McDonald’s Company SWOT Analysis
Question:
Who Is The Company Serving And What Type Of Behavior Is ‘Typical’ Of Them?
Marketing is an aspect that is considered to be vital for an organization as it serves as a mechanism in which the management of an organization gets to sell its products and services to its esteemed clients. Therefore, in marketing the company management gas to come up with various marketing strategies that will enable the company to meet its client’s expectations and at the same time enable the company product to attain a competitive advantage in the marketing industry over its competitors (Bagozzi, 2008). Therefore, marketing management has been considered to be an important aspect of an organization that has to be put into consideration to enable an organization to effectively and efficiently attain its set goals and objectives within a particular period of time.
The objective of the paper, therefore, is to conduct an analyze icon the marketing management at McDonald’s as well as identify various strategies employed by the management of the company to attain a competitive advantage over is competitors in the marketing industry (Cateora et al., n.d.). In addition, the paper will also shade more light on the merits that a McDonalds will attain as a result of setting reliable marketing strategies as well as the challenges faced by the company in marketing its products and services.
McDonald’s (MCD) is a food service industry operating over 36,000 restaurants in over 100 countries. McDonald’s is an employer to over four million people and serves over 70 million customers daily.
McDonald’s menu includes sandwiches, hamburgers, the big mac, fries and soft drinks. It also serves the public with beverages, salads, cheese and wraps (Comfort and Brieger, 2000). To meet the international demands, McDonald’s offers local food menus, for instance, it offers gazpacho in Spain, black and white burger in the Chinese market, and veg Pizza McPuff in the Indian market. Its main competitors are Wendy’s (WEN) and Burger King (BKW).
McDonald’s trademark is QSC&V “quality, service, cleanliness and values” and it employs the “plan to win” strategy with support from the three-legged stool approach. The three-legged stool approach includes the involvement of the operators or owners, suppliers, and the employees. All the three must work together for the stool to remain firm (Belloc, 2007). The company focuses on the 5ps- the people, the product, the place, the price and promotion as a strategy which can help them win.
It states, “Our overall vision is for McDonald’s to become a modern, progressive burger company delivering a contemporary customer experience. Modern is about attaining the brand to where we need to be today and progressively is about doing what it takes to be the McDonalds our customers will expect tomorrow (Davis, 2005). To realize this commitment, we are focused on delivering great tasting, high-quality food to our customers and providing a world class experience that makes them feel welcome and valued.”
Marketing management is concerned with supervision, creation, control and designing of operations in a business environment to produce goods and services in an economical manner. Operations management is one of the most important factors that accelerate economic growth in an organization. The paper focus on operations of the coca cola company and how management is conceived, supported, delivered and developed in the Company. Critical issues are analyzed, and the solution suggested (Kotler and Armstrong, n.d.). In addition, the paper will also analyze the contribution of both the management as well as the employees in attaining organizational set goals and objectives. In addition, the paper will also analyze the mechanisms employed by the company to attract and retain more clients to be the consumers of company products and services. Also, the paper will shade more light on the strategies employed by the company to attain competitive advantage in the marketing industry thus being able to attain maximum returns on its investments
The Role of Marketing Management in an Organization
It states, “Our mission is to bear our customer’s favorite place and way to eat & drink. We’re dedicated to being a great place for our people to work; to be a strong, positive presence in your community; and to deliver the quality, service, cleanliness and value our customers have come to expect from the golden arches- a symbol that’s trusted around the world (Dickson, 2007).”
From the mission statement, we get the brand image of the company and the attractiveness of its products. A financial objective is stated which included minimization of cost for value optimization.
Issue 2 (20% of marks for the assignment)
a. Company
McDonald’s company SWOT analysis
The company has expanded the range of products to meet customers’ expectations, coffee, smoothies, and Angus burgers have been added to the menu (Du Plessis, Strydom, and Jooste, 2012). The McDonalds brand is among the best in the world serving over 70 million customers daily with over 14,000 locations in the United States alone. The company pays an annual dividend of over 55cents per each share which increases yearly.
The McDonalds sells fallen drastically because of increased competition from other restaurants. Due to cultural changes the MacDonald menu can become obsolete (Kotler and Keller, n.d.). The Chinese market was destabilized because of the sale of expired meat; the Russian unrest has affected the franchise in the region.
There is an opportunity to set new restaurants outside the United States because of ready markets in Asia. This is due to low-interest rates on capital for growth. Expansion of the menu to the inclusion of healthier foods as McWraps is an opportunity at hand.
The company is facing competition from Panera and Chipotle who have more variety for young consumers. Yum! Brands (NYSE: YUM) and Burger King (NYSE:BKC) are strong competitors in this industry. The weak economy has caused prices of commodities to increase reducing sales.
The McDonald Company serves every group of people the children, youths, and adults. The McDonalds customers are going with the trends. Many of them are influenced by the culture and McDonalds try to include local food on its menu. In this case, Kids are served with toys to attract them while adults are provided fast foods because they have less time. Cheap food for the middle and low class, a variety of foods for the youths and teenagers are provided to meet their needs.
McDonald’s outsource supply chain because of lack of funds to develop their own supply chain. McDonald’s supplier’s belief in “what’s in it for we” (WIIFWe) mindset which has enabled the company created the most powerful supply chain globally (Lancaster and Massingham, 2001). The partners believe a success for McDonald’s is their success too which has helped build a strong partnership. The distributors have ensured the products are available to restaurant chains at required time to keep the customer’s demand.
McDonald’s main competitors are the burger king, Wendy’s (NASDAQ:WEN) taco bell and subway. The new possible competitors emerging in the market as fast food restaurants include the Chipotle Mexican Grill, Inc. (NASDAQ:PNRA), the Starbucks Corporation (NASDAQ:SBUX) and Panera Bread company (NASDAQ:PNRA)
The Three-legged Stool Approach Employed by McDonald’s
Political factors affecting the McDonalds Company include the tax reforms, the international trade agreements, and the public health policies. All these are possible opportunities but can also pose a threat to operations of the company (Ramachandra, Chandrashekara and Shivakumar, 2010). For instance, the public health policy discouraging fast foods may discourage customers from the McDonalds fast foods.
Legal factors affecting the McDonalds Company include the local health regulations in schools and workplaces which demand healthy meals, animal welfare regulations on meat production and the minimum wage level as demanded by the government.
The McDonalds Company uses technology in maximizing its productivity and in research to improve the company’s efficiency and effectiveness. Technology has enabled the company to increase its business automation, increase sales from the mobile ordering and payment and advertisement through company’s website.
(20% of marks for the assignment)
McDonald’s company has embarked on marketing research and market intelligence because of technology. The availability of computer software’s and environmental changes has encouraged firms to embark on research. Market research enables the company to make valid decisions (Tinniswood, 2016). Therefore, based on this aspect, the company have laid down various strategies to ensure that it attains adequate information that will enable the company to attract and retain more clients in the market thus attaining a competitive advantage. In this case, the company is investing in the competitor’s market price as well as the quality of their product and services. That is McDonald Company is investigating on the current market price of the products offered by firms offering the same products and services thus being in position of setting realistic prices that will enable the company to attract and retain more clients in the company thus enabling the organization to be able to attain a competitive advantage over its competitors (LaPlaca, 2008). In addition, determination of the quality of products offered in the market is another aspect that has been given much consideration by McDonald Company. In this case, the company ensures that it offers a quality product that will meet its client’s expectation at any particular time thus winning their loyalty.
The McDonalds gather information on customer’s tests and preferences through market research, the marketing team issues questionnaires to prospective buyers and information garnered is used to improve the service delivery and make necessary changes to the menu. In this case, the company marketing team will ensure that they attain relevant information on client’s opinion in relation to the prices as well as the quality of the products that clients expect from the company. Therefore, based on this information, the company will be in the position of making a reliable decision that will enable it to meet its clients demand at any particular time thus winning their loyalty.
About their competitors, the company learn through online sources and undertaking market intelligence program. The collaborators help the company get to the consumers, and since they understand that the success of MacDonald’s is their success, they help in the market research program and intelligence. In this, the company will have to ensure that it maintains good customer relations on top of quality products and realistic prices thus enabling the company to attain a competitive advantage offer its competitors in the marketing industry (Woodall, 2007). In addition, the company will also ensure that it employ various marketing strategies to win more consumers in the market as compared to its competitors. In this case, the company employs discounts that will enable the client to enjoy economies of scale thus enabling the company to attract and retain more clients in the industry.
Operations Management in the Fast Food Industry
Based on market analysis, the McDonalds Company has a market share of over 70%; its menu is structured to capture the needs of the children, the youths, and the adults. The availability of cheap food captures the low class and the middle class thus giving MacDonald’s a market segment larger than its competitors (Woodall, 2007). Therefore, in this case, the company considered the aspect of marketing as a key factor that will enable it to effectively and efficiently attain its set goals and objectives. For instance, the company uses various channels of marketing like social media to reach to all its consumers thus being able to inform them of the products and services available for them in the market. In addition, the company is giving room for its esteemed clients to enjoy the benefits that come with the economies of scale. In this case, the company ensures that individual who buys their product in bulk are granted a realistic discount that will enable the enjoy economies of scale. Therefore, the clients will find it vital to buy company product in large quantity thus getting more as compared to their initial cost of buying few products from other companies. This aspect will enable the company to win the loyalty and consistency of its clients thus being able to attain maximum returns from its investment.
On value proposition, the McDonald has ensured it offers goods and services that satisfy the customer’s needs (Sheehan, 2011). The McDonald has opened their outlets in almost every corner in the world to reach its customers; it has a total of 36,000 outlets all over the globe situated in strategic locations. The company ensures it offers local food in its menus in the prospective target market.
Issue 5: Developing marketing tactics (25% of assignment marks)
The marketing mix is essential in McDonalds Company. This is because the market contains a group of buyers divided into groups having different personality traits, different lifestyles, and different values. With this in mind marketers ensure they divide their buyers along these lines to capture their special needs and preferences. In addition, strategizing company products in the market is another aspect that has been given consideration by the company management. In this case, the location in which the products of the company are located should be quick to access thus saving the time of the consumers for they will quickly access the product in the market. Also, customer relation is another major aspect that enables an organization to attract and retain more clients in the market. In this case, the sales agents are expected to respond to all questions raised by the consumers of a particular product thus enabling them to attain adequate information they need about that particular product. Therefore, based on good customer relation, the company is in the position of winning more clients thus enabling the company to have a larger market share as compared to its competitors.
Through a marketing mix strategy; favorable products, pricing, and promotion strategies can be put in place. Different people different passive strategies that are why the McDonald has ensured it uses the marketing mix strategy for all its customers (Winer and Dhar, 2014). In this case, studies indicate how consumers perceive the operations, as well as products and services offered by a particular company, contributed a lot to the success of the company. Therefore, the management of the company has to ensure that its esteemed customers have a positive attitude towards in products and service in any particular case. Therefore, the management has to ensure that the product offered meets client’s expectation. Also because the company operates in different parts of the world, the governments they operate under requires their rules on marketing be followed that is why the marketing mix is essential to the company. Furthermore, availability of the company products is another aspect that has to be put into consideration to enhance the effectiveness and efficiency of company operation in the marketing industry. In this case, the management of the company should ensure that there is a balance between the supply and demand of a particular product in the market. Customers are not expected to take a lot of time to find a particular product in the market. Therefore McDonald Company ensured that the products supplied to a particular market will be sufficient enough to meet its client’s demand thus enabling the company to be the best in the industry.
In conclusion, marketing management at McDonald Company will accelerate growth through invention and innovation in the field of production, branding, merchandise and distribution. To increase sales and brand popularity a ‘choose life’ campaign must be created. This will create a brand name which favors client’s health, not sales and in turn bring respect in return increasing sales of the newly created brand. In addition, the company should also ensure that it puts into consideration the basic needs of the employees in an organization to motivate them to put in more efforts in their daily activities. In this case, the motivation of employees will make them feel part and parcel of the organization thus they will be in the position of producing quality products and services that will enable the company to meet its client’s expectation within a particular period of time. In addition, it is recommended that the company should also be constantly monitoring market trends thus being able to offer competitive prices that will enable it to attract and retain more clients to consume company products that enabling the company to attain maximum returns from its investments. The company ought to create a production system with industrial and administrative variables in mind. Technology to be put in place must provide decreasing automation cost of production and in turn, improve variety and volume of production. Therefore, basing on this aspect, McDonald Company finds it vital to give marketing management much consideration for it will help it attain a competitive advantage and at the same time being in a position to meet its clients demand at any particular time.
References
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