This report recommends marketing strategies for McDonald’s Australia considering their market position. It discusses growth, sustainability, and corporate strategies and suggests ways to sustain in a competitive business environment.
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Running head: STRATEGIC MANAGEMENT: MCDONALD’S, AUSTRALIA Strategic Management: McDonald’s Australia Name of the university Name of the student Author note
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1STRATEGIC MANAGEMENT:MCDONALD’S AUSTRALIA Executive summery The purpose of writing this assignment is to recommend few marketing strategies considering the market position of McDonald’s, Australia. In order to do that, this report has briefly explained the issues that the company had experienced previously. A discussion of their growth, sustainability and corporate strategies has been presented in order to understand their effort to make it one of the leading fast food chains across the globe. In the era of digitalization, preferences of consumers has become dynamic. Therefore, this report will work as a guideline as it suggests the way to perceive the value and sustain within such a competitive business environment.
2STRATEGIC MANAGEMENT:MCDONALD’S AUSTRALIA Table of Contents Introduction..........................................................................................................................3 Corporate strategies initiated by McDonalds......................................................................3 Growth strategy of McDonalds...........................................................................................4 Stability strategy of McDonalds..........................................................................................5 Recommended strategic initiatives......................................................................................6 Conclusion...........................................................................................................................7 References............................................................................................................................9
3STRATEGIC MANAGEMENT:MCDONALD’S AUSTRALIA Introduction Corporate level strategies are important for business organizations as these are helpful in enhancingbusinessoperationalongwithretainingtheperformanceexistingbusiness. Considering the current competitive business scenario, corporate level strategies are having more importanceasthosehavethepowertodeterminethecompetitivenessofthebusiness organizations. Being the world’s one of the leading fast food chains, to sustain the business within such a competitive business environment McDonald’s, Australia has initiated strategies to operate their huge operation sector with the help of effective corporate strategies. Consideringtheirhugeoperationandrevenuegenerationalongwithincreasing competition,McDonald’s has realized the need of effective and efficient corporate level strategies. This essay will identify and discuss about strategies initiated by McDonalds as well as the suitability of these strategies will be evaluated as well. In addition, few strategies will be recommended to improve future operations of McDonald’s Australia. Corporate strategies initiated by McDonalds Since past few years, McDonald has been facing a difficult business environment to operate. Issues have been developed regarding the sale of the stores due to the poor growth of stores in China (Xu, 2014). Besides, lack of variation in food menu and European recession have been identified as some of the reasons behind such challenging nature of the business. In order to get back the golden days, the company decided to initiate a strategic approach (Mishra & Kar, 2013). McDonald’s has kept the expenses for advertisement same as they used to do targeting different age groups especially children. In order to make the brand recognizable
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4STRATEGIC MANAGEMENT:MCDONALD’S AUSTRALIA worldwide their extensive advertisement has become common in television. Moreover, to influence the children they have started to provide small toys for them with every order of Happy Meals. Children have developed an interest to go for McDonald not only because of food but also for the additional benefits. As described inCairns et al., (2013), use of global mascots Roland McDonald has been maintaining to attract the attention of children along with adults who prefers to have quality fast foods in a fun place. Advertisements towards children has developed an image of McDonald’ as a place to go with entire family. McDonald’s have extensive global presence. Although, in this era of globalization, when every native brands are even busy presenting them globally; considering the competitive business environment like all other companies Following the study ofCoursaris, van Osch and Balogh, (2016),McDonald’s has adopted social media marketing strategy as well. They have realized instead of spending billions for advertisements, promotional activities can be executed via Facebook, Instagram and Twitter Pages, which would work effectively to maintain customer relationship as well. Growth strategy of McDonalds There are several factors, which have been working towards success since the initial days of their business operation. One of the most significant factors is they value their customers more than any other sector. Employees are being trained to maintain a friendly behavior. Priority has always been not make the customers wait for too long and serve the food when it is hot. They have realized the customers’ preferences quickly just after entering the market. The company renovated the kitchen for commercial use just to reduce the serving time. Faster
5STRATEGIC MANAGEMENT:MCDONALD’S AUSTRALIA delivery and quality food have made the customers happy and with this faster flow, they have achieved the title of restaurants of new generation. Customers can experience a clean and secure experience every time they step into their stores as they focus on consistent cleanliness and installed several technology including CCTV to make the service better and to monitor any immoral practices within stores (Kogan et al., 2017). According to experts, the central reason behind its consistent success and growth is the customer-oriented nature of the services by keeping the stores and adjacent bathrooms clean, fast delivery of quality food at affordable prices, good behavior and efficient execution of operations. Not only strict restrictions of serving good quality foods at affordable prices, their relationship with the suppliers is so well maintained by the management that even it encourage them to develop innovative food items and creative idea of serving (Coursaris, van Osch & Balogh, 2016). As far as their global presence is concerned, and as per the description inQureshi & Hassan, (2013),all the stores are being monitored by central office with technological aids. Apart from that, the company is successful to implement successful franchise models across the world maintaining every single detail. Stability strategy of McDonalds When it comes to providing products of perceived value, McDonald’s has always been dominating other food chains in this case. Customers can easily choose McDonald’s while deciding where to eat best quality products without investing much time.
6STRATEGIC MANAGEMENT:MCDONALD’S AUSTRALIA The company has mastered the act of sustaining competitive advantage as they have been operating the market since a very long time by providing creative dishes with high-class taste. Menus are changed occasionally as per the customer preferences to gain the sustainability. The company follows strict restrictions regarding operations and employees are bound to follow every organizational rules to make the operations perfect. As perAl-Shaiba, (2017),in order to keep the as the leading one management strictly monitors the resource development sessions to ensure efficiency of human resource in the case of every order. Their focus has been to generate more traffic in the path of their existing rivals and other restaurants. The company possesses a strong substantial advantage over its competitor food chains as they have extensive global presence, possesses more resources in order to innovate and promote brand according to the market trend (Mishra & Kar, 2013). The organization’s hard work, resources and global presence have made it one of the most recognizable fast food chain, which means it has possessed a positive brand image among the consumers across nations. Recommended strategic initiatives The first thing that company can consider is, occupying the international market. Interpretation is not that McDonald should expand their business internationally, instead the company needs to recognize the cultural differences and varied preferences among the different regions. Besides, creating customized burgers and wraps it can response against the varied preferences. It can promote their innovation and business by forming websites and pages over social networking sites. It will help the company to increase the knowledge of the customers
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7STRATEGIC MANAGEMENT:MCDONALD’S AUSTRALIA more than broadcasting advertisements on Television. As per the views ofPfeffer, Zorbach and Carley, 2014),some of the stores have been practicing it in an isolated way; McDonald’s Australia must recognize their customers and try to resolve the queries of them over social media to maintain a better communication with customers. It would be helpful for the economy of country if the company consider country farmers as their major suppliers of raw materials instead of departmental stores (Mylan et al., 2015). It will help to generate profit keeping the operation cost low. Considering the recent global issue of obesity if company can innovate healthy options in the food menu, customers who are fitness conscious or suffering from health hazards will definitely respond to the initiative (Schrempf, 2014). Moreover, right price, maintenance of the menu according to customers’ choice and effective strategies to maintain public relations (attracting attention of the children, presentation of transparency through social media etc.) will be key to success and retain it perceived position in the market (Chhabra & Sharma, 2014). Conclusion It can be concluded with the statement that there is a possibility of failure as far as recognizing new competitors is concerned. They have a huge sector to work on. While managing such elaborative sectors of operations if they cannot influence the consumers with innovative process and recipes, the company may lose its market share globally. Therefore, installation of new technologies to keep the operation cost and effort low, following the social trends can be the key to frame corporate strategies. Hence, the concentration should be to achieve sustainability based on the business of their existing restaurants instead of expanding the franchised store. The purpose will be fulfilled if McDonald’s can create brand loyalty and maintain the growth by
8STRATEGIC MANAGEMENT:MCDONALD’S AUSTRALIA influencing both the existing and new customers in terms of providing them quality fast food at the right price.
9STRATEGIC MANAGEMENT:MCDONALD’S AUSTRALIA References Al-Shaiba, A. S. (2017). Role of Human Resources Function in Successful Organizational Transformations for Efficiency Improvement.European Journal of Multidisciplinary Studies,6(2), 273-280. Cairns, G., Angus, K., Hastings, G., & Caraher, M. (2013). Systematic reviews of the evidence onthenature,extentandeffectsoffoodmarketingtochildren.Aretrospective summary.Appetite,62, 209-215. Coursaris, C. K., van Osch, W., & Balogh, B. A. (2016). Informing brand messaging strategies via social media analytics.Online Information Review,40(1), 6-24. Kogan, L., Papanikolaou, D., Seru, A., & Stoffman, N. (2017). Technological innovation, resource allocation, and growth.The Quarterly Journal of Economics,132(2), 665-712. Leekha Chhabra, N., & Sharma, S. (2014). Employer branding: strategy for improving employer attractiveness.International Journal of Organizational Analysis,22(1), 48-60. Mishra, A. J., & Kar, S. (2013). Broader social implication of the strategies of business corporations.International Journal of Indian Culture and Business Management,7(2), 213-225. Mylan, J., Geels, F. W., Gee, S., McMeekin, A., & Foster, C. (2015). Eco-innovation and retailersinmilk,beefandbreadchains:enrichingenvironmentalsupplychain management with insights from innovation studies.Journal of Cleaner Production,107, 20-30.
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10STRATEGIC MANAGEMENT:MCDONALD’S AUSTRALIA Pfeffer, J., Zorbach, T., & Carley, K. M. (2014). Understanding online firestorms: Negative word-of-mouthdynamicsinsocialmedianetworks.JournalofMarketing Communications,20(1-2), 117-128. Qureshi, A., & Hassan, M. (2013). Impact of performance management on the organisational performance:Ananalyticalinvestigationofthebusinessmodelof McDonalds.International Journal of Academic Research in Economics and Management Sciences,2(5), 54. Schrempf, J. (2014). A social connection approach to corporate responsibility: The case of the fast-food industry and obesity.Business & Society,53(2), 300-332. Xu, Y. (2014). Understanding CSR from the perspective of Chinese diners: the case of McDonald’s.International Journal of Contemporary Hospitality Management,26(6), 1002-1020.