MGT300 Report: Strategic Management Analysis of McDonald's

This report provides an in-depth analysis of McDonald's strategic management, focusing on its competitive advantages, business strategies, and organizational structure. It explores the development of strategies at the business, functional, and corporate levels, highlighting the company's focus on sustainable competitive advantage through technological innovations and strategic alliances. The report examines the impacts of mergers and acquisitions, particularly the strategic alliances with companies like Walmart and Disney, and discusses the importance of leadership and organizational structure in achieving business objectives. Furthermore, the report analyzes McDonald's competitive strategies, including its lower pricing structure, fast-food format, product variations, and advertising strategies, while comparing it to competitors like Burger King and KFC. The analysis covers various aspects such as competitive dynamics, market commonality, and resource similarity to understand McDonald's market position and sustainability.

Running head: BUSINESS MANAGEMENT AND STRATEGIC MANAGEMENT
Business Management and Strategic Management
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3.3 Development of Strategy at a business, functional, and corporate level
The emerging competition in the business field has becoming much challenging for the fast
food chains. This challenging scenario is not an exception for McDonalds as well. The company
has undertaken the effective business strategies for strengthening the sustainable position in a
competitive market. The following strategic developments have been undertaken by McDonalds.
 Competitive Advantage and Sustainability
Sustainable competitive advantage is sometimes quite difficult for the firms due to the
extensive competition. While expanding business in the international market, McDonalds has
been concentrating on the business integration and coordination between the managerial and
organisational process. McDonalds believes in investing more on the technological innovations
during the merger and acquisition (Thompson, 2017). For example, Starbucks coffee is
concentrating on business innovations by offering the customers the superior quality burger of
McDonalds while they take sip of their coffees. The comparatively lower prices of the food items
in McDonalds have also achieved the greater customer base worldwide.
 Impacts of Merger and Acquisitions of McDonalds: Strategic Alliance
Currently, it is reported that McDonalds is looking for expanding business in the Far East
Zone. The establishment of the fast food chain in Japan is quite a remarkable strategic movement
adopted by the company. However, the current food safety scandal also impacted negatively on
this business expansion strategy. Another most successful approach undertaken by McDonalds is
the remarkable strategic alliance with the internationalized companies like Wal-Mart, Coca-Cola,
Disney, and Amoco. Wal-Mart, the largest retail chain is significantly allied with the company.
McDonalds is available in the stores of Wal-Mart due to which the customers receive the

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excellent low cost fast foods in a convenient way (Sandu, 2018). Another most commendable
alliance took place between McDonalds and Disney. McDonald received the sole rights to sell
the fast food in the theme parks of Disney. There is the mutual contract between these two
corporations that informed about the promotional process of Disney. Disney can promote their
films through the advertisements of McDonalds. These successful strategies allies between these
companies ensured competitive advantage for McDonalds at the international level.
 Strategic Implementation and the Importance of Leadership
The leadership and management of McDonalds are much creative in nature. They focus on
establishing the creative problem solving skills by using the organisational resources. The
leadership team of McDonalds concentrates on the appropriate planning process to meet the
business objectives and mission. The vision statement of the company is to create the linking
between the employees worldwide. In order to improve the internationalized positioning of the
company, the leaders are continuously providing efforts on improving technologies and business
technicalities. The transformational leadership strategy is followed to improve the personal and
professional skills.
 Organisational Structure, Controls, and Corporate Governance of McDonalds
The internal organisational structure of McDonalds focuses on coordination, division, and
control of tasks as well as the flow of information. In this centralized structure, the managers
distribute the job responsibility to authority job holders. A rigid structure sometimes undermines
the creativity level of the employees. However, the management encourages the work practices
of the employees and assists other franchisees to deliver the commendable customer services.

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On the other hand, controlling process in McDonalds is the alignment of the clear
policies and motivated workers. This amalgamation helps in keeping the right track of the work
functions. The line managers work according to the work standardization of the work activities.
The corporate governance of McDonalds is controlled by the Board of Directors who is entrusted
with the honest, diligent, and fair work process. The focus towards integrity and commitments
helps in dealing with the stakeholders from diverse background.
3.4 Competitive Advantage and Sustainability
McDonalds has adopted the appropriate competitive advantage strategies for
strengthening the sustainable position in a competitive landscape. The competitive strategies
adopted by McDonalds are different to the direct competitors like Burger King, Hungry Jacks,
and KFC. The first and foremost different noticed between these food chains is the lower pricing
structure. However, it is noticeable that the continuous challenges in the business industry
require more effort to maintain the sustainable position (Zanoni, 2013). Cheaper price of the food
items is the major competitive advantage of McDonald. The company utilizes the economies of
scale for achieving the cost advantage. The prices of the McDonalds menu are cheaper than
Burger King and KFC due to which the customers prefer this restaurant.
Another competitive advantage of McDonald is the food chain format. The company
maintains the ‘fast food’ format for serving the global customers. The faster customer delivery
services of McDonald are quite famous among all other food chains (Mcdonalds.com, 2018).
These efficient customer services of McDonalds are securing the competitive position of the
company in a significant way. Burger King, Hungry Jacks, or KFC are not yet maintaining this
systematic format that is attracting the customers in a significant way.

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One of the most commendable strengths of McDonald is the extensive product variations.
The product variation is another most prominent feature of McDonalds that ensures the
competitive advantage. The consistent tastes of the food items are quite attractive to the
customers. This consistency and product variations of McDonald are creating more opportunities
for the company in the upcoming future (Gregory, 2017). In maintaining the effective product
variations, it is noticed that the number of varieties of products available in McDonalds are
superior to other food chains like KFC, Hungry Jacks, and Burger King (Thompson, 2017).
Moreover, the effective innovative practices undertaken by the company is also suggesting more
benefits for gaining competitive advantage.
In addition to this, the effective advertising strategies maintained by McDonalds are quite
different to the other competitors. The company has even adopted the effective promotional
strategies for attracting more number of the customers. It has been observed that the
advertisement strategy of McDonalds is unique and attractive to the customers (Mcdonalds.com,
2018). The product variation is another most prominent feature of McDonalds that ensures the
competitive advantage. The flexible work functionalities are quite helpful for the management
team to undertake the appropriate strategic decisions and provide better customer services
(Thompson, 2017). The consistent tastes of the food items are quite attractive to the customers.
This consistency and product variations of McDonald are creating more opportunities for the
company in the upcoming future.

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References
Design your way. (2018). KFC vs Burger King vs McDonald's Print Advertising. [online]
Available at: https://www.designyourway.net/blog/inspiration/burger-king-vs-kfc-vs-
mcdonalds-print-advertising/ [Accessed 9 Jul. 2018].
Gregory, L. (2017). McDonald’s Generic Strategy & Intensive Growth Strategies [online]
Available at: http://panmore.com/mcdonalds-generic-strategy-intensive-growth-strategies
[Accessed 9 Jul. 2018].
Mcdonalds.com (2018). Our Business Model [online] Available at:
https://corporate.mcdonalds.com/corpmcd/about-us/our-business-model.html
[Accessed 9 Jul. 2018].
Sandu, B. (2018). Mcdonald’s vs Kfc vs Burger King: which is better?[online] Available at:
https://www.designyourway.net/blog/inspiration/burger-king-vs-kfc-vs-mcdonalds-print-
advertising/ [Accessed 9 Jul. 2018].
Thompson, A. (2017). McDonald’s Organizational Structure Analysis. [online] Available at:
http://panmore.com/mcdonalds-organizational-structure-analysis [Accessed 9 Jul. 2018].
Zanoni, D. (2013). McDonald's: Leveraging Competitive Advantages [online] Available at:
https://seekingalpha.com/article/1275991-mcdonalds-leveraging-competitive-advantages
[Accessed 9 Jul. 2018].