Marketing management help essay on: McDonald’s Corporation

1. Introduction to the Company:McDonald’s Corporation is the world’s biggest fast food and hamburger restaurant’s chain. It serves in the region of 64 million customers daily in 119 countries.

The company is headquartered in the United States. It started as a barbecue restaurant in the year of 1940. Then it was run by the Richard and Maurice McDonald. The company was named after them. In the year of 1948 they reorganized their business as a hamburger stand using production line principles. Businessman Ray Kroc joined the company as a franchise agent in 1955. Later he acquired the chain from the McDonald brothers and administered its universal expansion.McDonalds refers to one of the largest food chain which provides different varieties of food to the customers. The size of the organization could be seen with the help of the number of employees it has employed for the past many years. It has employed approximately 11.7 million employees all across the globe (Reiss, 2001).  The size of McDonalds could also be seen with the help of the number of stores opened in various regions of the country. Out of the stores opened, 80% of them are franchised. There has been a constant rise in the operating income earned by the enterprise. The current operating income estimated for McDonalds is $3.9 billion.

2. Porter’s Five Forces Model Analysis for McDonalds:

The five forces porter’s model for McDonalds could be seen with the help of five different aspects such as Existing competition in the food industry, Threat from Substitutes, Bargaining power of the suppliers & buyers, Threat of new entrants.Þ    Level of Competition: The level of competition in case of McDonalds is quite high. The threat of competition for McDonalds is rising with an increase in the number of fast food chains. The main competitors for McDonalds are Wendy’s, Burger King, etc who offer similar type of food items to its customers (Porter, 2008). The local road side hawkers have been considered as one of the main competitors for McDonalds.

Þ    Threat of Substitute goods: The main threat of the substitute goods to McDonalds could be seen with an increase in the sandwich industry. It has been seen that, the service in case of the sandwich industry is quite quick as compared to the other players in the market. The variants of the food products have been increasing as compared to the product offerings by McDonalds (Porter, 2008). The local road side hawkers have been considered as one of the main competitors for McDonalds. They offer different varieties of the similar kind of products to the target group.  The substitute goods which might affect the demand for the burgers & combo meals in McDonalds would be Pizzas, Ready to Cook food available at various 24X7 outlets, grocery items, etc (Porter, 2008).

Þ    Threat of New Entrants: With a rise in the food industry, McDonalds would have a major threat from the new rivals or competitors which might arise in the years to come. Apart from the rise in the food industry, it should also be kept in mind that, opening up a new store would be major issue. The food industry is so saturated that, it would be a difficult task for the new entrant to establish it (Porter, 2008).

Þ    Bargaining power of buyers: Buyers in case of food industry refers to the people who would visit the restaurant, road side hawkers, etc. The bargaining power of the buyers is quite high. It could be seen that, the number of suppliers in the market is quite large in number therefore; the buyers would have a greater bargaining power. The prices charged by the suppliers would be negotiable. This would help the suppliers to retain their buyers & continue with the smooth functioning of the same (Reiss, 2001).

Þ    Bargaining power of supplier: Supplier refers to the group of people through which the various resources are being purchased in the future. The bargaining power of the suppliers is quite low. The main reason for the same would be due to the fact that, majority of the products is being purchased from the different outlets. It must be kept in mind that, the organization should buy the products from the different sources rather than relying on one outlet. The suppliers would have very little bargaining power as there are many suppliers available in the food market (Porter, 2008).

3. Recommended Competitive Strategy for McDonalds:Cost efficiency, product development, marketing, and promotions these are the major key factor for the immense success of McDonald’s. In fact McDonald’s sold Donatos Pizzeria, a company they owned for the past four and half years, as the operations costs were quite high during running the company because they wanted to ensure that they remained consistent with these factors. Following these issues McDonald’s addressed the issues of slumping sales which they went through previously and concentrated on the operations. Recently the company has initiated a new plan for revitalization which had an objective to cater to the set of customers who are health conscious and to develop its position with respect to finance with the help of discipline (Adamy, 2009).

With the help of several innovative campaigns, McDonald’s is currently looking like one of the most premier players in the global industry of food service. They have added new options for foods like chicken options and salads which has created its own following amongst the customers who are more health conscious (McGee, 2003). The training and operations systems of the company was also streamlined and bettered by different techniques. All of these efforts put together made the customer experience more enjoyable in the restaurant (Porter, 2008). In addition to all of these, McDonald’s has also shown exemplary financial discipline in recent times. Due to that they have been able to pay for the debt they had incurred earlier.

The two strategies which could be recommended for McDonalds in order to act competitive would be as to stay on the offensive front and executing the strategy & control. Both the strategies have been discussed as under:

Stay-on-the-offensive strategyThe first strategy which should be taken up by McDonalds in order to act competitive would be to stay offensive in order to be the leader in the food industry. The main goal of this strategy would be to attain sustainable competitive advantage as compared to its competitors. Various improvements in the technology should be implemented by the same which would help them to give the best quality food products to its customers (Reiss, 2001). This would help in order to have better methods for processing their orders, decrease the waiting time etc. Better products should be offered by McDonalds which would help this food joint to be at the top of the food industry & attain a better position (Porter, 2008). This would help in order to increase the satisfaction level of the customers as well as attract more number towards it.  Better training should be imparted to the newly hired employees as it would help in order to train them in the best possible manner (McGee, 2003).

Executing the strategy and control:

The second strategy which should be adopted by the same would be to execute the strategy as well as control the entire process. McDonalds should try to make its presence felt with the help of the introducing better innovation strategies, marketing strategies, and innovations in the product offerings, provide better services to its customers & train the employees in the bets of its manner. By practicing any of the following innovations mentioned above, the employee would have better expectations from the same as well as have high levels of success in the organization (Porter, 2008). The main goal or objective of McDonalds would be to have a “Plan & Win strategy”. This means that, the strategies should be formulated in such a manner which would help in order to retain as well as attract more number of people. The strategies should be such that, it would help in order to overpower the competitors (Porter, 2008).

This strategy would help its customers to know that, McDonalds would not be referred to as a food joint which is mainly concerned in earning high levels of profit but at the same time is focusing upon the service to its customers & employees as well. The main focus to succeed in this type of an industry would be to take care of People, Process, Place, Promotion & Product (Porter, 2008).

4. Two Computer Based Systems Relevant for McDonalds:

The first computer based system which would be relevant for McDonalds would be the use of internet & intranet. This would help McDonalds in order to market as well as advertise regarding their organization. This computer based system would also help in order to focus upon the current product offerings along with the prices charged for the same (McDonalds, 2011). The main aim or function of internet would be to launch different types of marketing strategies which would help McDonalds to be a step ahead of its competitors. With the use of this computer based technology, the members of the organization would stay connected with each & every person employed in the same. Internet would also act as one of the major communication channel amongst the stakeholders such as customers, employees, suppliers, etc (McGee, 2003).The next best computer based system which could be used at McDonalds would refer to the e-payment system. This payment system would help McDonalds to act as one of the key systems which would make McDonalds a faster food chain in the market. It could be seen that, long queues occur at the cash or the order counters (McGee, 2003). Therefore, with the implementation of this system the cash or the orders received would take less amount of time. This system would also help in order to save time of the consumers (Porter, 2008). The e-payment system would also help McDonalds in order to increase the percentage of cash & decrease the number of queue.

The SWOT Analysis for the two computer based system mentioned above in the report could be described as under:

Þ    The first strength of using this computer based system would be the highly skilled human resource.

Þ    The work performed by such system would be of optimum quality.

Þ    There would be competitiveness in terms of cost by applying such types of system in the enterprise.

Þ    The quality of infrastructure would increase by adopting the same.Weakness

Þ    Implementing such type of technology would lead to lack of practical knowledge.

Þ    Research & Development would not be done by implementing the same.

Opportunities

Þ    Adopting the same would help in order to have better processing of the transactions, proper maintenance of the accounts.

Þ    It would help in order to increase the level of market share or sales.Threats

Þ    The major threat attached with such type of technology would be that, there is lack of data security.

Þ    Implementing such technologies would be done in certain regions only.

5. Critical Analysis and Evaluation of These Systems:

The critical & evaluation of the two computer based electronic system discussed above would help in order to improve the overall sales & marketing of the productivity as well as the effectiveness of the organization. The first computer based information system i.e. internet, would help in order to improve the sales along with the marketing activities of McDonalds (McDonalds, 2011). Customer relationship management & the overall inventory would be kept in mind with the help of the two systems mentioned above.

With the implementation of the e-payment system, processing of the order & payment system would help the consumers to act efficiently & quickly. The entire data would be collected at one point & help in further reference of the customer base (McGee, 2003).

6. Conclusion:McDonalds refers to one of the largest food chain which provides different varieties of food to the customers. The size of the organization could be seen with the help of the number of employees it has employed for the past many years. It has employed approximately 11.7 million employees all across the globe (Reiss, 2001).  The size of McDonalds could also be seen with the help of the number of stores opened in various regions of the country. Out of the stores opened, 80% of them are franchised. There has been a constant rise in the operating income earned by the enterprise. The current operating income estimated for McDonalds is $3.9 billion (McGee, 2003).

The five aspects of the porter’s model have been discussed in the report. This would help in order to take into consideration the level of competition, threats from the substitutes, bargaining power of buyers, sellers & the new entrants. The two main strategies which could be used by McDonalds in order to be a step ahead of its competitors would be Stay-on-the-offensive strategy & Executing the strategy and control. The main goal of the first strategy would be to attain sustainable competitive advantage as compared to its competitors. Various improvements in the technology should be implemented by the same which would help them to give the best quality food products to its customers (Reiss, 2001). The second strategy which should be adopted by the same would be to execute the strategy as well as control the entire process. McDonalds should try to make its presence felt with the help of the introducing better innovation strategies, marketing strategies, and innovations in the product offerings, provide better services to its customers & train the employees in the bets of its manner.

The two computers based information system would help the organization. Implementation of either of the two information system i.e. transaction processing and recording and financial management or help desk service would help in order to upgrade the entire system. Increase in the effectiveness as well as efficiency of the same would be practiced (McGee, 2003). The SWOT Analysis of the information system along with the five forces model of McDonalds would help in order to see its position amongst the food industry. With the help of the SWOT Analysis a in depth analysis should be done which would help in order to seek whether any of the two information system should be implemented or not (Botterill & Kline, 2007).

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