Strategic Planning of McDonald’s Organization

Discuss about the Strategic Planning of McDonald’s?

This report is a case study of McDonald’s strategic management. McDonald’s is a global brand which manages a chain of restaurant globally. McDonald’s strategic management system is praised by various organizations in the market. Thus, this report basically discusses about strategic planning of the organization and the external factors that influences the strategic planning process of the organization (Tybout, Calder & Sternthal, 1981). The report also identifies the strategic options for the organization present in the market and on the basis of those options, an implementation plan for the organization has been developed in the report.

Figure: Strategic management model of McDonald’s Organization (Vrontis, 2008)

The above figure is representing the strategic model of McDonald’s Organization.  The first step of the strategic management of McDonald’s is defining the Mission and policies of the organization. After defining the mission of the organization, McDonald’s uses the McKinsey matrix and PLC concept to define the current situation of the organization. Then it uses the analysis of the internal and external environment of the organization (Vignali, 2001). These factors help the organization to take the clear view of the organization and create the base for the strategy of the organization. SWOT analysis of the organization provides the strength, weaknesses, opportunities present in the current market (Han, 2008). Then the objectives for the strategy are being defined by the organization. Fundamental strategies are used to define the current objectives and the effectiveness of the objectives created for marketing tactics. Finally, the implementation and evaluation of the whole campaign is performed. Thus, McDonald’s uses the above model for strategic management (Schröder & McEachem, 2005).

Political factors

Political factors are the factors which creates limitations for the organization in a particular society or country. In other words, political factors include the rules and regulations published by the specific country to create stability and opportunities for both government as well as the organization in the market. Political factors are very important to be considered by McDonald’s. Each organization has to create their strategy according to the political factors as to perform business in the specific country, the rules and regulations of that country must be followed.  In 1993, government had published a law that all stores in Moscow must have a Russian name. Thus, McDonald’s had to change its name (Fortune, 2014). Same situation also happened in Japan, and then McDonald’s had changed its name to MaKudonaldo. Thus, the political factors really influence a lot in creating the strategies of McDonald’s.

It’s really important to consider the economy of any country for an organization as this helps in gaining the knowledge about the purchasing power of the consumers in that country.  When the economy of any country is strong the relative income of the people of that country will be high and they will be willing to spend more money. Economic factor for any country helps the organization in setting up the prices of products. McDonald’s also considers the economic factor on priority. It is necessary for the company to set low prices for economically weak countries to stabilize its market in a particular country. If we consider the marketing strategy, in the economically poor countries, McDonald’s should use the cost effective marketing tools to lower down the prices (Rodrigo, 2012).

External Environment of the Organization

In the fast growing and developing world, technology has a great influence on the world. It’s very important for an organization to adopt the latest technology available in the market to grow its business rapidly. If we move to twenty years back, most of the work used to be done by pen and paper, but today each work, from maintenance of stock to billing of the product, is done by machines. It’s really an effective way. It’s the result of latest technology that McDonald’s is able to provide an effective home delivery services. The density of customer has also increased at the store of McDonald’s (Watson et al, 2008). As the company is a global brand, it becomes very easy for the organization to manage a global organization just due to latest communication technology. Marketing, supply of raw material, collection, communication and verification of the stores, every field becomes very easy to manage for McDonald’s. Thus, the technological factors also influence the strategic management of any organization (Mourdoteoutas, 2013).

People of every country are very much sensitive about their culture and society. Thus, it is very important for an organization to take care of social and cultural limitations of a particular country in every activity, whether it is marketing or product specification (Boulding et al, 1994). McDonald’s, in U.S., is famous for its beef burger but in India it doesn’t have beef burger even in its menu because Indians neglect beef.

The socio-cultural factors also include the research of different age groups. If we consider McDonald’s in the U.S., in the period of 1960s and 70s, McDonald’s had identified children as the group who are most demanding. Thus, the stores of McDonald’s was designed to attract children and teenagers. Marketing campaign of McDonald’s also has strategies by considering the age group of children (Kotler, 2010).

In Cantonese, the pronunciation of the death and four is similar. Thus, while setting the prices in China, McDonald’s omitted the digit four. If Japanese culture is considered, family bond has a great influence on the local residents. People value their family a lot. Thus, in Japan, McDonald’s is designed according to a full family visit spot. The advertising campaign in Japan also includes the family depiction. In 1996, when McDonald’s was launched in Japan on advertising campaign, it showed a father and a son bringing burger on bicycle together. Thus, the socio cultural factors affect the strategic management of McDonald’s.

The climate and the environmental considerations are really important for an organization to be successful in any country. These factors actually influence in designing and creating of significant products in the market. For example, the sales of cold drink generally reduces in the winter season. Humidity, temperature and altitude are the entities which influence environmental factors. For entering in to the new market, it is beneficial for McDonald’s to consider the environmental factors as it creates a positive impact.

McDonald’s always tries to be environmental friendly. However, according to the internal market research by McDonald’s, it shows that the environmental issues don’t create any impact on sales but then also, McDonald’s does not use the Styrofoam or plastic bags for packing (Slide share, 2012). 

Political Factors

Multinational companies value their local stakeholders, like their suppliers, staff, distributors, shareholders, consumers and staff. The two factors are very important to consider in making strategy in any particular market. One is the properties of the targeted market and second is the image of the organization in corporate sector. The perceptions of people decide the position of the organization in market or the effective strategies to be created for repositioning in the market.  People’s negative perceptions on any organization indicate the improper functioning of market strategies. McDonald’s always tries to build strong relationships with all types of stakeholders.

Interest of customer is also a very important issue to be considered by the organization. Especially in the case of food industry, people are very much sensitive about their taste and interest. It is very important for each organization to identify the needs and wants of the customers. The organization should design the marketing and product strategy according to these factors. If McDonald’s is considered, it provides the same product and services in all over the world. Thus, it follows the same strategy in throughout the world. It just customizes those strategies according to the culture, national and regional differences to make it effective in a particular country. The tagline of McDonald’s ‘Think global, Act global’ is verifying the international marketing strategy of McDonald’s.

Competition in the market is increasing with time. Today, the competition level of the market is so high that if any organization makes any fault, it results in the fall of its position. The strategy related to competition in market includes the collecting of data about competitors like strengths & weaknesses, strategy, objectives etc. It is really important for McDonald’s to develop an efficient strategy for this competitive market. KFC is the strongest competitor of McDonald’s. It’s really important for any organization to make strategy for competitive market, otherwise it may lose its identity in the market (Rothbort, 2012).

There are various strategic options present for McDonald’s in the market. Some of them are as follows:

The first strategic options that can be implemented by McDonald’s is to analyse the local market of the countries and add the local items in their menu. Currently, McDonald’s only deals in burgers and French fries, but for developing the market, it can add various new local items in their food list. This strategy will help in attracting more customers towards the company.

If we observe the marketing strategy of McDonald’s, it is not much active in social media marketing. Social media marketing includes the marketing and advertising options on social media platforms like Facebook, Twitter etc. Thus, the organization can use the social media marketing option to grow and enhance its growth (Lutz, 2014).

Today, consumers are becoming too health conscious. So, the organization can divide the category of food in two parts, one is low calorie food and other normal food (Rathi, 2014).

From the above strategic option, we can develop the following implementation plan for McDonald’s.

Thus, the above implementation plan may work for McDonald’s to increase its revenue and sales in the market.

Conclusion

According to the above report, it can be concluded that McDonald’s has an efficient strategic model and management but there are various changes that can be made to enhance the performance of the organization in the market. The main external factors that affects the organization are political, economic, socio culture, public interest, technological and competition in the market. McDonald’s considers all the above factors while developing their strategic plan. There are various strategic options available to McDonald’s which can be implemented for a better performance in the market. The implementation plan developed in the report is very much efficient and may work for the organization to improve its performance in the market.|

References

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