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McDonald’s Market Analysis
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Introduction
McDonald’s is one of the best franchised fast-food chains globally. The restaurant was opened in the United States (U.S.) in 1955. McDonald’s has grown over the years to cater to the needs of its customers. It has approximately 40,000 outlets distributed in more than 120 countries across the world. The chain serves almost 50 million customers daily (Singireddy, 2020). Its slogan is to offer customers the best services and maintain cleanliness to keep and attract new customers. The restaurant has a good partnership with its customers, which has helped its goodwill in the industry. McDonald’s has expanded sustainably by opening smaller outlets in small cities. The chain values its development along the road in community parks and malls with customer traffic.
Resources available for McDonald’s to Attain Competitive Advantage
McDonald’s has a high position in the fast-food industry because it has several resources that give it’s a competitive advantage. Resources are considered the strategy or reduced-based view of the firm that it needs to do business (Kincheloe, 2002). An organization needs to understand its resources to succeed and remain competitive. McDonald’s has tremendously grown because it understands how its resources function in the business model. This concept guides managers and owners on managing the resources to achieve the company’s full potential. It also helps them discuss challenges and develop strategies to manage and evaluate resources.
Resources are basic factors and inputs of the production process in the organization. It is effective for the company to focus more on its internal resources because they determine its competency and help develop a strategic plan. McDonald’s has a solid financial base that allows it to run operations effectively (Wu, 2020). For example, the company is sustainable to grow and ultimately return capital to the investors. It also generates profits and cash flow to pay bills and debts. The company uses its generated revenues to open other outlets in different countries. The expansion tactic has helped the company generate more traffic in existing restaurants. McDonald’s also focuses on operating efficiently at all levels to keep costs competitive. These resources have helped the company succeed and increased its competitive advantage.
McDonald’s has hardworking employees committed to giving their best for the success of the business. The firm has improved its brand image because it has friendly employees who offer the best services to its customers (Rajawat et al., 2020). McDonald’s also hires the best employees in the market with experience in the industry. Employees perform their jobs properly and get things done in time. They also run and improve their services to outdo their rivals. The company also motivate its workers to do their best and build positive customer relationship. This has helped the company retain and attract new customers, increasing its competitive advantage.
Whether McDonald’s is supported by the Value Chain and other Internal Resources
McDonald’s value chain is the component of the industry value system. It engages in various business units such as suppliers that ensure the constant distribution of inputs to the company (Singireddy, 2020). The company also owns and operates some processing hubs and distribution networks. McDonald’s has a distribution network for transporting intermediary food products to individual restaurants. The value chain has a significant framework for providing value and benefits to the end customer. McDonald’s recipes and production systems are essential for preparing food based on customer needs. These competencies ensure that the value chain is effective and convenient for the customers. The value chain helps the company attract more customers even though many other restaurants offer similar and competitively priced products.
Recommendations
McDonald’s should focus on service differentiation to stay ahead of its rivals. The restaurant should focus on strategies to make its services superior to its competitors. It should offer superior services at every touchpoint, from the placement of orders to the delivery of the products. This strategy will make their services remain in the mind of target customers. The services will lead to more referrals hence increasing its competitive advantage.
The organization should also focus on personal differentiation. Customers should deliver high-quality products to the customers. McDonald’s should invest in the training and development of its workers to maintain high services. Besides, the training programs will ensure the long-term growth and development of the business. More importantly, McDonald’s should integrate a promotion mix to stay ahead of its rivals. The company should balance traditional and modern digital media to promote its products and services. It should also recognize the importance of digital media for the business and develop marketing strategies to engage the ever-growing online customer base.
McDonald’s should also engage in product augmentation by offering additional features in their food on demand. The company should improve its home deliveries to make them more convenient. It can also enhance product quality using fresh ingredients to increase its competitive advantage. The organization should invest more in menu customization and standardization strategies to attract more customers in other markets.
Conclusion
McDonald’s is growing at an unprecedented rate to cater to rising customer needs. The company has a solid financial base that has helped it run its operations and open up new outlets. It also has committed employees who give their best to achieve the firm’s goals and objectives. McDonald’s should focus on product and personal differentiation to stay ahead of its rivals. It should also engage in product argumentation to attract more customers in a diverse geographical area.
References
Kincheloe, J. L. (2002). The sign of the burger: McDonald’s and the culture of power (Vol. 27). Temple University Press.
Rajawat, A., Kee, D. M. H., Malik, M. Z. B. A., Yassin, M. A. Q. B. M., Shaffie, M. S. I. B. A., Fuaat, M. H. B., … & Santoso, M. E. J. (2020). Factors: responsible for McDonald’s performance. Journal of the Community Development in Asia (JCDA), 3(2), 11-17.
Singireddy, M. (2020). Mcdonald’s: Global Marketing. International Journal of Health and Economic Development, 6(2), 16-27.
Wu, F. (2020). An Analysis of McDonald’s Business Model Based on Business Ecosystem Theory. In RSU International Research Conference (No. 1, pp. 1756-1763).
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