Marketing Strategies of McDonalds Australia Holdings - Case Study Example

Marketing Plan of McDonald’s Australia Holdings Professor (Tutor) The Name of the School (University) The City and State Date Table of Contents Table of Contents 2 Executive Summary 3 Introduction and Background of the Company 3 SWOT Table 4 Findings 5 Strengths 5 Weaknesses 7 Opportunities 7 Threats 8 Recommendations 9 Target market 9 New product description 10 Customer value proposition 10 References 11 Marketing Plan of McDonald’s Australia Holdings Executive Summary The following paper aims at exploring the internal and external environments of MacDonald’s Australia Holdings in terms of A SWOT analysis. The paper also focuses on analyzing the environment in which a new product can be realized as well as the appropriate strategies needed for the new product to be successful. The purpose of the paper is aimed at applying necessary skills to understand the internal and external environment that should be applied in order for a new product to thrive in a company. A SWOT analysis can help a company zero down on its environments and help in making strategic decisions to enable growth and success (Gilligan & Wilson, 2009). It is the easiest method of analyzing the different environment a company is operating in and make necessary recommendation to ensure its overall success with a new product (Bertelsen, 2012). Introduction and Background of the Company MacDonald’s Australia Holdings is a franchise under the U.S-based MacDonald’s Corporation. MacDonald’s Corporation is one the leading or biggest fast food retailing chains in the world with over 30,000 food restaurants in 119 nations around the world (McDonald's Australia, 2015). The company has grown over to become a multinational company through franchising. The brand came into Australia in 1971 when the first MacDonald’ restaurant was opened in Yagoona, Sydney (McDonald's Australia, 2015). Currently, there are about 900 restaurants throughout Australia that employ an estimated 90, 000 people (McDonald's Australia, 2015). The company is an unlisted public company in Australia. Being a franchise means that over two thirds of the restaurants in Australia are operated by personal business men and women while the others are operated by the company. MacDonald’s Australia offers numerous products including drinks, breakfast, desserts, salads, dinner, coffee, freshly baked pastries, snacks, burgers, and smoothies among others (McDonald's Australia, 2015). The main target market includes people looking to live healthier lifestyles based on the improved menu that offers healthier choices for consumers. This means that the main target market is people aged between 18 and 50 years based on the fitness and health awareness in this group of consumers. The basic product lines are focused on healthier food choices based on the rising awareness in the population on adopting healthier lifestyles that includes their diet. MacDonald’s Australia Holdings is a successful company with profits of about $4 billion in 2015. Nonetheless, more can be done to increase the opportunities and competitiveness of the company. This can be achieved through a SWOT analysis. SWOT Table Strengths Weaknesses Strong market leadership and brand value Positioned as a family restaurant brand Healthier food choices Strong social and corporate responsibility plans Law suits and tax evasion Opportunities Threats Growing fast food service market Developing hot drinks market Increased use of technologies by consumers Increased competition in the retail Australian food industry Regulations of food safety Labor relations Findings Strengths Strong market leadership and brand value The first strength of MacDonald Australia is strong market leadership and brand value. The company is ranked as one of the top retail food chains in Australia with over 900 outlets around Australia. MacDonald has been able to establish its market share through the franchising strategy. This has seen increased growth in terms of market share holding about 60% of the retail food industry market share in Australia (Australian Business Case Studies Pty Ltd, 2015). Moreover, MacDonald Australia also benefits strongly from the brand value that is associated with the MacDonald’s food chain. Originally established in the United States, MacDonald’s has become a household name around the world. This popularity and increased brand awareness has helped the Australian subsidiary to successfully grow in the last few years. Without such a name, it would be difficult to convince consumers to buy food at MacDonald’s. The strong brand value of MacDonald’s has increased brand loyalty as most people prefer to eat at a well-known restaurant. Positioned as a family restaurant brand Just like the U.S-based MacDonald’s, MacDonald’s Australia has positioned itself as a family value restaurant brand (Dobhal, 2015). The company aims at attracting the whole family with food choices that fit the needs of the whole family. Moreover, its customer service is family friendly. The food choices are healthy, well-cooked, and offer the customer a family experience (Dobhal, 2015). Foods choices are well developed to meet the needs of each family member from the young to old. Healthier food choices MacDonald’s Australia is best known for serving among the best of healthy food choices. Having learnt from the challenges faced by U.S McDonald’s in terms of healthy food choices and obesity lawsuits, MacDonald’s Australia developed the first ever meals to be approved by the Heart Foundation (Australian Business Case Studies Pty Ltd, 2015). The approvals mean that these meals are healthy options for consumers and pose no threats to heart disease of complications. Currently, the MacDonald’s serves about 9 meals that are heart approved (Australian Business Case Studies Pty Ltd, 2015). This has been one of the main success factors for the company based on the rising consumer awareness for adopting healthier lifestyles and diets. Moreover, MacDonald’s Australia is also the only food chain to offer a burger that includes beetroot, which is a specialty in Australia (Australian Business Case Studies Pty Ltd, 2015). Again, all the beef used to prepare meals is locally produced, thus guaranteeing increased healthy products. Strong social and corporate responsibility plans MacDonald’s Australia has some of the best social and corporate responsibility strategies. It focuses on playing its critical role in the community through charities, projects, and awareness campaigns. Moreover, it has invested in market research aimed at meeting consumer needs around Australia. This has resulted in increased customer trust and good public reputation that is growing its market share. Weaknesses Lawsuits and tax evasion MacDonald’s Australia has been increasingly put on the spot light for tax evasion and other major lawsuits (GlobalData, 2015). This has seen increased damaging of its reputation in the public. Although the issue of tax evasion is not that common or popular among customers, it may harm the reputation of the business. This may also lead the company to numerous and costly fines that may damage its financial abilities. Increased law suits should also be avoided to cut operating costs and ensure increased profitability. Opportunities Growing fast food service market The fast food industry is increasingly growing as consumers look for quick and easy ways to eat healthy meals. People around the world are spending much of their time working and have less time to prepare food or enjoy meals for an hour or two. This has the increased option of fast food where customer can catch a quick meal on their way to work or during lunch and dinner (IBISWorld, 2015). This market is also expanding into the option of home or work delivery. This presents a new opportunity for MacDonald’s Australia to develop their strategy based on meeting these consumer needs. Developing hot drinks market Although Australians are not naturally coffee or tea lovers, the hot drinks trend is slowly catching up. Coffee is one of the leading beverages consumed around the world and even in Australia (GlobalData, 2015). Nonetheless, not many fast-food companies offer different product ranges or choices for hot drinks. This presents an opportunity for MacDonald’s Australia to develop a strategic offering in the hot drinks category. Increased use of technologies by consumers The increased adoption of different technologies by consumers is a big opportunity for MacDonald’s Australia. The company can effectively target consumers through the use of smartphone apps that allow customers to order different meals anytime and anywhere in the country. MacDonald’s Australia has already made a step in this are by introducing the first iPhone app that allows customers to order from the comfort of their phones (Barwick, 2014). Moreover, the company has also invested heavily to offer free WIFI throughout its stores in the country (Barwick, 2014). The use of these technologies is a new opportunity to offer a differentiated customer experience in the retail food industry. Threats Increased competition in the retail Australian food industry Competition has always been the number threat for any business. The Australian retail food industry is growing at a high rate, meaning the entry of new and expansion of major competitors. The main competitors include KFC, Ali Baba, Subway, Donut King, and Hungry Jack’s among others (GlobalData, 2015). These food chains are also developing at fast rates posing increased competition and reduced market share. The company should focus on increasing its competitive advantages to ensure reduced competitive threats. Regulations of food safety Dealing in the food industry, means having to comply with numerous food safety regulations, which may be a threat to growth and success of MacDonald’s (GlobalData, 2015). The company has to follow food safety regulations of a daily basis, meaning that its staff should adhere to high standards of work. Overall, the lack of complying to food safety regulations could lead to closure or increased losses for the company, thus a potential threat to the company. Recommendations Target market MacDonald’s Australia should target consumer who are healthy conscious or aware about adopting healthy lifestyles. This includes people aged between 15 and 55 years. These are both males and females who are aware on the need to live healthy lifestyles, which means eating or adopting healthy diets. The company should also target middle income people who lack the time to prepare food or make dinner at home or take much time off to take a meal. These people include students, employees, and business people. The overall target market should primarily focus on health awareness rather than occupation, education, price, or race among other segmenting variables. This will ensure a strategic position for the company to build its brand and successful grow. New product description MacDonald’s should focus on adopting a new product that offers a combination of meals at a discounted price. The combination should include options on a full meal that includes salads, desserts, drinks, and fries and beef. A consumer can make numerous selections to order a full meal that has all the main offerings at a volume that is recommended for health and at a discounted price. This will ensure that consumer spend less for a perfect meal that guarantees wonderful taste, health, and value. The overall offering should be well-developed to adopt the family value by ensuring that each combination is labeled or described with the recommended number of servings. This means that families can order foods based on their family members, thus ensuring no wastage of food as well as money. Customer value proposition MacDonald’s Australia offers the perfect meal with its new combo offerings that allow our consumers to enjoy our best meals and offerings all at once and in a discounted price. Customers can get different combinations of healthy food options and drinks at special prices with well-indicated servings that are also contain the daily intake descriptions for the health conscious. Consumers will be able to save a lot by ordering for what they need at the moment and avoiding food wastage as well as paying for what they will eat. This new product is aimed at ensuring that the whole family can rely on MacDonald’s to enjoy a healthy and delicious meal that feels as if it was cooked right at home. Justification of the choice of new product using at least one strategy The choice for the new combo product is based on the SO or Maxi-Maxi strategy that relies on the using the strengths to maximize on opportunities of a company (Bertelsen, 2012). Having a strong brand value and increased market leadership is useful for expanding further especially based on the projected growth in the fast food market. Moreover, the new combo product is based on ensuring that the position of a family value restaurant is exploited to the opportunity of growing markets and increased health awareness among consumers. References Australian Business Case Studies Pty Ltd, 2015. AFR Business Case Studies | McDonald's: Addressing changing food values through market research. [online] Afrbiz.com.au. Available at: [Accessed 10 Aug. 2015]. Barwick, H 2014, 'McDonald's Australia to roll out iOS, Android ordering app', CIO (13284045), p. 1. Bertelsen, B 2012, Everything You Need to Know About SWOT Analysis, BrainMass Inc, [Newmarket, Ont.]. Dobhal, G., 2015. Marketing research in brief : A case study of McDonald's branding campaign in India and Australia. [online] Academia.edu. Available at: [Accessed 10 Aug. 2015]. Gilligan, C, & Wilson, RS 2009, Strategic Marketing Planning, Routledge, Amsterdam. GlobalData, 2015. McDonalds Australia Limited - Strategic SWOT Analysis Review. [online] Aarkstore.com. Available at: [Accessed 10 Aug. 2015]. IBISWorld, 2015. McDonald's Australia Holdings Limited - Retail. [online] Ibisworld.com.au. Available at: [Accessed 10 Aug. 2015]. McDonald's Australia, 2015. Macca’s® Story Where we’ve come from. [online] Mcdonalds.com.au. 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