Strategic Management Techniques Of McDonalds

My research topic deals with one of the most profitable societies of the world, The Mc Donald's. It underlines the proper management approaches adapted by Mc Donald's that helped it to grow from a tiny business to 1 of the most successful businesses.

McDonald's is the leading junk food service organization on the planet. The story of Mc Donald's started out way back in 1954 when, Raymond Kroc its founder envisioned a nationwide fast food string upon discovering a hamburger stall in San Bernardino, California. By revolutionizing the North american Restaurant Industry, Kroc demonstrated himself as the pioneer. Today Mc Donald is one of the very most valuable brands globally, value more than $25billion. It is number one fast food string stores with about 40 million customers going to it per day. The Golden Arches and its mascot Ronald Mc Donald have gained widespread recognition. Although company has its origins in the U. S. , Mc Donald's today has become an accepted citizen of the world.

The main focus is on the proper evolution of this corporation. The advantages and weaknesses are highlighted which throws light on how Mc Donald's has survived in your competition.

Keywords: strategic management strategies, Raymond Kroc, strategic management approaches

How Mc Donald's has preserved its position?

McDonald's has been able to keep its competitive edge by constantly adding new items in its menu. Which means that an analyzer kind of strategy is accompanied by Mc Donald's, i. e. introducing new items and defending the prevailing ones.

In Strategic Management, creating a mission and perspective statement is the principal step. It reflects the management's aspirations for the business and its own business providing a breathtaking view to customers and presenting specifics about future business strategies.

How Mc Donald's has identified its MISSION AND Eyesight:

Mc DONALD'S Quest AND Eye-sight: To provide quality food, fast and also at low cost. The perspective of McDonald's is to dominate the food-service industry at global level. Global dominance methods to set up criteria of performance for client satisfaction and increase market show and success by implementing prices and execution strategies (Flack, 2008).

What is the business's strengths?

Strength serves as a a unique competence that gives the firm a competitive benefits in market. For example image, market management, buyer supplier relationships, money, etc. Mc Donald's strength lies in creating a graphic in the people's heads and introducing those to a fresh culture of fast food. Customer support, delivery, rate and sanitation are its core advantages that lead to its extension. These were successful in creating a corporate symbol and its advertisement campaigns set up its brand image in the brains of thousands of people. McDonalds determined two main rivals i. e. the Burger Ruler and KFC.

The online marketing strategy of McDonalds is concerned with internal resources, external environment, and its own competencies.

McDonald's product value is its power. Customers know very well what to expect when they enter McDonalds. It offers emphasis to human resources by satisfying its employees and customers both.

Next comes the innovation aspect. In order to serve the new preferences and trends of individuals, services are launched. Its diversity into new businesses may also be regarded as its advantages.

The question develops is how much effective are the above strengths over time of the business? McDonald's today is much less amendable as it was during its inception. So what are the driving a vehicle factors that have resulted in its decrease in sales and services? To be able to analyze this factor we must identify the weaknesses in the company's business and online marketing strategy. The factors that are considered as strengths turn into a weakness if it blocks the performance of the business.

Customer alternatives and styles change. Generally, people get tired of their old brands that they had been using over the years. When they don't get a product with the expected development they change to new brands. With so many outlet stores, people find McDonalds everywhere you go. This over publicity may also be grounds for abstinence. Then preserving standards of an enormous chain is difficult and if there is insufficient quality or service in virtually any one outlet, then your brand all together gets damaged.

Reaching the target audience is the secret of any online marketing strategy. So the target audience should be chosen carefully. It is very important for an organization's success, that its customers attain satisfaction level. Before Mc Donald's targeted mostly the young person, which includes improved now. Now McDonald's has turned into a more general kind of market i. e. it now specializes in individuals also. They began targeting diverse market which consists of elderly people to children, by releasing products including the 'Happy Meals' for children and Egg McMuffin for the elder ones. Together with the changing lifestyle, the demand for better food has increased and also ever before changing demographic group demands fast, low in energy quality food. McDonald's responds to the kind of opportunity by presenting new and progressive products. Earlier, that they had introduced a fresh product that was a regular hamburger and tasted like the true one but was manufactured from Soya coffee beans, a plant materials. This product was also used to focus on another demographic group, i. e. vegetarians. McDonald's generally uses psychographic segmentation by which it targets the middle and working classes. These type people will be more susceptible to enter in junk food restaurants because they lead an easy and occupied life and for that reason require some fast food. In a nutshell McDonald's customers belong to all age ranges and classes, but comprises mainly of working and middle income people. (Kroc, 2001).

The above factors point out key advantages and weaknesses at the exterior level. There are a few interior factors also which influences the performance of the business. One major factor is the relationship between your franchise sellers and the management. Organizational durability is the trunk bone of any business and once it starts to shake the whole system can collapse. But slowly McDonald is dealing with all these weaknesses. Through latest scientific developments it is becoming possible for its brand professionals to communicate, compare and enhance the services. They can also use internet in order to boost, motivate and compare performances of other centers.

The analysis of all exterior as well as inner strengths and weaknesses of the company should be done so that a sustainable plan for the further advancements in the business can be drafted. For any kind of improvement or development the option of internal resources is crucial. By inspecting this aspect, a changed strategy can be developed to suit the business's vision. Hence by using all the key competencies, the corporation can successfully increase and support in the competitive market (Richard Whittington, 1993)

In 2003 the change in the most notable managerial level created a new wave in the performance of the corporation and also some major changes were integrated to retain and sustain the product quality and innovation aspect of the brand. Now why don't we understand the sustainable competitive advantage of Mc Donald's.

What is intended by sustainable competitive benefits? How is it significant to McDonalds?

SCA is the advantage a firm has which is very hard or mainly impossible for rivals to own or break through. It could be either brand, cost structure, dynamic customer care, or any kind of patents. The benefit should be either proprietary or distinctive to become considered as sustainable. Other than this, three different facets have been recognized that helps in SCA.

First, there must be a good integration and coordination between the organizational and managerial procedures. Therefore the essential 'value' is created when every staff in the organization strives to work for one common goal. The organization should learn to be adaptable and change according to the needs in the surroundings such as customer developments, government limitation or enhancements in technology. Nowadays McDonalds is focusing on organizational behavior as well as managerial competence. Previously it was disregarded because the organization was more involved with establishing its stores everywhere than building up its key competency. Because of this the revenue did not increase much despite newer outlets being exposed. The firm experienced a huge loss for the very first time since their inceptions which finally lead to changes in the managerial strategies.

Second, structural, financial investments and technology areas of any firm are excellent market position which assists with building SCA. No doubt Mc Donald's is loaded in aspects such as framework, technology and financing. All that is required is to recognize and combine these resources in the right direction for the improvement of the business. From 2003 onwards the company has really began to concentrate on its competencies.

Third, the greatest benefit is the vision of the business with which it began. Sustaining this fantasy over the passing years is any companies' very best advantage. A business usually revolves around its eyesight declaration, so sustaining this eye-sight and employed in accordance with it, is a superb SCA. McDonalds was began to help people who have been too occupied and had little time to prepare. The eye-sight was to provide value, customer support, quality and sanitation. Keeping its eye-sight in mind, the organization which slackened somewhat earlier due to its incompetent franchise holders is being weeded and new and better people are placed in this place.

Thus, SCA means putting into action the cost effective established strategies using all the initial advantages of the business which can't be replicated by the rivals. In today's circumstance, everything is outsourced from staff appointment to customer support. No business is useful enough to take care of all types of work. It isn't easy for big organizations like McDonalds to concentrate on every small information. But key competences of the business should not be outsourced. Mostly companies concentrate on their core competencies whereas outsource its staying operation. McDonald has recently tested its drive by order service. Outsourcing is therefore helpful in the increasing exterior suppliers and overcomes the difficulties faced credited to lack of latest technologies and other enhancements.

So what makes Mc Donald's still strong and maintain its rank as one of the leading business. The answer is its core competences and the inner as well as exterior lasting competitive advantages. Certainly, to maintain with the changing business environment, the business has also started to outsource, but then it will not be overly enthusiastic by the outsourcing mania. This company has recently began to get back to its golden period because of large size revamping of its structural and organizational changes being integrated (C K Prahalad and G Hamel 1990).

Strategic Allies:

A proper ally's means an organization is working along in a joint venture or an identical arrangement with one or more organizations. McDonald's is within strategic alliance with: Wal-Mart, Chevron, Amoco, Disney and Coca-Cola. Wal-Mart, the major retail chain in U. S. and several neighboring countries, is symbiotically allied with McDonald's. In each Wal-Mart stores, there are McDonald's restaurants. Therefore it provides its customers excellent low cost junk food in a convenient way. Chevron and Amoco are two petrol pumps with which Mc Donald's is alliance with. This alliance represents ultimate convenience. Little or nothing can become more convenient than filling the car with as well as obtaining a meals, that too all in a single stop. Another important alliance of the business has been Disney. Exclusive right has been granted to Mc Donald's to sell junk food in Disney's theme parks around US with other Disney places in the world. As per the terms of the contract, McDonald's will operate as restaurants and Disney will promote its motion pictures through McDonald's.


As such there is absolutely no particular competitive strategy that warranties to have success every time. Risk behaviour change anticipated to professional volatility, environmental uncertainty and several interior conditions might also be involved. Because the marketing function is consumer oriented, customer needs should be discovered and then strategies should be made to meet those needs. The circulation system brings the product or service to the place where in can best load customer needs. Since every product requires support from circulation channels, therefore the right selection of distributors and wholesalers is very important. Promotion of products is more important than advertising. The positioning, size and characteristics of markets described by business strategy will indicate this content of promotional materials as well as it will guide the advertising mix decisions. Costing is another intricate issue which is employed as a competitive weapon because it is related to cost, quantity, tradeoffs etc. Changes in pricing policy are likely to provoke competitor's response.

Marketing has received increasingly better attention in the competitive business because the early modern age. The old marketing theory focused on selling of the prevailing products of the company and promoting it to maximize sales to achieve profits, but now the new notion focuses on the customers of the organization and seeks to earn profit by customer satisfaction with a built-in marketing program.

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