Category: McDonald’s

Introduction

McDonald’s is an international organization founded in 1948. It is a fast food restraint chain outlet serving an average of 58 million customers spread over 118 nations. Its mission is “to be our consumer’s favorite place to eat” (Gilbert, 2008). The food variety it offers ranges from chicken, non-alcoholic beverages and drinks, burgers, chicken, ice cream and salads.

Its first stall was opened in San Bernardino with only a hamburger on sale (Kincheloe, 2002). It was founded by two members Dick and Maurine McDonald’s who later relinquished ownership to Ray Croc. Under him, the McDonald’s product variety increased coupled with the growth in several franchisees. The restaurants under McDonald’s are run by a franchise. Currently, McDonald’s is an ultimate globalization symbol with its presence in international markets (Kincheloe, 2002).

Process of implementation in the Market

McDonald’s has a franchise model that makes only 15% of outlets to be owned by the company, while the remaining 85% are held by franchises. The company ensures a uniform model in monitoring and training of staff across all of its franchises. Its Head of Training is in charge of the implementation and direction of the company training. The restaurant managers and supervisors, in charge of the restaurant, take part in the training.

The strategy to develop and the use of a uniform supply and distribution system have enabled the company to be consistent in their products taste (Kincheloe, 2002). McDonald’s implementation in the market economy is based on a plan to win. They aim at being the best fast food chain and not the biggest.

This has enabled it to satisfy consumers through implementation of projects and initiatives revolving around five issues touching on customers, such as promotion, people, products, price, and place. McDonald’s also uses a variety of marketing mix, to reach goals. This includes daily meals, more working hours and efficiency optimization.

Demographics segmentation, using age as a parameter, is a strategy employed by McDonald’s. It is geared towards kids and urban youths. They provide toys, delicious meals and entertainment spots to attract them. A third party company has a partnership with McDonald’s to provide a toy for each meal. The urban youths are targeted through price sensitivity and offering of WiFi (Mieth, 2007).

McDonald’s also uses varying plans according to geographical locations. McDonald’s incorporates several organizational strategies (Watson, 2006). Some of the organizational strategies consist of better restaurant operations, placing the customer first, menu variety and beverage choice, convenience and continuous reinvestment in restaurants (Mieth, 2007).

Its growth strategy is hinged on three factors; increasing the number of outlets, profits, and sales maximization at current outlets and an increase in profits internationally. This is to be realized through improved operations, low operational costs and effective marketing (Watson, 2006).

Financial flow

In 1955, Ray crocs opened doors to his first outlet and created the McDonald’s Corporation in 1957. The company then went public in 1965, while the introduction of Big Mac occurred in 1968 (Mieth, 2007). Another product, Happy Meal, was introduced in 1974. They hit the 95^th country in their operation, with the opening of an outlet in India, 1996.

Their financial flow in the US dollars, million, from 1990-1994 is given below.

The budget for various activities during various periods is as follows:

Happy Meal, during 2009-2011, US$ 300,000 was used; marketing promotions totaled $ 1,000,000 from 2009-2011. The advertisements for Big Mac cost $300,000 in 2009. $25000 was spent on training while marketing advertisements during 2009-2011 were $100,000 (Kincheloe, 2002).

Security

McDonald’s ensures that it displays nutrition information on their products, mostly food items, though that was not the case initially. In the past, they would encourage their customers to eat more unhealthy foods through larger portions, supersize, which was an infringement on consumer rights (Mieth, 2007). This shows that, in the past, their security on consumers’ health was wanting, but now it is gaining ground.

Presently, McDonald’s is striving to remove more trans-fats in their products. This is aimed at sensitizing people to watch their weights and also absolving itself from blames of causing obesity. This consistency makes it a major stakeholder in making a healthy society.

Another factor is the requirement that a manager on duty carries out a thirty minutes travel path during a shift, checking the outlets’ surrounding. The areas normally checked include restrooms, walk inns, stores, refrigerators, and perimeter. The organization also carries out regular food safety tests several times in a day, coupled with changing of food safety book multiple times yearly (Love, 2008).

Technology

Technology is a crucial factor in McDonald’s because of its impact. They emphasize on using the most modern technology to lower production cost, gain more profits and increases the speed of serving customers at their outlets. Technology has helped them have the edge over their competitors. McDonald’s valuation of technology as a factor is attested, by their establishment of the Hamburger University to train and model their staff.

Most of their products are also mechanized to increase the hygienic level, rather than hand produced. It recently introduced a database service that is customized to give quick service to consumers (Love, 2008). This enhanced customer service is making their cashiers alert in terms of orders and stock. Currently, McDonald’s has a website that provides consumers with a choice menu, to choose items, and even carry out a nutritional analysis.

In 1999, McDonald’s spent $181 million in adopting a new system to be on par with rival organizations. This system ensured that standard foods are not held on bins till sold, but are only prepared by order, via a computer monitor that relays the order to the kitchen. The system, made for you, came after a consistent drop in customer satisfaction for three consecutive years. They have discarded the old system. Instead, they are perfectly made for you.

Change Process

McDonald’s has carried out several strategic transformations to improve service delivery to its consumers. During the old system, sandwiches would be made and placed in a bin to keep them warm until the time they were bought. The new system requires calculation on the amount of food to be held in the bins. This had to be done methodically to avoid food shortage which would increase customer delays, more food on the other side would lead to wastage.

The introduction of ‘made for you’ system in 1999 that cost McDonald’s $181 greatly assisted its service delivery (Mieth, 2007). It shifted from adding more outlets to increase sales, instead of adopting an increase of sales in already existing outlets. This is geared towards reducing spending and increase cash flow to stakeholders (Mieth, 2007).

McDonald’s has also tried carrying out changes in their menus and offering wide varieties of nutritious products to their consumers. McDonald’s announced a loss of $343.8 million in 2003, which was it’s first since its establishment. This was attributed to the quick expansion of the organization; hence, poor customer service delivery and products quality.

Currently, it has slowed down on the launching of new outlets from the 1700 outlets it has developed in the last ten years. In 1993, the corporation made a management error by abolishing the national grading system for its franchisees, while in 1994, it was ranked very low in the food industry.

Their poor services provision gave their competitors pizza huts, taco bell, and Kentucky an edge over them. This also necessitated the opening of more fast food restaurants. The company’s shift and concentration to development of the real estate, franchise, compromised their service delivery quality (Love, 2008). They ignored the fact that poor returns by a franchise adversely dent McDonald’s earnings.

Organization model to define features of McDonald’s

The application of porters’ five forces model to McDonald’s.

• Power of buyer- due to the quick and rapid growth in the fast food industry, several competitors have entered the market leading to an increase in competition. This has caused the companies to aim at producing better goods to give them an edge over their competitors to gain more customers (Love, 2008). This provides multiple choices for customers to choose from during purchase. This translates to a higher customer purchasing power in this industry.
• Power of supplier- the bargaining power of the customer is minimized due to the existence of corporations that supply food to the outlets. Due to a large number of suppliers for competitive products, switching by the corporations becomes easier in case of dissatisfaction (Gilbert, 2008). This significantly reduces the bargaining power of customers.
• The threat of new entrant- the ease of entry for a new firm into the market is relatively high. It is also easy for those firms to bring products with competing prices, though larger investments would be needed for them to compete with seasoned players in the market.
• The threat of substitutes- companies that offer substitute products to customers causes stiff competition to McDonald’s, apart from those that deal in fast foods. These products can be found in shops, hotels, cafes, and groceries. They also seem to be cheaper according to customers’ perception (Watson, 2006).
• Industry competitiveness- companies that offer substitute products to customers cause stiff competition to McDonald’s, apart from those that deal in fast foods. The competitors are a threat to McDonald’s due to the varying tactics they introduce to gain customers.

To be successful in the development of business, McDonald’s should stay on the offensive (Watson, 2006).

Conclusion

McDonald’s process of implementation in the market is comprehensive for the growth of an organization. This process involves market research, consumers forecast, new product line innovations and feedback from consumers. These factors have enabled McDonald’s to create a successful brand name. Due to the dynamism of the world, demands for similar products is increasing significantly. This has forced McDonald’s to the drawing board to ensure efficiency and better service delivery to their consumers.

References

Gilbert, S. (2008). The Story of McDonald’s. New York: Creative Co.

Kincheloe, J. L. (2002). The Sign of the Burger: McDonald’s and the Culture of Power. Chicago: Temple University Press.

Love, J. F. (2008). Mcdonald’s: Behind the Arches. Chicago: Paw Prints.

Mieth, H. (2007). The History of McDonald’s: Hammer, Patrick, Tanja Hammer, Matthias Knoop, Julius Mittenzwei, Georg Steinbach u. Michael Teltscher. New York: GRIN Verlag GbR.

Watson, J. L. (2006). Golden Arches East: McDonald’s in East Asia. New York: Stanford University Press.

Introduction

After reviewing the case, I agree with the jury’s decision to impose heavy punitive damage on McDonald’s for its attitude toward a clear safety hazard. A firm can be sued for an unintentional tort and held liable for its product’s impact on others’ health. This paper will assess the Liebeck v. McDonald’s case, the company’s negligence, and how its hot coffee was a significant legal liability.

Discussion

Despite the fact that Mrs. Liebeck had inflicted this damage by herself, the firm failed to prevent the occurrence of these injuries. The company has known about the danger that its hot coffee imposed on customers for years yet did not issue any warnings (“McDonald’s hot coffee case,” n.d.). Despite this knowledge and past incidents, McDonald’s did not fix the issue. Judges have decided that the evidence is sufficient to punish the company for its disregard of critical information (“McDonald’s hot coffee case,” n.d.). Exceedingly hot coffee can be counted as a defect in a product. This substance can be dangerous to others’ health and can lead to strict liability for its seller (The Business Professor, 2013, 00:20-00:01:12). It is apparent that Mcdonald’s did not ensure the safety of its beverage, and the judges’ decision was correct.

Conclusion

In conclusion, the strictness of the court’s decision is adequate for this case, as McDonald’s has failed to adequately assess the dangers of its products or warn its customers about them. Punitive damages the company paid after this trial ensure that it will never show the lack of any concern for the potential damage to people’s health. I agree that it was essential to punish such negligence from a major firm that already had a history of similar incidents.

References

The Business Professor. (2014). Strict product liability – Tort[Video]. YouTube. Web.

The McDonald’s hot coffee case. (n.d.). Consumer Attorneys of California. Web.

Introduction

The application of change initiatives in business is as important as in any other branch of human activity. Sooner or later every company encounters necessity of applying changes in the organization due to changes that take place in the areas such as technology, corporate governance, evaluation of leadership competencies, and other concepts related to the sector of business including marketing strategies and sustainable competitive advantage.

So, the strategic change initiative should be thoroughly planned in order to result in successful changes in future regarding the period when changes should be implemented.

One of the strategic change initiatives includes vision of the changes with regard to the vision statement which shapes the whole strategy for changes, mission statement which justifies the reasons for change and indicates the highest point to strive for; finally, the change strategy is the set of approaches that should be used to reach the goals stated in the mission or at least to approximate to those.

The changes that should be introduced in McDonalds concern the attitude of customers, reputation of the company, and reaction of staff members.

Application Analysis

As suggested by Palmer, Dunford, and Akin (2008), each change implemented in organization should have its own image and should be built in accordance with a certain strategic change initiative vision. So, the application of changes with regard to vision of these changes should be analyzed in order to evaluate effectively the effects expected from this change, the way the change was applied, the attitude of employees in the process of implementation and final results of the change application.

In other words, it is necessary to take into account the change outcomes expected to be reached after application of strategic change initiative as reported by (Palmer, Dunford, and Akin, 2008), they can be intended (p. 25), partially intended or unintended (p. 26).

Thus, the change that should be introduced in McDonalds can be considered intended or partially intended regarding the nature of external factors that can shift priorities and attitude of employees including their understanding of importance of changes applied to this business.

Lessons Learned

The application of strategic change initiative requires certain sense of the situation because the change can be partially intended or unintended due to external factors and lack of underground for implementation of theoretical issues into practice. Besides, what is good for one business in terms of competitive advantage or corporate governance is not applicable to another business due to relation with customers, engagement of personnel, and other concepts.

A practicing manager could create a plan for application of strategic change initiatives with the help of vision concepts including vision statement, mission statement, and strategy in terms of approaches suitable for the case. The more thorough is the plan of application, the more successful can be its application to business because a practicing manager should identify some risks that can occur and be ready to solve problems related to strategic change initiatives application.

The strategic change initiative was applied in accordance with the plan including identification of vision and mission statements, and selection of approaches necessary for effective reaching of intended change outcomes. Some mistakes that could occur in this situation could be fixed with the help of a detailed analysis of every step taken before the changes occurred and identification of mistakes.

Reference List

Palmer, I., Dunford, R., & Akin, G. (2008). Managing organizational change. 2nd ed. Boston: McGraw-Hill.

As observed by Pine and Gilmore, as commoditization of goods and services become more pronounced, customers experience is very important. Customer satisfaction is important for every business especially the hotel industry for it determines its stay in the market. For a business to thrive, it not only has to provide a commodity but also create customer value by employing effective marketing strategies. In the hotel industry, restaurants use different approaches to market their services.

While some concentrate on selling the services they already have by cutting prices, employing more sales personnel and aggressive advertising others focus on giving the customer the best experience. In simple terms, there are those which differentiate themselves as service providers and others as experience providers.

Starbucks and McDonalds are both fast food restaurants operating various outlets across the globe. With the hotel industry in the maturity stage of its life cycle, both companies have to adopt effective differentiation strategies to ensure growth in their current markets and also expand in possible new market.

Comparing the two giant companies may seem insensible but as matter of fact they do have a lot in common. Both chains promise customer satisfaction achieved by developing good customer rapport rather than just selling their commodities.

The fast food restaurant industry is highly saturated with Starbucks having less market share when compared to McDonalds. To stay competitive, the industry does affect the strategies which each restaurant will adopt. Differentiation is an effective competitive strategy which both Starbucks and McDonalds have employed.

This is where the issue of commodity versus experience provision comes in. As a commodity provider; the restaurants focus on making their products readily available at low prices. The customer may be attracted by the low price even when the service or rather the experience they get from the particular restaurant is not good.

On the other hand, experience providers will concentrate on creating customer value even when the prices of their commodities are high. In marketing, customers are the king and to develop a good customer relationship, the business needs to create value through experience provision.

Customers are said to be the best advertisers and if they are served well, then brand loyalty is created hence growth. An experiential marketer makes the customer feel special; they add value to the commodity such that the customer can justify any extra dollar that they spend.

McDonalds offers a wide variety of products at low prices as compared to Starbucks. McDonalds differentiates itself as a commodity provider although the unhealthiness of the meals it offers acts as its major disadvantage. On the other hand, Starbucks concentrates on both strategies.

The company has put more effort in selling its coffee and at the same time making the whole experience for the customer unforgettable. According to a certain customer “Starbucks is a place to sit down and have a conversation or have an informal meeting with a rich tasting high quality coffee in a unique environment.” For this reason, the chain has attracted all manner of customers including students and employees and any other person who loves enjoying a cup of coffee.

Even though Starbucks sells luxury products like lattes and cappuccinos, its customers experience satisfaction and value for their money. From this perspective, it is a fact that when a company sticks with an effective competitive advantage, it satisfies its customers who ensure it’s profitable therefore the growth of market share in the industry.

An experiential marketer like Starbucks shapes its customers needs in new directions which happen to increase customer value proposition. At the same time, when the chain shapes its customers needs, it improves its business systems.

Experiential marketers engage their customers in personal and memorable ways. While the commodity providers try performing the normal function of selling, the experience providers go beyond the normal function to compete by creating customer value. Before manufacturing, the experiential marketer aims at creating a product with an excellent design.

An experiential marketer understands the two dimensions of experiences, these which are: customer participation and the connection with the commodity and the environment. Considering the aspects of customer participation and connection improves value propositioning.

The reason why Starbucks stands out than McDonalds is because of the fact that it has its experience well themed. When a customer steps in a Starbucks outlet, they instantly know what to expect. The theme is well defined and this promises the customer a nice experience at the restaurant.

According to Pine and Gilmore, an experiential marketer understands the importance of harmonizing impressions with cues that are positive and at the same time eliminating the negative ones. Experience providers strive to eliminate any aspect that seems to diminish the theme unlike commodity providers who focus on making a sell.

The authors also appreciate the role played by the five senses. In the hotel industry, customer experience is enhanced by smell, taste, vision, and other sensations. The sweet aroma and taste of Starbucks coffee accompanied by excellent customer care makes the restaurant stand out against its competitors. Its not that Starbucks is perfect than the other players in the industry, its experiential aspect makes it stand out.

Introduction

Organizations that wish to remain operational in present-day competitive markets have to invest in evidence-based compensation frameworks. Some companies, including my present workplace, have not recorded maximum benefits associated with the existence of reward systems. These institutions may have overlooked major elements that influence the effectiveness of reimbursement packages.

As this paper reveals, successful organizations consider factors such as the anticipated objectives to be realized and the prevailing market competitiveness when developing their remuneration systems. Justifying the significance of the above factors requires me to describe the status of compensation systems in my current workplace, including some aspects that need to be improved such as providing incentives and aligning salaries and wages with those of its competitors.

My Organization’s Present Compensation System

My current organization, McDonald’s, is a well-recognized fast-food business based in the U.S. It has branches that are spread across various countries around the globe. My company boasts of a team of more than 235000 workers in all its approximately 36000 stores (Olsen, Popovich, & Thompson, 2016). Although this organization has a huge customer base, it is alarming that its recent performance has been declining.

McDonald’s current compensation system seems to contribute significantly to this deteriorating profitability. According to Olsen et al. (2016), this company’s overall returns went down by roughly 15% from almost 6 billion U.S dollars recorded in 2013 to about 4.8 billion U.S. dollars realized in 2014. Although it is possible to have other factors such as poor work-life balance and inexperienced taskforce leading to this low productivity levels, an article by Bloomberg (2018) reveals the pitiable nature of the prevailing compensation framework that does not recognize the impact of incentives and reasonable wages on the overall business performance.

Workers in several McDonald’s outlets participated in protests dubbed “Fight for $15” (Bloomberg, 2018, para. 5) following the company’s move to deny them reasonable remuneration packages and incentives. Overall, the prevailing decline in profitability in my company indicates the extent to which it has failed to recognize the significance of a well-researched compensation framework that appreciates the role of motivated employees in informing business performance. Consequently, as it will be revealed later, several areas may need to be changed to reap the best from McDonald’s current remuneration scheme.

Factors to Consider when Developing Compensation Systems

One of the factors that need to be considered revolves around the anticipated objectives, which the required remuneration structure seeks to achieve. For instance, a company may implement a compensation system to be recognized as the employer of choice. Another system may focus on linking remuneration packages to workers’ performance. The study by Onken-Menke, Nüesch, and Kröll (2018) presents flexible working conditions as among issues that companies need to emphasize in their compensation frameworks.

Such flexible job environments attract new employees while at the same time helping businesses to retain their existing teams of experienced personnel. Specifically, this strategy enhances “organizational attractiveness for job seekers and the organizational attachment of employees” (Onken-Menke et al., 2018, p. 239). High employee-retention levels and the capacity to attract new and competent workers characterize many global institutions.

Another factor to consider when designing a compensation framework is the prevailing market competitiveness. Employers should ensure that their employees receive wages and salaries that match what other businesses in the same industry are providing (Bloomberg, 2018). Workers are likely to quit or demonstrate low morale and, consequently, reduced productivity, especially when they realize that their respective working conditions, for instance, work-life balance, salaries, and incentives among others, are not comparable to what competitor companies are giving.

Areas of Improvement for My Company

As earlier mentioned, regarding objectives, companies that seek to be recognized as employers of choice implement compensation frameworks, which focus more on benefits, as opposed to salaries, pay based on employees’ performance, and provide flexible working conditions. McDonald’s should restructure its compensation system in a way that recognizes the need for reimbursing workers fairly and in line with the amount of job done. The current framework emphasizes profits more than workers’ welfare and hence the reason why some of them have been engaging in protests.

This company should also do a market analysis to investigate various factors that well-performing multinational organizations such as Google and General Motors considered when implementing compensation systems, which have been confirmed to contribute significantly to their present success. This strategy will also help to customize its prevailing remuneration model to match what competitors are offering, hence eliminating chances of turnover among employees. Well-compensated workers not only feel motivated but also ensure quality services, which, in turn, translate into higher profitability levels.

Conclusion

Compensation systems play a crucial function in helping to realize human resource management agendas of ensuring enhanced organizational performance and productivity through a motivated team of employees. Renowned companies such as Google and General Motors have managed to attain their current global business leadership, thanks to their well-researched compensation models, which have not only helped to attract experienced human resources but also retain the existing pool of knowledgeable workers. Organizations such as McDonald’s should consider factors, including the anticipated objectives and market competitiveness, when designing their compensation systems.

References

Bloomberg. (2018). McDonald’s workers say the company is breaking its minimum wage pledge. Fortune. Web.

Olsen, P. E., Popovich, K., & Thompson, T. (2016). WTF? McDonald’s minion unhappy meal. Journal of Critical Incidents, 9, 115-117.

Onken-Menke, G., Nüesch, S., & Kröll, C. (2018). Are you attracted? Do you remain? Meta-analytic evidence on flexible work practices. Business Research, 11(2), 239-277.

Introduction

Marketing entails offering quality products at reasonable prices. The research focuses on the marketing strategy of McDonald’s Company and its critics. The research includes the history of McDonald’s Company from its humble birth in California to its current worldwide acceptance as the best seller in the food and beverage market segment.

Specifically, the research includes a SWOT analysis. The research ends with a recommendation as to what McDonald’s should venture into in the years to come. McDonald’s implements textbook-based marketing strategies to catapult it to its present stature in the restaurant, food, and beverage world.

History

Gilbert Sara (4) emphasized McDonald’s was founded by Ray Kroc. Dick and Mac McDonald’s had opened its McDonald’s Restaurant on 14^th and E streets in San Bernardino state, California in 1940. The original store included a drive-in environment with a corresponding large menu and car hop services. In 1949, Dick and Mac had reduced their menu. The new menu item list included hamburger, cheeseburger, soft drinks, coffee, milk, potato chips, and pie. The most popular menu during this time period is the 15c hamburger.

In 1954, Ray Kroc accidentally enters the McDonald’s scene by selling a multimixer product to both Dick and Mac McDonald’s. Ray Kroc learns that both owners of McDonald’s were interested to set up franchises of their McDonald’s restaurant in many cities across the United States. Ray Kroc decides to enter the McDonald’s franchising business. Consequently, Ray Kroc opens his first McDonald’s store in Des Moines Plaines, Illinois on April 15, 1955.

Stanley Meston created the Golden Arches logo of McDonald’s. The company’s first day sale catapulted to $366. This was a large sum of money when comparing the value of $366 during that time period and today’s $366 value. The cost of food, clothing, shelter, and other necessities were cheaper back then compared to the prices of food, clothing, shelter, and other necessities of today, April 20, 2011. In 1965, the company was able to franchise 700 McDonald’s restaurants across the United States.

The new recipes included the “Big Mac” which was introduced to the public in 1968 and the replacement of potato chips with French fries. McDonald’s celebrates its 25 years of business operations. In addition, the company reached its 50^th anniversary in 2005. In 2008, McDonald’s came up with a global design of the company’s products.

SWOT Analysis

Strengths

Anja Bohm (12) opined McDonald’s company has its strengths. First, the company has distinctive competencies. The competencies include its strategic advantages. Competencies include low prices, high quality goods, excellent service and.

Second, the company gains a competitive advantage, people will enthusiastically flock to a new McDonald’s branch because the McDonalds name is a name that can be trusted and admired. Third, the company has a strong marketing strategy. The company spends lots of money for advertising the different McDonalds products in the television, radio, and newspapers.

Fourth, the company has strength in research and development. The company continues to experiment with new ingredients and menu to pamper the current and future McDonalds clients. Fifth, the company has strengths in human resource management. The crew are well trained to serve each client the same high quality way; serving the same high quality products at low prices.

Sixth, the company has strengths in information system. Clients and log on to the online McDonald’s website and make an order for hamburgers, French fries and the like. Seventh, the company has strengths in infrastructure. The company sets up the standard McDonald’s restaurant format. The people from different countries have grown to love the same store fast food style infrastructure, especially the busy working person.

Anja Bohm (12) reiterated the McDonald’s Company has its strengths. The strengths represent the McDonald’s development and growth of the company over time which is identified as the company’s “competitive advantage” and “distinctive competency” that is responsible for the company’s growth to be one of the top restaurants, food, and beverage companies of the world.

The company has the most critical components of a company’s financial resources. The company’s high revenues allow the company to have ready cash on hand to pay for its maturing obligations as well as daily operating expenses.

There are other strengths not discussed above. First, the McDonald’s Company has distinctive competencies that include a strong worldwide presence. The company is recognized the leader in the fast food chain market segment around the world, especially within the United States.

Everyone within the United States and major cities around the world has come across the name McDonald’s. People from all walks of life have visited a McDonald’s store. Everyone will comfortable that they can easily munch the same McDonald’s quality and taste whether one is in Los Angeles, California, Upstate New York, Virginia, London, China, Saudi Arabia, Japan, Korea, Malaysia, India, and other countries.

Second, the McDonald’s Company has under its worldwide fast food market segment more than 30,995 restaurants. The restaurants are strategically located in many places around the world. More importantly, more than 13,998 of the McDonald’s Company’s own stores are strategically located in many major cities within the local United States territory.

The establishment of the McDonald’s Company restaurants in different parts of the world indicates that there is strong demand for the McDonald’s Company’s products and services. The increase in the number of McDonald’s Company restaurants around the world proves that there is a strong demand for McDonald’s Company products and services.

Third, the McDonald’s Company introduces the important economies of scale principles in assigning costs and prices on its McDonald’s products. With the implementation of the economies of scale principle, the company continues to lessen its restaurant operating costs to more realizable levels.

Specifically, the implementation of the scale greatly lessens the expenses of its overall charting of new paths into uncharted fast food market segments around the world. The economies of scale theory states that some countries are composed of a majority of poor people.

The economies of scale theory states that some countries are composed of a majority of poor people. The economies of scale theory states that some countries are composed of a majority of very rich people. The economies of scale theory states that some countries are composed of a majority of average income people. McDonald’s offers it products at low prices. The company targets the general masses of the community.

Since there are poorer and average income people in the community compared to the community of rich and very rich persons, McDonald’s targets the average income and low income groups of people. The company is satisfied to generate a small income because there will be more clients visiting the McDonald’s stores compared to restaurants and food and beverages stores that offer its food and service products at very high prices.

Fourth, the McDonald’s Company maintains a string of children’s charities around many of its branches around the world. The name of the charity is The Ronald McDonald House. The McDonald’s Company spends lots of cash to feed the children entering its charity outlets. By engaging in children’s charities the image of the McDonald’s Company will improve in the eyes of the current and future customers. The amount allocated for the care of the children

Fifth, the McDonald’s Company focuses on the clients’ health and overall well-being. The company only uses ingredients that have passed its strict high standards. The McDonald’s Company complies with all the policies of the United States Department of Agriculture in terms of healthiness of the food ingredients and the food itself.

The company ensures that ingredients used in the production of goods and services are not spoiled or expired. The use of expired or spoiled food ingredients may cause the customers to suffer from food poisoning. Consequently, the customers can file a case in court for the food poisoning incidents. Such cases will cause a huge dent the image of the McDonald’s Company.

The company goes out of its way to protect its image. A damaged image will translate to a decline in the demand for the company’s products and services. A decline in the demand for the company’s products and services will cause a drop in the company’s revenues. A reduction in the company’s revenues will translate to a reduction in the company’s net profits.

Sixth, Anja Bohm (12) reiterated the McDonald’s Company invests in properties around the world and offers franchises. The establishment of McDonald’s Company restaurants around the world shows that many investors believe that the infusion of their hard-earned cash into the McDonald’s Company will be a profitable decision. The spread of McDonald’s Company restaurants indicate the investors are comfortable with their capital investment decision to have one or more franchises of the McDonald’s Company restaurant.

Seventh, the McDonald’s Company has a long list of real estate portfolios. The company is willing and able to purchase properties in different countries around the world. The purchase of such properties would be useful in terms of improving the company’s balance sheet presentation. The investors would be happy to see that the McDonald’s Company’s properties have increased through the years. An increase in the McDonald’s Company’s properties shows there is also an increase in the company’s stockholders’ equity accounts.

Eight, the McDonald’s Company has patents over very popular food items. The food items include Big Mc, Chicken McNuggets. Patents are defined as the government’s right given to an inventor or new product developer to craft the McDonald’s Company products. The copyright prevents the competitors and new entrants to the restaurant, food, and beverage competitors to produce the same products or even use the same product name such as “Big Mac”.

Ninth, the McDonald’s Company has one of the world’s most recognized logos. The Company’s logo is a huge “M” sign. Any person seeing the “M” logo can easily state that it means a McDonald’s restaurant is located nearby where the “M” sign can be easily seen from afar.

Tenth, the McDonald’s Company focuses its unwavering attention on its corporate social responsibility. The company implements community-caring programs. The programs are aimed at giving back to the community what the community has given to each McDonald’s restaurant located in major cities around the world in terms of food and beverage revenues.

Eleventh, the McDonald’s Company incorporates the local culture in all its branches in the United States, Europe, Asia, Africa, and other parts of the world. The McDonald’s Company hires the local residents to manage each McDonald’s restaurant. With the locally-hired McDonald’s employees, the company can be classified as a diversity-based company.

The Chinese employees bring a touch of the local Chinese culture to the McDonald’s China branches. Likewise, the Korean employees bring a touch of the local Korean culture to McDonald’s Korean branches. The United Kingdom employees bring a touch of the local United Kingdom culture to the McDonald’s United Kingdom branches.

Twelfth, the McDonald’s Company is strategically located in major airports, cities, highways, tourist attractions, and parks. Consequently, the large number of people passing through each McDonald’s branch easily accepts the sumptuous menu items displayed in each McDonald’s establishment.

Weaknesses

Mike Meldrum (27) reiterated the McDonald’s Company has its weaknesses. First, the McDonald’s Company uses advertising strategies focused on inviting the children to visit the nearest McDonald’s restaurant.

Second, the McDonald’s Company implements a low pricing strategy to capture the competitors’ current clients. Clients would easily transfer their preference to McDonald’s products because the prices of their food items are low. Consequently, the competitors are forced to reduce their prices to levels matching or even nearing the McDonald’s food pricing levels.

Third, the McDonald’s Company lacks the penchant to innovate its products. The company continues to sell the same old McDonald’s products. The products include hamburgers, French fries, coffee, chocolate, beverage, Big Mac, and others. The people will generally prefer a change in the food menu to avoid boredom.

Opportunities

Mike Meldrum (27) theorized the company’s superior performance is the result of a successful fit between strategy and the environment. The community needs low priced food to fill their hunger fangs. In response, McDonalds creates high quality products to fill the community’s needs, wants, and caprices.

In addition, the company’s main technique is to analyze the competitors. The McDonalds Company does not fear the entry of new competitors because it is difficult to outmatch the McDonalds Company’s established high quality products sold at low prices. The suppliers are willing to supply McDonalds with highest quality ingredients and other company needs at reasonable prices.

The McDonalds Company does not fear product substitution because the substitutes are sold at higher prices; the clients will prefer lower priced goods and services. Realistically other traditional restaurant competitors offer their products higher prices than McDonalds.

Nadine Pahl (73) proposed The McDonald’s Company has its set of opportunities. First, the McDonald’s Company can effortlessly adapt to the food needs of the community where the company has established its strategically located branches. The company can introduce products that are very popular in the competitors’ restaurants. For example, the China branch of McDonald’s can introduce the popular food menus being sold to the competing Chinese restaurants or food outlets.

Second, Mike Meldrum (27) theorized the McDonald’s Company can introduce new marketing strategies to increase its revenues. The company can set up websites in each city, community, or state. With the McDonald’s website, the clients can easily order a hamburger or coffee with just the click of the mouse.

In addition, the company can distribute leaflets or promotional brochures to communities indicating the cell phone text numbers. The clients can easily order a McDonald’s Big Mac just by sending a cell phone text message to the local community’s McDonald’s branch.

Threats

In terms of threats, Mike Meldrum (27) insists the company can easily hurdle the encroaching new competitors because the new entrants cannot easily win the away the established client base of the McDonalds brand.

Further, the supplier threats can easily be resolved by contacting other suppliers to offer reasonably priced ingredients and other products. Likewise, the threat of substitute products can be easily answered by offering different product choices within the McDonald’s restaurant. For example, the Starbucks coffee is price three times higher than a cup of McDonald’s coffee.

Economics tells us the as prices go up, the demand for the products decreases. Thus, McDonald’s will always better alternative compared to Starbucks coffee because there are more middle income and low income people than rich people. The restaurant and food industry is composed of strategic groups. McDonald’s countless branches around the world are one strategic group that constantly wins most of the current and prospective client’s food preference.

The members of McDonald’s Company’s strategic group can easily resolve its immediate competitor situation. The company has been successful in implementing one universal marketing strategy to capture the new clients and communities food preferences. Currently, the company is at its maturity stage in the product life cycle environment.

The people from around the world have accepted McDonald’s as a mature company that serves their quality food needs at low prices for more than 50 years. Likewise, the macroeconomic environment, political environment, global environment, legal environment and social environment continues to be very favorable to the setting up of a new McDonald’s branch as well as the continued profitability of each currently established McDonald’s brand.

The McDonald’s Company has to contend with its threats. First, the McDonald’s Company has to overcome the current economic depression or recession. The recession covers much of the United States and Europe. The recession has reduced the current clients’ penchant to spend quality time gobbling a McDonald’s hamburger or sipping coffee while reading the newspaper’s headline stories.

Second, the McDonald’s Company has to resolve the currency exchange rate fluctuations. The McDonald’s Company will be happy if the currency exchange rate between the United States dollar and the Chinese currency, Yuan, will remain on the same level. A change in the currency exchange rate between the two currencies may spell an increase in revenues and profits or a decrease in revenues and profits.

Third, many of the competitors are coming up with new food items that can rival the taste, price, and quality of the McDonald’s products. Many local restaurants can easily implement new marketing strategies to please the ever-changing needs, wants, and caprices of its current and future food customers. On the other hand, the McDonald’s Company continues to steadfastly hold on to its popular brands throughout the years.

Fourth, the McDonald’s Company has to finally settle the health issues relating to the company’s food products. Everyone knows that eating too much hamburger is hazardous to a person’s health. Too much indulgence in the McDonald’s products may trigger hypertension, diabetes, and other ailments, especially for the “older” generation of restaurant clients.

Fourth, the McDonald’s Company focuses a major part of its capital investment on advertising. People often see McDonald’s advertisements in television shows. Likewise, McDonald’s advertisements are found in newspapers. In addition, McDonald’s advertisements are found in radio stories.

Fifth, many of the parents detest the McDonald’s Company’s marketing strategy. The strategy focuses on enticing the children to visit the nearest McDonald’s restaurant. The children are easy prey to the continuous advertising of the McDonald’s products and services. Consequently, the growing child will bring the McDonald’s food craze into their adulthood and elderly stages of life.

Sixth, the McDonald’s Company has been sued in courts for the effects of the unhealthy McDonald’s products on the health of its current and future restaurant customers. The lawsuits include charges that the food items are injected with addictive additives. The additives will create a craving among the current and future McDonald’s Company clients to return back to the nearest McDonald’s fast food restaurant to buy another set of McDonald’s addictive products to satisfying their addiction to the McDonald’s food items.

Seventh, major competitors are slowly, but surely, creeping into McDonald’s market segment and literally grabbing major markets. The popular Starbucks coffee is gaining a continuing increase in coffee lovers.

Likewise, Burger King has been able increase its food and beverage market share by chopping away and pirating many of the clients of McDonald’s. In addition, Wendy’s has successfully increased the number of its worldwide branches. The increase in Wendy’s branches translates a decline in the McDonald’s clients.

Eight, the McDonald’s Company’s setting up of new branches in other countries has been unfavorable in many instances. Some countries have slow economies which translate to slow sales. Slow sales statistical figures translate to slow profits. On the other hand, a fast economy translates to fast revenue generating activity. It is common knowledge that some countries have slow economies while other countries have fast economies.

Consequently, a fast economy will generate more revenues and profits compared to companies with slow economic inputs. Normally, communities or countries with few people having purchasing money will translate to lesser revenues and profits when compared to communities or countries having more people with higher purchasing power or having more money to spend for McDonald’s products.

The company’s control systems

Karl Moore (83) emphasized the company’s control systems focus is very realistic. The store officers and staff ensure that all the company’s ingredients are fresh and healthy. The store officers have implemented one strict production process in all the McDonald’s Company branches around the world. The company’s food preparation manual indicates the step by step process of preparing, cooking, and serving each McDonald’s around the world.

The food preparation process in the California McDonald’s Company branch is similar to the food preparation of the McDonald’s Company branch in Florida. Likewise, the food preparation process in the United Kingdom McDonald’s Company branch is similar to the food preparation of the McDonald’s Company branch in France. The food preparation process in the Saudi McDonald’s Company branch is similar to the food preparation of the McDonald’s Company branch in India.

The implementation of only one standard tried and tested ingredient choosing, and food cooking, and food preparation in all the McDonald’s Company branches around the world ensures that the outcome of each McDonald’s Company food and beverage activity complies with the company’s preset quality standards.

The company implements preset standards as a measure of quality performance. All branches must adhere to the standards for the sake of maintaining the company’s top spot in the world’s fast food market segment. The McDonald’s Company officers compare the employees’ actual job performance with established standards with the aim of improving any lackluster service performed by the company’s crew.

The McDonald’s Company officers do not waste any time in correcting or alleviation any customer complaints. The McDonald’s Company food crew is a human being, sometimes one commits unintentional errors. The new greenhorn employees are apt to commit mistakes fulfilling the needs, wants, and caprices of the clients.

The McDonald’s Company must be quick to remedy such errors to ensure the company will continue to patronize the company’s products and services. It is also customary to post the picture of the best employee of the month in each McDonald’s Company branch as a reward for enthusiastic and hardworking employees.

Recommendations

Based on the above discussion, it is highly recommended that the company continue its present course in terms of ingredient choosing, food cooking, food preparation, and pricing of the regularly sold McDonald’s Company products that include the “Big Mac”, Chicken McNuggets, the Frappes, and the standard hamburger, coffee, egg McMuffins, chicken, and other McDonald’s mainstay products being sold in its more than 50 years of existence.

The company should continue to expand its horizons by setting up more branches in other communities and countries to ensure that the world’s craving for the favorite McDonald’s Company products will be filled to overflowing status.

The Company does not have to retrench its employees because the company’s food and beverage market segment continues to generate huge revenues and profits. The company can use a combination of online (internet website) ordering, cell phone texting, and phone calls as a means for current and future clients to fill their need for the mouth-watering McDonald’s Company products.

In terms of the future, the horizon is crystal clear. Crystal clear means the company sees an increase in the number of McDonald’s Company branches sprouting like mushrooms in other cities that do not have a McDonald’s Company branch within the reach of the hamburger-loving, French fry-loving, and chicken McNuggets-craving residents.

Using trend analysis, since the current trend of setting up new McDonald’s Company branches in the past has spelled financial success, the company should continue in its unwavering stand to set up new branches in other parts of the world.

In terms of rationalizing, the company has been able to generate profits from each branch set up in major places where a huge volume of people congregate, the company should continue its present course to set up new McDonald’s Company branches, in malls, groceries, busy street corners, airports, train stations, and other busy intersections around the world.

Conclusion

Marketing includes offering quality products at reasonable prices. The history of McDonald’s Company from its humble birth in California to its current worldwide acceptance as the best seller in the food and beverage market segment shows the company deserves the accolades for striving to be the best in terms of product quality and quality service.

Specifically, the SWOT analysis scrutinizes the strengths, weaknesses, opportunities, and threats of McDonald’s. The recommendations show that McDonald’s continue its present course because the company will continue to generate more revenues and profits. Indeed, McDonald’s Company continues to successfully implement textbook-based marketing strategies to retain its catapulted stature as one of the best in the restaurant, food, and beverage world.

Works Cited

Bohm, Anja M. The SWOT Analysis. New York: Grin Press, 2009.

Gilbert, Sara P. The Story of McDonalds. New York: Creative Press, 2008.

Moore, Karl A. Marketing: The Basics. New York: Taylor & Francis Press, 2009.

Pahl, Nadine R. SWOT Anaysis, Methodology, and Practical Approach. New York: Grin Press, 2009.

Executive Summary

McDonald’s Company has established, managed, and enhanced its business visions in United Arab Emirates (UAE) where it sells hamburgers and other fast-food products. The company was founded in 1940s in San Bernardino, California; nonetheless, it has its headquarters in Oak Brook, Illinois (USA).

McDonald’s has grown remarkably in the past decades. This report unveils whether the company has increased the number of its customers since its establishment in UAE in the recent past (Brady 2010, P. 106). It is evident that McDonald’s has enhanced its market penetration, regional visibility, and customer services in the region.

This is based on the findings of the research executed on this matter. The research unveils that most people are satisfied with the company’s services and business prospects. Precisely, McDonald’s has increased its market share in UAE. There are internal and external environmental factors that dictate its progress within the region. Internal factors affect the company intrinsically and might influence its services to customers. Conversely, external factors affect the industry at large. Formulating research questions, objectives, designs, and the ultimate data collection, compilation, coding, and analysis have contributed to the mentioned findings with precision.

Background of the company’s internal and external environment (McDonalds UAE)

McDonald’s restaurants and fast food joints have performed tremendously in the UAE’s market as indicated by their market penetration and customers’ acceptability. It is evident that the company prepares quality products compared to its rivals in the similar market.

Nonetheless, there are various issues that emerge when the company’s background is subjected to both internal and external environmental analysis. This is an important observation since it provides the true picture of the company in the realms of business prowess and other relevant provisions.

From the data collected, it is evident that McDonald’s has grown remarkably and numerous customers are satisfied with its products and services. For example, an average (mean) rating of 3.62 out of the possible 5 (according to the research stipulations provided) is commendable.

It shows that the company is above the neutral gauges. This indicates that McDonald’s is performing well in the UAE’s market since its commencement in the Arab world. The respondents to the designed research indicated their satisfaction with the company.

Internal environmental factors relate to the conditions inside the organization. The company has established and embraced substantial internal environmental factors in the realms of competitive products, suitable pricing, profitability, customer services, innovation, novelty, and considerable business cultures among others (Hammond 2005, p. 276). On products, McDonald’s is branded with delicious hamburgers.

However, the company has internally diversified its products in order to respond to the dynamic/changing market demands. This is to ensure that the company remains relevant and competitive in the UAE’s market. Evidently, McDonald’s has increased its number of customers in the past few years due to the diversification of its commodities and services in order to serve customers’ vast interests. This has contributed to the success of the company with precision.

Other products that the company offers in its outlets incorporate cheeseburgers, French fries, soft drinks, and desserts among other viable fast-food products in the UAE market. This diversification has allowed McDonald’s restaurants and fast food joints to gain considerable eminence, competitiveness, and market share.

The provided research findings indicate the customers’ positive response to the McDonald’s commodities and service provisions as indicated earlier. The company has progressed considerably in the recent past. It has a considerable market divide and enjoys a massive marketplace presence and regional visibility with respect to UAE.

Another considerable internal factor in the realms of environmental analysis is the pricing strategy that the company uses in order to remain competitive in the UAE’s market. McDonald’s has established competitive prices for its commodities. This has allowed the company to compete favourably in the UAE’s market as indicated earlier.

Internally, the company has established and embraced viable pricing strategy for its hamburgers and other products within its outlets. This relates to what customers want and to what value and quantity. Consequently, there is a considerable marketing strategy that McDonald’s assumes in its business endeavours.

This is an important provision in the entire marketing and business contexts. Additionally, its ability to respond to other market demands indicates the flexibility of the business in the UAE’s market.

This occurs regardless of the stringent Muslim cultures in the region. Having studied the market, McDonald’s has ratified other business provisions to grasp and retain substantial quantity of clients. This indicates how the business is focused and endeavours to serve its Arab customers with delight. Evidently, this is a considerable provision in the business realms.

Another internal factor in this context is the brand name of the company and its adaptability into the UAE market. It is important to recognize that McDonald’s has a considerable brand name having served several customers globally with quality fast-food products since its inception in US (in 1940).

This has acted as a considerable strength for the company in the realms of business and expansion. Brand name helps businesses to grow faster since customers admire associating themselves with the prosperous brands. It is from this context that McDonald’s has managed to survive and grow remarkably in the UAE market despite the cultural challenges.

This has related to the aspects of adaptability assumed in this context. McDonald’s can easily adapt in a given market due to its novel products and other associated business cultures. It has strategic business position with substantial market segments for its commodities. This has allowed the organization to survive considerably in various markets globally.

The company equally strives to cut costs, attain quality, and enhance its profitability. This is a considerable internal provision when scrutinized critically. It is from this context that the whole marketing prospects for McDonald’s lie (Oxford Business Group 2007, P. 211). Additionally, the ability of McDonald’s to reduce its operational costs is helpful in managing the pricing strategies enacted by the company.

This forms the background of the company’s internal and external environment indicated earlier. Since the company deals in food products, the aspects of quality, reliability, taste maintenance, sanitation, and healthy living have been internal considerations of McDonald’s in order to remain competitive in the UAE market.

This provision conforms to the noticed increment in customer reception and expansion of the business in the Arab market since its establishment in the region. It is important to consider these provisions in the business context for any organization to remain competitive in the desired market.

This provision has allowed McDonald’s to enjoy a considerable market share and business opportunity in the Arab market as evident in the research findings provided. Additionally, the nature of the company’s employees, customers, and service provisions equally contribute to the background of McDonald’s internal environment.

The way the company intends to attend to its clients is important in this context. McDonald’s has established and embraced customer-focused services to its diversified clients. This has allowed it to capture and retain most of its clients in the Arab market and beyond. In addition, the company has increased the number of its customers in UAE due to these internal business provisions. It has also managed to enhance its market presence due to novelty and other business strategies applicable in UAE’s market.

Concurrently, the external environment in this context refers to factors that are outside the organization. They constitute opportunities and threats that engulf the company and its industry in the realms of business. These factors contribute to the background of the company when considered critically. It is from this perspective that the whole business prospects lie.

Factors considerable in this context range from social issues to technological aspects within the industry and beyond (Walker & Butler 2010, P. 110). Nonetheless, McDonald’s has managed to survive in the fast-food industry despite the challenges fronted by the external environmental factors.

Conventionally, every business has its specific external environmental factors that dictate the survival of the business. UAE is inclusive in this context. McDonald’s has managed to break such business barriers with precision in order to survive in the UAE’s market. Cultural and social challenges are other prominent external factors in the McDonald’s business background with respect to UAE. Nonetheless, the company has increased the number of its customers as evident from the research findings provided.

Stringent competition is another considerable external factor in this context. The company has managed to survive considerably amidst stern competition from both local and international firms operating in UAE and beyond. Precisely, competition is a substantial environmental factor that businesses must consider in order to operate appropriately and successfully.

Additionally, economic aspects of the region have contributed to the external forces that affect McDonald’s in the realms of business and other vital operations. The recent global economic crisis has played critical roles in formulating an external background for the company. Economic challenges affect the buying trends of customers and other associated factors.

This eventually affects the company’s sales, growth, and profitability. Additionally, political and cultural background of the region has also contributed to the mentioned business prospects. As an external environmental factor, political issues affect the business in the realms of policies, operational legislations, political instability, and other relevant factors that can affect the company adversely.

The aspects of technology embracement and ratification in the business are other considerable external factors, which can affect the company negatively if not considered critically. Using technology in transactions, communication, and booking of services has proved quite lucrative in various contexts.

It is the mandate to the company to ensure that its business prospects conform to the demands of technology. Precisely, these factors have contributed to the background of the company’s internal and external environment with regard to UAE.

Marketing Research question for consumer research

Research questions are important in probing respondents to provide the demanded information (with precision) for subsequent analysis. Since this report endeavoured to find out whether McDonald’s has increased its number of customers in UAE within past a few a years, it is agreeable the business has grown tremendously in its operations despite the challenges. From this context, the research question endeavours to unveil how McDonald’s has progressed in UAE (Peng 2011, P. 41).

In the business framework, it is important to ask whether McDonald’s is performing as expected in the entire context. The research inquires how people perceive McDonald’s in the market. The questions also ask why such trends happen. It is from this milieu that the entire business provisions with respect to external factors mentioned earlier emerge.

ccording to the findings provided, the research questions inquired from the respondents whether they perceive the McDonald’s as very convenient, convenient, neutral, inconvenient, or very inconvenient in the realms of business and customer focus.

Since respondents are allowed to choose only one choice based on his or her genuine experience with the business, indisputable answers can be attained from the respondents. These questions have managed to attain important data for analysis on whether McDonald’s has increased its number of clients in the UAE market within the recent few years. Precisely, the research revolves around how clients and other relevant prospects perceive McDonald’s with regard to its expansion in the UAE market.

Research Design of McDonald’s

In order to unveil whether McDonald’s has enhanced the number of its clients in the UAE market or not, a viable research design was involved to accomplish the research objectives. Precisely, the research design initially formulated problem statement followed by research objectives and consequently research questions (Kumar 2005, P. 44).

, the research design incorporated the aspects of literature review regarding the organization’s business aspects with reference to UAE (since it ventured into the Arab market). The literature review on the matter was to provide a viable synopsis of the matter from the business point of view. Concurrently, data collection method included the use of questionnaires with stipulated questions to be answered. The respondents were grouped demographically based on ages.

Each age group was assigned a code namely 1,2,3,4, and 5 denoting age groups of 18-23, 24-29, 30-35, 36-40, and 40+ respectively. It is important to establish appropriate questionnaires in order to attain the required information for further analysis. The questions given to clients probed whether McDonald’s has attained any remarkable market share, presence, and visibility within UAE. 120 respondents (from both sexes) were used to respond to the deigned questionnaires.

The targeted answers incorporated “very convenient, convenient, neutral, inconvenient, and very inconvenient”. Very convenient provision in the questionnaires scores the highest (5) while very inconvenient scores the least (1). After collection of the required data, there is data compilation, coding (designating numbers to respective answers) and analysis.

Data analysis, Findings, Recommendations

Analysis of the provided data reveals a lot on whether McDonald’s has attained any considerable market share in the UAE market. Since the study involved same number of males and females (60 respondents each), it was possible to attain a fair perception of clients with regard to McDonald’s prosperity.

Because respondents’ perceptions of the business were graded as either very inconvenient, inconvenient, neutral, convenient, and very convenient, only 5 of the 120 individuals rated McDonald’s as very inconvenient against 24 respondents who rated it as very convenient. This indicates that the business has prospered remarkably in the UAE marketplace. Additionally, the data collected has a mode of 4 (convenient) against the possible 5 (very convenient).

This demonstrates that the business is already thriving in the UAE’s market as indicated before. This claim is supported by a mean/average of 3.62, which when rounded off, comes to 4 (convenient). Evidently, this indicates that McDonald’s has increased the number of its clients prospectively since it ventured into the UAE’s market a few years ago.

This is important in various aspects especially to the growth of the business. Upon analysis, a standard deviation of 1.07 and a variance of 1.15 indicate some positivity towards McDonald’s prevalence in the Arab market. A standard deviation of above 1 means that respondents have varying opinions on the issue investigated. Nonetheless, the majority still view McDonald’s as convenient within the UAE’s market. This is quite important in various aspects.

This also relates to the standard deviation’s mean of 0.29598 as evident from the data. Additionally, it is important to note that men viewed McDonald’s more positively than women. This indicates that the business has grasped clients from both sexes. Concurrently, the business had a positive response from individuals aged 18-23.

This group forms the major market segment of McDonald’s in UAE. On recommendations, McDonald’s should enhance its marketing strategies and business endeavours in order to capture more customers and remain relevant in the market.

Limitations

There are various limitations that arise with respect to this report. The research was not comprehensive enough to uncover the respondents’ perception on various products offered by the company apart from the known hamburgers. Additionally, the sample size could have been expanded in order to give a precise inference and conclusion on the matter. 120 individuals are not enough to execute such a crucial and vast marketing research.

Reference List

Brady, D 2010, Essentials of international marketing, M.E. Sharpe, New York, US.

Hammond, A 2005, Pop culture Arab world! : Media, arts, and lifestyle, ABC-CLIO, California, US.

Kumar, R 2005, Research Methodology: A Step-by-Step Guide for Beginners, SAGE, London, UK.

Oxford Business Group 2007, The Report: Dubai 2007, Oxford Business Group, London, UK

Peng, M 2011, Global business, Cengage South Western, Ohio, US.

Walker, J & Butler, S 2010, Oman, UAE and the Arabian Peninsula, Lonely Planet Publications, London, UK.

The current assignment evaluates the liquidity, solvency, and profitability of two US companies McDonald’s and Yum! Brands, Inc. Both companies are highly recognized for their quality of fast food and brand reputation in the global market.

Liquidity Analysis

Table 1. Liquidity Position of McDonald’s, Yum! Brands, Inc., and Industry Average.

The liquidity position of McDonald’s was strong as compared to Yum! Brands, Inc. indicated by the values of current and quick ratios in table 1. McDonald’s had a variety of current assets, including inventories, that enabled it to remain financially stable. The main reason for the stability of its liquidity was its strong brand reputation in the global market created through effective marketing and sales strategies (McDonald’s). However, the position of Yum! Brands, Inc. was also strong in 2017, as highlighted by the values of both liquidity ratios.

Solvency Position

Table 2. The Solvency Position of McDonald’s, Yum! Brands, Inc., and Industry Average.

The solvency position of McDonald’s was negative in 2017, as given in table 2, due to the negative value of its shareholders’ equity. The main reason for the decline in its equity value was the decrease in its stock price followed by unfavorable economic conditions in different countries. A similar trend was found in the ratio values of Yum! Brands, Inc., but its reason was different. Yum! Brands, Inc. accumulated a deficit for the last three to five years that resulted in the negative value of its shareholders’ equity in 2017 (Yum! Brands). However, the industry average was higher, which indicated the solvency position of McDonald’s and Yum! Brands, Inc. was weak in 2017 as compared to other companies.

Profitability Position

Table 3. The Profitability Position of McDonald’s, Yum! Brands, Inc., and Industry Average.

The profitability position of McDonald’s was weak as compared to Yum! Brands, Inc. in 2017, as shown in table 3. The values of the net profit margin of both companies were the same, but there was a significant difference in the values of the gross profit margin. The situation indicated that Yum! Brands, Inc. was inefficient in controlling its expenses in 2017, which wiped off the positive effects of cost controls. The situation indicated that the management did not pay attention to controlling and managing its revenue expenses (Wilson 124). On the other hand, both companies were more efficient in generating profits than their peer companies, as indicated by the industry average.

The overall analysis of both companies and their comparison with industry averages showed that McDonald’s and Yum! Brands, Inc. improved its profitability and liquidity in 2017. However, they need to control and manage their equity position to manage their operations efficiently.

Works Cited

McDonald’s.

“McDonald’s Annual Report 2017.”McDonald’s, Web.

Wilson, Philip. Almanac of Business & Industrial Financial Ratios. CCH Incorporated, 2015.

Yum! Brands. “Yum! Annual Report 2017.” Yum! Brands, Web.

Synopsis of the Situation

The McDonald’s burger has been people’s favorite breakfast meal for several years, but this seems to have changed in the recent past. Unlike the older generation, who fancied McDonald’s burger in their younger years, the younger generation no longer enjoys it as much.

The company has also been struggling to meet the huge orders that come in everyday as demand has outstripped its supply ability at some point. Besides, McDonald’s Corp. also faces stiff competition from its competitors who are slowly overtaking it in the market (Jargon, 2014).

As a result of these challenges, there has been a decrease in McDonald’s total sales over the last few months, despite the company’s strategy of luring more customers by giving clients free coffee alongside other meals.

Key Issues

McDonald’s Corp. is in the restaurant industry, which specializes in selling ready-made food to clients. This is a highly competitive industry with a variety of customers with diverse needs. Companies in this industry serve clients with their menus at various prices depending on quality and class.

The restaurant industry has spread all over the world driven by the high demand for ready-made food. There are restaurants of various levels for different classes of people; the high-income earners, middle-income earners and the low-income earners.

The competition in this industry requires companies to be dynamic in order to always please their clients, make enough profits and remain at the top of the competition at the same time.

This requires a lot of creativity in preparing the menus; hence restaurants have to employ highly qualified and skilled chefs (McDonald’s, 2013).

McDonald’s restaurants are in over one hundred countries all over the world. Most of them are located in the United States of America, Europe and such Asian countries as Japan. The company focuses its efforts on markets where it is already established.

However, the company remains optimistic about venturing into new markets if its business improves in the future, but the dates for this have not been set yet (Jargon, 2014). Menus in its already established markets are prepared to cater for people of all ages and with diverse needs.

This increases its market as anyone can walk into the restaurants and eat something at any time (Grewal and levy, 2013). Most of McDonald’s businesses are franchise based while a few others are based on mutual agreements.

According to Jargon (2014), the company has been struggling to do well in its markets for the last few years. As such, the company has decided to scale back some of its less popular menus to cut on the expenses on foods that do not bring high profits into the company.

McDonald’s has decided to stick to its dollar menu as it is doing well in the market compared to the others.

According to Kaufman (2013) McDonald’s earned $1.4 billion in the second quarter of 2013 and revenue rose to $7.08 billion slightly missing analysts’ expectation of $7.10 billion, but food service sales fell by 1.2% in June, which was the largest decline since February of the same year.

Kaufman adds that the company is, however, still struggling to make the investors happy with their profits as the sales has risen by only 1% during this period.

The company’s CEO, Don Thompson, acknowledged that the 2013 results are likely to remain challenged for some significant period of time, saying that the monthly sales are disappointing as consumers are spending less money on eating out since the cost of living has gone up (Kaufman, 2013).

He adds that the company’s main competitors, the Burger Kings and Wendy’s, have taken a large share of the company’s markets and are doing well, despite the hard economic challenges.

But this is not all for McDonald. The company recorded a drop in the share value of $2.64 (2.9%) to $888.94 billion and net income fell by 4.5% to $1.35 billion for the second quarter in 2012 from $1.41 billion a year earlier, mainly attributed to a weakening of global economy and the impact of a stronger dollar (Reuters, 2012).

The combined effect of a weakening of global economy and the impact of a stronger dollar forced consumers to spend less on unnecessary things (Grewal and Levy, 2013).

McDonald’s earnings, however, missed analysts’ average estimate by 5% a share as the total revenue edged up to $6.92 billion from $6.91 billion a year (Reuters, 2012).

Target Audience

McDonald’s Company has a wide target audience. The company serves an array of customers ranging from the young to the old customers and from the high-income earners to the low-income earners. The company has, therefore, adopted marketing strategies that incorporate everyone in their menu to maximize sales.

As such, the company designs its advertisements to catch the attention of all sorts of viewers in a bid to attract as many customers as possible (McDonald’s, 2012). McDonald’s also have menus for families, prepared to serve parents, teenagers and the younger children.

Such menus are highly nutritious and tasty for everyone and the prices are fair for all categories of customers. In addition, McDonald’s provide takeaway packs that are fit for a family picnic, in case the members want to have their meal out during picnics.

The company also has takeaway packs for the working class, which are light and well packaged in such a way that one can easily eat while walking or working. These are also available at favorable prices just like family takeaway packs.

Marketing Efforts

It is important to note that the company has somehow effective marketing strategies in place as outlined by McDonald’s (2014). The company’s main aim has always been to ensure that its products fulfil the demands of its diverse customers.

First, the company carries out regular opinion polls to seek customers’ views as a way of obtaining customers’ feedback on what could be done to better company’s products.

Customers provide feedback, both on their likes and dislikes about the company. The changes suggested are effected to ensure that the clients are always kept happy.

Second, McDonald’s has started the ‘happy meal strategy,’ which is specially prepared to catch the attention of clients, especially the children (McDonald’s, 2014). This, as a result, attracts even parents to eat other meals as they always accompany their children to the ‘happy meals.’

Third, the company has put so much effort and resources into packaging its products in such a way that they attract clients. The products are made to look attractive and appetizing so that customers are lured into buying at the first sight.

Fourth, the company has special menus to take care of people who do not just eat everything like Muslims and Hindus.

The company has developed menus that are culture sensitive to serve the needs of all clients, despite their cultural affiliations. For example, McDonald’s is providing a pure vegetarian menu in India as most of the clients do not eat meat.

Fifth, the company has its outlets located close to each other in such a way that potential customers have no other choice, but to enter these restaurants.

This is accompanied by the fair prices offered by McDonald’s to attract both the low and middle income earners, which forms the greater percentage of company’s clients. In this way, the company is able to tap into the market with the largest number of people.

Sixth, the company runs numerous advertisements on the most watched television channel to make sure that all the clients are aware of its products and hence will make a purchase. The adverts are well designed to attract, catch and maintain the viewer’s attention and arouse interest to make purchases.

Key Players

The restaurant industry is highly saturated with about 8 million restaurants managed by 300,000 companies globally.

Key players in the industry include such companies as McDonald’s Corp., Wendy’s International, Inc., Starbucks Corp., Autogrill S.p.A., Yum! Brands, Inc., Outback Steakhouse, Inc., Whitbread PLC Darden Restaurants, Inc. and Brinker International, Inc., KFC.

Definition of the Problem

Despite its effective strategies discussed above, McDonald’s performance in the market against its competitors has raised concerns in the recent times owing to several factors.

This is a challenge that affects McDonald’s both locally and abroad as the competitors are slowly taking up a significant portion of its market share (Mourdoukoutas, 2013).

One of the greatest challenges facing McDonald’s is the weak economy, especially in Europe (Mourdoukoutas, 2013). The cost of living has gone up tremendously and people can no longer afford to eat out all the time. This has led to low sales registered by the company.

Besides, the cost of ingredients has gone up and the company cannot afford to make the menus any cheaper to attract more clients if it has to make meaningful profits.

This affects McDonald’s marketing due to the fact that it has no control, whatsoever, over its markets and clients. Its advertising has also not been convincing enough to lure clients into the restaurant in the hard economic times, because clients still do eat out, in other eateries.

Another challenge is that the market is saturated and there is great competition.

The company has tried to invest in foreign countries, but this has not yielded any good returns due to the fact that foreign markets are already owned by the native companies and it is extremely difficult for new entrants to beat such companies in their already established markets (Mourdoukoutas, 2013).

The company needs to develop locally instead of going into foreign countries, but it can consider exploring markets only in countries where clients prefer a mix of global preferences. It needs to concentrate more on the local markets where the company is well-known by its clients and is doing well.

The most pervasive problem that McDonald’s needs to address seems to be indulging in new markets that are already saturated. The company is focusing on the wrong areas where it would not do well, no matter what amount of marketing it engages in or how attractively it prepares its menu.

McDonald’s ought to have concentrated at home where it is well-known and already have an established market instead of exploring new markets.

This problem is most important because no matter how good a business idea is and how much marketing and advertising have been put into it, the place of work needs to be right. The four most crucial factors required for the business to do well are product, price, place, promotion and the people (Grewal and Levy, 2012).

If one of these goes wrong then the business is likely to collapse or if it survives, then it would only make low sales and hence low profits.

Alternative Solutions to the problem

I believe that McDonald’s situation is a problem that can easily be solved through proper planning and management of the company using the following alternative solutions.

First, the company can pull out of the foreign markets where it has no prospects of doing well and instead concentrate on the markets where it is well established. This will enable the company to maximize on the resources it has at its disposal to make huge profits against its competitors.

Second, the company can put more resources into marketing and advertising in their new markets. This might take long to yield returns, but with time people will slowly shift their interest towards McDonald’s as new products tend to arouse a lot of interest and desire.

This should, however, be done with a lot of creativity to ensure that potential customers are lured into liking what the company offers.

Finally, the company can also put more resources into marketing and advertising in the foreign countries where it has set up. This should go hand-in-hand with providing cuisines that are liked by residents of those foreign countries.

However, McDonald’s should also consider employing workers from those regions as a way of earning the approval of the community.

Incorporating locals in the business will not only create employment, but also make the clients perceive McDonald’s as a company that has the needs of the community at heart and hence buy from it.

Selected Solution to the Problem

The third solution is the best way to go as both the company and the community coexist and benefit from each other. It is good to explore new markets and openings as the company never knows where its luck lies. The company could find that it conquers these markets against the local competitors.

Expected Results and Rationale for the Solution

Marketing and advertising are vital strategies that McDonald’s should integrate into its daily management activities. The company needs to find out what it has not been doing well in the recent past.

The company also needs to do an audit of both its products and the locations where it is conducting its business to be able to identify exactly where the problem lies: product or the location.

Reducing the rate at which McDonald’s ventures into new markets until such a time when the company will have started making enough profits to spend in marketing and advertising in new markets is a wise decision.

Advertising and marketing is the only way through which consumers would get to know about the product and it is obvious that the company needs to do much about this in its current markets alongside other strategies like restricting investment in new markets.

Recommendations

The company should pull out of the foreign markets where it has no hopes of doing well. It should instead concentrate on the markets where it is well established and is doing well to maximize on the available resources and make huge profits against its competitors.

It should also put more resources into marketing and advertising in their new markets, especially the ones with high growth prospectus.

It might take long for McDonald’s to realize any returns in these markets, but with persistence and perseverance the efforts shall pay as people shift their interests to the company since new products tend to arouse a lot of interest and desire.

Finally, the company needs to put more resources into marketing and advertising in the foreign countries where they have set up. This should be accompanied by the provision of local cuisines to take care of the interests of residents of those foreign countries.

The company should also consider offering employment to residents of its foreign locations as a way of earning the approval of locals. This would not only create employment, but also make the clients to perceive McDonald’s as a restaurant that has people’s needs at heart and hence buy from it.

Positive and Negative Results

As already discussed above, putting more resources into marketing and advertising in the foreign countries with high growth prospectus seemed to be the most appropriate solution for McDonald’s situation. However, this solution would generate both negative and positive outcomes. The outcomes would be as follows.

The company would expand its markets, probably do well and increase its sales and hence its profits. This would ultimately lead to its growth. On the other hand, the company might experience some rivalry from the local restaurants, which would not be good for business.

The local companies might even intentionally soil the name of the company so that it can exit their market, which would be bad for business. Besides, the company might spend a lot of time and resources as they try to please the people to come to their restaurant, which might prove to be too expensive.

Providing employment and their preferred menus is not a guarantee that McDonald’s will be accepted into the new market. Nevertheless, the company would create employment to the locals, which would help in reducing poverty levels in those countries.

Handling the Situation

If I were to handle the situation, I would take the following steps to make McDonald’s better. First, I would pull out of the foreign markets where the company has no prospects of doing well. I would instead concentrate on the markets where it is well established and is doing well.

This would ensure that the company maximizes on the resources it has at its disposal to make huge profits against its competitors. Second, I would put more resources into marketing and advertising in the new markets with high prospects for returns.

It might take long for the people of that place to shift their interest to the company, but with persistence and determination the locals are likely to give the company a try as new products tend to arouse a lot of interest and desire.

Finally, I would put more resources into marketing and advertising in the foreign countries where McDonald’s has set up and is at least doing well. I would make sure that this is blended with the provision of menus, which are liked by the people of those areas.

I would also look into the possibility of employing some of the best chefs from those areas to make the community perceive the restaurant as their own.

Incorporating the community in the company would work against the competitors as the clients would perceive McDonald’s as a restaurant that cares about people’s needs and hence would buy from it.

References

Grewal, D., Levy, M. (2013). Marketing (3^rd Ed.). Irwin: McGraw Hill.

Jargon, J. (2014). McDonald’s faces sharper competition in breakfast battle ground. The Wall Street Journal. Web.

Kaufman, A. C. (2013). Analysis: McDonald’s disappointing 2Q earnings reflect larger economic trends. Web.

McDonald’s (2012). Who is your target market audience? Web.

McDonald’s (2013). McDonald’s franchise strategy. Web.

McDonald’s. (2014). Marketing strategy of McDonalds. Web.

Mourdoukoutas, P. (2013). McDonald’s big challenge at home and abroad. Web.

Reuters, T. (2012). McDonald’s profit declines as world economy weakens. Web.

Corporation that operates internationally – MacDonald’s

McDonalds has spread widely all over the world through the many chains of restaurants it has. It owns the biggest fast food restaurant chain globally. Millions of customers go to McDonald’s hence increasing its sales revenue.

In the US, it tops compared to other restaurants followed by Burger King and Wendy’s (Hitt, Ireland & Hoskisson, 2013). In 2003, McDonald incurred losses that analysts associated with consumer behaviour.

It failed to realize the changing needs of its customers and therefore it became less competitive. However, in 2009, it experienced a turn around and there was a boost in its sales.

Strategy that led to merger or acquisition

The reason behind the turnaround was its strategic leaders who decided to adjust its corporate-level strategy but improve its business-level strategy.

McDonalds took a step of changing the value of its products and modifying their features rather than increasing the number of restaurants globally (Hitt, Ireland & Hoskisson, 2013). It minimized its diversification by selling some of its chains.

McDonald’s began to be attentive to its clients who wanted better and healthier products. In addition, it started training programs for its workers, added their opening hours, and upgraded their stores to attract the younger generation.

It also introduced McCafe coffee bars in the United States in 2009. The coffee drinks add value to customers by offering quality drinks at prices less than what their competitors offer. The corporation is modifying its stores and looking forward to a global economic recovery by acquiring prime real estate in Europe.

Company that does not operate internationally- Transfer Technology International Corporation

Transfer Technology International Corporation is a U. S. based company dealing with giving maintenance services in regions that receive moderately high temperatures.

An acquisition strategy will enable the company raise its revenue through acquiring of profitable firms in the maintenance industry. In addition, it will be in a position to develop a range of highly profitable businesses that render services throughout the year.

Company to acquire – Royalty Lawn

Royalty Lawn is a good target because its line of business is similar to Transfer Technology International Corporation. Royalty Lawn provides its services to more than four hundred customers. It has attained a notable growth rate since its foundation.

A team of skilled and experienced leaders, who ensure that their customer service reputation is not tainted, leads Royalty Company (Lovelock, 2007).

The objective of this company is to ensure that their clients get services that they desire. They have done research on their clients and so they understand what their clients need and how their products can fit in within their home and business goals.

This company is profitable because it has good market share and robust growth prospects.

Why the company would be profitable

The newly acquired corporation will help the existing corporation acquire resources that are impossible to get or manufacture internally because of cost factors. The synergies from the resources of the two companies will form more value (Hoffmann & Schaper, 2001).

Moreover, this is a great opportunity for exchanging skills and expertise. The two companies will exchange useful information to develop new ideas.

Behavioral uncertainty will be minimal through forming of control mechanisms and costly safeguards. This would lead to increased transaction costs and low economic efficiency. A solution for this would be acquisition, which would increase economic efficiency.

Merging with a company will minimize the taxes, lead to diversification, and deal with competition appropriately (Lovelock, 2007). There will be achievement of economies of scale and there will be better control of patents and tax advantages.

Corporation that operates internationally

International Business-level strategy

McDonald’s success relates to the business level strategies of differentiation and low-cost leadership application, with basis on the geographical structure. Its key strategy of retaining its top level was to maintain their key markets while still searching for other new markets.

Through the geographical structure, McDonald’s was able to meet the needs of the local customers as well as contribute to local development (Lovelock, 2007).

A cost leadership/differentiation strategy focuses more on products that have undergone differentiation and products manufactured at low costs. A company uses it to design goods and services. This technique is able to satisfy the needs of a wider market or a smaller market.

McDonald’s uses this strategy to meet the needs of the global market. McDonald’s have met two key objects of this technique, which is producing differentiated products and secondly, producing them at a lower cost.

This strategy has its risks in that if it cannot produce differentiated products at low costs then it stagnates, and with stagnation, there is no growth. A cost leadership/differentiation strategy is sometimes hard to execute

McDonald’s business strategy has had a significant effect on environmental factors such as its rivals, social aspects, and the uncertainty condition. McDonald has experienced a threat from rivals because it could not modify its food products according to the changing needs of its consumers (Hitt, Ireland & Hoskisson, 2013).

However, it made a turnaround by differentiating itself through creative ideas. For example, it permits its clients to use the internet through provision of wireless technology. McDonald’s has also used a strategy of focusing more on children.

For instance, it has introduced computers with games made to trigger the kid’s creativity and defining their personal traits.

McDonalds chose to focus on kids because the highest sales were to kids, focusing on children would encourage the whole family to go to MacDonald’s hence high chances for more sales, and finally developing a loyalty with children would establish a lasting legacy for future business.

International Corporate-level strategy

McDonalds have used the transnational strategy where they have applied both low-cost and domestic responsiveness at the same time to market their products and services. This strategy requires a creative method in order to control the manufacturing and marketing of the goods.

This strategy is most effective because it is the only workable technique in the international market, which is very competitive (Hoffmann & Schaper, 2001). The international strategy form value by taking products and services to international markets where they are nonexistence.

This is an easy strategy in that the international corporation provides standardized products and services in different parts of the world, without differentiating the products. McDonald’s has introduced a McCafe menu in addition to their standard menu.

They have expanded their businesses by focusing on coffee-espresso industry alongside the fast food restaurants. As a result, they have increased their rivals such as Starbucks, which were not there before (Hitt, Ireland & Hoskisson, 2013).

Recommendations for improvement

McDonalds should consider introducing international flavors in its food in the USA. The new menu should satisfy the need for healthier foods by offering salads and more meals that are chicken and other varieties.

McDonalds should differentiate its food products so that they include flavors from India and Russia to satisfy the changing demands of their clients. In addition, they should consider strategic alliances with other businesses found in other countries.

This alliance would be important because they could enhance their organizational capabilities and therefore acquire competitive advantage especially in the global market.

They could achieve this by working to have entrance to new markets, which would be easy for the local business because they know about the culture of the people and understand the local market (Hoffmann & Schaper, 2001).

Through strategic alliances, MacDonald’s would form a network of beneficial links, which would allow them do well and increase their sales.

Corporation that does not operate internationally

Business-level strategy

Business-level strategy proposal for Transfer Technology International Corporation would be the differentiation strategy. In this technique, the corporation will focus on improving the value of their products so that they satisfy the demands of their customers.

This company will accomplish this by modifying their designs, adding new features, enhanced branding and improved after sale services. A differentiation strategy will help the corporation to get a competitive advantage therefore gaining control of the consumer demand.

For example, it can improve the value of a product by doing a study to know what the customer wants though marketing. This will help the company produce products that precisely match the consumer wants (Hoffmann & Schaper, 2001).

Secondly, an after sale service forms an opinion of advanced differentiation in the thoughts of the consumers by answering customers’ questions and helping them with their purchased products. This would raise the value that clients associate with the company’s products and therefore the cost of each product.

Differentiation will make the company realize more profits because of the high demand due to successful differentiation, which will allow the corporation to utilize its assets more expeditiously and therefore experience reduced costs from scale of economies (Hoffmann & Schaper, 2001).

Productive differentiation enables a corporation to retain prices at a constant level or maybe rise slightly. Increase sales, and increase productivity through scales of economies. At the end, this company will achieve its objectives by increasing their sales and accelerating profit growth.

Corporate-level strategy

The diversification strategy is a good proposal for Transfer Technology International Corporation. The strategy of the company will be to venture into other businesses that may have similarities with the original business or they may not have a relationship.

With successful diversification, the corporation will be able to improve the productivity of one or more businesses, which would not be the case if the corporation were independent.

This corporation will improve the productivity of each business by leveraging valuable skills, experience, and utilizing them to the new businesses (Hoffmann & Schaper, 2001). In addition, this company will be in a position to improve productivity by achieving economies of scope.

This implies that the company will experience low costs because there is a distribution of expenses across the businesses. Therefore, the corporation will incur less expenses and experience greater profits than companies with no potential to share available resources.

Diversification will also enhance the productivity of this corporation through superior internal governance shills (Lovelock, 2007). This occurs when superior managers set high standards of productivity from the other businesses that are part of the corporation.

Superior managers can achieve this by giving incentives to managers and employees who perform well, choosing managers with experience and training them, helping managers detect issues in their businesses and discover solutions to them, setting high standards of performance each business and giving this responsibility to managers.

Reference List

Hitt, A., Ireland, D., & Hoskisson, E. (2013). Strategic management: Concepts and cases: Competiveness and globalization. Mason, OH: South-Western Cengage Learning.

Hoffmann, W. & Schaper W. (2001). Acquire or Ally? A Strategy Framework for Deciding Between Acquisition and Cooperation. Journal of Management International Review, 41(1), 131-159.

Lovelock H. (2007). Developing marketing strategies for transnational service operations. Massachusetts, USA: Lovelock Associates