McDonalds is one of the world’s leading fast food companies with more than 36000 locations in more than one hundred countries. This company was initiated in 1950 as a barbecue restaurant operated by Maurice McDonald and Richard. McDonalds serves a locally relevant menu of food and beverages in different countries (Sue, 2014). McDonald’s mission statement is “to be our customer’s favorite place and way to eat and drink.” The company’s global operations is aligned to its global strategy known as plan to win, which mainly center on exceptional customer experience, products, place, promotion and price.
McDonald’s is committed to continuously improve its operations and enhance its customer experience. Some of the main competitors comprise of subway, burger king worldwide INC, Yum brand INC, Wendy’s company among others. In its marketing orientation, McDonald’s focuses on the customer needs and develops products based on their wants and expectation. Since its inception, the company has been taking every aspect of marketing orientation and utilizing its philosophy to the maximum.
Like any other company, McDonalds has strengths, weaknesses, opportunities and threats. One of its strengths is strong global brand. Most people in United States and other countries recognize the company’s “GOLDEN ARCHES.” The company provides consistency in its products so that the consumers can have the same taste irrespective of their country (Danielle, 2011). However, it provides cultural diversity considerations on its foods based on the country or location, hence adding to supplemental sales in its regions of operation. The other strength associated McDonald’s is diversified income. Since the company is big and operates in different countries, its cumulative sales and revenue in different areas tend to offset each other. Operating in different countries makes the country not to depend on one key source of revenue.
One of the weaknesses associated with McDonald’s is negative publicity. The company experiences a perception that most of its foods are unhealthy, with improper quantities of fat, sugar, salt, carbs and other products which endanger human health (Crawford & Geddy, 2015). Based on facts, some of these perceptions are on point because most of foods on its standard menu are not healthy. The company also experiences high employee turnover because most its jobs associated are low skilled and low paying.
One of the major opportunities associated with McDonald’s is expansion chances. McDonald’s is popular in different countries and therefore expanding is not challenging (Jonathan, 2012). The company is always on the look out to expand its operations and also to maximize its market share.
One of the major threats faced by this company is competition. Since its inception, McDonald’s has been facing significant competition from regional, national, international, as well as local retailers of food and beverages. The company competes on the basis of service, product, price, menu variety, convenience among others. The other threat affecting this company is increase in health-conscious consumers. Most people in the United States and other countries are considering taking only the health diets because of increase of diseases which are related to diet.
Customers in this case refer to the buyer force. The purchasers have great deal of choosing power because of the fact that if they are not satisfied with the products or services can easily switch or buy from other companies. But it is undeniable that companies cannot satisfy the needs of all the customers (Sheena, 2014). Therefore, they divide the market into different segments which display uniform characteristics of the customers for easy decision making. McDonald’s has segmented its market based on demographic factors, age variations and lifestyle. The target markets for this company comprise of seniors, adults and teenagers, but the most heavily targeted segment is kids.
Because customers are the most important assets in this company, its management strives to ensure their demands are addressed through focusing on continuous production of high quality products. The management emphasizes on continuous market research to ensure the customer expectations are identified (Maddisen, 2012). Although this company operates in a competitive industry, it struggles to use the required measures to maintain customer loyalty. Some of the strategies used include producing products based on the expectation of their consumers, selling the products at prices which can make the customers realize the value for their money and so forth.
To succeed in its orations, McDonald’s has different collaborators who play different roles for the company (Maddisen, 2016). Among the collaborators are suppliers who assist in delivering products and raw materials from one place to the other. Recently, the company has four main suppliers; lopez food for meat products, keystone foods for chicken products, 100 circle for potatoes and finally Gavina coffee for McCafe products.
Other McDonald’s collaborators comprise of farmers and shipping companies. Each kind of meals sold by this company is made from one or more farm products (Charles, 2013). Some of the primary farm products required by McDonald’s comprise of meat, tomatoes, mild, wheat, potatoes, cucumbers, potatoes among others. All of these products are produced and processed in different regions across the country and therefore requires shipping companies to transport them from one place to the other.
McDonald’s operates in one of the most competitive sectors. Over the years, one of the major challenges which this company has been facing is pressure from competitors (Kunkel, 2013). The company competes directly with other fast food restaurants such as taco bell, KFC, Subway, Burger king, and Wendy’s. Fast- casual restaurants which comprise of chipotle, Mexican grill and chipotle are as well close competitors.
Internationally, this company faces competition from variety of the big fast food chains in addition to regional competitors and small local restaurants (Russo, 2010). Although this company operates in such competing industry, it always establishes good strategies which assist it to maintain a competitive advantage. Some of these strategies include, using good marketing strategies, emphasizing on quality products and services, maintaining customer loyalty among others.
McDonald’s operations are impacted by various factors. Some of these include political, economic, social, technological, environmental and legal and legal factors. Political factors in this case refer to the effects of governmental action on the macro environment of this company (Metin, 2015). Some of the significant political factors which impact McDonald’s comprise of pending tax reforms, increasing international trade agreements and evolving public health policies.
Some of the notable economic factors which influence McDonald’s include the slow but stable growth of US economy, the stable but risky European economies, and the slowdown of Chinese economy among others. McDonald’s should respond to different sociocultural changes in its macro environment (Mathieson, 2010). Various sociocultural factors which influence McDonald’s business include widening of wealth gap, increase in cultural diversity, and healthy lifestyle trend.
The most outstanding way which technology has assisted this company is assisting it to market itself across the world through the use of social media. However, this has acted as a double sword for this company because people use the same social media to post how some of the foods associated with this company are unhealthy (Charles, 2013). Other technological factors which impact the operations of McDonald’s include moderate R&D activity in the industry, increasing business automation, increasing sales through mobile automation among others.
In this company, customers are highly valued because they are the reason why the company exists. The organization always aims at providing goods and services based on customer expectation so that they can enhance their satisfaction (Tybout & Calder, 2010). This is attained through collecting information concerning what the customer wants. To collect information concerning what the customers wants, the management uses various strategies which include conducting interviews, using simple questionnaires, using advanced systems which capture the consumer’s level of satisfaction and so forth.
The other way used by McDonalds to obtain information concerning customer wants is using feedback boxes. The company values this type of obtaining information because it enables the clients to fully express their opinion (Luther, 2011). The feedback boxes are also convenient for both the customers because they drop their information whenever they visit the organization.
The customer also uses surveys to obtain information concerning what the customer wants. The reason why McDonald emphasizes on this type is because it is easy to set up, easy to send out and simple to analyze (Sue, 2014). Surveys help the customer to not only know what the customers want, but also to know their level of satisfaction.
Based on the fact that this company operates in a global market, it is exposed to many competitors who pose different threats. This means it should always analyze both existing and emerging firms which are likely to challenge its operations (Russo, 2010). Some of the ways it uses to do this include using its marketing professionals to conduct market research, using brain storming technique which includes collecting ideas from a group of people among others.
The company also undertakes market surveys to identify the firms it competes with and establish strategies which can assist it to maintain its competitive advantage.(Papke, 2014). The reason why McDonald emphasizes on extensive research and market surveys is because it knows it operates in a competitive sector and failure to identify these threats may make the business to fail.
The context of business in this sector changes from time to time because every company wants to be leading. These changes impacts McDonald’s in different ways which include reduced annual sales, revenue, change of customer loyalty, among others (Arsim, 2017). Therefore, to come up with strategies which can assist the management to establish the best strategies of adapting to the changes, McDonalds analyses several factors like consumer’s perception towards the company, change of competitor tactics, decrease in sales and revenue and so forth.
McDonalds also undertakes regular market research to explore what the possible changes in the business context. The market research uses different types of data collection tools like questionnaires, use of different software designed for this purpose among others (Kanti, 2012). Some of the important information which the company aims to collect is what triggers the changes and what are the likely impacts of the changes. With the help of this information, the management uses its concerned departments to establish strategies which can aid in addressing the issue.
Collaborators play a significant role in the performance of this company. Some of the collaborators which the company values most are its suppliers (Reinhold, 2013). To analyze the role played by these collaborators, the management uses its supply chain department to collect information through various tools of data collection techniques like questionnaires and interviews. The most important information collected in this case is the level of satisfaction which the suppliers deliver in each level of the supply chain.
There are many potential markets which this company can target. Based on the fact that the company has a global reputation, it has the opportunity to grow by targeting not only kids but also other people in different countries (Angela, 213). For instance, this company deals with food and every person should eat in order to survive. This means targeting adults as well as other segments can aid it in attaining great success
The company has segmented its market based on demographics and psychographics factors (Kanti, 2012). To obtain good success, maintain its competitive advantage and address the customer needs in the right manner, the McDonald’s can also segment its market based on behavioral factors. With this type of segmentation, the management can focus on various aspects like the degree of loyalty, personality and user status.
Behavioral segmentation will enable the company to know how to address the easy going and careless customers and maintain the loyal ones (Lee, 2010). Although the company has tried to segment the market based on this factor, it has not fully used the strategies which can assist it to realize the benefits of this type of segmentation.
McDonald’s choice of target market should be based on the key drivers which make or prevent people from consuming various types of foods. For example, one of these factors may be cultural factors because in some societies there are some cultural beliefs which may make people not to eat or drink some types of foods and beverages (Danielle, 2011). The other factor may include health concern towards consumption of particular products. In the recent years, consumers are becoming sensitive to consuming various types of foods and drinks and therefore considering this aspect when choosing target market is vital.
McDonald’s targets markets based on three factors; kids, teenage and families. Targeting the market based on these factors is ideal for this company because it assist them to plan prices based on each category (Lee, 2010). However, this targeting factor seems to rotate under the same thing because when one says kids and families it seems like talking about the same thing. The company can also target the market based on other factors like social class, gender, occupation and so forth.
Although customers may have reasons why they purchase goods from one company and not the other, their loyalty changes as soon as the company fails to demonstrate why their products are better than those of its competitors. This means companies must always make their potential customers feel the value for their money through demonstrating why their products are outstanding as compared to those of competitors.
To succeed in the competitive market which McDonald’s operates in, the management should come up with strong statements which define why its customers should purchase goods from this company and not from competitors (Danielle, 2011). The value preposition must relate the prices charged and the quality of the products. The statement should specifically target the the potential customers and not other stake holders.
The company should come up with a concise description of its target market and also the compelling picture concerning how it wants the target market to perceive its products and services (Crawford & Geddy, 2015). For example if it is kids, the company should describe how it wants the kids to perceive its products. Some of the perceptions which the management may opt to describe may include the tastiness of the foods, the temperatures at which they are served, the level of nutrients and so forth.
Because positioning statement is an internal tool, each product, service and marketing decisions which the company makes concerning the brands should align with and support this statement. Using positioning statement in marketing can aid McDonald’s to maintain focus on its brands as well as its value preposition.
This company provides mainly food and beverages and targets kids, teenagers and families. To succeed in its operations, the company must ensure the products are of high quality in order for its Value preposition for the target market to obtain the desired results (Luther, 2011). This is because without mentioning quality in the value preposition, the customers cannot find good reason why they should purchase products from this company. Quality and good description of the products will also assist the management to come up with proper and effective positioning statement for the target market.
McDonald’s restaurants are the most prominent places where its products are distributed. The major places where the products can be found include restaurants, McDonald’s mobile app, Kiosks, post mates website and app among others (Lee, 2010). Place will not only define distribution of the products but will also define other aspects like segmentation and target customers.
If for example the company does not have a place where its products can be found, it means it does not have segments and target customers (Angela, 213). To succeed in its operations, McDonalds must ensure the products are easily accessible by its target customers whenever they require them because if the customers do not find the products at the expected places they may purchase them from other companies.
This company promotes its products and services as one of the strategies of attracting more customers. Some of the tactics it uses in its promotional mix comprise of advertising, sales promotions, public relations and direct selling. Without using promotions, the target customers cannot realize the products offered by this firm (Kanti, 2012). It cannot also make its Value preposition for the target market effective because for a company to inform consumers why they should purchase products from the company, it must start by attract the desired customers to the company.
Because McDonald’s operates in different countries, it should emphasize in using social media for advertising. The reason why this channel is ideal for this company is because apart from United States, the company has customers in other countries who need to be aware about the company. Social media is cheap way of advertising, and reaches many people irrespective of their geographical locations.
The pricing strategy used by McDonald’s includes price building combined with psychological pricing. To build its price, McDonalds offers foods and drinks for a discount (Charles, 2013). To succeed in its pricing strategy and also to maintain the loyalty of its target customers, the management should always charge fair prices which make the customers feel the value for their money.
The prices should also be based on the quality of the products, production costs, and the target customers. Planning the prices based on these factors makes the Value preposition for the target market as well as the positioning statement to be sensible to the consumers (Charles, 2013). When planning the prices, the management should also consider the prices used by competitors for similar products. It should also find out if the consumers have found it worth purchasing products at that price.
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