Strategic Management - Resources and Capabilities of McDonalds - Coursework Example

?Strategic Management Table of Contents Introduction 3 Resources and Capabilities of McDonald’s 4 Assessment of Resources and Capabilities of McDonald’s Based on Strategic Management Theory 6 Competitive Advantage of McDonald’s Aligning with Resource and Capabilities 8 Conclusion 10 References 11 Introduction Strategy depicts the range of actions that initiates by an organisation in order to mitigate any sort of vulnerable business situations (Bracker, 2001). The perception of strategic management is referred as the process of decision-making by analysing certain organisational aspects for gaining sustainable competitive position. It plays a major role in the business development of a particular organisation (Griffith University, 2002). The idea involves detailed analysis as well as analytical actions in order to facilitate the organisations to attain their expected business objectives. In strategic management, the analysis of internal as well as external factors of an organisation is considered to be the primary factors (Amason, 2010). Once the internal as well as external factors are determined, then the management of an organisation has to make strong decisions on proper implementation of those factors for sustainable growth of the business (Gregory & et. al., 2005). McDonald’s has been proudly serving to deliver its different products to the customers since the year 1955. Today, McDonald’s is regarded as one of the world’s best fast food retail chain (McDonald’s, 2012). In recent times, the company established its restaurants in around 100 nations. Consequently, it generates huge amount of revenue by performing in the international market with increased expansion of restaurants. It has been observed that McDonald’s is operating 33,510 restaurants throughout the world till the end of the year 2011 (McDonald’s Corporation, 2011). The company has been committed to provide the best services to its customers. McDonald’s execute certain significant policies as well as relevant strategies that enable it to expand the size of the business at large (McDonald’s, 2012). The vision statement of the company is to become the world’s top fast food retail chain as well as the best service provider in the similar industry (Scribd Inc., 2012). McDonald’s has proved itself as an integral part of the communities through its social involvement such as organising youth sports, inspiring the society by organising events as well as conducting local charities (McDonald’s, 2012). Moreover, its effective as well as powerful distribution channel enables it to serve quality product to its customers (McDonald’s, 2009). In this paper, McDonald’s resources as well as capabilities and its assessment based on the theory of strategic management will be taken into concern. Moreover, the competitive advantage aligning with the company’s core resources and competencies will also be portrayed in the paper. Resources and Capabilities of McDonald’s Organisational resources as well as capabilities are often viewed to be the main factors that are responsible for assisting the organisations to raise their competitive advantages. The core resources of an organisation can be identified as tangible as well as intangible resources. These resources are the major components that develop the organisational strategies. In this similar context, tangible resources represent financial assets, technological means as well as organisational infrastructure. On the other hand, intangible resources signify the aspects relating to human resource, innovation as well as goodwill (Fogleman, n.d.). McDonald’s serves significant portion of customers on regular basis through its several high demand products. The different products of the company are served to near about 119 countries throughout the globe by engaging substantial number of employees. It has been viewed that the company has been preparing effective business strategies for expanding its business in certain parts of South-Asian region. McDonald’s possess a better option for expanding its business in that particular region due to its increased brand image, business reputation and demand in the fast food sector. The company produces quality products for satisfying the customers as well as increasing its huge customer base. In the global market, McDonald’s is well- known for its several menu items such as hamburgers, pork as well as beef burgers. Specially mentioning, McDonald’s also produce vegetarian burgers in certain specific regions aligning with regional culture, customer’s taste as well as eating habits. It has been apparently observed that the target customers of McDonald’s are usually the children and the youths among others (Scribd Inc., 2012). One of the major resources of McDonald’s that can be recognised is about attracting the children by serving delicious items such as Happy Meal along with various toys such as Hot Wheels and Walt Disney that are offered in its several restaurants. Moreover, another inclusive resource of McDonald’s is that it provides facility to the customer groups for entertaining themselves such as ‘Play Place’ where the customers can play arcade games, air hockey and many others. With regard to the capabilities, it has been viewed that the company designs its restaurants as a fun place where people can expend quality time together. Furthermore, Wi-Fi facilities are available in McDonalds’ restaurants that attract the customers by a considerable level. Another capability of McDonald’s can be identified relating to its production process. In this regard, the production process of the company usually takes place in huge plants and the production managers emphasise more upon maintaining the quality of the products. One of McDonald’s significant capabilities is managing its distribution channels as well as effectively organising its suppliers for providing better services to the customers. The company possess proper infrastructure for ensuring high level of production and better working environment. Human resource management team of McDonald’s conducts special training for ensuring high level of employee’s performance (Scribd Inc., 2012). The goodwill value of McDonald’s has been increased over a period of time due to its business expansion throughout the world by following the business expansion of franchising (EBIT Financial Analyses Center, 2012). Assessment of Resources and Capabilities of McDonald’s Based on Strategic Management Theory Organisations need to prepare relevant strategies in order to accomplish sustainable business growth. The theory of strategic management mainly includes three processes such as strategy formation, strategy implementation as well as strategy reformulation. In order to create strategic identity, determining missions along with visions and planned goals are considered as the primary factors for any organisation. The vision statement of an organisation depicts the future picture of a company. It is considered to be one of the motivational aspects that help to formulate effective strategic plans by a significant level (Hill & Jones, 2012). Mission statements represent the objectives of an organisation for business expansion. McDonald’s mission statement is to provide excellent service to the customers, generating higher profitability and most significantly attaining significant competitive position (McDonald’s, 2012). The vision statement of McDonald’s comprise ensuring better customer experience, developing leaders for implementing high level business plans and performing social responsibilities (Golden Arches Restaurants, 2011). The identification of the tangible as well as intangible resources is important for McDonald’s in order to signify its core competencies. It can be stated that the resources of McDonald’s play a pivotal part in its strategic management process. The company had carefully identified its resources for strengthening its strategic business process. The imperative tangible resources of McDonald’s are identified to be its superior quality of products or services that offers by the company throughout the globe (Slideshare Inc., 2012). In relation to the assessment of resources and capabilities of McDonald’s based on strategic management theory, it has been viewed that certain products of McDonald’s such as chicken hamburgers are the highest selling fast food products worldwide. It can be affirmed that McDonald’s’ product or service are responsible for its global business success. Improved production means are quite essential for producing high quality products. In this regard, modern production techniques are implemented by the company in its production process. The necessity of employing quality material as well as improved production means is identified by the management of McDonald’s. According to the company, success depends upon improving the product or service quality. For this particular reason, the company emphasise more upon enhancing its production process in order to deliver superior quality of products to its valuable customers (Scribd Inc., 2012). With regard to the theory of strategic management, it has been observed that McDonald’s has been providing training to its employees for a long period of time in order to enhance their work efficiency as well as to provide them the knowledge regarding the product designs and other operational techniques. In order to meet customer’s changing preferences, McDonald’s has improved its production technique as well as launched new products. Brand value is considered as one of the relevant aspects by the company for attracting customers in the restaurants. The brand value of McDonald’s is responsible for its business success around the world. McDonald’s possess certain effective strategies in order to enhance its brand value as well as to increase customer satisfaction. Maintaining product quality, enhancing production techniques, implementing sensitive pricing strategies and providing additional services are the key factors or the strategies that facilitates the company to become world’s best fast food retail chain (Scribd Inc., 2012). In relation to strategic management theory, it has been apparently observed that McDonald’s follows three business levels of strategies that include corporate, business and functional level strategy. From the perspective of corporate strategy, the company emphasises upon managing its different business activities along with maintaining business interrelationships by sharing as well as coordinating staffs and other valuable resources. With regard to business strategy, McDonald’s focused upon raising its sales from existing ones rather than opening new restaurants. From the standpoint of functional level strategy, the company pays much more attention upon developing various functional areas such as finance, human resources, marketing and operations. Thus, on the basis of the above discussion, it can be affirmed that the aforementioned strategic management theories, McDonald’s possess effective resources and capabilities that in turn would help it to attain competitive position over chief business market participants (Scribd Inc., 2012). Competitive Advantage of McDonald’s Aligning with Resource and Capabilities The notion of competitive advantage represents the positioning of a company with respect to other companies that determines profitability. There are two different strategies that play a decisive part in the competitive market which ultimately helps the organisations to attain significant competitive position or advantage over its chief business market participants. The strategies include cost leadership and differentiation. In this similar context, cost leadership strategy depicts the process of delivering superior quality products by maintaining low operational costs (Grant, 2001). In this connection, McDonald’s prepares its different products in accordance with the changing customer preferences and requirements. The company uses advanced resources in order to prepare and serve quality products. Quality material and improved production technique are responsible for generating superior quality products of McDonald’s. In order to reduce the operational costs, several restaurants of McDonald’s are efficiently operated and the additional cost of production is effectively managed. These factors are responsible for the competitive advantages of McDonald’s. Conversely, the strategy of product differentiation is regarded to be another process that enhances the competitive advantage of the organisations by a greater extent. In differentiation strategy, similar type of different products is prepared in order to compete with the competitors. Superior quality product, stylish look along with other unique features is always preferred by the customers. McDonald’s introduces new products in order to satisfy the customer needs. This factor helps to gain competitive advantage over its competitors (UHV, n.d.). Furthermore, it has been viewed that one of the significant competitive advantages of McDonald’s is strategic locations of its several restaurants. In this similar context, the restaurants belonging to McDonald’s is positioned in different attractive locations such as in major cities and airports among others (John Willey & Sons, Inc., n.d.). Conclusion After acquiring a brief idea about the resources and the capabilities of McDonalds, it can broadly be stated that the company attains significant competitive position over its major business market competitors. The major core resources as well as capabilities of McDonald’s have been identified to be its focus for not only in increasing sales but also in protecting and augmenting brand reputation. Moreover, serving quality products in accordance with the preferences and the desires of the customers is also regarded as the other significant resources as well as capabilities of the company. With regard to the strategic management theory, McDonald’s follows three sorts of theory that include business, functional level and corporate strategy. These strategies enhanced the resources as well as the capabilities of the company by a significant level. Thus, it can be affirmed that the strategies relating to strategic management theory and the identified core resources along with capabilities ultimately supports the company to accomplish sustainable competitive position over its chief business market contenders. References Amason, A. C., 2010. Strategic Management: From Theory to Practice. 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