3 1 Managing In a Changing Environment February 14,2022 Outline Name of

Managing In a Changing Environment

February 14,2022

Outline

Name of Company: McDonald’s Corp

Industry: Global restaurant and foodservice industry

Brief History of Company

McDonald’s started as a humble family fast food restaurant owned by brothers Richard and Maurice McDonald. Their first location was in San Bernardino, California and it opened its doors to the public in 1940. Initially, it operated as a drive-in but eight years down the line, the brothers decided to try out a new model for their business. This was to offer low-cost food in huge quantities across a number of small restaurants. The goal was to capitalize on volume since the profit margin was very slim (McDonald’s.com, n.d.). It was this innovative idea that catapulted the brothers above their competition as their food was affordable. They initiated a franchise program to expand their presence in the United States (US) and beyond the borders. Ray Kroc bought the McDonald brothers in 1961 and set the pace for a rapid global expansion for the brand.

Milestones from McDonald’s History

1. The most significant milestone for McDonald’s is its expansive network of operational restaurants both wholly owned and franchises. The company had an incredible 13,682 restaurants in the US, an additional 10,560 in International Operated Markets, and another 14,956 operating in International Development Licensed Markets (McDonald’s Corp SWOT Analysis, 2021). This makes it the largest restaurant chain in the world with no close rival in sight. It is a phenomenal milestone because it grants McDonald’s a large operational portfolio that helps it navigate challenges in local markets.

2. The second critical milestone that manifests itself throughout McDonald’s history is its strong brand presence and awareness. The company’s marketing team has done an incredible job of ensuring that it remains relevant in the industry despite the fierce competition, especially from local restaurants (An, 2020). Today, a lot of people know about McDonald’s and its famous offerings of the Big Mac, Chicken McNuggets, Filet-O-Fish, McGriddles, and McMuffins because of the effectiveness of its incredible marketing team. Having a strong brand that has dominated the industry for decades is a significant milestone that ought to be recognized.

3. The third milestone that McDonald’s has achieved over the years is sustaining a low-cost approach without compromising the quality of food delivered to customers. The entire model of operation that McDonald’s operates on is based on making the product as cheap as possible and selling huge volumes to realize profits (Raj & Singh, 2021). This can be difficult to sustain without affecting quality, especially during tough economic times. However, McDonald’s has managed to maintain its brand under this low-cost strategy without infringing on the quality of food served to clients. This has been a critical factor in the success of McDonald’s as it keeps customers coming back for more and ultimately bolsters brand loyalty.

Resources

An, J. (2020, October). Analysis on Marketing Segmentation of McDonald’s. In 2020 The 4th International Conference on E-Business and Internet (pp. 122-125). https://doi.org/10.1145/3436209.3436886

Mathur, S. (2017). Glocalization in fast food chains glocalization in fast food chains: A case study of Mcdonald’s. In Strategic Marketing Management and Tactics in the Service Industry (pp. 330-347). IGI Global. http://dx.doi.org/10.4018/978-1-5225-2475-5.ch013

Raj, S. K., & Singh, N. K. (2021). Strategizing of fast food industries using a balanced scorecard approach: A case study of Mcdonald’s corporation. International Journal of Humanities, Arts and Social Sciences, 6(6), 258-273. https://dx.doi.org/10.20469/ijhss.6.20004-6

Unique Business Opportunity Available for McDonald’s

The most viable business opportunity available for McDonald’s to capitalize on right now is establishing strategic initiatives and partnerships with third parties. This will help with two critical factors. The first one is expanding the brand’s presence in new areas. A perfect example is the January 2021 partnership with X5 Retail Group to establish a fast-food restaurant in Pyaterochka, Russia (McDonald’s Corp SWOT Analysis, 2021). Such initiatives and strategic alliances will help McDonald’s extend its footprint even in remote areas that are not ideal for the franchise model that the company has historically operated. The second advantage of strategic initiatives and alliances is the shared revenue that McDonald’s will get by partnering with potential competitors in the markets that it currently operates in. There are very many start-ups that are capitalizing on innovative technologies to revolutionize the fast-food industry. McDonald’s needs to establish strategic alliances with them to remain relevant. For example, its strategic partnership with Postmates helped expand the McDelivery system to more than 300 new restaurants in Los Angeles and Dallas (McDonald’s Corp SWOT Analysis, 2021). This eradicates the potential competition with Postmates and helps McDonald’s recoup some of the revenues that would have otherwise gone to a competitor. Strategic initiatives and partnership are, therefore, the key to McDonald’s continued dominance of the restaurant industry into the future.

Function of Management Required to Capitalize on the Business Opportunity

The management team at McDonald’s needs to embrace speed and flexibility when running the company. The environment that the restaurant chain is operating in is constantly changing. Only those companies that can react to the changing circumstances fast enough emerge victorious (Jones, 2020). Therefore, McDonald’s management must be proactive. They must anticipate these changes and react to them with strategic initiatives. They need to be open to changes and embrace flexibility. This includes taking compromises by establishing strategic alliances with competitors to sustain the brand and protect its local markets. This agility will guarantee successful outcomes for McDonald’s and also continue its quest for global expansion to the areas that it does not serve currently. Only speed, agility, and flexibility will make the management team quick at identifying opportunities for strategic alliances and capitalize on them before competitors do so.

References

An, J. (2020, October). Analysis on Marketing Segmentation of McDonald’s. In 2020 The 4th International Conference on E-Business and Internet (pp. 122-125). https://doi.org/10.1145/3436209.3436886

Jones, G. R., (2020). Contemporary management (11th ed). McGraw-Hill Education.

McDonald’s.com. (n.d.). Our history: Ray kroc & the McDonald’s Brothers | McDonald’s. McDonald’s.com. Retrieved February 13, 2022, from https://www.mcdonalds.com/us/en-us/about-us/our-history.html

McDonald’s Corp SWOT Analysis. (2021). McDonald’s Corporation SWOT Analysis, 1–7

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