McDonald's Corporation - Essay Example

Also McDonald is already considered the market leader in the fast food industry in the world, with a total market share of nearly 34 percent followed by Burger King that has a total of 13 percent of the market share (Iqbal, 2011). This, therefore, suggests that McDonalds is and has been a very successful organisation. 2. Strategic Reasons for the Success of McDonalds The key reason for the success of McDonald’s success has always been the people or employees that work in all the various franchises of the business organization across the world (McDonald, 2012; Elbel et al.

, 2011; Holmes, 2010; Coombes, 2004; Boyle, 2004). This sums up the huge number of employees that McDonald employs on regular basis. The company‘s policy of employing only the local people of where it is located seeks to promote the company from within its own internal customers. This policy of employing local people is to have managers that understand the business and domestic cultures within which they are operating (Ritzer, 2007 ). The second factor that contributes to its success is the company’s products (McDonald, 2012, Mottram, 2011, Holmes, 2010, Adams, 2007).

One of the cardinal objectives of McDonalds is to design and build a uniform set of items that are consistent in taste and quality across the globe. It also believes that adapting to changes, especially with respect to local condition is intrinsic to the success of the company. The differentiation of the company’s products and services also form the basis of McDonald’s competitive strategy (Adams, 2007). Indeed, to sustain growth and development, McDonald’s has differentiated its products by targeting children and the elderly as its core consumers.

The company offers an assorted line of foods so as to attract customers across the various levels of society. Building credible brand equity through effective promotion, sustainable business practice and quality service has also been vital part of its success. McDonald’s promotional maxim of branding globally and advertising locally offers the company the opportunity to design promotional activities specific to each marketing environment. This is to focus on the building of trust and brand loyalty in the eyes of its numerous customers that are spread across the globe.

McDonalds recently introduced mantra “I’m lovin’it” which the company is using to bring its products closer to families is an effective promotional strategy (Holmes, 2010). Most importantly, expanding globally through franchising and creating a strong network of business network and relationship has been a major element of its success. More than 80% of its business is run on the franchise basis. (McDonald annual report 2011) Under a McDonald's franchise, McDonald’s products, with same quality and taste are sold.

McDonald's receives a monthly rent, which is calculated on a sliding scale based on the restaurant's sales (McDonald, D.2008). Franchisees across the world follow the same standard vis-a-vis infrastructure, ambience, quality, taste and customer service. as such, the success of the company can usually be related to being able to become accustomed to a specific environment. (Holmes, 2010) 3. Strategic framework of competitive advantage Kanter (2001) has strongly asserted