Marketing Environments, Competition and Analysis
Started in 1955, McDonalds has been one of the most trusted product providers for fast foods in America, and it is currently the world’s biggest restaurant chain for fast food production. The rise to the top has been gradual, since the company had to withstand and curb the stiff competition, which faced it. Consequentially, the company successfully managed the utmost customer satisfaction, therefore becoming the best product provider, and gaining the rankings with which it is currently rated.
McDonalds is distributed all over the states of the US, has restaurant distributions in all the major cities worldwide and has over the years diversified in the kind of products it offers to customers for an increased customer base (Pride, 2009). The company serves not less than 58 million customers daily, and makes an operating income of approximately $4 billion annually (Pride, 2009). The company has however undergone various changes, influenced by various environmental attributes, which leads to a change in the rate of income based on the fluctuations of demand. This aspect will be on focus in this work, giving possible changes in the company’s operation, based on the company’s prospection and the trends in the market.
Over the years, the business environment of McDonalds has had a great impact on the company’s operations. Putting into context the kind of decisions engaged to maintain a favorable a constant and productive business environment, it is realizable that the company has had to engage every applicable means necessary to prevent any negative impacts associable with both the internal and external environmental factors. This ensures that any problems that would influence the achievement of goals and interests are detected and solved before causing any adverse effects on the business’s operations.
The microenvironment of McDonalds entails operational dealings that are aimed at managing all processes necessary in dealing with the customer satisfaction. These include the implementation of management engagements in the company’s dealings, employee relations and all associated transactional processes that ensure the company gives a good output (Hartley, 2010). The company’s management follows the principal steps of leadership, as set up in its early years of development by its founder, Ray Kroc.
The kind of leadership used by its founder entailed persistence upon achieving goals and taking all risks necessary until the required advantage is attained. The management ensures that all the staff of this company gives the best there can possibly, for not only the attainment of efficient leadership within the company but also leadership in product provision for the community which the company serves.
This step has always been achieved in all the years that McDonalds has been in operation, owing to the fact that only the competent members of staff qualify to work for the company. Competence is not just sought through evaluating the qualifications of an individual, but also ensuring that the profile of a worker keeps improving throughout the period one works for the company. Additionally, etiquette is a key factor that is sought for employees to qualify in serving the company as efficiently as can be found necessary. Etiquette ensures that the company’s staff gives the customers satisfactory services, which coupled with excellent products result in the best customer satisfaction possible (Weihrich, 2010).
The kind of risks that McDonalds engages in has to undergo thorough evaluation, before the decision to put the company in an engagement that has to give unknown results. A major kind of risk engagement that is used by McDonalds is the case in which a competitor fails to succeed after embarking on a strategy in the wrong manner. In this case, the company’s management puts to effect strict evaluation techniques and eliminates all risks associable with the practice in context, before coming up with a firm and pertinent solution (Jacob, 2003). This is then applied in the company’s application and in most cases, it has yielded excellent results.
Employee relations are always encouraged and enhanced as much as it can be achieved. The main objective for this is to ensure that a proper working environment is attained. Promoting employee relations is done through forums, in which team leaders announce predetermined interactive activities (Hartley, 2010). These give chances to workers from different branches to interact and learn from each other. It also provides the opportunity to reduce the formality that highly reduces the friendliness with which workers relate. The increased employee interactions, which is achieved through these forums results in improved service to customers, as the environment in the workplace is always efficient for all company’s activities.
A final attribute associable with the internal environment of the company is the importance placed upon advertisements. These put the company in an advantageous position, as the already loyal customer are reminded of the company they need to purchase food products from (Weihrich, 2010). This promotes the relationship between the company and its customers, increasing the customer loyalty to their entrusted brand.
The importance of these factors applied in the microenvironment is that the company is always at a competitive position, giving the competitors a run for their customers. To the customer, the influence that result entails limited choice on the company to rely on for quality provision in terms of products and services. McDonalds therefore becomes the most preferred fast food joint. Profits are therefore assured, and the company’s distribution continuously grows globally, at the convenience of both the customer and the company.
The macro-environment of McDonalds is composed of various external forces that positively or negatively influence the company’s interaction with its customers. Economic forces, natural forces, political and technological factors are just some of the major influential factors upon McDonalds operations in all its areas of specialization. Cultural factor and environmental factors vary depending on the location in which a McDonalds’ branch is situated.
A major economic influence that determines the company’s operations in any particular area of specialization is the kind of people’s livelihood. This is the factor that determines the cost of living in the area in context, which consequently determines the amount of interest the people would have upon the company’s products (Pride, 2009). For instance, in a region which produces surplus of food, the cost of living is considerably low, so is the price of food commodities. Consequently, the cost of McDonalds’ products is considered high, and the customers fail to generate interest upon these products.
However, in a region where the cost of living is high, people will tend to go for a brand based on quality and/or price differentiation. Considering the fact that the products from McDonalds range from an average to high, but with excellent quality, a majority of customers will prefer the company’s products to competitors’ which in most cases are observed to cost more but of poorer quality and class (Pride, 2009).
Natural forces will have a great influence upon the company’s operations based on the common interests of the customers that will be determined by various natural influences. One these are the seasonal fluctuations of climate. In the cold season, it would be expected that the company would make lower profits from sales of juices, ice creams and related products. The company deals with this by supplementing such products with those that fit with the weather. However, as the populations that go outdoors are uncontrollably low, the company has to make lower profits during such profits. Similarly, during summer, the reverse is observable, and the company maximizes on profits appropriately.
The change that has been observable in the trends that affected the company since it was established in the 60s has undergone considerable alternations owing to the fact that the societal interests have been varying. Additionally, the state of the economy has also undergone gradual variations, as the numbers of people served by the company swelling with time. Putting these factors into context, the workforce of the company has had to increase, the creation of new branches has taken place globally, and the quality of the products and services has had to be improved (Hartley, 2010).
One major societal matter of concern for the company is the rate at which cases of obesity are recorded. This has been blamed on the role of the company’s products, which in the past only included artificial sugar products. The response to this has been production of natural juices from fruits, which are healthy and appropriate for positive growth, rather than the negativity of obesity (Weihrich, 2010). This kind of improvement has engaged decision-making at all levels of the company, from the lowest, which receives the complaints about the products, to the highest, which is responsible for the execution of new strategies (Weihrich, 2010). Expanding the field of product provision has only been achieved through efficient strategizing from the highest level of management.
This kind of diversity is expected to be continued in the future of the business operations. Through providing products that are specific to the interests of a people, the company can easily venture into new markets consisting of people with diversified interests. Considering the trends in the modern societies entail consumption of foodstuffs that cause little or no long-term effects on the consumers, the company is also expected to venture more into the production of products that have been processed from directly available farm produce (Hartley, 2010). The aim of this would be continued customer satisfaction, regardless of the variation of mass interests. Consequentially, the company will retain the top spot in product provision and customer satisfaction.
References
Downing, D. & Clark, J. (2010). Business Statistics. New Jersey: Barron’s Educational Series
Hartley, R. (2010). Management Mistakes and Successes. London: John Wiley and Sons
Jacob, N. (2003). Intercultural management. Manchester: Kogan Page Publishers
McDonalds: operations. Retrieved from: http://www.mcdonalds.com/us/en/home.html on May 10, 2011.
Kroc, R. & Anderson, R. (1992). Grinding it out: the making of McDonald’s. New York: St. Martin’s Paperbacks
Pride, M. & Hughes, R. (2009). Business. New York: Cengage Learning
Weihrich, H. (2010). Management. Washington: Tata McGraw-Hill Education
