Strategic Options for McDonald's in Australia

This report discusses the different strategic options available to McDonald's in Australia, financial and corporate performance, and the recommended strategy. It also covers implementation and monitoring of the strategy.

Running head: MARKETING MANAGEMENT
Marketing Management
Name of the Student
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Executive Summary
Strategic Management is considered to be a crucial aspect of the organization and an
organization operating in the global market needs to have a proper strategy in place in order to
ensure that it is successfully able to compete with the competitors and make a place for itself.
The given report will be discussing the different strategic options which are available to the
chosen company Mc Donald’s in India and the recommended strategy as well. The latter half of
the report has thrown light upon the implementation strategy as well as the monitoring and
controlling plan of Mc Donald’s.

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Table of Contents
Introduction......................................................................................................................................3
Market size and trends.....................................................................................................................3
Financial and Corporate Performance.............................................................................................4
Strategic Options.............................................................................................................................4
Final Recommended Strategy..........................................................................................................6
Implementation of Final Strategy....................................................................................................8
Monitoring and Control of Future Performance............................................................................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

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Introduction
Strategic Management is considered to be a crucial part of the business as it enables the
company to make suitable strategies for the future success of the business organization. The
organization must ensure that the company has suitable strategies in place which will help them
to compete with the different competitors present in the market and assist them in gaining a
strategic advantage (Rees & Smith, 2017). The company which is chosen for the report is the
McDonalds in Australia. The report follows a structured format which tends to discuss the
market size and trends, followed by the corporate and financial performance. The different
strategies which are available to the firm will be discussed followed by the final strategy adopted
and the way the strategy shall be implemented.
Market size and trends
The McDonalds is an American fast food giant which has approximately more than 950
restaurants around the globe and through this the company has been able to generate and income
of around 5 billion dollars in the year 2016. The burger company has been able to make an
increase of 3.5% annually all around the globe (Jarillo, 2013). The market in Australia has been
able to show a continuous growth in the past few years and hence, this has been predicted to
become even better in the coming years. In the recent years, the Australians have increased their
takeaway food system in the recent years. This has served well for the company and the
company has been able to become the king of the Australian fast food market (McDonald's
Australia., 2018). The market size in Australia is 15.6 billion and hence, this serves as a rather
good opportunity for the company.

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The market positioning of Australia amounts to around 29.5% which is a fairly good
percentage. However, there are various competitors present in the marker which tend to provide
tough competition to the company. These competitors are KFC, Hungry Jack’s, Domino`s and
Subway.
Financial and Corporate Performance
The country Australia has proved to be a star in the global operations related to the
functioning of Mc Donald’s globally. The company has been able to earn high amount of profits
annually and it has doubled since the last few years. The revenue generated by the company has
been quite stable since the last few years and this has led to a growth of around 40% in Australia.
The restaurant has been able to increase the growth in sales with the help of the customization
choices it has been able to offer (Rothaermel, 2015). The customers down under have a different
taste from the one in America and due to this they have unique demands. As Mc Donald’s has
been able to meet these demands successfully, it has been able to the large market share in
Australia.
Although the market conditions have not been very preferable, Mc Donald’s has been
successful in maintaining a suitable position throughout its years of operations and has been able
to adapt to the changes in the perceptions and the tastes of the customers.
The different investments which have been made by the management on behalf of the
company in different ventures, properties and goods have proved to be efficient in nature and has
bought about adequate returns and revenues for the organization (Stead & Stead, 2014).

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Strategic Options
There are different kinds of strategic options that can be adopted by McDonald’s which is
related to the different kinds of generic kind of strategies for development of the business in an
effective manner. These kinds of strategic options will help the company in gaining competitive
advantage in the entire market (Barney, 2014). The respective kind of strategies that have been
incorporated by the company are based on the growth that is intensive in nature of the fast food
chain. The different kinds of generic strategies included the strategies related to the growth of the
McDonald’s in relation to the different tastes and preferences of the different consumers.
Furthermore, these generic strategies along with the growth related intensive kind of
strategies of McDonald’s are being changed and revised as per the different needs and wants of
the customers in the economy (Steinbach et al., 2017). The different growth-related strategies
changes have been implemented by the respective organization are based on the long-term
viability of the company and this will help in impacting the business in a positive manner. The
strategic options that can be implemented by McDonald’s is to analyze the different local market
of the countries along with addition of local items in the menu.
Furthermore, the generic strategy that is implemented by McDonald’s is the cost
leadership strategy and this helps in minimizing the different costs of offering products at lower
price to the different customers in the entire market (Lasserre, 2017). Furthermore, the intensive
growth-related strategies of the respective organization McDonald’s are based on three kind of
concepts that includes market development, market penetration and product development
strategies. The different kind of strategic options are the major kind of reason for the growth of
McDonald’s in the entire food industry (Eden & Ackermann, 2013). The respective organization

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tried to create a separate and distinct kind of position in the entire market with the help of low
cost items that are being provided to the customers.
Additionally, the social marketing options have to be enhanced in an effective manner
and this has been noticed that the social media marketing includes the advertising and marketing
on different social media platforms such as Twitter and Facebook. Furthermore, the usage of the
social media is one the best strategic options that can help in enhancing the growth and
enhancing their presence everywhere as well. The respective restaurant McDonald’s needs to
enhance the different options to enhance the growth in an effective manner (Hill, Jones &
Schilling, 2014).
McDonald’s need to enter different countries that includes Middle East, Australia and
Australia as well. The entire food market in Australia is required to create their competitive
position in the entire industry with the help of low cost items and provide the customers with
accurate kind of services in an effectual manner. These are the different kinds of strategic options
that is required to be adopted by McDonald’s as to create a different and unique kind of position
in the entire market and provide low cost items that is provided to the customers in an effective
manner.
Final Recommended Strategy
Any organization who is looking to establish itself in the future should be prepared to
apply various generic strategies in order to ensure that it achieves success in the long run. In a
similar manner, a multinational organization needs to make use of several strategies in order to
achieve success. The different strategies which have been used by Mc Donald’s have assisted it

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to achieve success all around the globe. These strategies have gone a long way in helping the
firm to penetrate into the different markets.
As McDonalds is a brand which deals in different types of markets and each of those
markets have different kinds of needs and requirements. This has gone a long way in helping the
organization to attain a leading position in the market (Meyer, Neck & Meeks, 2017). Over the
years, the different strategies as used by Mc Donald’s has helped the company to attain the status
it has today. The cost leadership strategy which was adopted by the organization has helped it to
maintain its position in the market. The main unique point about Mc Donald’s is that it offers
good quality products at low prices. The company has also adopted the differentiation strategy
which has helped the firm to make profits, the differentiation strategy helps an organization to
give tough competition to the different competitors who are present in the market.
However, after analyzing the internal capabilities of the organization have been analyzed
and after the external capabilities have been examined (Frynas & Mellahi, 2015). The strategy
which is being recommended to the organization is the strategy related to the establishment of
various offices throughout the globe (Karadag, 2015). This will help the firm to achieve success
and to be able to function well into the food industry. The strategy to be adopted by the firm is
the combination of market development and market penetration strategy (Engert, Rauter &
Baumgartner, 2016).
It is the need of the hour that the organization prepares an international strategy which
shall serve as a guiding path and will be able to assist the organization in expanding its product
line and extending the operations. The Mc Donald’s company needs to focus on the growing
population of the big cities and areas which have high population. Hence, this will assist the firm
in creating an advantage which will help them to increase the brand value and become a global

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leader in the fast good industry (Wheelen et al., 2017). It can aim to improve its operations and
formulate new production processes so as to ensure that the organization will be able to increase
the speed of production and the supply chain so as to ensure that the customers are being served
faster. The primary purpose of the given strategy is to reduce the queue lines which are created in
the store.
These queue lines tend to reflect a wrong image in the minds of the different customers
who tend to think that the management is not capable enough to deal with the different customers
and that the employees lack operational efficiency. Hence, to overcome this perception and to
ensure operational efficiency, the improvement in product process strategy is being
recommended.
Implementation of Final Strategy
Hence, the final strategy which has been adopted is the strategy of improving the
production processes in order to be able to cater to the needs of the customers in the urban cities.
As the footfall in the urban cities is more than that of the pother parts, the outlets of the company
in these urban cities are generally very high. This high peak is generally observed during 3 time
slots which range from breakfast to dinner, including lunch (Gamble & Thompson, 2014). Other
than this, during the weekends as well, the crowd footfall is very high. The primary reason
behind this is that McDonalds offers a wide range of options for the breakfast and lunch menu.
The prices of the different products are affordable and thus for this reason, the customers prefer
that they can use the give restaurant to meet their needs.
However, the queues during these high footfall times get very long and the service gets
too slow. The company has received feedback from its customers over the years and thus for that

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purpose, the company has made an objective to improve the processes in order to ensure that the
customer do not face any inconvenience and the organization can compete against its
competitors and achieve long term success.
For the implementation purpose, the organization needs to ensure that it is able to bring
about the change in the organization by improving the production processes. For the similar
purposes, the staff also needs to be trained with regard to the adaptation of the modern
technology and a dummy test needs to be run accordingly. This test will ensure that the firm is
being successfully able to see to it that given strategy to adopt an efficient production process is
being adopted successfully and whether the employees are being able to adapt themselves to the
new change which needs to be brought about or not (Morschett, Schramm-Klein & Zentes,
2015). After this has been done, the firm will be required to introduce the new process for the
use in the actual stores and business environment and the feedback which they receive from the
customers and the increase in the number of customers served will determine the success of the
system. The following implementation plan will be suggested for the international strategy of Mc
Donald’s.
Activity Time period Responsible
Developing the objectives for the full procedure 1 week Strategic manager
Analyzing the market for the strategic options 1 month Market Analyst
Developing a strategic plan for the described
strategic options
1 month
Strategic management
team
Formulating the new procedure for the production 1 month Food Analyzers and

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Operational managers
Training the different employees based on the new
procedure
3 months
Human Resource
Manager and Trainers
Advertising on the various channels with respect to
the new procedure and its benefits
6 months
Online Marketing
managers
Testing the ne process in certain countries 15 days Food Analyzers
Improvisation of the system 3 months Marketing managers
Rolling out the new procedure in the market 4 months Strategic Managers
Receiving feedback 3 months Strategic Managers
Measuring success against the Key Performance
Indicators
1 year Strategic Managers
Monitoring and Control of Future Performance
Monitoring and Controlling forms an essential aspect of the organization. When an
organization plans strategically, it becomes essentially important for the organization to ensure
that they are able to control the program well and monitor it at all stages.
If the program is not monitored well or the controlling goes wrong then the whole
purpose of the organization fails and then Mc Donald’s will not be able to measure the
effectiveness of the program in the long run and not be able to make amendments (Brown &
Bessant, 2013). For this purpose, it is essential for an organization to have a proper indicator set

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in place which will help the firm to analyze the program closely and be able to see to it that the
performance of the organization is on track with the planned structure.
Mc Donald’s has formed a plan which aims to strategically improve its operations all
around the world by introducing faster production systems which will help the firm to meet the
needs of the customers and reduce the waiting time and long queues (Carroll, Primo & Richter,
2016). The outcome of the strategic plan will be the satisfaction of the customers. In order to
monitor and control the program, the different key performance indicators of the given strategy
will be as follows:
 Customer Attrition- The loss of the clients must be decreased to a great rate after the new
system has been implemented. This is because the satisfaction of the customer will
increase considerably.
 New customer acquisition- Due to the implementation of the new production system the
new customer acquisition will increase considerably and for this reason, after the queues
are reduce, this must increase.
 Profitability – The profitability of the outlets in the different reasons, will also be used as
a measure to ensure that the profitability is increased (Trigeorgis & Reuer, 2017).
 Sales- The sales of the organization and the increase will measure the success of the
strategic plan
 Serving time per customer- The serving time per customer needs to reduce after the
system.

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Conclusion
Therefore, from the given analysis, it can be stated that the company Mc Donald’s has
been doing considerably well and has been utilizing its resources efficiently. However, after the
analysis of the different strategic options that are available to the company and the demographic
trends which exist in the market, it can be suggested that the firm should seek to apply an
improving the production process so that the queue time decreases and the company is able to
cater to the needs of the customers effectively.

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