Paper on McDonald's Global Market Strategy: Strengths, Weaknesses, and Strategic Recommendations

McDonald's is a fast-food chain restaurant and a renowned brand globally with branches in several countries, including India and the UK. Its market capitalization was $702 billion in 2018, and its revenues have consistently increased (Mark, 2018). McDonald's niche in the food and beverage industry has fierce competition, as several established brands exist. The firm has diverse strengths, but several weaknesses necessitate strategic recommendations.

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The company faces several external factors in the form of threats and opportunities to respond to. The possibilities include new geographical markets, such as Asia, since there is an increased demand for fast food globally (Mark, 2018). It could also develop new product lines to match the increasing customer needs (Harvard Business School, n.d.). Conversely, threats include legal actions against the firm for allegedly selling unhealthy foods. The government also plans to formulate regulations on the fast-food industry, which could adversely affect McDonald's.

Several competitive factors affect McDonald's. Competition is fierce from established brands, casual dining restaurants, and quick-service eating establishments. The main competitors have recognized brands with significant influence in the market. Besides, buyers' bargaining power is high as they seek the best offerings at the lowest price (Kim & Mauborgne, 2014). Nevertheless, new entrants' threat is relatively small since the food industry is near saturation in the US.

The critical success factors in the food industry include customer convenience and food quality. In ensuring customer satisfaction, the company has provided multiple ways to make payments and custom-made menus to offer options based on time of day or weather and trending aspects (Schmid & Gombert, 2018). In contrast, McDonald's promotes food quality by maintaining high hygiene standards, using sustainable ingredients, and ordering directly from small farmers to ensure optimal freshness.

McDonald's boasts of several strengths and weaknesses relative to the critical success factors. The dominant power is a loyal customer base since its clients love the affordable prices and quick service (Mark, 2018). McDonald's has also successfully rolled out new quality items, such as coffee and burgers hence expanding its menu choices. Contrastingly, the primary weakness has been the firm's inability to capitalize on organic foods despite their increasing popularity. Besides, it has gained negative publicity, with its food being viewed as unhealthy and loaded with sugar and carbs.

The firm has several sustainable competitive advantages. McDonald's has a global presence, which sets it apart from competitors as the brand is known worldwide. It also has exceptional customer service, enhanced by collecting feedback from digital sources and working on them (Schmid & Gombert, 2018). Another core competence is marketing efforts that keep customers engaged, retain them, and keep them from switching to other brands (Mark, 2018). Furthermore, McDonald's has an extensive and diversified menu tailored to meet the needs of different regions. It is unlikely that competitors will imitate such steps soon.

For McDonald's to retain its position in the market, it should take several strategic actions. The firm should focus on further diversifying its menu by innovating new products that would limit buyers' bargaining power. The fast-food restaurant should also expand to new nations, particularly the Middle East and Asia, where there is a large untapped customer base. Moreover, the company should seek means to differentiate its products to counter the industry's intense rivalry (Kim & Mauborgne, 2014). Such steps will enhance McDonald's stand in the market besides improving its core competencies. It will provide an ideal approach to countering weaknesses and heightening the company's strengths.

References

Harvard Business School. (n.d.). Types of Strategy: Which Fits Your Business?

Kim, W. C., & Mauborgne, R. (2014). Blue ocean strategy, expanded edition: How to create uncontested market space and make the competition irrelevant. Harvard business review Press.

Mark, K. (2018). Amazon.com: Supply Chain Management.

Schmid, S., & Gombert, A. (2018). McDonald's: Is the Fast Food Icon Reaching the Limits of Growth?. In Internationalization of Business (pp. 155-171). Springer, Cham.