A Comprehensive Analysis of The Global Fast Food Giant

The brand I've picked is one of the most recognized and powerful brands in the history of this country and, honestly, the whole world. They've been super successful globally, and pretty much everyone has grabbed a bite from them at some point. The brand I'm talking about sells all sorts of food, like hamburgers, chicken, French fries, salads, and so on. This iconic and influential brand that's been around for years and still going strong is McDonald's.

A Comprehensive Analysis of The Global Fast Food Giant

This company started back in 1948, founded by two brothers, Richard and Maurice McDonald. Their first restaurant was in San Bernardino, California. They got most of their appliances for their burger joint from a salesman named Ray Kroc, who was really curious about their need for eight malt shake mixers. Kroc visited their store and was amazed at how such a small place could sell so many milkshakes. He saw huge potential in the McDonald's brand and offered to start a franchise program for the brothers (Britannica, 2018).

McDonald's Global Reach and Management Strategies

Fast forward to today, McDonald's is the world's largest restaurant chain by revenue. They serve over 69 million customers every day in more than 100 countries, across around 36,900 outlets as of 2016. Their management has played a big role in their success as a brand and an effective company overall. The management makes sure all McDonald's restaurants work towards achieving common goals. What makes this company so successful is their great customer relationships and constant innovation, which is maintained by their management. The planning function helps develop company objectives, while the controlling function checks and monitors resources. These strategies ensure that McDonald's remains a leader in the fast food industry.

Factors Contributing to McDonald's Success

What makes this company stand out is their focus on customer relationships and innovation, driven by their management. The organizing function helps build strong human resources, leading activities to achieve efficient results. These management functions heavily influence McDonald's competitiveness and overall performance. Also, the planning function ensures the brand sets and achieves reasonable goals. This is a serious role because it confirms all restaurants work towards shared objectives. Managers benefit from these goals, ensuring resources are effectively used to achieve McDonald's objectives. McDonald's value offering is strong. What sets them apart from competitors is their convenient locations, comfortable seating, and facilities for people to relax and socialize while eating.

Service Quality and Product Offerings

Their service is fast and efficient. They're consistent with their quality menu items, like the famous Big Mac. Their pricing is reasonable, and they offer a broad range of foods that appeal to all ages. Their value offering is unique because they target a wide audience. McDonald's food choices can appeal to a whole family, with options like Happy Meals, Quarter Pounders, salads, Big Macs, and more. Overall, McDonald's has a distinct brand compared to its competitors for all these reasons. They give customers a reason to stay loyal to the McDonald's brand, which contributes to their longevity in the market.

The Business Environment and PESTEL Analysis

Next, let's look at the business environment. Every organization, including McDonald's, is affected by the business environment. Just because they're successful doesn't mean they aren't affected. McDonald's falls under PESTEL, which stands for political, economic, social, technological, environmental, and legal factors. Their operations are influenced by state policies and government regulations. Some important issues include health, tax issues, employee licensing, and other concerns (Greenspan, 2017). The company follows local and foreign government policies for its franchise strategy. Political stability also affects McDonald's business.

Economic and Social Factors

Economic factors are also a big deal for most businesses. For example, a global economic downturn can affect all companies. Because McDonald's operates internationally, they've faced different tax and revenue challenges in various countries. They've also had issues due to international currency, especially with global food distribution. Local economic conditions can also affect McDonald's operations. If the economy is struggling, people might not want to spend money on fast food.

Social factors come next. People's lifestyles change over time, affecting demand for McDonald's. Technology plays a big role here, as modern society expects updated service and technological advancements from McDonald's. That's why they have touch screen menus and apps for ordering. McDonald's operates worldwide, and changing demands vary by country. In India, for example, many people prefer vegetarian options, and Muslims avoid pork. McDonald's needs a different approach there, which requires research to satisfy Indian customers, especially with the menu (Kannan, 2014).

Technological and Environmental Considerations

Then there's the technology factor. Technology is crucial for meeting customer expectations. There are many competitors like Burger King, Domino's, KFC, Wendy's, and Popeye's, so McDonald's has to stay ahead. They use technology to enhance customer experience, with Wi-Fi, entertainment equipment, and touch screen order menus. This helps McDonald's stay successful.

With positives, there are also negatives. Environmental factors have negatively impacted McDonald's because they use harmful materials. For example, they use non-biodegradable substances for drinking glasses and Styrofoam containers, which are discouraged. Environmentalists are concerned about McDonald's packaging and call for the company to address these issues and spread awareness.

Legal Issues and Compliance

Legal issues are also important. Following rules, regulations, and procedures ensures smooth operations. This includes safety rules, staff laws, registration, taxes, and more. In Islamic countries, Halal food authorization is crucial, and McDonald's needs to respect customer beliefs. Following legal processes benefits everyone and ensures smooth operations. McDonald's, being a huge company, must be responsible for legal issues.

Target Marketing and Brand Positioning

When it comes to target marketing, McDonald's is one of the best. Their target market ranges from toddlers to seniors. Their environment is very family-friendly, which is evident in their commercials, food, mascot Ronald McDonald, and play areas for kids. McDonald's appeals to anyone looking for a meal. They don't just appeal to families with kids; they also cater to workers on the go with their breakfast menu and coffee. Teenagers looking for a place to relax can also enjoy McDonald's. They even target health-conscious individuals with salads and fruits. McDonald's broad audience is a key element in their success.

McDonald's brand positioning is another key element. They use an adaptive product positioning strategy, constantly adjusting their products and services. According to the company, "McDonald's has made itself the family-friendly, low-cost restaurant in the fast food business. We have a narrow scope for a customer base and a low-cost strategy" (McDonald's 2016).

Competitive Forces and Promotional Strategies

Next, let's analyze McDonald's competitive forces. The competition is fierce. Their main competitors include quick service restaurants, street stalls, casual dining, takeaway delivery, and more. Some of McDonald's biggest competitors are Starbucks, Subway, Burger King, KFC, and Domino's Pizza. The threat of substitute meals is strong, and home-cooked meals are also a threat.

The bargaining power for McDonald's is low. They work with large suppliers like Dr. Pepper Snapple Group, Coca-Cola Company, Clorox Company, and International Paper Company. McDonald's affiliates usually don't supply food, paper, or related items. Factors like the abundance of supplies and low product uniqueness reduce the bargaining power of McDonald's suppliers.

The threat of new entrants is weak. Competing with McDonald's requires a huge number of outlets worldwide, massive capital investments, and significant effort. It's extremely difficult for new entrants to compete with McDonald's, especially when established brands like Subway, Starbucks, and Domino's struggle to keep up.

When it comes to promotional strategies, McDonald's spends a huge amount on advertising campaigns, including TV, newspaper ads, billboards, and sponsoring major sports events like the Olympic Games, FIFA World Cup, and more. McDonald's is aggressive in their approach, but they don't use negative campaigns against competitors. They focus on promoting the McDonald's brand.

They have a catchy slogan, "I'm Lovin' It," created by Heye and Partner. They've also used popular celebrities like Michael Jordan, Justin Timberlake, Kobe Bryant, and Venus Williams as spokespeople for the brand.

Training and Brand Maintenance

McDonald's provides training through Hamburger University, a facility that teaches and trains people in restaurant management. They emphasize cleanliness, good service, and quality on behalf of the McDonald's brand (n.d.). From my research, I've learned that a lot of work goes on behind the scenes to keep McDonald's on top of the market. They invest a lot of time, energy, and resources to maintain their success. This shows how important it is to market your brand effectively.

Conclusion

In conclusion, despite the competition, as long as McDonald's keeps up with their audience, they'll stay relevant and on top of the fast food industry for years to come.

References

• Britannica, T. E. (2018, February 05). McDonald's. Retrieved March 30, 2018, from https://www.britannica.com/topic/McDonalds
• Greenspan, R. (2017, February 05). McDonald's PESTEL/PESTLE Analysis & Recommendations. Retrieved March 30, 2018, from http://panmore.com/mcdonalds-pestel-pestle-analysis-recommendations
• Kannan, S. (2014, November 19). How McDonald's conquered India. Retrieved March 30, 2018, from http://www.bbc.com/news/business-30115555
• McDonald's Restaurant Management Training System. (2017, September 26). Retrieved March 30, 2018, from https://www.geckohospitality.com/restaurant-management-training-system/
• McDonald's segmentation, targeting and positioning strategy. (2016, April 13). Retrieved March 30, 2018, from https://mpk732t12016clusterb.wordpress.com/2016/04/10/mcdonalds-segmentation-targeting-and-positioning-strategy/
• Home. (n.d.). Retrieved March 30, 2018, from https://www.franchisedirect.com/information/markettrendsfactsaboutfranchising/thesuccessofmcdonalds/8/1111/