The major problem affecting McDonald’s corporation is the lack of proper management of resources, which has led to a drop in sales compared to the previous years. For McDonald’s to achieve more excellence, it must fully utilize marketing. Marketing delivers to the target market what they need at an affordable price.

ANALYSIS

This paper examines McDonald’s performance in the market concerning environmental analysis, SWOT analysis, market analysis(market segmentation), customer analysis, and market mix analysis. It finally gives recommendations that may help McDonald’s achieve excellence in its operations.

ENVIRONMENTAL ANALYSIS

All corporations and businesses have visions, missions, and goals. For the visions and goals to be achieved, the organizations have to look at their environment. Both the internal and external environment of the McDonald corporation affect its performance in the market. The environment affects the number of revenues collected by the corporation as well as other achievements of the corporation. Internal environment analysis usually focusses on how to use scarce resources to maximize revenue. The external environment focusses on identifying potential threats and opportunities that the corporation faces. Th external environment is affected by political factors, economic factors, social factors, technological factors, and legal factors.

Political factors

McDonald’s operation is largely affected by political factors. McDonald’s has franchises all across the world. The political situation and government interventions in all these countries affect McDonald’s. Political stability, political instability, labor laws, foreign direct investment policies, and other restrictions affect the market performance of McDonald’s. Political stability has enabled McDonald’s to dominate the market. Also, McDonald’s expands to the areas with friendly foreign and labor laws such as Asia.

Economic factors

Macroeconomics and microeconomics affect the performance of all business.McDonald’s is not an exception. McDonald outperformed other competitors after the recession in 2008 and 2010. In the depression, economic growth, interest rates, foreign exchange rates, and other economic variables were affected; this had a significant impact on the corporation. Unemployment also affects the corporation, when many people are employed to work, they will have more money to buy food and vice versa. It is important to note that a weak global economy drains sales. In 2015 McDonald share dropped below the one at 2012 despite the market share increasing by 50% ( Rothaermel and Marne, 1)

Social factors

The social factors that affect McDonald’s corporation include age distribution as well as the growth rate. Keeping in mind McDonald’s is all over the world, the growth rate of different countries affects the performance of the Corporation due to income differences. The main customers of McDonald’s are Mothers, children, and Youths. so the corporation has to make decisions that favor their target market, mainly mothers and children. Youths and children love play station and prefer the corporation to provide such services. These social factors have an impact on the companys products and services and overall performance.

Technological factors

Advancement in technology is always good news for companies and corporations.Mc Donald corporation has effectively and efficiently used modern technological improvements such as microwaves to have operational advantages(Rothaermel and Marne, 2). The acquisition of eight multi mixers was the first technological advancement that made the corporation ahead. Any improvement in technology should improve the effectiveness and efficiency of the corporation’s operations. When a competitor acquires new technology, McDonald’s performance in the market will be affected, and vice versa.

Environmental factors

The corporation is conscious of environmental factors such as the health of the customers. The corporation should ensure that the environment is safe and the environment is also safe. The customers will be impressed with this. Hence the corporation’s decisions have to support environmental preservation. The decision by the corporation to publicly announce that it stopped selling chicken products from chicken treated with antibiotics was an environmental factor.

Legal factors

Legal factors include labor laws, work ethics, food safety, and the business relationship of the corporation with its suppliers and other entities. McDonald’s was sued for selling chicken that had chicken antibiotics.many legal factors affect the external working of the corporation.

Competition analysis

The main competitors for McDonald corporation in the quick service restaurants include; Wendy’s, Burger King, Taco Bell, and Yum Brands. Recently, McDonald’s is almost twice the size of the next big competitor(Rothaermel and Marne, 6); all other competitors combined. Traditionally competition offered by these companies enabled McDonald to stand strong. Mc Donald has successfully managed to be the top, and there is little competition. Just like all other corporations and business companies, competition in the early 90s enabled Mc Donald to be dominant and successful. McDonald’s has excellent marketing strategies that allow it to beat other competitors. Mc Donald controls almost half of the hamburger market in the United States, which is three times larger than the market share held by either Wendy’s or Burger King.

SWOT ANALYSIS

This analysis looks at the strengths, weaknesses, opportunities, and threats that the corporation faces. These analyses help the corporation to make good strategies looking at both internal and external environments.

STRENGTHS

Establishment of a strong brand.

McDonald’s has successfully established a powerful brand globally. The slogans “In business for yourself, but not by yourself,” have created excellent emotional experience since the early 1960s, specifically 1965(Rothaermel and Marne, 1). The principles employed from the infant stage of the cooperation, such as quality, service, cleanliness, and value, have also made the company develop a strong brand. There are better products offered by McDonald’s competitors. most individuals across the world have strong bonds with mc Donald products, which is unbreakable. Many people proclaim the love of Mcdonald’s products because everywhere in the world you can get the same products with the same taste. Mc Donald products can be counted on. This strong brand has helped in building McDonald’s credibility and fascinating memories with the customers.

Customer satisfaction

Mcdonald’s corporation has successfully established excellent customer satisfaction. The corporation has always listened to its customers. When the company was sued for selling harmful food to students, it moved forward and announced that it stopped selling chicken products from chicken treated with antibodies. This move makes customers happy(Rothaermel and Marne, 11). The corporation made several changes to improve customer service. The challenges include; eliminating poorly selling items, reconstructing united States operations to give local franchisees more autonomy. Kroc developed some philosophy that improved customer service. The three-legged stool concept, parent corporation, franchisees, and suppliers made it very easy for customer services to be efficient. Many customers are satisfied with the quality of service and cleanliness of the corporation; this is one of the success factors in foreign markets.

Huge gains from implementing excellent work ethics and best practices.

McDonald’s employees work both with the public(customers) and ith their colleagues. The good working relationship among the employees has also led to the company achieving success globally. The corporation has many franchises across the world and is controlled by several managers. All the employees who worked for McDonald’s have attributed to fair treatment and excellent communication with the management. This has attributed to the success of the corporation. Mc Donald gives leadership opportunities to the team members to help them succeed. The good relationship that started between the McDonald brothers and Ray Croc has inculcated good interpersonal skills and excellent communication within the corporation. Excellent work ethics and communication between the franchisees both home and abroad has led to the success of the corporation.

Innovation

Mc Donald corporation has effectively and efficiently used modern technological improvements such as microwaves to have operational advantages(Rothaermel and Marne, 2). This has enabled the corporation to stay ahead of other competitors. The acquisition of eight multi mixers was the first technological advancement that made the corporation ahead. Franchising is also another innovative idea that has increased the strength of the corporation in the market. The corporation used traditional franchising, developmental franchising, and affiliate franchising. The development of many McDonald restaurants globally and the consistency in its innovative nature has achieved great success for the corporation.

Market leadership

The main competitors for McDonald corporation in the quick service restaurants include; Wendy’s, Burger King, Taco Bell, and Yum Brands. Recently, McDonald’s is almost twice the size of the next big competitor(Rothaermel and Marne, 6); all other competitors combined. Traditionally competition offered by these companies enabled McDonald to stand strong. Mc Donald has successfully managed to be the top, and there is little competition. The competition initially available made the corporation successful. Just like all other corporations and business companies, competition in the early 90s enabled Mc Donald to be dominant and successful. McDonald’s has excellent marketing strategies that allow it to beat other competitors.

Huge risks and global experience

Huge risks are always associated with huge benefits. Mc Donald, as a corporation, has always taken huge risks. The original menu comprises a hamburger, fries, and shakes. The corporation has added more breakfast products, salads, etc. this risk taken by the company has earned great success at home and abroad.the risks involved in expanding franchisees are interesting. The corporation made several deals in the United States, Japan, China, Israel, and the rest of the world. The decision to eliminate poorly selling items was a risk. Reconstruction of the United States operations to give local franchises to greater autonomy was also a huge risk. The decision by the corporation to publicly announce that it stopped selling chicken products from chicken treated with antibiotics was a serious risk. All these risks led to the growth and expansion of the corporation. Despite the little challenges that come with the risks, McDonald’s success has been factored by the huge risks that they take.

WEAKNESSES

Declining brand image.

Improving the public perception of McDonald’s brand has been an objective. In 2004 a documentary, “Fast Food Nation,” and Jamie Olivers exposed “pink slim” in 2012 made the public criticize the corporation negatively. The customer satisfaction index reduced in 2015. This has been a challenge, and Easterbrook has made the quality of food a priority. This is to improve the corporation’s image and improve and maintain brand loyalty. The decline in the brand image has been consistent, and the management should save the brand.

Unhealthy food on the menu

Just like other corporations, McDonald’s faces several challenges ranging from the choice of menu, product quality, appeal to millennials, and labor (Rothaermel and Marne, 10). There are several suggestions that the corporation should serve all-day breakfast in the United States. Many consumers have been asking for this change, but the management is hesitant to make the change since the types of equipment used to prepare both lunch and breakfast are the same. This challenge has been in the corporation and the management plans to work on it in the next six years

Reduced appeal to millennials

Appealing to millennials is a significant challenge the company faces. Millennials need food of high quality despite the prices. Easterbrook aims to increase the companys appeals to millennials. Between the years 2011 to 2014, the trips made by youths (19- to 21-year olds) to McDonald’s restaurants reduced by 13%. The visit to other casual restaurants increased by 3%. McDonald’s management found a difficult time in convincing citizens above 37 years to visit their restaurants. The corporation has tried though digitalization to solve this problem. The administration has found it difficult to appeal to millennials despite the use of digital platforms such as social media.

Opportunities

Increase market penetrations in high growth markets.

It involves Increasing the number of McDonald restaurants in a high growth market, including highly populated cities. This recommendation will solve the challenge of appeal to millennials outside the United States. Many developing countries, such as Asia, offer high growth markets. Japan provides a good market, yet the corporation has not expanded entirely in the area. China is also a functional area that the corporation has underutilized. Besides appealing to millennials, it will also increase the overall performance of the corporation. Mc Donald can expand into Asian counties such as Japan and China. This will also strengthen the brand and increase sales as well.

Enhancing more focus on the nutritional menu.

McDonald’s has the opportunity to focus more on the nutritious menu. There are several suggestions that the corporation should serve all-day nutritional breakfast in the United States. The corporation should take advantage of and provide customers with what they need. With 17% of youths in the United States considered to have obesity, marketing fast foods to children have been a bit hard and awkward. Mc Donald minimized the happy meal calorie by about 20%. The corporation also added apples which are very healthy for the children and reduced-sodium content products, sugars, saturated fats by 15%. The company has an excellent opportunity to provide healthy foods and, at the same time, make more sales.

The corporation needs to diversify its products

One of the strengths of McDonald’s is the introduction of new products. With the completion around, the corporation should expand its products. The competition in the industry is getting stronger, and many competitors diversify their products. Mc Donald should take advantage of modern technology and new production to expand their products. This recommendation may help corporations overcome some challenges, such as millennial appeals. Intensifying research and coming up with new products will improve the efficiency in the operations. Not all McDonald restaurants have play stations. Many children love playing games, and this will make the restaurants the children’s favorite destinations. Applying this strategy will make people come to the Mcdonald regularly. Diversification of the menu will also improve the corporations’ customer base.

Threats

McDonald’s faces threats that arise from weaknesses, challenges, and opportunities. Some of the risks include.’

Security food concerns
Saturation of fast food in developed countries such as the united states.
Lawsuits against the corporation.
Competition from businesses offering quality food.
Fluctuations of currencies.

Customer

MARKET SEGMENTATION

Most companies and corporations use the behavioral approach, demographic approach, and geographical approach to analyze market segmentation. The three methods are also used to analyze the target market.

Geographical segmentation.

McDonald’s has established many franchisees across the world. McDonald’s has dominated the United States compared to other locations. Customer needs differ across different areas. The needs of the customers in Asia differ from the needs of customers in the United States.McDonald’s offers services and products that appeal to their various customers present in different locations of the world.

Behavioral segmentation

Consumers have different tastes and preferences. The corporation has to provide products and services that satisfy its customers. Mc Donald has been consistent in changing consumers’ tastes and preferences. Even though changing the product according to the customer’s preferences entails risks, McDonald has always given the customers what they wanted. The new products such as Happy meals, Mc muffin, chicken mc nuggets are just but a few examples of change and improved customer service. Also, eliminating the poorly selling items as a result of a change in customers’ taste and preference. A good example is when the Mc Donald removed the supersize option as the customers became more health aware concerning certain foods. The company offered what the consumers not only needed but required; chicken without antibiotics(Rothaermel and Marne, 5)

With excellent customer service and consistency in changing products according to the customer’s preference and taste, many customers love McDonald’s. Looking at McDonald’s franchise, 25,00 individuals form additional market insights in the middle suburbs(Rothaermel and Marne, 9). Approximately 16 residents out of 1500 residents visit the local McDonald restaurants in a given day. Across the globe, breakfast sales account for the most significant percentage of total sales. In that proportion, breakfast accounts for 30%. Lunch follows closely by 24%. Early morning, late night account for 16% in the portion. The lunch hours are always the busiest and most profitable, making $200,000 in total revenues. An average franchise is expected to earn approximately $1.7 million considering sales. The average operating profit is $150,00 annually. This shows how impressive McDonald’s products are to customers.

CUSTOMER ANALYSIS

Customer analysis looks at the ability and willingness of a customer to buy McDonald products. Customer analysis is done through comparing incomes, age range,lifestyle, geographical location, scope, customer base, consumers’ past behavior, and future needs of customers.

Income

McDonald’s corporation has many customers globally. The customers range from low-income earners, middle-income earners, and high-income earners. The heavy users of fast food comprise single and middle-class professionals who earn above average income. This group visits the chain twice in a week providing the customer base hence rising sales and profits. McDonald’s products are affordable to all.

Age

McDonald’s is lucky to enjoy customers of all ages. Children, mothers, and young adults are the primary targeted market by the Mc Donald corporation globally. Many mothers are convinced that McDonald’s corporation offers quick, easy, and affordable meals for many families. Between the years 2011 and 2014, people within the age bracket 19 to 21 years increased their monthly visits to fast-casual restaurants (Rothaermel and Marne, 10).

Lifestyle

The dominant demographic group that visits McDonald’s fast-food restaurants is the young single professions who earn income above average. Several McDonald franchisees have adopted online orders, payment, and deliveries, while others maintain the original system.

Geographical locations

McDonald corporation is one of the largest and most successful quick-service restaurants in the world. It has gone through numerous changes since its establishment in California. McDonald’s has dominated the United States and is currently expanding to the rest of the world. McDonald’s has been established in many countries through franchisees.

Scope

Being a corporation, McDonald’s enjoys a broad scope of potential customers, different ages, and across the world. The scope wides through customer satisfaction, innovation, international satisfaction, innovation, and global expansion.

Customer base

Children, mothers, and young adults are the primary targeted market by the Mc Donald corporation globally. Many mothers are convinced that McDonald’s corporation offers quick, easy, and affordable meals for many families. The corporation is very dominant in the United States but also does well across the word.

Past behavior

There several past consumer behavior towards McDonald corporation. Impulse buying of the products,concerns over health and safety of McDonald products. Comparison of other casual restaurant products to McDonald products.

Future trends

Mc Donald moves toward ensuring competency and staying ahead of all other competitors. In a meeting the CEO said “We do not need to change McDonald , we only need to be a better McDonald.” The future trend is clearly to maintain the lead in the market through solving the challenges and maximizing on the opportunities.

MARKETING MIX

Marketing mix of a company helps to analyze the marketing objectives and marketing strategies. Marketing mix usually looks at prices, quality of products, customers preference and channels of distribution.

Place

Place is vital in analyzing the market mix. Place deals with the physical locations of the of the McDonald restaurants and the distribution points. Place also includes the many processes of transporting the product to the final consumers. McDonald’s restaurants and outlets are spread in all countries and are accessible and convenient to customers.

Product

McDonald corporation deals with Hamburgers, breakfast items, chicken products, salads, soft drinks, fruits, fish wraps, and desserts. The corporation is widely known for its hamburgers. All these form the product strategy in the marketing mix. At the beginning of the corporation, only hamburgers, hotdogs, milkshakes, and fries were sold. The other products breakfast and lunch meals came due to diversification and customer taste and preference.

Promotion

McDonald’s spends vast amounts of money on development through advertising, ads, billboards, and sponsoring several sporting events like little league and Olympic games. When it comes to marketing mix, McDonald is always committed and consistent in its promotions. The main form of advertising is television “I am loving it” is branding campaign which is part of the advertising. Famous people are also McDonald’s ambassadors, eg. Venus Williams and Michael Jordan.

Price

Mc Donald applies different pricing strategies to different products. McDonald’s majorly uses Psychological pricing to ensure more customers buy the product. In India, the prices have been reduced by almost 25%, so that customers may prefer McDonald’s to competitors. In different places, McDonald discounts the prices for the various products packed together. This is a brilliant pricing strategy. The pricing strategy of McDonald targets to gain the middle class in the society and young adults.

ALTERNATIVE

Selling new products.

One of the strengths of McDonald is the introduction of new products. With the completion around, the corporation should expand its products. The competition in the industry is getting stronger, and many competitors diversify their products. Mc Donald should take advantage of modern technology and new production to expand their products. Intensifying research and coming up with new products will improve the efficiency in the operations. Not all McDonald restaurants have play stations. Many children love playing games, and this will make the restaurants the children’s favorite destinations. Applying this strategy will make people come to the Mcdonald regularly.

RECOMMENDATIONS

Redefine the visions and plans.

The corporation has been present for a lot of years; examining the vision and plans is inevitable. The corporation will be able to know how to provide products and services which balance quality, speed, and affordability. The corporation will know how to come up with a menu without causing unnecessary creep. A clear vision will also enable the company to cope with the competition without changing the real corporates identity. Many fast-casual restaurants are expanding and winning on taste and even image. Mc Donald can maximize on clear goals and vision which advocate for sacrifice and competence.

Increase market penetrations in high growth markets.

It involves Increasing the number of McDonald restaurants in high growth markets, including highly populated cities. Many developing countries, such as Asia, offer high growth markets. Japan provides a good market, yet the corporation has not expanded entirely in the area. China is also a functional area that the corporation has underutilized. Besides appealing to millennials, it will also increase the overall performance of the corporation. Mc Donald can expand into Asian counties such as Japan and China. This will also strengthen the brand and increase sales as well.

McDonald should develop its corporate social responsibility programs.

This strategic objective should improve the environmental and social impacts of the business on the customers. The corporate will have a chance to address the consumer public deception scandals and have an opportunity to make the brand stronger. Through this program, the corporation will have a platform to explain and improve the quality of services offered. The corporation can also highlight the measures taken to ensure the consumers are safe. These include the reduction of collateral, fats, and sodium products.

Work cited

Rothaermel, Frank T., and Marne L. arthaud-day. “McDonald’s Corporation.”

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