Wednesday, February 27, 2019

International Journal of Business and Management Essay

As hotshot of the close to victorful debased food arrange in the world, throughout the enculturation of McDonalds, we could easily site many masteryful bloodline scheme implementations. In this paper, I impart discuss some critical business strategies, which linked to the companys structure and international surroundings. This paper is organized as follows In the scratch line section, I pull up stakes give brief introduction to the succeeder of McDonalds. In the second section, I leave analyze some particular strategies utilise by McDonalds and how these strategies argon satisfactory to their business structure. I will then analyze why McDonalds choose these strategies in retort to the changing external environment. Finally, I will summarize the approaches used by McDonalds to achieve their strategic goals. Keywords Strategy, McDonalds structureIntroductionMcDonalds, originated in California, USA, 1954, has become iodin of the most fared and respected brands i n the world. The victor achieved includes that they have established more than 30,000 franchising stores in 119 countries, serving more than 47 million people each day, and generating closely $15 billions r even outues annually. McDonalds besides continuously enhances its brand imagine through incompatible social activities and the sponsorship of finicky events and sports i.e. as a major(ip) sponsor of the world cup since 1994 and the Champions federation football in England from 1996 to 2000.(www.McDonalds.com)How toilet McDonalds achieve such success? There be many formulatingstrategies, which we could use for our analysis of their recipe of success such as Porters competitive strategies model, which includes variediation and inexpensive leadership or Miles and Snows dodge typology, which defined prospector, defender, analyzer, and reactor strategy. Obviously, it is extremely important for McDonalds to choose the most appropriate strategy to be successful. From my pers onal point ensure, to be an Analyzer is the most suitable strategic position for them to develop their business as a all especially when they facing an extreme complex continuously changing world. As Miles and Snow defined that The analyzer tries to chief(prenominal)tain a stable business while innovating on the periphery. It seems to lie midway between the prospector and the defender. Some products will be targeted toward stable environment in which an efficiency strategy designed to keep current customers is used. Others will be targeted toward clean, more dynamic environment, where harvest-feast is possible. (Richard L.Daft) It is likewise very important to consider how McDonalds applies these strategies and how their strategies interact with their business structure and the external environment.1. How McDonalds business structure influences its strategy? The McDonalds business structure is based upon a geographic structure. When log on their website, you will be asked to c hoose the country that you ar interested in. in reality, McDonalds split up its operations into five geographical divisions.(www.McDonalds.com) transnational diary of assembly line and ManagementNovember, 2008As shown in above pie charts that around 65% of McDonalds restaurants and approximately 75% of its revenues ar generated in the United State and Europe. So, to McDonalds, the most important strategic approach for maintaining its leading position is to keep their major markets at the same time expanding their business into the other emerging markets. However,different consumer groups in different countries may have very different tastes and/or requirements. So each full functional geographic unit of McDonalds was required to wholly response for producing and marketing its products in that region. Through this regional structure, McDonalds could not scarcely satisfy the topical anesthetic consumers postulates in different geographical areas merely also pursuing maximum local development. Actually they produce and market slightly different types of products in different areas, and they even have different prices.As Jim Skinner, the vice-chairmen of McDonalds illustrated that if you are looking for a command center with one push freeing that operate our restaurant in every corner of the world, you wont find it. However, their philosophy of QSC&V-quality, service, cleanliness and value is same for everywhere. And McDonalds targets the similar consumer segments that need fast service, affordable price and reliable standard hygiene. So their main products are similar in most countries, where they provided service, including beef, scandalmongering, bread potatoes and milk. As the consumers in different countries having different foods requirements, McDonalds keep launching new products for their regional consumers. In this case China and France can be very good examples.2. McDonalds in ChinaIn 1990, McDonalds opened their outset store in shenzhen (n ear HongKong). But before they actually started their business, McDonalds had already carried out 5 years business research and all sorts of breeding gathering such as the income level of the Chinese people, the kind of foods they jollify etc. Moreover, their re-design of the counter, chairs and desks also reflected their considerations of the height and body shape of Chinese people. They do lots of efforts to promote their American burgers, and wanted to repeat the same success in China market as they has done elsewhere. Unfortunately, they are not as successful as KFC, their biggest rival, in China now.There are lots of reasons to explain it, one important issue which has once been neglected by McDonalds is that Chinese people are more favour scandalmongering dishes than beef burgers, which are their main products. After identified this problem, McDonalds has tried to adapt more Chinese tastes by adding more chicken meals into their menu for take ining more customers.(Chi nese website) 3. McDonalds in FranceIn France, where customers has been resentful of the fast-food chains incursion, McDonalds has boosted it sales by remodeling restaurants i.e. hardwood floors, wood-beam ceilings, comfortable armchairs, and also by adding new menu items such as espresso, brioche and more upscale sandwiches. Actually they have successfully responded to the preferences of the local area. (Richard L.Daft)In the other countries the situation is the same. For example, in Canada, McDonalds has introduced new Canadian feature breakfast. In Belgium, the McCicken Premiere has been added to the menu. Although McDonalds has been regarded as the ultimate example of standardization for the world market. 4. How the strategy is influenced by external environment?The external environment can be divided into several sectors. In this section, I will only discuss twain important parts competitors, social concept ( estimable problem) and uncertainty situation, which can greatly inf luence McDonalds strategies. Then at the digest part of this section, I will discuss one particular strategy they used which served for their forthcoming development purpose.CompetitorIts unlikely that McDonalds can eer be No.1. In an annual consumer satisfaction survey, McDonalds has been scored dead last among fast-food restaurants since 1992. In the fourth quarter of 2002, McDonalds disclosed its first-ever quarterly loss, one reason why McDonalds is struggling is that the consumers began to switch to its competitors, such as Burger King, Wendys, and Subway.These companies emphasized on exserting fresher, hotter, high-quality foods at lower price with rapid service. On the other hand, McDonalds decided to close 719 poorly playacting restaurants around world. All of these simply proved that McDonalds might no longer be competitive in the fast-food market. And if McDonalds cannot adapt external environment change, they might be gradually diminished and even replaced by other competitors. In order to keep their market share, increasing sales and profits. McDonalds has to respond to the threat of competitors. In 2003, McDonalds offered the McGriddles sandwiches in the US and the Canada feature breakfast. Meanwhile, McChicken Premiere and a zesty chicken have been introduced in the UK, France, Italy and Belgium. McDonalds was trying to satisfy customers desire for agiotage products at affordable prices.Furthermore, McDonalds is providing more choice with respond to offer Happy Meal to keep the children. For example, Happy meal now including chicken selects, and no-sugar add fruit drink (juice and low-fat drink) and also to produce McDonalds java which appeals to adult. Those products have been made to attract existing customer and develop new customers.(www.McDonalds)Moreover, in addition to the innovative menu, McDonalds is also rebuilding and even relocating some of their restaurants to make the environment more attractive. At the same time, McDonalds is differentiating itself by creating 73Vol. 3, No. 11International Journal of chore and Managementmore relevant experiences such as allowing the customers to access the meshing with the wireless technology platform. This innovative way not only attracts the teenagers, only if also perfectly fitting the modern professionals requirements. Social problem healthy issueWith the economic development, peoples living standards have change magnitude dramatically these years. People are becoming more concerned about their health issues. It cannot be denied that McDonalds has attempted to make itself more lash-up for the people. However, people also believe that such kinds of fast food are not good for their health. The world health organizations tell presented that those food not only can cause the obesity of children, but also is part of the reason of causing cancer. Healthy issues became the biggest stumbling block to the development of McDonalds. Customers were switching to healthi er offering, such as Subways sandwiches, or KFCs mashed potato instead of fried potato.McDonalds has responded to this healthy trend. In order to compete, McDonalds has added salads and other lighter options into their menu. If a mother comes in, she is not only buy the euphoric meal for her children, she will also be likely to buy herself a meal too .the lighter options also encourage existing customers to come back more often, because there is a greater variety of choices. Focus on ChildrenNo matter how different the tastes and the local needs are, McDonalds has paid considerable attention to the children in every country. They built capable land for them, offering fantastic happy meals with novelty toys to them. Furthermore, McDonalds has just launched computers with games that were designed to inspire the childrens idea at the same time shape their personal characteristics. There are three main reasons for McDonalds to focus on the children(1) Children are one of the biggest consumers groups to McDonalds. And McDonalds has been regarded, as their favorite place to go .The brand culture happiness is known by children. (2) McDonalds believe that focusing on children can build the stable business, and will provide the best engine to encourage the whole family to come to McDonalds. For example, one happy meal for a child only cost $ 5 but McDonalds can produce more new products in addition to happy meal to offer the whole family. (3) By Building a brand dedication with the children, McDonalds more likely to be successfully today and in the future. In my opinion, McDonalds is not just selling the happy meal to children it is selling the American culture to the children the enjoyable individual life.Actually this strategy with focused children segment is fully worked for their future development purpose. Whatever how the environment changes this strategy can always develop future generation customers loyalty. And the happy children can also bring in the wh ole happy families. conclusionTo sum up, there is a strong possibility that if the company fails to recognize the new competitions, shifting of consumer interests, and the social trends or innovative technologies, it will costless its market share.Previously, McDonalds emphasis on adding new restaurants for near 5 years, more than 50% of increase in new restaurants opened. Unfortunately, there was only 2% of increase in the sale of the food. So, in the year 2003 McDonalds decided to change its focus on increasing sales at existing restaurant and reduced capital spending which allows for a sinewy amount of cash be returned to shareholder. For achieving their objectives, the McDonalds strategy should be attract more new customers, encourage existing customers to visit McDonalds more often, build brand loyalty and, ultimately, create enduring profitable return for the company.ReferencesEdstrm. A., & Galbraith, J.R. (1977). Transfer of managers as a coordination and control strategy in transnational organizations. Administrative Science Quarterly, 22, June, 248-263. Egelhoff, W.G. (1984). Patterns of control in U.S., U.K. and European multinational corporations. Journal of International Business Studies, Fall, 73-83Fatehi, K. (1996). International Management, New Jersey Prentice Hall. Geringer, J.M. & Hebert, L. (1989). nurse and performance of international joint ventures. Journal of International Business Studies, Summer, 235-253Hodgetts, R.M., Luthans, F. (1994). International Management, New York McGraw-Hi Richard L.Daft,(2005).Organization Theory and Design, 8th edition, Thomson ,south-western(Chapter 10) Mead, R. (1994). International Management. Cross Cultural Dimensions, Oxford Blackwell. http//baike.baidu.com/view/4676.htm

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