Strategic Analysis of McDonald's: Management Practices and Strategies

This report provides a comprehensive analysis of McDonald's strategic management practices. It begins with an introduction to the company and its global presence in the fast-food industry, emphasizing its unique position and market share. The report then explores the application of strategic management concepts, including the resource-based view and competitive advantage, to understand McDonald's success. It examines how the company leverages its resources, capabilities, and core competencies to gain a competitive edge. The report also discusses the influence of industry attractiveness and globalization on McDonald's strategies. Furthermore, it analyzes the company's approach to cost leadership, product uniqueness, and customization to create competitive advantages. The report concludes with recommendations for enhancing promotional strategies and expanding market reach, providing valuable insights into McDonald's strategic approach and its implications for future growth.

MANAGEMENT
ASSIGNMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK...............................................................................................................................................1
Example of strategic management practices................................................................................1
Resource based view....................................................................................................................2
Competitive Advantage...............................................................................................................2
Influence on strategic management practices..............................................................................3
RECOMMENDATIONS.................................................................................................................3
CONCLUSION................................................................................................................................3
REFERENCE..................................................................................................................................4

INTRODUCTION
McDonald is an American oriented internationally operating company having a wide market
share in number of national markets located world wide. It has acquired a unique position in fast
food industry, having a chain of restaurant located in different geographical regions. A frame
work have been presented below in the form of essay writing, for highlight the concept of
strategic management. The study work presented below includes explaining various theoretical
concepts enhancing application as well as effectiveness of strategies followed by the cited
corporation to acquire a positive brand image as a prominent fast food company. Mc Donald’s
extraordinary performance in food industry can be accredited to its core competence utilized to
provide a tough competition to its rivals, attempting to acquire the market share possessed by
cited corporation (Porter, 2011).
TASK
Example of strategic management practices
The organization considered in the report, has set its image as that of a role model for
number of fast food chains existing in food industry. Globalization concept of international
marketing has enable the cited entity to exploit number of benefits confronted. Effectiveness of
unique strategies have been a major reason behind overall performance of Mc Donald. Strategies
framed by top most executives, focus on enhancing internal strengths as well as considering
impact of strategies followed by competitors. Surviving in competitive business environment
requires number of procedures to be carried out for providing higher level of satisfaction to
customers by catering their personnel needs.
Industry attractiveness: Mc Donald company is a part of fast food industry providing
hamburgers, cheese burgers, french fries and cold drinks, etc, to its customers. Number of
customers follow different ideologies and preferences. However, they are assumed to follow a
common liking for fast food items. It has therefore exploited the benefits provided by operating
in food industry to a greater extent. Considering statistics on global basis, it has been observed
that there has been a sudden increase in liking for fast food products by different customer world
wide. Food industry of different regional markets has provided ample of opportunities for cited
entity to establish number of outlets catering needs of its customers (De Wit and Meyer, 2010).
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Factors prevailing in industrial environment of food industry have impacted positively for
enhancing brand image of number of products served by Mc Donald.
Resource based view
Analyzing availability of required resources, capabilities and core competence of Mc Donald
provides a clear picture for highlighting factors behind its current financial stability. Number of
resources are required for effectively applying strategies framed by cited organization. It can be
included here undoubtedly that Mc Donald has acquired maximum market share of fast food
industry by effectively utilizing available resources and carrying out production as well as
promotional activities in an appropriate manner. The cited organization has gathered required
financial resource on the basis of earning obtained through royalty and franchising fees paid by
number of franchisee. It also has a control on bargaining power of suppliers of ingredients
required for producing quality assured fast food items that can be relished by customers.
Moreover, its uniqueness in producing mouth watering food items including variety of burgers
specially, is itself its core competence. Catering different tastes of number of customers, it has
been introducing new range of burgers that is one of its core competence. For example, Mc
Donald has introduced Mc Spicy Chicken Fillet for its customers in Hong Kong (Barney, 2012).
Competitive Advantage
In common parlance, Competitive Advantage is all about positioning current brand image
of cited organization with respect to position of competitors in the market. Michael Porter has
provided three aspects for differentiating an organization among number of competitor existing
in food industry. Starting with cost leadership, Mc Donald has been providing food products at a
very nominal rate so that these can be afforded by medium class customers. Medium class
customers dominate the total percentage of customer and the fact has been considered by cited
entity. Customers prefer to relish these products during traveling as they can obtain easily on
account of drive thru facilities provided to travelers. Another aspect considered is uniqueness of
products that differentiates the cited organization from other fast food provider companies in
international market. The special crunch provided in french fries along with minimal oil usage
have created a liking for other Mc Donald’s product too, as customers are attracted to try them.
Lastly, focusing on customization has enabled the organization to create a competitive advantage
against its competitors such as KFC, Domino's pizza, etc. It has fulfilled required taste
preferences of different customers.
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Influence on strategic management practices
Various theoretical concepts explained in above sections have impacted list of strategies
followed by the cited organization to a greater extent. Competitive advantage and the manner in
which resources are utilized by the cited organization is the blue print of its success in
international market. For maintaining a permanent position in food industry, Mc Donald has
framed a strategy to deliver quality assured products and services to ensure core competence for
leading the market. Analysing strategies and policies of competitors and acting accordingly to
pull potential customers requires great deal of focus on effectively using various resources. For
managing various activities, Mc Donald considers researching market condition to understand
trends prevailing in market using theoretical concepts of management (Gebauer, Gustafsson and
Witell, 2011).
RECOMMENDATIONS
McDonald must focus on enhancing effectiveness of promotional strategies applied
usually. For surviving in competitive environment, it must increase its level of participation for
sponsoring various campaigns and activities to promote brand image. Strategies framed for
distribution of financial resources must include investing in functional activities that would
enable the cited organization to expand its scope of activities in areas that have not been accessed
till date (Wong and Karia, 2010).
CONCLUSION
It can be concluded here that Mc Donald has attained a super position in fast food industry by
applying various theoretical concepts effectively. Moreover, core competence of providing
standard products at a very nominal rate has enabled it to provide a strong defeat to number of
competitors. Thus, benefits of globalization have been exploited efficiently for securing a
position in international business environment.
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REFERENCE
Books and Journals
Allred, C.R., Fawcett, S.E., Wallin, C. and Magnan, G.M., 2011. A dynamic collaboration
capability as a source of competitive advantage. Decision Sciences. 42(1). pp.129-161.
Barney, J.B., 2012. Purchasing, supply chain management and sustained competitive advantage:
The relevance of resource‐based theory. Journal of Supply Chain Management. 48(2).
pp.3-6.
De Wit, B. and Meyer, R., 2010. Strategy synthesis: Resolving strategy paradoxes to create
competitive advantage: Text and readings. Cengage Learning EMEA.
Gebauer, H., Gustafsson, A. and Witell, L., 2011. Competitive advantage through service
differentiation by manufacturing companies. Journal of Business Research. 64(12).
pp.1270-1280.
Kindström, D., 2010. Towards a service-based business model–Key aspects for future
competitive advantage. European Management Journal. 28(6). pp.479-490.
Porter, M.E., 2011. Competitive advantage of nations: creating and sustaining superior
performance. Simon and Schuster.
Thompson, A., Peteraf, M., Gamble, J., Strickland III, A.J. and Jain, A.K., 2013. Crafting &
Executing Strategy 19/e: The Quest for Competitive Advantage: Concepts and Cases.
McGraw-Hill Education.
Wagner III, J.A. and Hollenbeck, J.R., 2014. Organizational behavior: Securing competitive
advantage. Routledge.
Wong, C.Y. and Karia, N., 2010. Explaining the competitive advantage of logistics service
providers: A resource-based view approach. International Journal of Production
Economics. 128(1). pp.51-67.
Online
What Is Competitive Advantage? 3 Strategies That Work. 2017. [online]. Available
through:<https://www.thebalance.com/what-is-competitive-advantage-3-strategies-that-
work-3305828> [Accessed on 12th January 2017].
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