Evaluation and selection of differentiation as a strategy for McDonald’s E-Book

Apakshit Sachdeva

• Herausgeber: GRIN Publishing
• Kategorie: Fachliteratur
• Sprache: Englisch

Veröffentlichungsjahr: 2016

Beschreibung

Document from the year 2015 in the subject Business economics - Operations Research, , language: English, abstract: This report is based on an evaluation and selection of differentiation as a strategy that McDonald’s should pursue in order to realise growth and competitive advantage in the fast food industry. As the business environment changes, businesses are forced to change their strategies in an attempt to adapt to the changing environment neither as a means of survival, or in order to prosper. In such a case, determining the strategic position of a firm is crucial. Johnson, Scholes and Whittington define strategy as “the direction and scope of an organisation over the long term, which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations”. The three key generic strategies that a business can use are: differentiation, focus, and cost leadership. McDonald’s is a leading multinational player in the fast foods industry that is famous for providing basic fast-food items at low cost. The firm has been very successful in implementing this strategy by taking advantage of its high bargaining power to acquire raw materials cheaply thus passing the benefits of costs savings to the end-consumer. While this strategy worked during the introductory phase of the company's business operations, McDonald’s has now been forced to pursue a growth strategy by ensuring quality and product differentiation.

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Contents

Introduction

MacDonald’s Macro environment

Suitability of Strategy: MacDonald’s Micro environment

Feasibility

Conclusions

Recommendations

Reference List

Appendices

Appendix 1: SWOT Analysis

Appendix 2: TOWS Matrix

Appendix 3: Force-Field Analysis Model

Appendix 4: SAF Model

Introduction

As the business environment changes, businesses are forced to change their strategies in an attempt to adapt to the changing environment neither as a means of survival, or in order to prosper (French, Kelly & Harriosn 2004). In such a case, determining the strategic position of a firm is crucial.Johnson, Scholes and Whittington (2005) define strategy as “the direction and scope of an organisation over the long term, which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations” (2005). The three key generic strategies that a business can use are: differentiation, focus, and cost leadership (Kraus, Harms & Schwarz 2006). McDonald’s is a leading multinational player in the fast foods industry that is famous for providing basic fast-food items at low cost. The firm has been very successful in implementing this strategy by taking advantage of its high bargaining power to acquire raw materials cheaply thus passing the benefits of costs savings to the end-consumer (Han 2008). While this strategy worked during the introductory phase of the company's business operations, McDonald’s has now been forced to pursue a growth strategy by ensuring quality and product differentiation. This report is based on an evaluation and selection of differentiation as a strategy that McDonald’s should pursue in order to realise growth and competitive advantage in the fast food industry.

MacDonald’s Macro environment

PESTLE analysis

Political:

 Reduce impact on taxation

 Reforming strategies and practices to reduce the effect of taxation on business while still obeying the law (Roper 2012)

 Changing public health policies that discourage the consumption of fast food

Economic:

 Reducing inflation rates in the UK

 Increasing trend in disposable income among UK households

 Increasing consumer spending in the UK

 Reducing rates of unemployment in the UK

Social-Cultural Factors

 Increased population among the 15-64 age bracket; this group is more likely to eat out due to possession of disposable income

 Changing lifestyles among the population with a higher propensity to eat out

 Expanding wealth gap

Technological:

 Fast food industry characterized by restrained R&D activities

 Increased automation of business processes

 Increasing sales via the use of mobile devices

Environmental:

 Recycling promotional activities to conserve the environment

 Reusing used fat as biodiesel

Legal: