McDonald's UK: Market Analysis, Competitive Strategy & Response

This report examines McDonald's position within the UK fast food industry, highlighting its competitive strategies and responses to market changes. It discusses the company's adaptability to consumer tastes, innovative marketing approaches, and operational adjustments in the UK market. The analysis includes a comparison with Burger King, focusing on pricing, brand values, and customer loyalty. The report also offers recommendations for McDonald's to further enhance its market presence, particularly regarding health concerns and sustainable practices. Desklib provides access to similar business reports and study resources for students.

BUSINESS EXTENDED BUSINESS PROJECT
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Table of Contents
Part 2...............................................................................................................................................2
Introduction....................................................................................................................................2
UK fast food industry keeping MacDonald’s in special focus................................................3
Competitive positioning of MacDonald’s...................................................................................5
First company response to market changes.............................................................................7
2nd company response to market changes................................................................................8
Recommendations........................................................................................................................8
Conclusion......................................................................................................................................9
Reference List:............................................................................................................................10
Part 2
Introduction
This research highlights the fast food industries in UK and how they have been catering
to the increasing global demands of customers. Macdonald’s in UK is coming up with
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delicious burgers to fulfill the hungry needs of young generation. This research also
highlights the market size of fast food industry in UK context and which brands are
mostly catering to the tastes of UK consumers. The preference of consumers regarding
fast food types is also discussed in this study. Moreover, this research also highlights
how Macdonald’s is gaining a unique place in the fast food scenario of UK context.
UK fast food industry keeping MacDonald’s in special focus
Macdonald’s has been ever flexible in its approach, which have helped a great deal
regarding its operations in the global sphere. UK fast food industry is gaining a new
dimension through Macdonald’s. This company has been successful in assessing the
consumer tastes and preferences in this fast paced world. Moreover, they are also
aware of the current and upcoming trends while also judging the level of changes in
consumer tastes and preferences. Macdonald’s is focusing to open more retail outlets in
UK in order to gain appeal among common mass. The discount schemes are also
catering the common mass to consumer more of Macdonald’s product at large.
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Figure 1: Operating earnings of MacDonald’s
Source: (Mun and Jang, 2018)
The company is very much aware of the busy lives of today’s generations and is
manufacturing food products according to their present needs. The consumers of UK
are also very active as they play a significant role while protecting international brands
from independent competition. The fast food companies like Macdonald’s are also
catering to health issues of global consumers. The company is incorporating various
food production techniques, which contributes to the health of an individual. The fast
food companies like Macdonald’s and Burger King are optimizing their delivery
platforms in order to gain the most of customer satisfaction. Macdonald’s has been
successful in assessing the key market trends, which they can adopt to gain consumer
attraction in the global sphere (Kataria and Mukherjee, 2017).
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Macdonald’s is diversifying its business in the form of chicken nuggets, fries and sides,
milkshake, desserts etc. More of UK consumers increasingly prefer these products as it
is available easily in the UK market while at the same time being healthy and tasty in all
terms. The introduction of the Signature Collection, Mc Cafe Iced, the Tennessee Stack
and the Ranch California Chicken is booming in the UK Markets and thus, gearing up
the sales revenue of Macdonald’s. The online platform of Macdonald’s with its friendly
user interface also caters a great deal to gain more of customer attraction. The catchy
taglines supplemented with effective app based platforms are also helping the company
to rise in its global sphere of operations especially in UK sector. The various offers
related to students are also catering Macdonald’s to gain attention in public domain. The
location based delivery services are also serving a great deal to enhance efficiency
level in delivery phase. The company is being consistent regarding its policies at large.
The aspect of product line and quality enhancement has been addressed by
Macdonald’s at large. This company is giving importance to be highly filtered in its
approach while granting franchises (Pauwels et al., 2016).
MacDonald’s has been rigorously adopting the Porter’s five forces model regarding its
operations. This model is increasingly helping the company of MacDonald’s to assess
the market opportunities regarding its global sphere of operations. The company is
using this strategy, which would most suit the contemporary business environment. This
company is taking into account the aspects of threat of new entities, power of the
suppliers, power of the buyers, threat of substitutes and competitive rivalry. The
assessment of these forces would necessarily benefit MacDonald’s while formulating its
marketing strategies at large. Moreover, the human resource department of
MacDonald’s is also keeping up to its standards while assigning the right tasks to
perfect people so that the latter may be able to show case their talents at large.
Moreover, the smart pricing strategies, CSR policies and sustainable development
techniques are also helping the company to enhance its ‘brand image’ among the
common mass.
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Figure 2: Porter’s five forces model
Source: (Yunna and Yisheng, 2014)
Competitive positioning of MacDonald’s
In the global context, Macdonald’s is gaining a significant place due to its innovative
marketing technologies supplemented with advanced technologies. The smart pricing
strategies of Macdonald’s are appealing the common mass to consume more of its
products. On the other hand, Berger King is much lagging regarding its pricing
strategies. Macdonald’s is giving discount schemes to its loyal customers and also
devising attractive pricing strategies to attract potential customers that would help to
gear up its sales revenue. Moreover, the company’s effective CSR strategies and
sustainable development practices is helping the organization to enhance its ‘brand
value’ among consumers (Gensler et al., 2015).
The company is implementing advanced technologies to conduct their business
operations in an error free basis. The innovative marketing strategies from the part of
Macdonald’s managers are catering this fast food chain to increase its sales in UK
context. The traditional methods of marketing from the part of Berger King are obviously
a hindrance regarding its operations in the global sphere. Moreover, the company of
Berger King has also failed regarding its market penetration policies in the UK sphere.
Macdonald’s various discount schemes and offers is far more penetrative into the
consumers’ mind unlike Berger King. The organization is also focusing to increase their
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store efficiency in order to conduct hassle free business while serving the customers.
The innovative advertising campaigns of Macdonald’s in television and digital channels
is very effective in gaining mass appeal especially of youths. Proper use of SEO tools
and appropriate digital marketing strategies makes Macdonald’s to loom large in the
global scenario. The company has been very effective in change management policies,
which have accelerated its operational level at large (BoBo, 2017).
Figure 3: Quarterly sales growth of MacDonald’s
Source: (Young and Page, 2014)
Moreover, in the contemporary context, where health issues are a prime concern
among the common mass the company has adopted various modified production
techniques that wouldn’t harm an individual’s health (O'Sullivan, 2015). The company
has adopted various sustainable measures, which are environment friendly in approach.
Berger King, on the other hand, is much lagging regarding the innovative marketing
campaigns. The food items, which Macdonald’s produce are very cheap and the
budgetary customers can also afford their products (Isa et al., 2016). Berger King
doesn’t come up with Macdonald’s in this scenario both in the price systems and quality
levels. MacDonald’s has adopted the policy of TQM (Total Quality Management) to
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enhance the quality aspects of its food products. The adoption of this policy is
subsequently helping Macdonald’s to gain a competitive lead from its potential
customers (de Vries et al., 2017).
Aspect Macdonald’s Berger King
pricing smart lagging behind
brand values positive not so positive
marketing innovative traditional
customer loyalty effective ineffective
Table 1: Comparison of MacDonald’s and Berger King
First company response to market changes
The company of Macdonald’s is very much resistant to its change management
procedures at large. The strategy of Macdonald’s is very flexible, which helps it to come
up in every fluctuating market environment. The innovative use of technologies in its
production process supplemented with innovative marketing strategies is helping this
company to cater more in its global sphere of operations (King et al., 2017). Moreover,
the company is doing extensive research regarding the contemporary market scenario
while assessing the current food trends at large. Macdonald’s has been very successful
in handling the changes in customer tastes and preferences. The company’s CSR
policies are helping in customer retention while the sustainability approach is catering to
environment in more ways than one (Manser et al., 2017).
2nd company response to market changes
Berger King has been the second fast food company in UK, which has successfully
managed the technological and economic changes in a positive note. The company is
moving at a fast pace but due to some drawbacks in its operations it is lagging behind
Macdonald’s fast food chain. The managers of Berger King have not been innovative in
their marketing strategies and the organizational strategies are not flexible in nature
unlike Macdonald’s. MacDonald’s is able to assess the social and cultural scenario of a
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country in which it operates and subsequently formulate its strategies based on the
respective country’s culture in order to gain a large customer base. Berger King is not
being able to segment its customers as a unified whole, which leads them to less
consumer base than Macdonald’s (Zheng and Callaghan, 2017).
Recommendations
The fast food industry in UK is very much adaptable to the changes in customer tastes
and preferences. Companies like MacDonald’s and Berger King are adopting various
innovative marketing strategies to accelerate their sales revenue largely. Macdonald’s is
successful while devising its discount schemes for existing and potential customers.
There are also changes, which are needed from the part of companies like Macdonald’s
in order to gain attention more in the public domain (Michel, 2017). It is recommended
that fast food companies like Macdonald’s must incorporate the ingredients, which are
beneficial to the human body. There has been an increasing concern among the
common mass that fast food brings obesity in an individual. Macdonald’s food
production techniques must address this glaring concern so that people may not deter
from fast foods in near future. In this age of perfect market competition, most of the fast
food companies in UK like MacDonald’s and Berger King are incorporating ingredients
in their recipes, which can have a harmful effect on human body. This is mainly done to
keep the delicious foodie aspects in priority list while neglecting the healthy issues. This
must be avoided from fast food companies like Macdonald’s in order to increase its
future scope of operations (Uribe, 2016).
Conclusion
In this age of dynamic changes in technology, most of the fast food companies in UK
are incorporating advanced technologies in their food production techniques.
Companies like MacDonald’s are blending these advanced technologies with innovative
marketing strategies to come up more efficiently in the global sphere. The company has
been successful in assessing the current trends in food production technologies.
Moreover, the company has also been successful in assessing the consumer tastes and
preferences at large. MacDonald’s is ever flexible in its approach while operating in the
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UK scenario and global sphere at large. The company bases its policies and strategies
according to the cultural context of the country they are operating in. Moreover, the
effective CSR and sustainable policies from the part of MacDonald’s is helping to
enhance its ‘brand value’ in the public domain.
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Preferences in Marketing Strategy (Doctoral dissertation, The University of Mississippi).
de Vries, L., Peluso, A.M., Romani, S., Leeflang, P.S. and Marcati, A., 2017. Explaining
consumer brand-related activities on social media: An investigation of the different roles
of self-expression and socializing motivations. Computers in Human Behavior, 75,
pp.272-282.
Gensler, S., Völckner, F., Egger, M., Fischbach, K. and Schoder, D., 2015. Listen to
your customers: Insights into brand image using online consumer-generated product
reviews. International Journal of Electronic Commerce, 20(1), pp.112-141.
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satisfaction in buying local brands: When local meets local. Asia Pacific Management
Review, 21(1), pp.48-61.
Kataria, A. and Mukherjee, J., 2017. Sustainability marketing research: current status
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pp.245-266.
King, T., Cole, M., Farber, J.M., Eisenbrand, G., Zabaras, D., Fox, E.M. and Hill, J.P.,
2017. Food safety for food security: Relationship between global megatrends and
developments in food safety. Trends in Food Science & Technology, 68, pp.160-175.
Manser Payne, E., Peltier, J.W. and Barger, V.A., 2017. Omni-channel marketing,
integrated marketing communications and consumer engagement: A research agenda.
Journal of Research in Interactive Marketing, 11(2), pp.185-197.
Michel, G., 2017. From brand identity to polysemous brands: Commentary on
“Performing identities: Processes of brand and stakeholder identity co-construction”.
Journal of Business Research, 70, pp.453-455.
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Mun, S.G. and Jang, S.S., 2018. Restaurant operating expenses and their effects on
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