Business Research Methodology: Mc Donald's Company Analysis

This report presents a comprehensive business research analysis of Mc Donald's, examining its environmental factors, competitive advantages, and marketing strategies. The research employs SWOT and PESTLE analyses to evaluate the company's strengths, weaknesses, opportunities, and threats, as well as its political, economic, social, technological, environmental, and legal factors. The report also explores Mc Donald's competitive forces using Porter's Five Forces model, analyzes its marketing strategies including segmentation, targeting, and positioning, and discusses the 4Ps of its marketing mix. Furthermore, the report offers recommendations for the company's future growth, such as increasing integrated marketing communications and expanding into emerging markets. The research successfully meets its objectives, providing insights into Mc Donald's management structure and strategic positioning in the fast-food industry. The methodology includes primary and secondary research, with limitations noted in the field research level.

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MC DONALD’S COMPANY OVERVIEW AND ANALYSIS
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Abstract
The report is based on research analysis of MC Donald’s company. The main scope of the
research is generally characterized by three research hypothesis. These include environmental
analysis and evaluation, company competitive analysis, and the marketing structure and size in
terms of distribution in the international market. MC Donald’s company is considered as one
best and biggest fast-food company in the entire world serving approximately more 40 million
customers on daily basis. Based on the SWOT and PESTLE analysis conducted on Mc Donald’s
environment situation, the company poses a significant competitive advantage both in its chain
structure and brand position (Vrontis and Pavlou, 2008). The organization structure and system
of Mc Donald’s management is considered one of the best and most effective in the entire fast-
food industry. This has led to an increase of loyal customer’s base which offers Mc Donald’s
great competitive advantage over its rivals (Eriksson and Kovalainen, 2015). With the Mc
Donald’s franchise network of over 31,000 branches, the company has significant control of the
entire fast-food market share in the provision of sustainable and quality standard services. The
main recommendations that the company should consider is increasing integrated marketing
communications in all its major markets and increase its market expansion in potential emerging
markets such as China and India (Chan et al., 2012). In summary, the business research done on
Mc Donald’s has been very successful in meeting the set objectives of the research and an
increase in the understanding management structure of the fast-food multinational company.

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Table of Contents
Abstract............................................................................................................................................2
Introduction/Background Analysis..................................................................................................5
Research Methodology....................................................................................................................6
Mc Donald’s Environmental/Situational Analysis..........................................................................7
SWOT Analysis of Mc Donald’s Company................................................................................7
The strength of Mc Donald’s...................................................................................................7
Weaknesses of Mc Donald’s...................................................................................................8
Opportunities for Mc Donald’s................................................................................................8
Threats of Mc Donald’s...........................................................................................................9
PESTLE Analysis of Mc Donald’s Company.............................................................................9
Political/Legal Factors.............................................................................................................9
Economic Factors..................................................................................................................10
Social Factors.........................................................................................................................10
Technology Factors...............................................................................................................11
Environment Factors..............................................................................................................11
Analysis of Mc Donald’s Competitive Forces...............................................................................12
Porters Five Forces....................................................................................................................12
The threat of New Entrance...................................................................................................12
Power of Suppliers.................................................................................................................12

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Threat of Substitutes..............................................................................................................12
Buyers’ Power.......................................................................................................................13
Threats of Rivalries................................................................................................................13
Competitive Advantages of Mc Donald’s.................................................................................14
Mc Donald’s Marketing Strategies................................................................................................15
Segmentation, Targeting, and Positioning in the Market..........................................................15
Market Mix of Mc Donald’s- The 4 p’s....................................................................................17
Product...................................................................................................................................17
Price.......................................................................................................................................17
Place.......................................................................................................................................18
Promotion..............................................................................................................................18
Discussion and Recommendations................................................................................................19
Conclusion.....................................................................................................................................19
Bibliography..................................................................................................................................19
Appendices....................................................................................................................................19

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Mc Donald’s Company Overview and Analysis
Introduction/Background Analysis
The following report is based on research analysis of MC Donald’s company. The main
scope of the research is generally characterized by three research hypothesis. Under each topic,
there is a comprehensive analysis of the results in focus on the factors that affect MC Donald’s
and their relative solution(s). The first research topic focuses on MC Donald’s environmental
positioning by measuring its strength and weaknesses. The second topic will analyze the
company market structure and its competitive advantages over its rival competitors. The third
research topic will focus on analyzing the marketing structure and size in terms of distribution in
the food industry and an international company. These research will broadly characterize the
company features as an international fast company and its bargaining and supply power in the
market. Basically, the research will focus on understanding MC Donald’s strategy management
distribution in its major operational branches.
Generally, the objective of the research is to understand business strategies, their
evaluation, and in line the implementation of business research methodology. The report also
outlines the understanding of the environmental structure of the company and the factors that
influence its performance structure. Basically, the main objectives include;
 One of the main priorities of the research is to produce a conclusive assessment of the
company’s environment and its surrounding factors which may influence the company
normal functioning.
 To have a conclusive idea and analysis of MC Donald’s competitive advantages and
position in the fast-food industry both in the local and international market.

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 Gain an understanding of the company Marketing strategic formulation and how the
company is able to meet its various objectives and goals as an international company.
 To generally attain an understanding of the advantages and disadvantages of different
management strategies.
MC Donald’s company is considered as one best and biggest fast-food company in the
entire world serving approximately more 40 million customers on daily basis. The company has
been in existence in the food industry for almost more than 77 years now. The company was
started by Richard and Maurice McDonald, in the year 1940, a just as a small restaurant in
California State. Since then, the company has grown to be the largest “restaurant chain” in the
world (Eriksson and Kovalainen, 2015). MC Donald’s is currently established in over 100
countries around the world thus also becoming the biggest earning revenue fast food company in
the United States and one of the best in the world. Most of the MC Donald’s restaurants around
the world are operated by franchises (Bryman and Bell, 2015). As per 2017 financial report, the
company reported a total revenue of 22.82 billion U.S. dollars. Major the company earns revenue
from sales in the restaurants, royalties, rents, and franchise fees.
Research Methodology
The main methods used for data collection are broadly characterized into two ways which
are the primary and secondary source. The primary sources have been utilized in the research in
several ways but generally in direct contact with MC Donald’s customers, employees, and the
management. The main scope of the primary field research was to identify the company real-
time effectiveness as a fast-food multinational company. The secondary sources were basically
reading materials such as books, articles, journals, and also some websites such as the MC

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Donald’s company website. Through the secondary sources, the aim of the research has been
comprehensively covered in terms of business management strategies and marketing strategies.
Majorly, the main data collection method that was utilized in the research is observation since
the nature of data was conceptual and also the report was more descriptive. The main limitation
of the study was mainly the field research level since it missed out a lot of important details of
the main research objectives due to unreliable practical situations.
Mc Donald’s Environmental/Situational Analysis
SWOT Analysis of Mc Donald’s Company
SWOT analysis is normally used to identify organization strength and weaknesses. It’s
categorized into four specific areas which are “Strength, Weaknesses, Opportunities, and Threats
of the company. The analysis is also focused on evaluating the microenvironment of an
organization and how it performance is affected by the envrionment situations (Dess, Lumpkin,
and Eisner, 2014).
The strength of Mc Donald’s
Through the company existence in over 78 years, it has managed to gain and portray a
significant experience in the fast-food industry in the world. The company main management
team are considered with high-level skills where most of the managers are promoted from
assistant managers. With this, the company has a wide skill range of management staff who more
than capable of dealing with unpredicted challenging situations (Dess, Lumpkin, and Eisner,
2014). Mc Donald’s company is currently operating in over 100 countries all over the world
whereas per last year annual revenue income the company reported approximately 22.82 billion
U.S. dollars. Approximately 80% of the company total restaurant are mainly controlled by

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franchises. Through the power of the franchise in most of the involved communities, the
company has been able to utilize most of its market capital share (Kotabe and Helsen, 2014). The
company has also a very effective supply chain which is related to the quality and safety of food
and services. This is can be majorly characterized as one of the main strength of the company
market share.
Weaknesses of Mc Donald’s
With the recent financial posts, the company has continued to experience fluctuation in
profit gain. The changes have also continued to occur with increase healthier food initiatives in
the world and the move to safer diet food (Gupta, 2011). Despite the strong company brand, the
company has been criticized for its less innovative strategies in maximizing its brand structure.
On the same note, there has been also reported cases of brand affiliation between Mc Donald’s
management and the involved franchises. Unlike other fast-food companies, Mc Donald’s has
also been lagging behind in service delivery and brand innovation. The issue has likewise been
characterized to continue to occur due to company operation dominance by franchises (Rohn et
al., 2014).
Opportunities for Mc Donald’s
One of a basic feature that suits Mc Donald’s is its food industry position. Despite the
economic challenges that may occur in the future, food is a basic human need that cannot be
ignored. There is an expectation of significant change in the rise of company revenue income
through an emphasized focus in inventing new food brand. The response to the new brand
innovation should specifically emphasize on healthier diet food which is now considered as a
critical issue in global health focus. The company has also expansion capabilities especially in

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emerging markets in Asia (Chan et al., 2012). Through this, Mc Donald’s will have an increased
capability in stretching its control power in market share. Mainly, this will be enhanced through
consideration of technological growth and adaptation and strategizing new brand segments such
as “McCafe’s” (Kotabe and Helsen, 2014).
Threats of Mc Donald’s
As stated earlier, one of the major concerns of Mc Donald’s as fast-food company is the
rise of junk food awareness. Example, in America obesity, and most chronic illnesses have been
related to the poor eating diet of the American population. This has also been the same case in
most company operational regions. Through the issue of fast-food as a national health issue,
major governments have enacted high levels of taxation to reduce the consumption rate junk
eating habits. The issue has correspondingly affected Mc Donald’s income generation in various
ways (Vrontis and Pavlou, 2008). The other threat factor for the company has been a constant
increase in competition in the market with rivals such as Starbucks, KFC, Burger King, and
Subway continuing to increase their performance level and position in the market. It’s also
considered that economy threat is another major concern to be considered for Mc Donald’s
current and future performance (Zhang and Zhou, 2012).
PESTLE Analysis of Mc Donald’s Company
Political/Legal Factors
One of the major factors every multinational corporation should consider is a political
and legal factors of a country or state. Example, Mc Donald’s has experienced a number of legal
issues concerning trademark an example is McDonald's Coffee Case in the year1994 (Grant,
2010). The issue of health concern in food control is one of the major legal concerns Mc

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Donald’s faces on daily occurrences (Nagle and Müller, 2017). Some of the issues that have
affected the Mc Donald’s are a concern for public health which led to the imposition of strict
policies and high taxation. Through political instabilities in various franchises regions, they also
directly or indirectly affect Mc Donald’s overall performance and its brand image. Example, in
the major Islamic States Halal food authorization is a significant issue that must be considered by
food industries companies. Ideally, this shows the company’s respect for regions beliefs and
cultural rules in relation to providing effective customer service (Papadopoulos and Heslop,
2014).
Economic Factors
Different countries and regions have different economic performance and challenges.
Through this, Mc Donald’s economic strategic positioning is altered by various factors which
directly influence its revenue income. Unlike in the recent years, the company has progressively
continued to reduce its debt level (Quinlan et al., 201l). Through the company capability to pay
its long-term debt effectively, its competitive advantage has similarly continued to increase. The
different currency exchange rate has also impacted Mc Donald’s profit rate (Kotabe and Helsen,
2014). Mc Donald’s economy variation is one of its significant challenge especially in price mix
where if the rise of raw material in some specific regions cause the rise of product(s) prices this
will also cause a decrease in customer base.
Social Factors
The society today is becoming very conversant in issues such as health and eating diet.
Basically, in America, more than 80% obesity and chronic illnesses are related to poor diet and
junk food. This can be categorized as one of the major issues that Mc Donald’s faces today. Over

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the years, Mc Donald’s has enjoyed significant brand recognition but with the recent change in
customer taste and preference, the company must create more 'Healthy Lifestyle' programs that
will be socially accepted in the company market share (Kotler and Lee, 2008). The recognition
of different cultural background and trends of various respective regions should be a key
strategic factor in creating more appreciated brands by the respective society. Through this, Mc
Donald’s has significant market influence through its franchises by relating more directly with
the local markets (Zhang and Zhou, 2012).
Technology Factors
The change of technology in the previous decade has significantly changed the entire
global business structure. Majorly, this has been characterized by the change in customer service
standards. Mc Donald’s company has been significantly affected by the change in technology
where the company has continued to restructure its supply chain to meet the customer needs and
wants (Yuece, 2012). Example, Mc Donald’s has emphasized its focus in creating more quick
and easy payment facilities, online services, internet facilities, customer entertainment
equipment’s, etc. With this in mind, Mc Donald’s also utilizes systems which are considered to
be more environmentally friendly and also reduce saving in operation cost of the company. This
has also mainly attributed the positive in reduction customer service cost (Ahmed and Rafiq,
2013).
Environment Factors
Mc Donald’s has faced a series of criticism in the use of non-biodegradable materials
such as plastics cups for drinks which have a significant effect in its surrounding environment.
The food delivery of Mc Donald’s is one of the majorly criticized issues i.e. the matter of food

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packaging based on polystyrene and Styrofoam containers (Feng, 2010). Like in most of the big
corporations in the world, Mc Donald’s should increase its emphasis on environmental
sustainability and more customer care health programs in eliminations of toxic substances in its
service operations. The other issue that Mc Donald’s should reconsider is the reduction of carbon
emission in its related operation by incorporating more advanced environmental technologies.
Analysis of Mc Donald’s Competitive Forces
Porters Five Forces
The threat of New Entrance
With the recent changes in globalization in businesses, the threat of new entrants in the
market has continued to increase due to a decrease in restrictions and increase in market demand.
The significance of a new entrance in the market is considered to be very important especially if
the competitor has huge brand recognition in the market (Yuece, 2012). Through this, Mc
Donald’s faces high competition level from its major operation regions such as America, Europe,
and Asia. Example, Starbucks market dominance in the fast-food industry has continued to
increase with its focus looking emphasized in recapturing Mc Donald’s already existing areas
(Zhang and Zhou, 2012).
Power of Suppliers
The power of suppliers is considered as very crucial matter especially to multinational
companies. The continuous operation of any company or organization significantly relies on the
effective supply relation that is able to the meet the standards of the raw materials required for
production (Quinlan et al., 2011). As a fast-food company, the power of suppliers is one of the
major competitive forces that Mc Donald’s critically approaches to meeting the required