Introduction
Throughout the history of McDonald’s development as the most successful fast food corporation in the entire world, it is very easy to identify a variety of business strategy implementations that have proven to work. However, how did MacDonald’s exactly achieve such success? The company has a variety of strengths: is shares the largest part of the food market in the world with a brand recognition estimated at approximately forty billion dollars.
It is also known worldwide for its memorable advertising. Although, to properly analyze the company’s strategy, it is also important to recognize its weaknesses. McDonald’s is aware of its main weakness, the negative publicity. The company is criticized for offering unhealthy food to the customers which contributes to the increased obesity rates. Another weakness is the employee turnover which contributes to the lower performance of the workers that are paid minimum wage and have low-qualified jobs.
Favorable geographical approach
The major bulk of the successful business strategy in McDonald’s is based on the geographical approach. Offering products that are relevant to a specific area on the globe gives the company a major competitive advantage in the field. For example, in India, where the consumption of beef is quite low, McDonald’s offers a lower selection of products that contain beef, compared, for example, with European countries. With the help of the geographical approach, McDonald’s not only caters to the specific needs of various populations but also pursues the ‘maximum local development’ of the products. However, the standards that every McDonald’s product should have are the same
everywhere. This means that the company is able to serve the needs of the niche at the same time with sustaining its standards and cost-effectiveness.
Up-to-date with the current trends
Another strong point when it comes to the competitive advantage of McDonald’s is being up-to-date with the current trends. For instance, the Happy Meals that cater to children are updated with toys that relate to the latest movies or games that are new to the market. On the other hand, this has a strong influence on the decision-making for the company: what if the movie toys were made for does not do well at the box office, and the main competitor, the Burger King, promotes a successful movie? Such decision-making is always a risk.
Issue of health
The main challenge for the company that contributes to lowering the sales of the products is McDonalds’ negative reputation when it comes to healthy meals. In the current economic development, the public became aware of the health issues caused by bad eating habits. The health organizations around the world issued reports that state that food offered by companies like McDonald’s not only causes obesity but also can be a contributor to cancer. The issue of health has become the largest issue to the company’s development. Competitors like KFC and Subway offer healthier options of sandwiches or mashed potatoes, so McDonald’s had to respond to the trend. Thus, healthier food options encouraged the customers to come back.
Conclusion
To conclude, if McDonald’s fails to recognize and address the challenges, its competitive advantage will continue to decrease. The shifting interests of customers along with media trends and new technologies are the main obstacles that stand in the way of the company’s development. For achieving the set goals and objectives, McDonald’s should find ways to attract new customers as well as encourage existing ones to return, build strong relationships with employees and, in the end, create growth for the company as a whole.