MacDonalds Market Analysis - Case Study Example

MacDonald Market Analysis (Author’s name) (Institutional Affiliation) MacDonald Market Analysis MacDonald an Indian based franchised company, is a joint-venture owned and managed by Vikram Bakshi and Amit Jatia. The company’s business model is based from four major cornerstones. The four pillars are, affordable prices, fresh food, limited menu and fast service ("Strategic Analysis Of Mcdonald In India Business Essay", 2015). The centralized customer service and a well-integrated supply chain is MacDonald’s core competencies. Nonetheless, the company needs to change its limited menu in India because, the Indians have different preferences ("Strategic Analysis Of Mcdonald In India Business Essay", 2015) . SWOT Analysis Strengths Innovation and flexibility MacDonald has adapted to the Indian market, particularly by meeting the cultural and religious demands of their product’s consumers. The company has dropped beef products and adopted vegetarian products in view of the Indian customers’ religion, lifestyle and eating habits (Rathi, 2016). Supply Chain Management Supply Chain is one of the most important aspects that guarantees success in business. MacDonald’s supply chain is amongst the most accurate supply chains in the world. The supply chain ensures that raw materials and other supplies are delivered in time ("Strategic Analysis Of Mcdonald In India Business Essay", 2015). Due to the timely supplies delivery, the firm is able to incur low costs hence maximizing its profit. Apart from reduction of costs, the company is also able to offer high quality services to its customers ("Strategic Analysis Of Mcdonald In India Business Essay", 2015) . Concentrated Consumers Support Service MacDonald has joined customer Corporation which has enabled the firm to have a centralized system by which it can deliver services to its customers. The system enables the customers to place an order ("Strategic Analysis Of Mcdonald In India Business Essay", 2015). In addition, the partnership helps the company to understand the demands and desires of the consumers and make the necessary efforts to meet their needs (Rathi, 2016) . Weaknesses Inadequate Menu The menu the MacDonald offers is not able to fulfill the market’s demand because is limited. The Indian fast food market is quite different from the European market (Rathi, 2016). For example, many Indian prefer curry food and spiced tandoori. Unlike, the European market, the Indian market is highly diversified. The Hindus do not eat meat especially the beef while the Muslims do not eat pork. The Indian culture is also highly diversified with each region having different culture. That diversity causes challenges to the firm in meeting demand ("Strategic Analysis Of Mcdonald In India Business Essay", 2015) . Inefficiencies in Home delivery The company has a weakness of slow order delivery in the Indian market. The slow delivery is because of unavailability of delivery services in some of the company’s outlets. This reduces the number of the sales the company makes and also give the competitors who are efficient in delivery an edge in the market ("Strategic Analysis Of Mcdonald In India Business Essay", 2015) . Opportunities Expansion The expansion strategies of MacDonald and its business model of opening new outlets in the country, provides an opportunity to increase its market share. There are many areas in India which the company does not serve. At such, these unserved towns and cities provides good opportunities of growth. The huge Indian population and increasing income among the Indians open doors of opportunities for the firm ("Strategic Analysis Of Mcdonald In India Business Essay", 2015) . Enhanced Home Delivery Inefficiency in home delivery gives an opportunity to consolidate costumers base. This encompasses, provision of faster home delivery services across all company’s outlets ("Strategic Analysis Of Mcdonald In India Business Essay", 2015) . Environmental Friendly Packaging The company can create an opportunity by using environmental friendly packaging. The environmental friendly packaging will portray positively the company’s image. Also, the company will be able to save itself from any possibilities of future embarrassment from environmental agencies ("Strategic Analysis Of Mcdonald In India Business Essay", 2015) . Threats Political and religious confrontation In 2001, the company faced political and religious challenges. American elements in the country confronted the company’s outlets in Mumbai ("Strategic Analysis Of Mcdonald In India Business Essay", 2015). The company may face mistrust from the Hindus and Muslims in the country if they offer products that are against the religious beliefs of those religions. In early 2000, the company faced mistrust from the Hindus and Muslims because of the matter of politicizing the matter of Western outlets using Pork and beef in its products. When there is mistrust in the company’s products, the firm’s image is tainted and at such it will affect sales and revenues ("Strategic Analysis Of Mcdonald In India Business Essay", 2015) . Changing Customers' tastes The new trends such as the use of genetically modified food can change the current concept of fast foods. In India, many people are facing obesity related issues because of eating fast food which is high in fats and calories. Therefore, there is a growing concern for healthy food to reduce the ever-increasing levels of obesity ("Strategic Analysis Of Mcdonald In India Business Essay", 2015). Stiff Competition. The rising number of local fast food joints are threatening huge multinationals such as MacDonald. Companies such as Nirulas will be a threat in the future, given an opportunity. However, with appropriate innovative strategies, supply chain model, pricing and meeting demand requirements of its customers, MacDonald easily can overcome its threats in the future. The company should learn and incorporate its weaknesses into strengths to continue expanding in Indian market ("Strategic Analysis Of Mcdonald In India Business Essay", 2015) . The Indian Fast Food Industry The Indian fast food industry has changed with time and has always been consistent with the needs and desires of all people in different market segments. There are chains that have hundreds of outlets such as MacDonald to the one that operate in one room. India has one of the highest fast food hotel industry in the world. The market is at 350-35% growth rate with almost all of the biggest world brands (Rathi, 2016). However, the market continues to be underpenetrated despite the recent rapid growth trends. Most of the companies providing fast food products are only found in major cities. Nonetheless, there is huge opportunities in tier-II and cities. This means that the future of fast food industry, is bright in India (Rathi, 2016). Competitive Analysis The fast food industry in India is very competitive. There are numerous big and small firms competing for customers by offering variety of products. Same is the situation with McDonalds in all over the world and India is not an exception (Rathi, 2016). The existence of Pizza corner, Dominos, KFC and many other fast food companies in India, pose a big threat to MacDonald. Low switching costs and high exit barriers increases the threats. The company is forced by high exit costs can force the firm to survive and compete in the industry. Whereas, the low switching costs provides power for the consumer hence resulting in the loss of customers ("Strategic Analysis Of Mcdonald In India Business Essay", 2015) . Profitability Analysis Profitability analysis is the analysis of revenues and cost of a business which determines the profits or losses of the company ("Growth, Profitability, and Financial Ratios for McDonald's Corp (MCD) from Morningstar.com", 2016). In 2000, the MacDonald’s profitability was as follows: Gross Profit= Total Revenues-Operating Income (Bhasin, 2016) =14243-3330 =10913 Net Profit= Gross Profit-Total Expenses =10913-(1945+1011) =7957 International Strategy Focusing on emerging markets MacDonald has been pushing very hard to concur emerging markets. Not only has it penetrated the Indian and Chinese markets only, but African nations as well. However, China is MacDonald number one international front, where its making good sales in its products (Rathi, 2016) . Variety of Products to attract more market segments. MacDonald is offering a whole range of products apart from the usual snacks and desserts. The firm is trying to get new market segment by offering non-traditional food menus (Rathi, 2016). The firm has been fighting its image of unhealthiness by providing traditional meals. For instance, instead of serving high-calories breakfast, the firm has switched to serve oatmeal. People who are looking for healthier meal, they have been provided with different types of salad shave (Rathi, 2016) . Customer food delivery services The company has established delivery services in almost all markets around the globe. In Asian and Middle East, it is a cultural thing for restaurants to do home delivery. For MacDonald to remain competitive enough, they have to embrace delivery option (Rathi, 2016) . Conclusion Even though MacDonald is considered as the masters of fast food industry internationally, the company is able to stay at the top because of its flexibility. Any changes that occur in a market impacts business operations. The market is highly competitive especially among the recognized brands. Therefore, any entity that has financial and brand mighty, cannot afford failure in their market of operations. MacDonald has combined different international strategies that have ensured that the company succeed. By focusing on the emerging markets such as the Indian market, provision of flexible menus and providence of quality delivery services, has been the major reasons for outstanding performance of MacDonald globally. References Bhasin, H. (2016). Profitability Analysis. Marketing91.com. Retrieved 23 November 2016, from http://www.marketing91.com/profitability-analysis/ Growth, Profitability, and Financial Ratios for McDonald's Corp (MCD) from Morningstar.com. (2016). Financials.morningstar.com. Retrieved 23 November 2016, from http://financials.morningstar.com/ratios/r.html?t=MCD Growth, Profitability, and Financial Ratios for McDonald's Corp (MCD) from Morningstar.com. (2016). Financials.morningstar.com. Retrieved 23 November 2016, from http://financials.morningstar.com/ratios/r.html?t=MCD Rathi, G. (2016). Global Strategy of McDonald and How It Reached All corners of World. Academia.edu. Retrieved 23 November 2016, from https://www.academia.edu/6465022/Global_Strategy_of_McDonald_and_How_It_Reached_All_corners_of_World Strategic Analysis Of Mcdonald In India Business Essay. (2015). UKEssays. Retrieved 23 November 2016, from https://www.ukessays.com/essays/business/strategic-analysis-of-mcdonald-in-india-business-essay.php Read More

 

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