The report helps in the overall analysis and identification of the capability of the different organizations in order to differentiate their products and services form the different competitors in the overall competitive business environment. It can be seen that in order to keep themselves updated, this is essential for the different businesses rely on the different competitive advantages which can be afforded by them through proper strategic marketing analysis. The two organizations which are being selected in the respective report are McDonald’s and Hungary Jack’s which are the major fast food restaurants.
McDonald’s is American fast food company which was founded in the year 1940 and the headquarter is situated in USA and they serve in the entire worldwide. The revenue which has been earned by the company has increased to US$22.820 billion till the year 2017. The number of employees working in the organization is 235000 till the year 2017 (McDonald’s.com., 2018).
Hungry Jack’s Pty Ltd is the Australian fast food franchise of Burger King and the company was founded in the year 1971 and the founder of the company is Jack Cowin. The revenue which has been earned by the company till the year 2015 is A$1.043 billion and the number of employees working in the restaurant is 15000 till the year 2017 (HungryJacks.com., 2018).
The major objective is to analyse and identify the structure of market, expansion along with the growth strategies, non -pricing and pricing strategies which will help in identifying the opportunities which can be gained by the company effectively. The relevant kind of data about the two companies are collected from primary and secondary data collection method. The primary data was received from the various visit to the different companies and the interview of the managers helped in attaining the different data related to the market share of the organization efficiently. The secondary data was collected from the different credible literature review and annual reports of the organizations which helped in analysing the different pricing along with non-pricing strategies in the organization.
The market structure analysis is essential to be performed which will help in managing the competitiveness of the fast food restaurants in the Australian market. The fast food restaurant joints are booming in the entire competitive market of Australia which is highly competitive in nature. According to Barney (2017), this can be identified that fast food industry in Australia is entirely concentrated with standardization.
The growth of the fast food industry in Australia has been expanded to more than 5% over the few years from 2013-2017 (Helfat & Martin, 2015). After the overall identification with the overall performance of the industry in terms of the growth in the revenue, this can be analysed that the restaurants cumulatively have increased to more than $34.8 billion till the year 2017 (Christensen, McDonald, Altman & Palmer, 2016).
Furthermore, the comparative advantage position is asserted with the look wherein McDonald’s is the largest retail fast food chain which is based in Australia as per their performance in the year 2017. Moreover, this can be analysed that the overall size of the Australian retail fast food market is $124 USD in the year 2014 and the gradually lower rate of interest of the retail market of Australia has helped in increasing the purchasing power of the customers in the entire competitive market.
Figure 1: Position of McDonald’s and Hungry Jack’s
Source:
From the above chart, this can be analysed that McDonald’s is one of the largest retail fast food chain with a market share of more than 29.5% in the entire competitive market. The sales and the revenue growth of the McDonald’s and Hungary Jack’s have been increased in the last few years which have helped in managing the overall effectiveness of the firm in a positive manner. The low-cost strategy is beneficial for the different retail food chain wherein the there are different threat from the new entrants in the market which is affecting the overall growth of the restaurants in a negative manner.
Figure 2: Revenue Performance of Hungry Jack’s and McDonald’s
(Source: Hill, 2017)
From the figure, this can be analysed and identified that McDonald’s revenue growth has been huge in comparison to Hungry Jack’s. The different new entrants such as Grill’D and Oporto are the two competitors of the McDonald’s and Hungry Jack’s which can lower down the sales of the organization in a negative manner which will be disruptive in nature as well (Das et al., 2015). In the year 2012, this can be noticed that the revenue of McDonald’s was $3.2b and in comparison, to McDonald’s, Hungry Jack’s sales growth was $1.1b which was low (Hill, Jones & Schilling 2014). From the overall comparison, this can be noticed that McDonald’s has been able to capture the entire retail fast food market in comparison to the other competitors (Lee & Jay, 2016).
Figure 3: Comparison of the Retail Fast Food Chains
(Source: Villar, Alegre & Pla-Barber, 2014)
From the table, this can be identified that there has been decrease in the sales and revenue growth of McDonald’s in comparison to the other competitors. On the other hand, there has been increase in the sales of Hungry Jack’s growth to about 1.22% in comparison to 2012 and 2016 and this has helped them in improving their growth aspects in an effective and efficient manner (Doz, 2017).
In the highly competitive fast food retail market, this can be analysed that there are various techniques such as differentiation techniques in the different products which are being sold by them in the market. With the help of the different kinds of differentiation techniques, this will be benefitting the companies such as by introducing the different food items which will be different from the other competitors (Villar, Alegre & Pla-Barber, 2014).
Figure 4: Position of the Retail Food Chains
(Source: Teece, Peteraf & Leih, 2016)
From the graph, this can be analysed that there has been almost more than 53% rise in the sales of the different food items of the restaurant. On the other hand, there has been increase of more than 29% in the sales and revenue growth of Hungry Jack’s which will be beneficial for the overall success of the firms in the entire competitive environment. The other major competitors such as KFC and Subway are the threats for McDonald’s as there are different diversification strategies which have been applied by them and this has helped them in gaining more competitive advantage in the overall market effectively (Vomberg, Homburg & Bornemann, 2015).
Strategies of Expansion for McDonald’s and Hungary Jacksto
McDonald’s primary generic strategy for the growth is cost leadership strategy which helps them in minimizing the different costs of the products in such a manner which will be beneficial for the overall success of the firm in a positive manner. With the cost leadership strategy, McDonald’s tries to offer the different products which are relatively cheaper in nature in comparison to the other competitors such as KFC and Subway (Rothaermel, 2015). On the other hand, this can be seen and analysed that McDonald’s uses the differentiation strategy as the supporting generic strategy which includes the developing of the business along with the different products which helped them in differentiating the products from the different competitors (Beske, Land & Seuring, 2014). The vertical integration is the other technique which is linked with McDonald’s cost leadership aspect which helps them in using the standardized mixtures of different ingredients and cost minimization is the other aspect which is beneficial for the overall success of the firm.
On the other hand, Hungry Jack uses the cost-effective pricing technique which is being used by them in order to become the most effective in the entire competitive market. With the product development strategy, this will be beneficial for the organization which will be helpful in managing the satisfaction of the customers (Hitt & Duane Ireland, 2017). There can be inclusion of the different kinds of loyalty aspects such as providing discounts and other development of the different products and services which will be beneficial for the overall success of the firm.
In order to achieve growth in the international market, McDonald’s need to analyse the different marketing strategies which will be beneficial for the overall success of the firm in a positive manner. The velocity growth plan is one of the aspects of McDonald’s in which retention of the customers is the major aspect which is required to be taken into consideration which will be beneficial for the overall success of the firm in a positive manner. The proper communication is the other aspect which is required to be taken into consideration which will be beneficial for the overall success of the firm in a positive manner. With the implementation of the respective strategy, this will help McDonald’s in expanding their market in different domains and be successful in the near future (Barney, 2017).
On the other hand, Hungry Jack’s opportunities of growth is effective wherein the main aspect of the company is to expand their business operations in different parts of world such as in different parts of United States and India. The organization can try in expanding their business operations by properly developing their products along with application of the diversification strategy which will be beneficial for the overall success of the firm in a positive manner.
Evaluation of Strategies of Pricing
|
Product |
Pricing Strategy of McDonald’s |
Pricing Strategy of Hungry Jack |
|
Pantry goods |
$ 5.99 |
$ 9 (premium pricing) |
|
Snack Meal |
$ 7.99 (Psychological Pricing) |
$ 11 |
With the help of the table, this can be analysed that McDonald’s is inclusive of changing along with monitoring the strategy of pricing on the conditions of the market effectively. The pricing strategy of McDonald’s is psychological pricing strategy which helps them in targeting the different market segment individuals in the entire competitive market. With the help of the cost leadership strategy, the main aspect of McDonald’s is to improve the overall market share in comparison to the other competitors (Grant, 2016).
McDonald’s mainly focusing on the providing value to the different customers for their purchases of the different products which will be helpful for them in gaining a huge amount of market share. With the psychological strategy of pricing, McDonald’s call the same as the charm pricing which involves the pricing which ends in 9 or 99 digits. Moreover, this has been noticed that there is inclusion of buy 1 get 1 free in the different outlets of McDonald’s which helped them in gaining huge market share in the market.
There are no such discounts which are being provided by the Hungry Jacks, the main aim of the food restaurant is to offer the best food items at premium pricing. Hungry Jack tries to attract only a certain group of customers which will be beneficial for the overall success of the firm in an effective manner.
Hungry Jack’s main aim is to target a premium and niche group of customers in the market which has been beneficial in nature for becoming successful in the entire competitive market. With the help of the same, this has been helpful for Hungry Jack to gain competitive advantage and improved the profits in comparison to the other competitors in the overall market which is competitive in nature.
This can be seen and analysed that both McDonald’s and Hungry Jack have applied and recruited the different trained staffs in the organization who helps in improving the demand and supply position of the organization (Helfat & Peteraf, 2015). The market research helps both the food joints in the entire competitive market to analyse the trends in the market wherein the downward or upward movement of the different food joints are analysed effectively (McDONALD 2016). These are the non-pricing strategies which is helpful and similar in both McDonald’s and Hungry Jack. This has helped them in improving the overall experience of the different customers and this helped in gaining more competitiveness in the market which is helpful for the overall success.
On the other hand, this can be seen that there are few differences between Hungry Jack’s and McDonald’s non-pricing strategies. This can be analysed McDonald’s try to implement the different home delivery systems which have been adopted by McDonald’s in different parts of the world which was effective in managing the overall efficiency of the firm (Handfield et al., 2015). This is different for Hungry Jack as there are no such services provided by them to the different customers in the market and this has been a huge distinguishing factor between the two food restaurants (Robson, 2015).
There are different kinds of opportunities which can be applied by McDonald’s in the future for analysing the different aspects which are as follows:
Implementation of Healthier Options
This is one of the most essential strategies which can be adopted by McDonald’s which will be beneficial for the overall success of the organization in different parts of the world. With the help of implementing more healthier food options, the company can introduce different food items such as less oily food items such as burger which would be organic and less calorie. Furthermore, McDonald’s can offer additional offers and discounts to the different nutritious foods to the target customers which will be effective in nature in managing their business operations in an efficient manner. With the home delivery system, the quality of the different products will be enhanced with fresh ingredients which will be beneficial for the overall success of the food joint.
Expansion of Business Operations
This is the other recommendation and opportunity for McDonald’s wherein they can expand their business operations effectively in different parts of the world. With the help of franchising, McDonald’s can allow the simultaneous expansion into different regions of the world which will be helpful in conducting semi-independent business in the entire world. With the help of the franchising strategy, McDonald’s will be successful in managing the different business operations in such a manner which will be effective in lowering the different types of risks and this will be effective in managing the different operations successfully.
These are the two major aspects which can be taken into consideration by McDonald’s as this will be beneficial for the overall success of the firm in a positive manner. On the other hand, there are few disadvantages which can create a negative impact and this can be solved with proper implementation of the control over the franchisee which will be helpful.
Conclusion
Therefore, this can be concluded that the market size, growth along with the different strategies of expansion have been analysed in an effective manner. With the help of Ansoff matrix and the Porter’s generic and intensive strategies, the different growth opportunities have been analysed and identified which assisted in the overall growth of the firm effectively.
The different pricing and non-pricing strategies have been taken into consideration which have been helpful in managing the different kinds of business operations in order to become successful in the overall competitive market. This can be seen and analysed that there are different kinds of variables in both McDonald’s and Hungry Jack’s aspects of selling food items to the customers which is required to be analysed positively to become more competitive in nature. The different non-pricing strategies such as training of the staffs and recruiting the most talented staffs in the organization is beneficial over the success of the firm in conducting different operations successfully without much constraints.
The cost-effective strategy along with the product development strategy have been helpful for both McDonald’s and Hungry Jack’s in becoming successful in the entire market which will be successful in their operations in the future. Furthermore, this can be noticed that the market penetration strategy helped both the companies in focusing mainly on maximising the base of the customers in the overall market effectively without much issues and this helped in managing the overall productivity of the organization. With the help of the different recommendations which have been provided to both McDonald’s and Hungry Jacks, this can be analysed that both the companies require to understand the recommendations by applying the different healthier options which will be beneficial for the overall success of the firm in a positive manner and gain more competitive advantage in the market.
References
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