Strategic frame work — macdonald 4 Essay Example
Strengths and weakness
Whereas there tends to be almost a balance between the strengths and weakness, the strengths outweigh the weaknesses. This is an indication that the company has a better chance of exploiting its position in the market to being a strong power to identify whether it can translate the weakness to strengths. For example, although the network of supply chain in India was under- developed by the time McDonalds’ penetrated the market, the firm has taken initiatives to mend the situation. Macdonald has a strong management and marketing times, the ability to offer discounts and run massive campaigns leads to high adaption rates among its customers.one major weakness that MacDonald faces it’s the inability to balance between sweetness and healthiness in its products which has seen it loose most customers who are conservatives (Hanratty et al. 552)
On the other hand, the income level of India is increasing and this presents a good prospect for McDonald to make profits and perform better in the market. The fast food outlet set up costs and franchising offer better opportunities for quick expansion and developing a pricing strategy for attracting consumers. In addition, the fast food industry in India is growing due to middle-class population and lifestyle change in conventional means of taking dinner (Keshari and Mishra 1359).
The fast food company faces the threat of substitute products although it is moderate. However, the family eating and convenience connected to dining in fast food outlets minimizes the threat of substitute products. Additionally, the MacDonald faces the threat from competitors such as the KFC and their price cutting tendencies (Nitin and saroja 124).
Prior to McDonald entering the Indian fast food market, the market was under-developed. However, because the entry rate to the Indian fast food market is high, there are a number of companies rivaling for the same consumers. As such competitors such as KFC and Pizza Hut are competing over consumers via price reductions, localization of products so as to suit preferences and taste as well as establishing outlets for convenience reasons (Hanratty et al. 551). On the other hand, McDonalds’ give price discounts and periodic promotions so as to increase its consumer base. Diversification offers the firm control over the consumer market by grasping profitable opportunities in the Indian market, for example, producing different fast foods suitable for vegetarians, Hindus and Muslims. In addition, the company invests in menu development team in order to deliver cost-effective products. McDonald has the skills capability of introducing products faster to the Indian market as opposed to the competitors which make the company enjoy benefits of first- mover (Rodrigues et al. 52). Such capability forms unique competencies which facilitate efficiency, innovation, quality, product adaptability and consumer responsiveness geared towards gaining a competitive advantage over the others.
The mission of McDonalds is to be the most suitable place for consumers to eat and the realization of this strategy depends on an effective international strategy with an approach plan tailored to win by offering a superior experience to the consumers (Priyadharsini and Annie 1). As such they have succeeded to enter the Indian market. The international strategy is governed by its strategic operational objectives of providing fast food at lower cost, generating quality services in a quick and flexible manner and in an environment that is flexible (Nitin and saroja 122-125). For instance, it acts as the price leader in the market of fast food via its mechanisms of cost control and scales of economies due to the fact that most of the population in India have a lower purchasing power and the economy of India is kind of a closed one. In terms of quality, it offers healthy and tasty options without compromising its standards as well as the culture of the Indian population that is largely characterized by a vegetarian diet (Keshari, Priya and Mishra 1352-1359).
McDonalds’ international strategy comprises both in the background and forwards in order to gain a favorite control over fast food logistic function and supply chain (Rodrigues, et al. 53). It diversifies into products that are related in providing of healthier products and sourcing of local products. That is why the company expands in various parts of India to tap the growth potential in the market. Additionally, it has done product adaptation so as to suit the taste and culture. This has enabled it to take into account its consumers who comprise of Hindus- who do not eat beef, Muslim- who consider eating pork as a taboo and the vegetarian population (Hanratty et al 549).
The international strategy has been quite successful for them to thrive in the Indian market. Their strategic positioning as a family restaurant, selective price discounts as well as periodic promotions so as to fight premium image in the public have been significant and have set it right ahead in the fast food market (Nitin and saroja 126). In addition, the setting up of a development team to oversee matters regarding menu plus the pricing strategy offers them an upper hand of success in the Indian market (Rodrigues, Nikhil and Jacob 53). Whereas McDonalds employs its strong international market strategy plus a presence in order to promote its products in the Indian market, their success is complemented by their understanding of the local market and their ability to joint venture for optimal results.
Hanratty, B. et al. «‘Mcdonalds And KFC, It’s Never Going To Happen’: The Challenges Of Working With Food Outlets To Tackle The Obesogenic Environment». Journal of Public Health 34.4 (2012): 548-554. Web.
Keshari, Priya and C. Mishra. «Growing Menace Of Fast Food Consumption In India: Time To Act». Int J Community Med Public Health (2016): 1355-1362. Web.
Pangarkar Nitin and saroja. «Beefing Up The Beefless Mac: Mcdonald’S Expansion Strategies In India». National University of Singapore (2001): n. pag. Print.
Priyadharsini, S. Annie. «Consumer Behavior And The Marketing Strategies Of Fast Food Restaurants In India». IJAR 4.4 (2011): 1-3. Web.
Rodrigues, Jonathan, S Nikhil, and Suraj Jacob. «Promotional Strategies Of Mcdonalds And Market Effects». Journal of Management Research and Analysis 3.1 (2016): 53. Web.
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