International Journal of Business and Management Essay Example for Free

International Journal of line of reasoning and Management EssayAs one of the well-nigh successful fast intellectual nourishment chain in the world, throughout the breeding of McDonalds, we could easily identify many successful crease strategy implementations. In this paper, I will discuss some critical avocation strategies, which linked to the companys structure and international environment. This paper is organized as follows In the first section, I will give brief groundwork to the success of McDonalds. In the second section, I will analyze some particular strategies used by McDonalds and how these strategies ar suitable to their business structure. I will then analyze why McDonalds lead these strategies in response to the changing external environment. Finally, I will summarize the approaches used by McDonalds to achieve their strategic goals. Keywords Strategy, McDonalds structureIntroductionMcDonalds, originated in California, USA, 1954, has become one of the nig h realised and respected taints in the world. The success achieved includes that they get to established to a greater extent than 30,000 franchising stores in 119 countries, serving more(prenominal) than 47 million people each day, and generating about $15 billions r heretoforeues annually. McDonalds also continuously enhances its brand imagine through varied social activities and the sponsorship of special events and sports i.e. as a major sponsor of the world cup since 1994 and the Champions League football in England from 1996 to 2000.(www.McDonalds.com)How nominate McDonalds achieve such success? There argon many formulatingstrategies, which we could use for our analysis of their recipe of success such as Porters competitive strategies model, which includes differentiation and low-cost leadership or Miles and Snows strategy typology, which defined prospector, defender, analyzer, and reactor strategy. Obviously, it is extremely important for McDonalds to choose the most app ropriate strategy to be successful. From my personal point view, to be an Analyzer is the most suitable strategic aim for them to develop their business as a totally especially when they facing an extreme complex continuously changing world. As Miles and Snow defined that The analyzer tries to maintain a stable business while innovating on the periphery. It seems to lie midway between the prospector and the defender. Some products will be targeted toward stable environment in which an efficiency strategy designed to honor current customers is used. Others will be targeted toward new, more dynamic environment, where growth is possible. (Richard L.Daft) It is also very important to consider how McDonalds applies these strategies and how their strategies interact with their business structure and the external environment.1. How McDonalds business structure processs its strategy? The McDonalds business structure is based upon a geographic structure. When log on their website, you w ill be asked to choose the country that you are interested in. Actually, McDonalds dual-lane its operations into five geographical divisions.(www.McDonalds.com)International Journal of Business and ManagementNovember, 2008As shown in preceding(prenominal) pie charts that around 65% of McDonalds restaurants and approximately 75% of its revenues are generated in the United State and Europe. So, to McDonalds, the most important strategic approach for maintaining its leading position is to keep their major markets at the same time expanding their business into the separate emerging markets. However,different consumer groups in different countries may devote very different tastes and/or requirements. So each full functional geographic unit of McDonalds was required to wholly response for producing and marketing its products in that region. Through this regional structure, McDonalds could non only satisfy the local consumers needs in different geographical areas but also pursuing maxi mum local development. Actually they produce and market slightly different types of products in different areas, and they even have different prices.As Jim Skinner, the vice-chairmen of McDonalds illustrated that if you are looking for a command center with one push button that operate our restaurant in every corner of the world, you wont find it. However, their philosophy of QSCV-quality, service, cleanliness and grade is same for everywhere. And McDonalds targets the similar consumer segments that need fast service, affordable price and good standard hygiene. So their main products are similar in most countries, where they provided service, including beef, chicken, bread potatoes and milk. As the consumers in different countries having different foods requirements, McDonalds keep launching new products for their regional consumers. In this case China and France can be very good examples.2. McDonalds in ChinaIn 1990, McDonalds opened their first store in shenzhen (near HongKong). But before they actually started their business, McDonalds had already carried out 5 years business research and all sorts of information gathering such as the income level of the Chinese people, the kind of foods they have intercourse etc. Moreover, their re-design of the counter, chairs and desks also reflected their considerations of the height and body shape of Chinese people. They made lots of efforts to promote their American burgers, and wanted to repeat the same success in China market as they has done elsewhere. Unfortunately, they are not as successful as KFC, their biggest rival, in China now.There are lots of reasons to exempt it, one important issue which has once been ignored by McDonalds is that Chinese people are more prefer chicken dishes than beef burgers, which are their main products. After identified this problem, McDonalds has tried to adapt more Chinese tastes by adding more chicken meals into their menu for attracting more customers.(Chinese website) 3. Mc Donalds in FranceIn France, where customers has been resentful of the fast-food chains incursion, McDonalds has boosted it sales by remodeling restaurants i.e. hardwood floors, wood-beam ceilings, comfortable armchairs, and also by adding new menu items such as espresso, brioche and more upscale sandwiches. Actually they have successfully responded to the preferences of the local area. (Richard L.Daft)In the other countries the situation is the same. For example, in Canada, McDonalds has introduced new Canadian feature breakfast. In Belgium, the McCicken premiere has been added to the menu. Although McDonalds has been regarded as the ultimate example of standardization for the world market. 4. How the strategy is influenced by external environment?The external environment can be divided into several sectors. In this section, I will only discuss two important parts competitors, social concept (healthy problem) and uncertainty situation, which can greatly influence McDonalds strategie s. Then at the last part of this section, I will discuss one particular strategy they used which served for their future development purpose. enemyIts unlikely that McDonalds can always be No.1. In an annual consumer satisfaction survey, McDonalds has been scored dead last among fast-food restaurants since 1992. In the fourth bum of 2002, McDonalds disclosed its first-ever quarterly loss, one reason why McDonalds is struggling is that the consumers began to switch to its competitors, such as Burger King, Wendys, and Subway.These companies emphasized on offering fresher, hotter, high-quality foods at lower price with faster service. On the other hand, McDonalds decided to close 719 poorly performing restaurants around world. All of these simply proved that McDonalds might no longer be competitive in the fast-food market. And if McDonalds cannot adapt external environment alternate, they might be gradually diminished and even replaced by other competitors. In order to keep their mar ket share, increasing sales and profits. McDonalds has to respond to the threat of competitors. In 2003, McDonalds offered the McGriddles sandwiches in the US and the Canada feature breakfast. Meanwhile, McChicken Premiere and a zesty chicken have been introduced in the UK, France, Italy and Belgium. McDonalds was trying to satisfy customers desire for premium products at affordable prices.Furthermore, McDonalds is providing more choice with respond to offer Happy Meal to keep the children. For example, Happy meal now including chicken selects, and no-sugar add output drink (juice and low-fat drink) and also to produce McDonalds coffee which appeals to adult. Those products have been made to attract existing customer and develop new customers.(www.McDonalds)Moreover, in addition to the progressive menu, McDonalds is also rebuilding and even relocating some of their restaurants to make the environment more attractive. At the same time, McDonalds is differentiating itself by creati ng 73Vol. 3, No. 11International Journal of Business and Managementmore relevant experiences such as allowing the customers to access the Internet with the wireless technology platform. This innovative way not only attracts the teenagers, but also perfectly fitting the modern professionals requirements. Social problem healthy issueWith the economic development, peoples living standards have increased dramatically these years. People are becoming more concerned about their health issues. It cannot be denied that McDonalds has attempted to make itself more contraption for the people. However, people also believe that such kinds of fast food are not good for their health. The world health organizations report presented that those food not only can cause the obesity of children, but also is part of the reason of causing cancer. Healthy issues became the biggest stumbling block to the development of McDonalds. Customers were switching to better offering, such as Subways sandwiches, or KFCs mashed potato instead of fried potato.McDonalds has responded to this healthy trend. In order to compete, McDonalds has added salads and other lighter options into their menu. If a mother comes in, she is not only buy the happy meal for her children, she will also be likely to buy herself a meal too .the lighter options also encourage existing customers to come back more often, because there is a greater variety of choices. Focus on ChildrenNo matter how different the tastes and the local needs are, McDonalds has paid considerable attention to the children in every country. They built happy land for them, offering grotesque happy meals with novelty toys to them. Furthermore, McDonalds has just launched computers with games that were designed to inspire the childrens imagination at the same time shape their personal characteristics. There are three main reasons for McDonalds to focus on the children(1) Children are one of the biggest consumers groups to McDonalds. And McDonalds has been regarded, as their favorite place to go .The brand culture happiness is known by children. (2) McDonalds believe that focusing on children can build the stable business, and will provide the best engine to encourage the whole family to come to McDonalds. For example, one happy meal for a child only cost $ 5 but McDonalds can produce more new products in addition to happy meal to offer the whole family. (3) By Building a brand loyalty with the children, McDonalds more likely to be successfully today and in the future. In my opinion, McDonalds is not just selling the happy meal to children it is selling the American culture to the children the enjoyable undivided life.Actually this strategy with focused children segment is fully worked for their future development purpose. Whatever how the environment changes this strategy can always develop future coevals customers loyalty. And the happy children can also bring in the whole happy families. ConclusionTo sum up, there is a strong possibility that if the company fails to recognize the new competitions, shifting of consumer interests, and the social trends or innovative technologies, it will loose its market share.Previously, McDonalds emphasis on adding new restaurants for near 5 years, more than 50% of increase in new restaurants opened. Unfortunately, there was only 2% of increase in the sale of the food. So, in the year 2003 McDonalds decided to change its focus on increasing sales at existing restaurant and reduced capital spending which allows for a sizeable amount of cash be returned to shareholder. For achieving their objectives, the McDonalds strategy should be attract more new customers, encourage existing customers to visit McDonalds more often, build brand loyalty and, ultimately, pull in enduring profitable growth for the company.ReferencesEdstrm. A., Galbraith, J.R. (1977). Transfer of managers as a coordination and control strategy in multinational organizations. Administrative Scienc e Quarterly, 22, June, 248-263. Egelhoff, W.G. (1984). Patterns of control in U.S., U.K. and European multinational corporations. Journal of International Business Studies, Fall, 73-83Fatehi, K. (1996). International Management, New Jersey Prentice Hall. Geringer, J.M. Hebert, L. (1989). Control and performance of international joint ventures. 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