Planning and Managing the Business Strategy of McDonald's Corporation

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Planning and Managing the Business Strategy of McDonald’s Corporation

McDonald’s Corporation is an America-based fast-food chain that was formed back in 1940 by Ray Kroc and now it’s a market leader. The business model is a fast-service restaurant with several franchises operating globally. They sell products such as cheeseburgers, Big-Mac, fish fillet burgers, wrap sandwiches, happy meals, salads, French fries, McNuggets, McFlurry, cold and hot beverages and many more. They also provide free Wi-Fi, play and party areas and delivery services. The company is well known for its drive-thru services as it is always busy all year round. According to Statista (2019), it has already achieved a market share of 17% in the U.S markets.

According to Statista (2019), it has employed about 210,000 individuals worldwide. The Company’s headquarters located in Chicago, and have opened up nearly 36,000 restaurants in 100 countries which are geographically dispersed across the globe. McDonald’s services include free Wi-Fi, play and party areas and delivery services. This report will assess how mission, visions, objectives and the core competencies that are formed at McDonald Plc with regards to the strategic planning and also, we are going to use effective tools that can be helpful in developing the strategy for McDonald’s in order to achieve competitive advantage in the business. According to an article GREGORY (2017), McDonald’s Corporation sets its corporate mission and vision statements in order to respond to changes in the global foodservice industry environment. Since it’s the biggest fast-food restaurant chain in the world, it considers its vision and mission statements as an essential policy and strategic management tool which ensures continuous growth. A Mission statement sets the purpose of the business. Whereas McDonald’s mission statement is establishment of the company as an influential favorite food service destination. A firm’s corporate vision statement is set to know where it wants to see itself in future. McDonald’s vision statement Is to push the company towards growth and improvement. It has major international competitors like Burger King, Subway, Starbucks, and Dunkin’ Donuts, and also regional or local firms. For McDonald’s its important to develop its competencies in order to manage competition and to achieve business goals.

Business strategy is understood as a long-term plan of action or sets of different decisions which is helpful for organisations to achieve their goals and objectives (Jargons, 2018). It’s a master plan that a company uses to set a competitive position in the market and also helps frame core competencies. It’s often made by considering the internal and external factors that ensures business runs smoothly and effectively. Therefore, it is important for McDonalds corporation to be rational by making strategic decisions and the decisions must always be taken based on the mission and vision of the business.

Strategic planning helps formulate a business strategy, implement and evaluate their impacts which are based on the organisation’s objectives. It focuses on integrating different business units to achieve organisational goals (Institute, 2019). It also helps evaluate the internal and external environment of the organisation.

Globalisation is a process where in two or more nations, or people, companies come together and trade their products or services internationally, through international trade, investment and through information technology. It has greater impact on organisations such as increased competition which is caused by foreign investment, there is greater awareness of the products as consumers will have wide variety to choose from. Opportunity to increase mergers and acquisitions is another impact on organisations. It also provides access to larger markets. Trading block is an agreement made between two or more countries that remove barriers to trade between those countries whilst keeping trade barriers for other nations (Agarwal, 2019). By reducing tariffs, companies can benefit from transferring off their goods from one part to another. The North American Free Trade Agreement (NAFTA) encourages trade to happen between Canada, US and Mexico with less tariffs (Llanes, 2017). This reduces the cost to companies and improves relation between nations.

Strategic decision-making is a process which helps managers and other organisations to solve problems by looking at alternative choices and deciding the best route to adopt. There are 7 different steps to be followed efficiently to have positive impact on the organization’s short and long-term goals (Hussung, 2017).It is also concerned with resources like capital available to the business, business growth as well as the competitive advantage of the business.

Corporate level strategy is made by the top management of an organisation and it includes bigger decisions such as acquiring a new business, expansion, or even diversification.

Business level strategy is formed to gain competitive advantage and also to provide value to their customers by exploring its core competencies. Its also concerned with the organisation’s position in the market (Starr, 2018).

Functional level strategies should be linked with both corporate and business level strategies. They are concerned with decision making at operational level known as tactical decision that are made on day to day basis to help execute corporate and business level strategies (Jargons, 2019).

According to Henry Mintzberg, there are five approaches to strategy labelled as 5 p’s (Mulder, 2018):

Strategy is a plan that is made to deal with certain situations. A plan is always made before taking any action and it must be revised effectively.
Pattern is a way employees and teams behave in an organisation based upon a strategy. If in past, a choice made increased sales in future, then in that case, this past behaviour becomes a pattern and is involved in ongoing strategy development process.
Having a strategic position in the market will not only gain competitive advantage for the organisation but also help fight again competitors. It deals with internal and external context of the environment.
Business should also think from the customers perspectives that where will their products stand in their eyes. What will be the image of their company in front of investors and where do they want to see themselves. All these elements will help them gain useful information and can work on strategic choices which they make.
Ploy is also a strategic choice where in organisations come up with a very innovative and unique idea that nobody has ever seen coming. For example, McDonalds already offers free WIFI services to their customers, and one day they develop their ownWi-Fi systems by entering into a totally new market which is technology. This becomes challenging for their competitors to compete.

By understanding each element of the above mentioned, McDonalds Corporation can develop a comprehensive business strategy that will allow them to take advantage of their capabilities to the fullest.

For profit organisations, their strategic plan is formed in such a way that, it achieves their aim to gain enough revenue which can be returned to shareholders in form of dividends or return to owners in terms of profit. Whereas, for non-for-profit organisations, their strategic plan differs in a way that, they aim to improve cashflow to reinvest and continue to operate and serve more people than before (Russo, 2019).

Internal and external environmental factors that affect McDonalds Corporation are:

Very strong brand image (political/legal);
Market diversification (sociocultural);
Standardised process (technological);
Intense competition;
Trends in healthy lifestyle.

In McDonalds all these factors are in favour and also allows them to create a more strategic plan for the future growth of the business and to maintain its brand image having a standardised process of making food It may face problems by government in having proper food labelling or its packaging process. These days, people are more diet conscious and they want to know how much calories are they consuming everyday therefore, McDonalds are asked by government to mention calories in every product. They can enhance their mobile applications and offer new deals with lesser price to order online and also, they can have a new system such as kiosk, which can allow consumer to customise their food and self-order. Fierce competition allows McDonald operations to be globalised in areas where there are less restaurants (Andino, 2015).

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