In the way, political factors can affect business profitability. in English literature from BRABU and an MBA from the Asia-Pacific Institute of Management, New Delhi. McDonalds is also making heavy investment in technology for successful marketing and growth of its brand. Moreover, product and service standardization lies in the cornerstone of McDonalds business strategy. [1] Annual Report (2014) McDonald’s Corporation, Interpretivism (interpretivist) Research Philosophy. Franchisee issues: The McDonald’s system is 90% franchisee based which is bound to give rise to franchisee related issues. It is because social factors now play an increasingly important role in deciding the fate of the businesses. McDonald’s Corporation Report contains more detailed discussion of the company’s business strategy. Moreover, from Dominos to Burger King there are several large and influential brands that are aggressively competing for market share in the fast food industry. There are other factors too leading to higher competition among the rival brands. The signage of a McDonald’s fast-food restaurant in Madrid, Spain. Millennials are a highly etch save generation  who want affordable products and  good customer service. This was around 33 billion dollars higher than the previous year. the number of international brands in the fast food industry has kept growing. – In the recent years McDonalds has reduced the expenditure on marketing and promotion. However, several brands are also including modern technologies like AI and other marketing methods to reach out to the millennials and engage them. The total revenue of McDonalds has continued to fall from 2013 onwards. Moreover, the brand is present in around 120 countries which also allows the brand access to a very large customer base. McDonald’s with 36000+ outlets all over the world is fighting hard with other popular chains like Subway, KFC, and Dominos etc. According to  research by Euromonitor International, the IEO (Informal Eating out Segment) which constitutes the primary competition of McDonald’s and includes quick-service eating establishments, casual dining full-service restaurants, street stalls or kiosks, cafés,100% home delivery/takeaway providers, specialist coffee shops, self-service cafeterias and juice/smoothie bars was composed of 9 million outlets in 2016 and generated 1.2 trillion in sales. The brands that have invested more in technology are ahead of the others in market. Implication 16 4.2. McDonald’s generic strategy of cost leadership enables the company to sustain its market leadership. In case of most their small size and isolated position does not give them much bargaining power. trust is important in this era and McDonalds has got a strong brand image which shows trust among its customers. Future Strategy 16 5.0. Mcdonald's Pestle Analysis On Effective Business Expansion Strategies. the overall threat from substitute products and brands remains moderate. Another important strength of McDonald’s is its global presence. The brand serves a diverse menu that includes hamburgers and cheeseburgers, Big Mac, Quarter Pounder with Cheese, Filet-O-Fish, several chicken sandwiches, Chicken McNuggets, wraps, french fries, salads, oatmeal, shakes, McFlurry desserts, sundaes, soft serve cones, pies, soft drinks, coffee, McCafé beverages and other beverages. The net income of McDonalds rose from 4687 million dollars to 5,192 million dollars. Environmental factors have become very important in the business industry given that. the millennial generation is highly health conscious and wants healthier products. There are very few suppliers that cannot be replaced or can be replaced with difficulty which gives them some bargaining power. The restaurant workforce of USA constitutes 10% of its entire workforce. This has led to higher marketing and promotion costs as well as research and development costs for international brands like McDonalds. McDonald’s is very popular in the global market and in various corners of the world. The company is engaged in an extensive utilization of economies of scale to achieve the cost advantage. This McDonald’s SWOT analysis reveals how the most successful fast-food chain company of all time uses its competitive advantages to continue dominating fast-food industry. each brand is quite aggressive about competition and uses so many strategies like seasonal discounts and offers to lure customers away from the rival brands. the threat of substitute products for McDonalds is moderate. However, the threat gets to be moderated by the brand image as well as, The threat from new entrants for McDonalds is also moderate. Here are some of the shortcomings of McDonald’s’ strategy and structured composition, which affects its overall growth. This organisation is the world’s best fast food restaurant. McDonald’s is a leading name in the world of fast food. It is a well known name in most corners of the world and brand image is helpful in terms of marketing as well as sales both. In this assignment will focus on the business strategy. However, the threat gets to be moderated by the brand image as well as  large market share of the McDonalds. That also includes maximum utilization of the available human resources, such as labor (Hambrick and Donald, pp.567-575, 1980). This report highlights the main business activities of the organisation, as well as provides an overview of the fast food retail industry and McDonald’s the competitive environment of McDonald’s. The business model of McDonald’s is overdependent on franchisees which operate more than 90% of its business. Business level strategy of McDonalds Business level strategy is an integrated & coordinated set of commitments and actions. However, McDonalds remains the most popular brand due to its quality and variety of food and extensive presence globally. The company procures raw material from suppliers around the world through its procurement teams. Brand value and brand awareness 3. Question. The threat is not just from the international brands but also from the local and smaller brands. The value chain includes all the activities from product conception to marketing and after sales service. The paper would analyze the strategic analysis of McDonalds in great detail while considering its competition, success factors, strengths and weaknesses, and strategy measurement. Apart form social media, there are other tools and methods also to bring the millennial consumers closer. As per the Euro Monitor International report for 2016, the entire restaurant industry had 19 million outlets. McDonald’s systemwide sales accounted for 3.5% of the entire restaurant industry sales while its outlets were only 0.2% of the total outlets. Sociocultural factors have an increasingly important role in the context of marketing and business strategy both. 90% of its restaurants are operated by franchisees. McDonald’s must design its menu as per the taste of the millennial regeneration and serve healthier products. The total amount that it generated in sales equalled 2.4 trillion dollars. In this assignment will describe the vision, mission, objective, competitive strategy, external fit, PEST analysis, porter’s five forces regarding McDonald. these distribution centres distribute products and supplies to Mcdonalds restaurants globally. While this has intensified the race on the one hand, on the other it has given customers higher bargaining power. McDonalds business strategy utilizes a combination of cost leadership and international market expansion strategies. Risk Management 18 8.0. the demographic composition of the world population has changed a lot in the recent years. Global comparable sales of McDonald’s increased by 5.3% and guest count increased by 1.9%. The bargaining power of customers in the 21st century, the threat of substitute products for McDonalds is moderate. Regarding diversification, McDonald’s has set its sights on Asia, with the hope of adding more than 1,500 new restaurants. https://economictimes.indiatimes.com/industry/cons-products/food/why-mcdonalds-had-to-shutter-outlets-in-delhi/articleshow/59402309.cms, https://www.restaurant.org/News-Research/Research/Facts-at-a-Glance, https://corporate.mcdonalds.com/content/dam/gwscorp/investor-relations-content/annual-reports/McDonald%27s%202017%20Annual%20Report.pdf. It provides the most useful resource of knowledge to business starters, researchers, strategists, and students. McDonald’s menu is very uniform that is composed of hamburgers, cheeseburgers, fish filet, chicken sandwiches, French fries, salads, and shakes Of the 37,241 McDonald’s restaurants that the brand operated in 2017, in 120 countries, 34,108 were franchised and 3,133 were operated by the company. Therefore according to pestle analysis of McDonalds we can say that Trade agreements have the capacity to simplify or complicate the process of undertaking business activities in certain areas. The social factors have also kept growing in relevance in the 21st century. Apart from that the brand has invested in technology down its supply chain as well as in other processes including internal and external communication as well as customer service. The stronger the brand image of a brand, the higher are its sales and profits. the brand plans to turn it into 95% operated by franchisees. Technology is heavily important for businesses to survive in the 21st century. Your answer must include examples of McDonald's strategy while also including personal experiences and approaches a small business can adopt and use from the McDonald's business strategy Rising health  consciousness and health related criticism: Globally, health consciousness is rising and people want  healthier food. Technology is heavily important for businesses to survive in the 21st century. True to ‘fast food’ format of its restaurants, McDonald’s is famous for the speed of customer service without compromising the quality of the service. McDonalds’ 90% restaurants are operated by franchisees. Total assets of McDonalds rose from 31,024 million dollars to 33,804 million dollars. McDonalds has a large customer base and enjoys very high level of customer loyalty. the Millennial generation especially is highly health conscious and wants only affordable and good food. As of year end 2017, McDonald’s employed 235,000 employees. A large number of McDonald’s restaurants had to be closed in India only because the brand could not manage its franchisees there well. Franchising and licensing forms of new market entry is utilized within McDonald’s business strategy to a great extent. However, both operating income and net income of the brand have kept rising during the last three years. In 1999, McDonald’s was leading the world catering market with a strong brand and total sales of $ 35 billion. Declining brand image 3. However, a possible strategic direction for McDonald’s continued growth is to establish more locations in developing economies and in countries where the firm has no market presence. Food quality related issues also erupt from time to time across the McDonald’s system. Testing the alternative strategies 17 6.0. Global Presence: McDonalds is present in around 120 countries. Abhijeet has been blogging on educational topics and business research since 2016. Big Mac tastes almost all over the world due to the use of the same ingredients in the same quantities and application of the standardized ways of cooking around the globe. It is why McDonalds is focusing on sustainability and trying to achieve higher sustainability in the long term. He likes to blog and share his knowledge and research in business management, marketing, literature and other areas with his readers. McDonalds is also subject to severe regulations, control and oversight by the government authorities. The number of restaurant locations in US is now higher than 1 million. For instance, World Wildlife Fund (WWF) experts led an independent analysis of the supply chain of McDonald’s in 2010 to help it identify the raw materials that represented the biggest sustainable sourcing opportunities for it to prioritise (McDonald’s, 2019). Such a consistence in taste has positive implications on consumer loyalty. As the US economy retrained in track , it eld to higher employment and higher spending by the consumers. However, for most of its raw material it has several options or several suppliers to source from. For example, company gives toys to kids on happy meals, the company offers discount coupons and freebies for certain products. Society is at the centre of the entire picture and brands have to keep in mind the changing social trends. Moreover, the report contains analyses of McDonald’s leadership and organizational structure, a brief financial analysis of the company and its marketing strategy and discusses the issues of corporate social responsibility. In 2017, a large number of McDonald’s restaurants in New Delhi India were found to be serving low quality food and had to be shut down. Of the 37,241 McDonald’s restaurants that the brand operated in 2017, in 120 countries, 34,108 were franchised and 3,133 were operated by the company. As per the Euro Monitor International report for 2016, the entire restaurant industry had 19 million outlets. It is also a large employer and employs more than 14.7 Million people alone. While on the one hand any negative news has the potential to hurt sales and reputation a healthy and innovative menu has become essential to retain the millennial customers. Even McDonald has built in America but in recently, to describe McDonald’s restaurant, it is … The number of QSR brands in the global fast food industry has grown high and McDonald’s has continued to compete on the basis of price, quality customer convenience and flavour. The number of restaurant locations in US is now higher than 1 million. Political factors have kept growing in importance in the 21st century. This has kept adding to the intensity of rivalry in the fast food industry. Its goal is to become 95% franchised over the longer term. It is a global brand operating across more than 100 countries. There are several reasons behind it apart from the increased competition. quick-service eating establishments, casual dining full-service restaurants, street stalls or kiosks, cafés,100% home delivery/takeaway providers, specialist coffee shops, self-service cafeterias and juice/smoothie bars was composed of 9 million outlets in 2016 and generated 1.2 trillion in sales. In case of McDonald’s it is well known as the leading fast food brand of the world. McDonalds business strategy utilizes a combination of cost leadership and international market expansion strategies. Customers know what to expect when they walk into a McDonalds store. Managing a large and international business like McDonalds is not an easy task. The brand sells across more than 100 countries through its franchised and company owned restaurants. Global presence Weaknesses 1. The Franchise business model. McDonald’s uses product development as a supporting strategy for growth. Competition in every industry has increased and only the brands that. Internationalisation Strategy 15 Think Global Act Local Option 15 Revamping Business Model 15 Franchisee and Joint Ventures 16 4.1. The most important strength of a global brand is its brand image and brand equity. Inbound logistics: McDonalds has managed a large supply chain from which it sources raw materials. It is also a large employer and employs more than 14.7 Million people alone. However, the competition from other small and big brands in the restaurant industry has kept growing intense and continued success of McDonald’s depends upon how well it is able to innovate its menu, prices and style of customer service. The IEO (Informal Eating Out) segment on the other hand had 9 million outlets and generated 1.2 trillion dollars in sales. The following table illustrates McDonalds SWOT analysis: Strengths 1. Operations: McDonalds is operational in around 120 countries. However, a  very large part of the McDonalds system around 90% is run by franchisees. It is especially so when the brand is heavily franchisee based. Global comparable sales of McDonald’s increased by 5.3% and guest count increased by 1.9%. Moreover, product and service standardization lies in the cornerstone of McDonalds business strategy. Another important strength of McDonald’s is its global presence. The most important strength of a global brand is its brand image and brand equity. SWOT Analysis of McDonalds Corporation. the 21st century customer is equipped with information as well as technology and is also highly health conscious. The company chosen for the purpose of analysing Strategy in Action is McDonald’s, one of the largest food chains in the world with global operations. Brand image and equity: One major resource of McDonalds that is above is its brand image and brand equity. Operating across more than 100 countries, the brand serves locally relevant quality food and beverages at various price points. (Annual report, 2017). However, to make such large scale operations possible as profitably one must have economies of  scale as in the case of McDonalds. Economic factors have a direct effect on the sales and profitability of businesses. Cheat prices is McDonald’s main competitive advantage. 8 out of 10 restaurant owners had started their careers as entry level employees. High level of profitability 5. McDonald's product value is also its greatest strengths. Both India and China are major markets which can be penetrated deeper. McDonalds marketing strategy is concerned with the internal resources, external environment and its basic competencies along with its share holders. There are several brands that are offering similar products or have similar menu items. Having a large and loyal customer base is an important strength that can result in higher sales and profits. HR & Culture: The HR management and culture of an organization are important resources and every organization including McDonalds has its own culture. Overall the level of rivalry among the existing brands is very high. To have the lowest cost possible McDonalds standardized its products and services. Increased focus government authorities on the environmental matters can affect McDonalds both directly and indirectly. McDonald’s restaurants offer substantially uniform menu that comprises  hamburgers and cheeseburgers, Big Mac, Quarter Pounder with Cheese, Filet-O-Fish, several chicken sandwiches, Chicken McNuggets, wraps, french fries, salads, oatmeal, shakes, McFlurry desserts, sundaes, soft serve cones, pies, soft drinks, coffee, McCafé beverages and other beverages.[1]. The QSR industry has grown highly competitive in the recent years. the brand is investing heavily in new technologies to improve its level of customer service as well as to engage its customers. Since each customer is valuable and none of the brands want to lose even a single one the focus has shifted towards customer and brands are trying to be more and more customer oriented. 7 out of ten restaurants in US are single unit operations. Customer loyalty can also be  major advantage in times of economic uncertainty. Maximum utilization of the world that help ensure good quality raw materials as new McCafé.. 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