Analysis of Mc Donald's Macro Environment and Marketing Strategies

This report delves into the macro environment of McDonald's, examining the socio-cultural and technological forces that have shaped the company's operations. It analyzes the potential impact of various elements, such as competitive advantage, segmentation, targeting, positioning (STP), and branding, on McDonald's marketing strategies, highlighting how these factors influence marketing decisions like paid media advertising and direct selling. The report further explores specific growth opportunities within McDonald's macro environment, providing a comprehensive overview of the challenges and adaptations required for building and marketing a high-performing organization in the fast-food industry. The analysis covers the changes in the macro environment forces and the elements that impact the marketing strategies of the company. Furthermore, the report includes a discussion on the significance of competitive advantage, STP, and branding for the company.

Building and
Marketing High
Performing
Organisations

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Summary on changes in any of the macro environment forces of the organisation................1
2. Potential impact of different elements on marketing strategies...............................................2
3. Specific growth opportunities in the macro environment of the company..............................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
In current era, it is very difficult to perform activities regarding building and marketing
high performing organisations due to influence of macro environment. In order to execute all the
business operations and attain long term business goals, it is very important to focus on such
activities as with the help of them all the objectives could be achieved successfully. For all the
companies, it is very important to make sure that all elements that are affecting macro
environment are taken into consideration so that possibility of their unfavourable impacts could
be reduced (Carlos Pinho, Paula Rodrigues and Dibb, 2014). The organisation which is selected
for this report is Mc Donald's which is one of the successful multinational companies executing
business all around the world. It was founded by Maurice and Richard Mc Donald's in year 1955.
This assignment covers various topics such as summary of change in macro environment
forces, potential impact of different elements on marketing strategy. Along with this, specific
growth opportunities in macro environment are also covered under this report.
MAIN BODY
1. Summary on changes in any of the macro environment forces of the organisation
Macro environment: It can be defined as the condition which exists in the economy of
different countries and affect the organisations that are executing operational activities within it.
There are various forces of it which includes demographic, economic, political, ecological, socio
culture and technological (Macro environment, 2019). Mc Donald's is one of the largest
multinational food chains. Some of the forces which are related to the organisation and changed
in last years are as follows:
 In last few years, socio culture forces of Mc Donald's have been change because as time
passes it results in changes in tastes and preferences of customers regarding food
products. Due to this, organisation have to make changes in food items that are sold to
consumers to meet their expectation level.
 Technological forces of Mc Donald's have been changed in last few years which has
resulted in introduction of different new techniques such as self ordering kiosks within
the organisation. Now in most of the outlets of it, such types of technologies could be
seen.
1

2. Potential impact of different elements on marketing strategies
Every organisation is required to conduct marketing activities so that all the awareness
regarding different products could be spread among customers. For this purpose, different
strategies are adopted by companies which helps them to provide detailed information of each
and every item to the clients. Mc Donald's is one of the largest multinational companies and it is
very important for it to focus on different elements which may leave potential impact of its
marketing activities (Chaffey and Ellis-Chadwick, 2019). All these factors are discussed below
in detail:
Competitive advantage: It can be defined as an ability of organisations which helps them
to compete with the other companies which are operating business in same sector. With the help
of it, long term business objectives such as profit maximisation can be achieved because it helps
to present a differentiating image of company in front of customers. Mc Donald's take initiative
in conducting marketing activities in order to spread awareness regarding different food items
that are offered by it. If an enterprise is not able to form strategies that are vital to market
products, then it may affect customer base because due to this the products will not be marketed.
For example, if Mc Donald's is not able to achieve competitive advantage or it is having a higher
level of it then potential favourable or adverse impacts in both the situations are described below:
 High level of competitive advantage helps to distinguish different products from others.
With the help of it, large number of customers could be attracted and brand loyalty could
be enhanced. When it is high, then organisation can set high price for its products as
customers will pay higher amount to consume the goods. Without it, it will be difficult
for organisations such as Mc Donald's to survive in market and compete with
competitors (Cummings and Worley, 2014).
 With the help of high competitive advantage, Mc Donald's can perform better in the
market as it helps to increase sales, profits and large number of customers.
 In order to achieve it, Mc Donald's adopts all the macro environment changes which
helps it to capture large market share by fulfilling all the expectations and needs of
clients.
 It may leaves potential impact on the organisation by making it elusive in the market as
unique products are offered by Mc Donald's to all the customers.
2

 High competitive advantage helps to improve the business image which is beneficial for
Mc Donald's and other companies as it may helps to attract large number of consumers.
 If Mc Donald's is not able to achieve competitive advantage, then it will affect the
process of business execution and the company will not be able to survive in the market.
 Lack of competitive advantage can result in decreased ability of the organisation to deal
with high level of competition available in the market.
Due to all the above described points, marketing strategy such as paid media advertising
of Mc Donald's get affected because marketers have to make changes in the plans according to
the position of the company. When competitive advantage is high, then they have to form
strategies to maintain it and if it is very low, then they have to from decisions effectively so that
it could be acquired to reach the long term goals. In both the situations, strategies will be
formulated by taking different elements in to consideration so that it can result positively for the
company (Dixon, Meyer and Day, 2014). In order to enhance competitive advantage
organisation is using innovative strategy by operating its business activities in new ways. Its
benefits for the company is that it helps to attract large number of customers by providing them
new eating items. Drawback of this strategy is risk involved in it because it is not easy to use
innovative ways to run business operations.
Segmentation, targeting and positioning: These are three different elements which are
focused by marketers while formulating marketing strategies such as paid media advertising,
direct selling, word of mouth etc. All of them are also taken in to consideration by Mc Donald's
in order to reach the long term business objectives such as attracting large number of customers.
Description of all of them with impact on marketing strategy is as follows:
Segmentation: It can be defined as the process of dividing customers in small groups on
the basis of age, personality traits, behaviour, age, gender, income level etc. While planning for
marketing activities, all these elements are focused by marketers of Mc Donald's. There are four
different types of segments such as geographic, demographic, psycho-graphic and behavioural.
In geographic segment, company formulate marketing strategies by taking different areas
in to consideration. As consumer preference regarding food vary country to country, so Mc
Donald's focus on all of them and form plans accordingly so that clients could be aware
regarding food items offered by it.
3

In demographic segment, all the customer are divided into groups according to age,
gender, income etc. Customers of all the ages and gender have different preferences regarding
food. For example, people in age group of 18 to 35 prefer spicy food and on the other hand,
individuals in the age group of 40 to 60 prefer less spices in their food. All the factors are
focused by Mc Donald's while preparing food items and they also conduct marketing activities
according to them (Feng, Morgan and Rego, 2015).
In psychographic segment, companies focuses on lifestyle, activities interest and opinion
of customers in order to retain them for a long period in future. While formulating marketing
strategies, marketers in Mc Donald's takes buying behaviour of customers in to consideration
which helps to aware them regarding the food items offered by organisation to them.
While focusing on behavioural segment, companies segregate customers on the basis of
their behaviour, usage and decision making patterns. While formulating decision regarding
buying anything to eat, customers tend to evaluate several elements. All of them are focused by
Mc Donald's to provide them such food items to eat that they are willing to have. For
segmentation demographic strategy is used by Mc Donald's. Its advantage for the company is
that it helps to meet the expectation level of all the customers by dividing them on the basis of
age, gender etc.
Targeting: It can be defined as the process of analysing target market of the company in
which companies select a specific group of targeted customers. Mc Donald's mainly target
children, their parents, teenagers and business clients of all the ages. Marketing activities get
impacted due to target segments because when company select a specific segment to target then,
it is very important for the company to formulate strategies to market products accordingly
(Katzenbach and Smith, 2015). In order to target the selected market segment Mc Donald's is
using marketing mix strategy which helps to analyse all the four major elements to meet
expectations of customers these are product, price, place and promotion. Its negative aspects are
that due to this strategy organisation will not be able to focus on other three main elements
people, process and physical evidence.
Positioning: It can be defined as the process which is followed by the companies to
establish a good image of the brand in the mind of customers. For this purpose, different ways
could be adopted by organisations which includes value proposition, unique selling proposition
etc. While planning for marketing activities, marketers in Mc Donald's take all of them in to
4

consideration as it helps them to form marketing strategies in appropriate manner. In order to
position the products in the mind of clients Mc Donald's is using pricing as a positioning strategy
in which price is set by the company for its items according to the market segment. Negative
aspect of it is that due to this upper class customers may think that the items that are sold by the
company are not made for them if they are having low prices.
From the above discussion, it has been assessed that segmentation, targeting and
positioning may leave impact upon marketing strategies such as direct selling, word of mouth
etc. because marketers are required to form effective strategies according to requirements of
business. When planning to market different food items, Mc Donald's analyse change in all these
elements because all the activities are based upon them. If company make alteration in its
positioning strategy then it will become vital to take this modification into consideration while
marketing. Change in segment and targeted customers also affect it because if company switch to
a new market then it results in variation in these elements. Hence, it is very important for the
marketers of Mc Donald's to focus on them so that effective marketing strategy for marketing
could be formulated. If they are not able to modify the plan according to the changes, then it may
leave negative impact upon the market image of company.
Branding: It can be defined as the process of distributing merchandise to brand with a
symbol, logo or slogan. While formulating decisions regarding marketing activities for different
products, it is very important for Mc Donald's to focus on branding. While conducting such
activities marketers takes branding in to consideration because main aim of marketing is to
establish a positive image of company in the mind of customers.
If they are not able to focus on all of them, then it will become difficult for the
organisation to aware customers regarding the food items that are offered by it to them. When
marketers take branding in to consideration while formulating strategies for direct selling and
word of moth, then it can help to accomplish goals such as attracting large number of clients
(Nieves and Haller, 2014).
In Mc Donald's marketers try to reflect effective image of company in front of customers
by using brand logo, symbol and tag line. All these elements are part of branding and if they
ignore such factors then it can affect whole organisation and fail different marketing campaigns
which are conducted for betterment of the entity. With the help of it, customers will be able to
gather information regarding various elements such as organisation's core value, principles,
5

mission and ability of fulfilling their needs (Proctor, 2014). For branding purpose, Mc Donald's
is using name brand recognition strategy which is very beneficial for the company as it helps to
be easily recognisable by the customers. On the other hand its negative aspects includes over
branding and increased expectations of clients. If company fails to meet them then it can affect
brand image of the organisation.
Main purpose of formulating marketing strategies is to deliver message of the brand and
products that are offered to the customers. Hence, it very important for marketers of Mc Donald's
to be aware of branding so that awareness of food items among customers could be spread. In
some of the circumstances such as lack of information regarding brand and branding, it could be
ignored by marketers. In this situation, marketing activities may get affected because without
having proper knowledge of business, it is not possible to form the plans to market products.
3. Specific growth opportunities in the macro environment of the company
In order to attain growth, it is very important for all the companies to analyse
opportunities available within the macro environment so that best suitable from all of them could
be adopted. Two specific growth opportunities for Mc Donald's are as follows:
Revamping menu cards: Now a days, people are becoming health conscious which has
resulted in increased awareness among them. Due to this, their demand for healthy and tasty food
is also increased. This market trend create various growth opportunities for companies such as
Mc Donald's to revamp their menu cards so that demand of all the clients could be fulfilled
(Sparrow and Makram, 2015). In order to take advantage from it, managers within organisation
may introduce some healthy but tasty items in the menu which can help it to satisfy the
customers and enhance their retention rate. With the help of it, inclination in the number of
consumers could be maintained by selling them such food items that they are willing eat. It can
also help to maintain the level for the years to come in future. It is one of the major opportunities
which could be acquired by Mc Donald's to attain growth and development in future.
Using speedier payment methods: In order to attract large number of customers, it is
very important for the companies to reduce waiting time for them. With the help of it, they will
have to wait for less time to making payment for the products that they are going to buy in
future. There are various new and innovative techniques which could be used for this purpose.
These are eWallets, mobile in store payments and applications, payment through social media
platforms and digital currencies (Vargo and Lusch, 2014). All of them are advanced options to
6

reduce the time which client have to spend while placing order and making payment. Mc
Donald's is one of the largest food chains in the world and to take advantage of it the enterprise
can adapt this trend and enable the feature of quicker transaction for the customers. With the help
of it satisfaction level of them could be increased which may result in higher growth for the
company. In order to become a developed organisation it is very important for Mc Donald's to
make sure that in its all the out lets all around the world new and innovative mediums are used
for taking payments and reduce waiting time for customers.
Both the above described specific opportunities could be adopted by Mc Donald's to
acquire growth in future and reach to the long term business objectives. If managers within the
organisation are not able to make changes in organisational policies then, it can affect the
business negatively in future. In order to resolve all their concerns, Mc Donald's can focus on the
growth opportunities and take advantage of them (Wirtz and Lovelock, 2016).
CONCLUSION
From the above project report it has been concluded that, all the business entities should
focus on macro environment as it can help to analyse potential negative or positive of different
forces such as economic, political, socio cultural, technological etc. There are various elements
which may affect marketing strategy of the companies. These are competitive advantage,
segmentation, targeting, positioning and branding. While formulating strategic decision for
marketing activities it is vital for marketers to take all of them in to consideration. It is very
important for the companies to identify growth opportunities in macro environment and take
advantage of all of them to attain development.
7

REFERENCES
Books and Journals:
Carlos Pinho, J., Paula Rodrigues, A. and Dibb, S., 2014. The role of corporate culture, market
orientation and organisational commitment in organisational performance: the case of
non-profit organisations. Journal of Management Development. 33(4). pp.374-398.
Chaffey, D. and Ellis-Chadwick, F., 2019. Digital marketing. Pearson UK.
Cummings, T. G. and Worley, C. G., 2014. Organization development and change. Cengage
learning.
Dixon, S., Meyer, K. and Day, M., 2014. Building dynamic capabilities of adaptation and
innovation: A study of micro-foundations in a transition economy. Long Range
Planning. 47(4). pp.186-205.
Feng, H., Morgan, N. A. and Rego, L. L., 2015. Marketing department power and firm
performance. Journal of Marketing. 79(5). pp.1-20.
Katzenbach, J. R. and Smith, D. K., 2015. The wisdom of teams: Creating the high-performance
organization. Harvard Business Review Press.
Nieves, J. and Haller, S., 2014. Building dynamic capabilities through knowledge
resources. Tourism Management. 40. pp.224-232.
Proctor, T., 2014. Strategic marketing: an introduction. Routledge.
Sparrow, P. R. and Makram, H., 2015. What is the value of talent management? Building value-
driven processes within a talent management architecture. Human resource
management review. 25(3). pp.249-263.
Vargo, S. L. and Lusch, R. F., 2014. Evolving to a new dominant logic for marketing. In The
Service-Dominant Logic of Marketing (pp. 21-46). Routledge.
Wirtz, J. and Lovelock, C., 2016. Services marketing. World Scientific Publishing Company.
Online
Macro environment. 2019. [Online]. Available through:
<https://www.marketing91.com/what-is-macro-environment/>
8