International Journal of Business and Management Essay Example for Free

outside(a) journal of traffic and reducesing EssayAs hotshot of the most conquestful fast food chemical chain in the world, throughout the training of McDonalds, we could easily identify many supremacyful business dodging implementations. In this paper, I will discuss some critical business strategies, which linked to the corporations building and external environs. This paper is organized as follows In the first section, I will give abbreviated introduction to the success of McDonalds. In the second section, I will analyze some particular strategies use by McDonalds and how these strategies atomic number 18 suitable to their business structure. I will then analyze why McDonalds choose these strategies in response to the changing external environment. Finally, I will summarize the approaches use by McDonalds to achieve their strategic goals. Keywords Strategy, McDonalds structureIntroductionMcDonalds, originated in California, USA, 1954, has become wizard of the most recognized and respected brands in the world. The success achieved includes that they have established more than than than 30,000 franchising stores in 119 countries, share more than 47 million people each day, and generating about $15 billions revenues annually. McDonalds also infinitely enhances its brand imagine through unlike social activities and the jockstrapship of special events and sports i.e. as a major sponsor of the world cup since 1994 and the Champions League football in England from 1996 to 2000.(www.McDonalds.com)How can McDonalds achieve such success? There are many formulatingstrategies, which we could use for our analysis of their recipe of success such as porters competitive strategies model, which includes differentiation and low-cost leadership or Miles and deoxycytidine monophosphates strategy typology, which outlined prospector, defender, analyzer, and reactor strategy. Obviously, it is extremely distinguished for McDonalds to choose the most app ropriate strategy to be successful. From my face-to-face point view, to be an Analyzer is the most suitable strategic position for them to develop their business as a whole especially when they facing an extreme complex continuously changing world. As Miles and Snow defined that The analyzer tries to maintain a durable business while innovating on the periphery. It seems to lie central between the prospector and the defender. Some products will be targeted toward stable environment in which an efficiency strategy intentional to conserve current customers is used. Others will be targeted toward radical, more dynamic environment, where growth is possible. (Richard L.Daft) It is also 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 o n their website, you will be asked to choose the country that you are interested in. Actually, McDonalds divided its operations into five geographic divisions.(www.McDonalds.com) international Journal of Business and ManagementNovember, 2008As shown in above pie charts that around 65% of McDonalds restaurants and nigh 75% of its revenues are generated in the United State and Europe. So, to McDonalds, the most important strategic approach for maintaining its pencil lead 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 adept functional geographic unit of McDonalds was required to wholly response for producing and marketing its products in that region. with this regional structure, McDonalds could non only satisfy the local consumers hires in different geographical areas but also pursuing maximum loc al development. Actually they produce and market jolly 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 aspect for a command center with one push button that operate our restaurant in both corner of the world, you wont find it. However, their philosophy of QSCV-quality, service, cleanliness and value is same for everywhere. And McDonalds targets the similar consumer segments that need fast service, affordable price and goodness standard hygiene. So their main products are similar in most countries, where they provided service, including kicking, chicken, bread potatoes and milk. As the consumers in different countries having different foods requirements, McDonalds keep launching unseasoned products for their regional consumers. In this case China and France can be very good suits.2. McDonalds in ChinaIn 1990, McDonalds opened their first store in shenzhen (near HongKon g). But before they actually started their business, McDonalds had already carried out 5 years business research and all sorts of information assembly such as the income level of the Chinese people, the kind of foods they enjoy etc. Moreover, their re-design of the counter, chairs and desks also reflected their considerations of the height and system shape of Chinese people. They made 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 one time been ignored by McDonalds is that Chinese people are more prefer chicken 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 coaxing more customers.(Chinese website) 3. McD onalds 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 two important move competitors, social concept ( levelheaded problem) and uncertainty situation, which can greatly influence McDonalds strat egies. Then at the prevail part of this section, I will discuss one particular strategy they used which served for their future development purpose.CompetitorIts unlikely that McDonalds can al counsels be No.1. In an annual consumer delight 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 religious oblation fresher, hotter, high-quality foods at lower price with faster service. On the other hand, McDonalds obdurate to close 719 indisposed performing 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 little 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 yeasty chicken have been introduced in the UK, France, Italy and Belgium. McDonalds was trying to satisfy customers desire for bonus 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 coffee which appeals to adult. Those products have been made to attract existing customer and develop new customers.(www.McDonalds)Moreover, in humanitarian 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 di fferentiating itself by creating 73Vol. 3, No. 11International Journal of Business and Managementmore relevant experiences such as allowing the customers to access the Internet with the wireless technology platform. This innovative way not only attracts the teenagers, but also perfectly fitting the modern professionals requirements. Social problem healthy issueWith the economic development, peoples living standards have increased dramatically these years. People are becoming more concerned about their health issues. It cannot be denied that McDonalds has attempted to make itself more convenience for the people. However, people also believe that such kinds of fast food are not good for their health. The world health organizations report presented that those food not only can form 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 transformation to healthier offe ring, such as Subways sandwiches, or KFCs mashed potato instead of hot up 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 happy 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 involve are, McDonalds has paid considerable attention to the children in every country. They built happy 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 imagination 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 co nsumers groups to McDonalds. And McDonalds has been regarded, as their favorite place to go .The brand stopping point 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 devotion 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 beat in th e whole 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 loose 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 great(p) spending which allows for a sizeable 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 growth for the company.ReferencesEdstrm. A., Galbraith, J.R. (1977). Transfer of managers as a coordination and control strategy in multinational 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). Control and performance of international joint ventures. 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