Strategic Management of Companies - Case of McDonald's in Australia

The report aims at understanding the value of strategic management through the enumeration of the case of Mc Donald’s in Australia. The purpose of undertaking the research is to identify the current market holdings of the concerned organization and the strategic options that are available to the same for the smooth functioning of the business.

Running head: STRATEGIC MANAGEMENT OF COMPANIES
STRATEGIC MANAGEMENT OF COMPANIES
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Executive summary
The report aims at understanding the value of strategic management through the enumeration of
the case of Mc Donald’s in Australia. The purpose of undertaking the research is to identify the
current market holdings of the concerned organization and the strategic options that are available
to the same for the smooth functioning of the business. The report also aims at portraying the
implementation plan that might be undertaken by the organization and the KPIs that might be
considered in order to measure the success factors of the change.

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Table of Contents
Introduction......................................................................................................................................3
Market size and trends.....................................................................................................................3
Financial and Corporate Performance.............................................................................................4
Strategic Options.............................................................................................................................5
Final Recommended Strategy..........................................................................................................7
Implementation of Final Strategy....................................................................................................8
Monitoring and Control of Future Performance............................................................................11
Conclusion.....................................................................................................................................12
References......................................................................................................................................13

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Introduction
Strategic management initiatives assist an organization in facilitating the smooth
operations of the processes as per the objective of achieving the long term sustenance. The key
changes that are undertaken by the organizations are dependent on the assessment of the market
situation and development of strategies for gaining a competitive edge. Wheelen et al. (2017)
stated that the strategies that are framed by the organizations help in attaining competitive
advantage over the other players in the market. The report will enumerate the different strategies
that might be considered by McDonalds in Australia through an assessment of the market
holdings, trends and financial performance. The final step of the discussion will generate a
strategy that might be undertaken by the concerned organization for gaining competitive edge
over the competitors.
Market size and trends
The concerned organization, McDonalds, is an American fast food company holding
around 950 restaurants globally. The net income of the organization was around $ 5 billion,
computed at the fiscal year 2016 (McDonald's Australia., 2018). Wheelen et al. (2017) stated in
a research that the organization made an expansion of around 3.5% annually. The wide
expansion of the organization has helped the same in retaining a greater market share in most of
the economies. The organization made aggressive expansion in the Australian markets. On the
other hand, the customers in the Australian markets reciprocated to the product and service
offerings made by the business due to the enhanced quality of the propositions. The increasing
trend of the takeaway food system has also helped the organization in maintaining the efficiency
of the operations as per the needs of the business. Trigeorgis and Reuer (2017) stated in a

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research that the market size of McDonalds in the Australian markets was computed to be 15.6
billion. It has helped the organization in gaining a competitive advantage over the other players
in the market. It has been forecasted that the market of the organization will grow in the coming
years due to the changing preferences and tastes of the customers and evolution of the takeaway
trend (McDonald's Australia., 2018). However, the presence of competitors like KFC, Hungry
Jack’s, Domino`s and Subway might affect the competitive edge of the concerned business.
Financial and Corporate Performance
Steinbach et al. (2017) stated in a research that Mc Donald’s growth by 40% in
Australian markets might be attributed to the stabilization of revenue since the last few years.
The continuous growth of the concerned organization might be cited as a contribution of the
maximized profit and better revenues collected by the same through successful business. The
organization provided customizable choices to the customers, which has helped the same in
attracting the attention of huge number of customers. The differences in the preferences between
the American and Australian customers might have affected the organizational propositions.
However, the customizable product offerings of the organization have helped the same in
attracting the attention of most of the customers towards the product offering. Stead and Stead
(2014) stated that the growth of Mc Donald’s in the Australian markets might be attributed to the
uniqueness of the recipes that are designed by the business, correlating to the tastes of target
customers. It has been researched that the market conditions of the organization was not much
preferable due to the indulgence of the competitors (Rothaermel, 2015). However, the
organization successfully achieved the competitive advantage of the same while operating in the
Australian markets through better quality of product offerings and the customizable options as
per the tastes and preferences of the Australian customers. On the other hand, the different

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investments that were made by the organization on the R&D initiatives and buying properties
have helped the same in gaining a competitive edge. The investments have also helped the
concerned organization in maximizing the rate of expansion in the Australian markets.
Strategic Options
The organization might evaluate different generic strategies in order to enhance the
operations of the same while operating in diverse international markets. The utilization of the
generic strategies will be helping McDonald’s in maintaining the efficiency of the operations
while operating in the Australian markets. Rees and Smith (2017) stated that McDonald’s
focused on intensive strategies for enhancing the growth of the same through developments in
the fast food chain. It has helped the organization in developing the product offerings as per the
tastes and preferences of the customers to gain a competitive edge in the market. However, the
concerned organization is planning to bring forth changes in the generic strategies in order to
adhere to the changing needs and preferences of the customers. Morschett, Schramm-Klein &
Zentes (2015) stated that the generic strategies are framed by the organizations in order to
achieve the long term goals relating to sustenance. The long term goals of the organization will
be helping the same to ensure the smooth functioning of the systems as per the needs of the
customers. In this relation, the strategic options that might be implemented by the concerned
organization is to analyze different local markets in Australia and thereby develop delicacies as
per the tastes and preferences of the local consumers.
The concerned organization implemented Cost Leadership strategy, which assisted the
business in minimizing the cost of the product offerings over the offerings made by the
competitors. The Cost Leadership strategy of the organization assisted the same in attracting the

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attention of majority of the customers as per the needs of attaining the competitive edge of the
business (Meyer, Neck & Meeks, 2017). The growth related strategies that are considered by
McDonald’s are focused on the concepts relating to market development, market penetration and
product development. The strategies helped the organization in maximizing the customer base of
the same in the Australian economies. Low cost and the higher quality of the product offerings of
McDonald’s assisted the venture in maintaining the efficiency of the operations in accordance to
the concerns faced by the customers.
The concerned organization undertook social marketing channels as the key options for
promoting the propositions. It has helped the organization in attracting the attention of huge
amount of potential customers. The concerned organization utilized vehicles like Facebook and
Twitter in order to maximize the engagement of the customers. Lasserre (2017) stated in a
research that more than 70% of the Australians between the age 17- 45 years utilize social media
platforms. Therefore, the enhanced utilization of the social media platforms will be helping the
organization in attracting the attention of the social media users towards the product offering.
The concerned organization must also take initiatives to enter countries in the Middle
East Australia in order to maximize the consumer base. The proposition of lower cost offerings
and effective services might be undertaken by the business in order to facilitate a wider
consumer base. The delineation of the customizable options on the recipes will be helping the
organization in maintaining the efficiency of the operations as per the needs of the business. The
evaluation of the different strategic options and implementation of a specific option on the
processes will be helping the organization in maintaining the efficiency of the operations as per
the needs of gaining competitive edge (Karadag, 2015).

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Final Recommended Strategy
The application of the generic strategies helps an organization in establishing the brand
name of the same. The multinational organizations implement diverse range of generic strategies
in order to maintain the competitive advantage of the same over the existing players in the
different markets. The strategies that are implemented by the organizations helps the same in
gaining a competitive edge (Hill, Jones & Schilling, 2014). The strategies that are
implemented by Mc Donald’s has helped the same in retaining the customer base. The strategies
have also helped the concerned organization in penetrating into different market sections in
Australia. The concerned organization adopted the cost leadership strategy, which assisted the
business in maintaining the efficiency of the operations. On the other hand, the uniqueness of the
propositions has helped the business in maintaining the efficiency of the operations as per the
concerns faced by the same (Jarillo, 2013).
The enhanced quality of the products and the lower cost of the same have helped the
business in maximizing the customer base in Australia. It has been reported that 89% of the
Australian customers prefer good quality products even at a higher price (Gamble & Thompson,
2014). Therefore, the concerned organization has gained a competitive edge over the other
players in the market through the proposition of good quality products at a reasonable price. On
the other hand, the differentiation strategy of the organization has helped the same in maintaining
the efficiency of the operations in accordance to the needs of the customers. Frynas and Mellahi
(2015) stated that the differentiation strategy of the business assists the same in enforcing
uniqueness of the propositions against the competitors. Therefore, the adherence to the

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differentiation strategy will be helping the organization in upholding the efficiency of the unique
propositions as per the diverse needs of the Australian customers.
Mc Donald’s must take steps to concentrate on the dense population of the different areas
in order to target large number of potential customers. On the other hand, the changes in the
production processes will be helping the concerned business in enhancing the chances of gaining
a competitive advantage over the other players in the market. The implementation of the
takeaway systems in the organizational operations will be helping the business in speeding up the
supply chain and production process. It will be helping the business in reducing the queue of
waiting customers, which will support the needs of the organization in maintaining the client
satisfaction rates.
Customer satisfaction through the product and services assists an organization in
retaining the existing customer base while attracting the attention of new customers to the
product offerings. On the other hand, the reduction of the queue lines will be helping the
business in enhancing the brand image of the business while operating as per the needs of the
customers. Engert, Rauter and Baumgartner (2016) stated that consumer satisfaction helps an
organization in building a strong brand image in the markets. Therefore, the strategy will be
helping the organization in enhancing the processes and thereby support the expansion in the
different regions of Australia.
Implementation of Final Strategy
Implementation of the strategies that are designed by the businesses support the need of
bringing forth improvements in the production processes. As per the case, the concerned
organization might implement the strategies in order to adhere to the needs of the urban

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customers and thereby make an aggressive expansion in the Australian markets. The strategy that
might be implemented by the concerned organization will be supporting the initiatives of the
same in relating to the specific needs of the customers. It has been reported that the organization
encounters 3 peaks where majority of the customers visits the stores which results to queues.
Therefore, the implementation of the strategy will be helping the organization in operating as per
the expectation of the customers. The key changes that might be undertaken by the organization
are based on maximizing the customer satisfaction. It will be helping the concerned business in
maintaining the efficiency of the operations as per the needs of the business.
The implementation of the strategy is basically dependent on the organizational
capabilities of bringing forth modifications the production process (Eden & Ackermann, 2013).
In this relation, the organization will have undertake a number of steps like training of staffs and
installation of different technologies which will support the smooth functioning of the systems as
per the objectives of the business. The strategic planning and testing procedures will be
undertaken by the business in order to identify the applicability of the process and thereby bring
forth modifications in the systems. The implementation of the process will be followed by a
monitoring and evaluation procedure, which will be helping the organization in understanding
the success factors of the change that is planned by the venture. The section will enumerate an
implementation plan for the organization, which will support the initiative of implementing the
processes in a systematic manner.
Activity Time period Responsible
Delineation of the objectives for the change process 2 week Strategic manager
Market analysis for understanding the core 3 month Market Analyst

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capabilities and competencies of the business
Designing a strategic plan for the change process 1 month
Strategic management
team
Framing the new procedure for enhancing the rate of
production
1 month
Food Analyzers and
Operational managers
Training and inducing the employees for enhancing
the rate of engagement of the same
5 months
Human Resource
Manager and Trainers
Advertising through the utilization of different media
vehicles
6 months
Online Marketing
managers
Conduction of Pilot Testing in certain countries 15 days Food Analyzers
Improvising the system 3 months Marketing managers
Implementation of the new procedure in the market 4 months Strategic Managers
Receiving feedback from the chief stakeholders 3 months Strategic Managers
Measuring success against the Key Performance
Indicators and monitoring the overall process for
enabling the smooth functioning of the same
1 year Strategic Managers

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Monitoring and Control of Future Performance
Brown and Bessant (2013) noted that Monitoring and Controlling of the newly formed
processes helps an organization in understanding the chief success factors. The organizations
take the sole responsibility of evaluating the process outcomes and thereby controlling the same
as per the strategic objectives of the business. Monitoring the processes and controlling the same
helps an organization in maintaining the efficiency of the operations in accordance with the
concerns faced by the same.
Barney (2014) stated that lack of proper monitoring and controlling mechanisms might
affect the organizational capabilities of measuring the success factors. Lack of proper monitoring
mechanisms also restricts the organizational capabilities of amending the loopholes in the
process, which might affect the brand name. Therefore, the Mc Donald’s must take steps to
evaluate the processes as per the needs of understanding the chief success factors and the
performance indicators.
The change that is being planned by Mc Donald’s is related to the introduction of faster
production systems, which will enable the organizations in adhering to the needs of the
customers (Carroll, Primo & Richter, 2016). The outcome of the strategic plan will be based
on the evaluation of the KPIs (Key Performance Indicators). Therefore, the monitoring and the
control mechanisms of Mc Donald’s will provide the same with the different KPIs, which will
help the organization in measuring the success factors of the business.
 Customer Attrition- The rate of customer retention should be improved through the
implementation of the new process as the system specifically aims at enhancing the rate
of customer satisfaction.

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 New customer acquisition- The implementation of the new process would help the
organization in acquiring the attention of the new customers.
 Profitability – The profitability of the outlets in the different regions will be collectively
taken in order to identify the total profits gained by the organization through the
implementation of the new process.
 Sales- The implementation of the new process would aim at enhancing the sales volume
through enhanced rate of productivity.
 Serving time per customer- The new process would reduce the service time for the
customers and thereby allow the organization in focusing on serving huge customer base.
Conclusion
Therefore, from the assessment of the factors it can be stated that Mc Donald’s must take
steps for utilizing its resources efficiently in order to adhere to the needs of the customers.
However, the analysis helped in enumerating different strategic options that might be considered
by the concerned organization in order to adhere to the demographic trends. The report also
enumerated different recommended strategies that might be undertaken by the organization in
order to boost the productivity and thereby gain a competitive edge in the market.
References
Barney, J. B. (2014). Gaining and sustaining competitive advantage. Pearson higher ed.
Brown, S., & Bessant, J. (2013). Strategic operations management. Routledge.

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Carroll, R. J., Primo, D. M., & Richter, B. K. (2016). Using item response theory to improve
measurement in strategic management research: An application to corporate social
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https://mcdonalds.com.au/

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