hill Education.
Dann, D. and et.al., 2007. Competitive Marketing Strategy. Pearson Education Australia.
Gilbert, D., 2003. Retail Marketing Management. 2nd ed. Pearson Education India.
Hall, D., Jones, R. and Raffo, C., 2007. Business Studies. 3rd ed. Pearson Education India.
Handlechner, M., 2008. Marketing Strategy. GRIN Verlag.
Hastings, H. and Saperstein, J., 2007. Improve Your Marketing to Grow Your Business.
Wharton School Publishing.
Henry, A., 2008. Understanding Strategic Management. Oxford University Press.
Homburg, C. and et. al., 2009. Implementing the Marketing Concept at the Employee –
Customer Interface: The Role of Customer Need Knowledge. American Marketing
Association. 73(4). pp. 64-81.
Kotler, P., 2006. Marketing Management, Analysis, Planning & Control. Prentice Hall, New
Jersey.
Online
5 Important Concept of Marketing Management Philosophy. n.d. [Online]. Available
through: <http://www.yourarticlelibrary.com/marketing/5-important-concept-of-
marketing-management-philosophy/1076//>. [Accessed on 10th November 2015].
The Importance of Marketing for the Success of a Business. 2014. [Online]. Available
through: <http://www.liftoffinitiative.net/2014/02/17/the-importance-of-marketing-
for-the-success-of-a-business//>. [Accessed on 10th November 2015].
THE MARKETING CONCEPT. 2000. [Online]. Available through:
<http://www2.nau.edu/~rgm/ha400/class/professional/concept/Article-Mkt-
Con.html/>. [Accessed on 10th November 2015].
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BIBLIOGRAPHY
http://www.mcdonaldsindia.net/Corporate-Social-Responsibility.aspx
http://www.csrwire.com/members/12873-mcdonald-s-corporation
http://newmarketingblogs.blogspot.in/2010/10/segmentation-targeting-and-positioning.html
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APPENDIX
McDonald's is the largest marketing chain which serve variety of fast foods to wide range of
customers. With the help of PESTEL analysis the macro factors that impact the working of
company has been explained which is as follows:
 Political: The increase in child obesity due to too much consumption of junk or fast
food has lead to the interference of government in the working of fast food chains
(Hastings and Saperstein, 2007). Therefore, the government is planning to pass a law
that will help in minimizing the incidents of adolescent obesity. With this aspect, the
working of company will be indirectly affected. Therefore, the company is required to
make necessary modification in its menu card and add more healthy and nutritional
products.
 Economical: The economic downturn of UK has been beneficial for company. The
disposable income of people have reduced therefore, individuals prefer eating at
McDonald's rather than visiting a more high-priced restaurants.
 Social: With the increase in health consciousness among individuals and modification
in their lifestyle the intake of fast food of McDonald's has been reduced. Therefore,
the company has made important changes and added healthy choices like, Apple Pie
and Big Mac Burger in its menu card (Buckley, 2002).
 Technological: With the help of new techniques the company is able to make
innovation in its services and product range. The up-gradation of its system with new
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Illustration 1: PESTEL analysis
(Source: Chimhanzi, 2004)

technology also help the brand to manage its supply chain effectively and minimize
the cost.
 Legal: There are various legal aspects that impact the performance of company.
Recently the company have faced legal consequences regarding employee
exploitation. Due to this, McDonald's have to go through legal challenges and is
forced to take due care of its employees.
 Environmental: The increase in environmental awareness, the company is required
use techniques and processes that are environment friendly (Gilbert, 2003). Therefore,
the McDonald's have important changes in its supply chain management that will
reduce the carbon foot prints.
Furthermore, with the help of SWOT analysis of company can identify different
internal factors that are also responsible for affecting the performance of business. It is
explained as follows:
SWOT analysis
Strengths (Internal factors of McDonald's)
 Global Brand image
 Diversified network (Kotler, 2006)
 Increased market share
 24 hours availability of food products
through take away.
 Socially responsible brand
 Easily identifiable logo
 Strong and competent management
team
Weakness (Internal factors of
McDonald's)
 Regarded as unhealthy choice
 Availability of substitutes
 High employee turnover
 Lack of innovative services and
offerings
 Seasonal food products like, ice
cream, salads (Hastings and
Saperstein, 2007)
Opportunity (External factors of
McDonald's)
Threat (External factors of McDonald's)
 Rising competition from healthy
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 Addition of healthy food products in
menu card
 Social media marketing
 Innovative products like, fruit snacks,
veggi roles
brands like, Subway
 Increase in the prices of raw material
 Negative impact of economic
downturn
 Increased health issue pressure
Furthermore, McDonald's can use porter’s generic model as another effective tool.
Porters Generic Model: This model is used by company to gain competitive advantage over
its rivals (Clarke-Hill, Comfort and Hillier, 2008). It implies the use of various strategies to
differentiate their products from rivals. The porters generic model uses generic strategy like,
cost leadership which enable low cost pricing structure to attract new customers. Secondly,
differentiation strategies that assist in using various methods that help in building distinctive
image of company. Third, company can adopt focus strategy to concentrate on specific
market. However, it is beneficial for company to use differentiation strategy; the explanation
of which is as follows:
Cost leadership
McDonald's is able to augment its strengths
and capabilities because the products of food
chain are highly different with that to the
competitors
Diversification
The business has been diversifying its
products and services in different market
places for more growth and development.
Cost focus
McDonald's is also suggested to adopt focus
strategy so that the entity can emphasize only
on a specific market place. The brand image
of the food chain is managed in such a way
so that lot of customers can be persuaded
towards the food products
Differentiation focus
As per the model, McDonald's has been using
low cost pricing strategy so that customer
base can be increased and this also enhances
the opportunities of sustainable market share.
Cost Differentiation
Differentiation strategy: With this strategy, McDonald's is required to pay more
emphasis on selection on offerings. With this aspect, company can give special attention to
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