Abstract
The sole objective of the above study is to carry out an internal and external analysis of McDonald Australia, a leading organization in the fast food industry in the world with over 30,000 outlets across the world in about 121 countries. The multinational organization is renowned for its rapid growth rate in the industry with responsibility for food preparation, serving consumers and offering most efficient services to its esteemed customers. Some of the significant areas highlighted in the paper include organization's structure, it competency aspects, and the manner in which the business devotes its resources. However, the study will reveal more on the different strategies utilized by the company in enhancing its competitive advantage in the market.
Introduction
Goulding & Lim, (2014) assert that the fast food industry is gaining popularity in the recent past due to the massive investment in the industry and significant growth of the world economy. Some of the aspects contributing to the sudden increase in the number of people consuming fast food are the escalating population of working populaces and enhancement of the living standards of people around the world. Moreover, many people consider fast food convenient especially due to its nutritive value and availability in different parts of the urban places. The objective of the study is to understand the internal and external environment of McDonald, and its massive operations in Australia. McDonald is the largest fast food organization in the world and is renowned globally for its brand name, an aspect that has made it experience significant growth since its establishment. The company uses a simple model, which is, having a consistent dining experience, and offering eminence food and efficient services. However, almost 80% of the restaurants around the globe are franchised, indicating that entrepreneurs purchase the right to use their brand name and get involved in selling their products (Dubuis, 2015). Moreover, one of the aspects that make the franchise owners to gain a positive reputation in the market is a chance to utilize McDonald's system of preparing food among other business strategies used by the organization. However, the business headquarter is in the U.S, an aspect that makes the group have almost 40% of its outlets located in the U.S and the remaining percentage from different parts of the world.
Internal Analysis
Company structure
Company structure indicates the various tasks carried out by the business, coordination of the different functions and supervision of the same. The objective of organizational structure is to ensure that a company meets its set goals in the most optimal way. Scholars have however argued that business organizations can adequately sell their products to different consumers with diverse needs through the differentiation strategy on the basis of how the product works and its eminence. Organizations that focus on differentiation strategy based on eminence practice the vertical organizational structure while those that focus on functionality base theirs on horizontal differentiation (Zaouali et al., 2015). Apparently, it is important to appreciate that McDonald utilizes the horizontal differentiation strategy in the sale of its products.
Moreover, some of the competency issues directed to the above strategy include flexibility of the enterprise operation, ease of controlling the business, and motivation of organizational employees as they feel engaged in the process. However, because the organization involves a lot of stakeholders and carries out different operations, the business considers the use of the bureaucratic mechanisms. Moreover, to enhance invention, the business gives incentives to its staff and has developed a tradition of ethical anxiety (Ronald, 2015).
Besides, the structure requires that the respective employees adhere to the set rules and regulations of the organization and abide by its culture as aforementioned. Every organizational employee should commit their efforts towards meeting the different goals of the business. Moreover, its unique culture is preserved through the various practices carried out in the organization such as the single nature of administration and hiring process (Fast Food Restaurants Industry, 2016).
Capability and Resource
It is imperative to appreciate that McDonald's and its franchised restaurants are unique in their operations and often serve a relevant menu to its esteemed clients with both drinks and food, at reasonable prices. Some of the primary products that the organization is renowned for since its establishment include Big Mac, Chicken McNuggets, Quarter Pounder and McFlurry desserts. Besides, most of the stores owned by the business organization also offer their consumers with breakfast containing the Egg McMuffin and McGriddles. However, to maintain its good reputation in the international market, the business requires the franchised restaurants to uphold high standards and adhere to the set policies so as to protect its brand. Another competency issue that helps upholds the organizations name is the fact that the business involves itself in the purchase of food and equipment from a broad range of suppliers (E., 2015).
Product line
Besides, the company has attracted a good market share in the world, making revenue of over $27.5 billion every year and is renowned for its uniqueness in the market. However, most of the organizational products as aforementioned include hamburgers, cheeseburgers, French fries, chicken, drinks, milkshake and desserts among others. However, as a way to meet the diverse needs of the varying consumer needs, the business has introduced new products into the market such as salads, fish wraps, and coffee (Dubuis, 2015).
Current Market Distribution and Supply
As earlier mentioned, the food industry is experiencing rapid growth in the recent past especially in Australia, an aspect that has made McDonald to capitalize on the various opportunities presented by the business environment so as to increase its revenue. Moreover, the fact that the organization is a multinational one operating in diverse areas with different needs and challenges has made it be in a position to adequately meet the changing consumer needs more effectively. Individuals' experiences, varied perceptions, and interests are some of the aspects that have enabled the business to expand rapidly in the country. Besides, the different socioeconomic attributes of the customers are one of the aspects that make the fast food industry to gain popularity in Australia. Therefore, it is worth recognizing that McDonald will greatly expand its operations across the globe and the rest of the world, hence making more profits (Mukherjee, 2014). The previous experience with the organization, various consumer needs, and varying products features are among the factors considered in the above case.
External situation
Competitive Environment and Industry Situation
It is imperative to appreciate that McDonald is among the leading company in the provision of fast food around the world. The company serves about sixty million consumers on a daily basis in almost 120 countries, an aspect that explains its significant growth. Some of the key competitors of McDonald include KFC, King Burger Corporation, Subway, BKC, WEN and Yum Foods. The above competitors bring in brand identities in the international market, making it difficult for McDonald products to prevail well. The fast food industry is gaining popularity and increased pressure for growth which can be evidenced by increased investment. Moreover, consumers of the products in the country are demanding for more as far as food quality and service is concerned. Due to the change in consumer behavior (Brawick, 2014), it is important to recognize that consumers in the country have high expectations of getting excellent services in the various restaurants that they pay a visit. Moreover, the current trend in the industry is to offer healthier food products as consumers are becoming health conscious.
PESTLE Analysis
Political
There are various policy issues concerning health and safety of fast foods across different regions of the world, an aspect that significantly influences the manner in which McDonald operates its business. Moreover, there are increased regulations from the government to manage different health issues resulting from the consumption of fast food such as obesity among other diseases. The organization being a multination organization, experiences different issues for example in India where there was a reduction in sales as the company had issues with meat offered in the sandwich.
Economic
Social
Different social groups have varied demands hence have a significant influence on the way in which the organization conducts most of its operations. Besides, various parts of the world where the business operates experience varied cultural needs hence impacting on the diversity of the local menu. For example, in areas where the majority of the customers are Muslims, pork is restricted from the menu, and where there are a lot of Indians, there is often the need to include a lot of vegetables.
Technological
The company's investment in innovation has helped it to enhance in the market especially with its new technique of internet based food-ordering among other advancements (Barwick, 2014).
Environmental
The fact that most of the food products offered by the organization are junky, various environmentalists criticize McDonald for releasing a lot of methane. Another concern that was experienced in Japan is the need to introduce whale burger, causing a heated debate based on the fact that the species is endangered.
Legal
The organization has to adhere to different taxation and employment requirements outlined in the various parts of the world, especially the ISO certification that is a requirement for its operation.
SWOT Analysis
Strengths
Strong global brand
It is important to appreciate the McDonald has strong brand recognition around the world and is renowned for its significant developments. Apparently, one of the aspects that the firm is recognized for is its consistency in the food so as to enable consumers to experience same taste irrespective of their location, where they take McDonald's meals. However, due to diversity issues, the business appreciates cultural diversity and, therefore, supplements its product line with demanded products based on the location of the restaurants. These among other significant issues have made the organization to become the world largest food restaurant (Mexico Food & Drink Report Q3, 2009.
Diversified income
The fact that the organization is a multinational corporation gives the company an advantage of generating more sales from across the globe, an aspect that offset the various restaurants in operation. The company does not have to rely on only one source of income as it can still generate more cash from the other restaurants situated in different parts of the world. The fact allows McDonald to experience stable cash flow and consistency in profit making, an aspect that allows for rapid development of the industry.
Weakness
Adverse publicity
Most people consider the nature of McDonald's meal unhealthy, a perception that has negatively affected the business growth in different parts of the world. It is important to appreciate that most of the meals offered by the restaurants have lots of fats and sugar, contributing to the high rate of obesity in the country (Mc Donald in Breach, 2015).
High employee turn-over
Apparently, although the organization employs a lot of people in the world, most of the positions require low skilled populaces and experience a low pay. The above issue has resulted in significant turn-over as people do not take the employment seriously.
Opportunities
As people become more health conscious across the globe, the company's fruit smoothies gain more appeal in the market as they are considered healthy. Moreover, the organization has considered introducing more products into the market, an aspect that will increase consumer loyalty to the company’s merchandise. Moreover, the plans to expand the organizational market share to different parts of the world will be an opportunity for the business to experienced more profits.
Threats
Competition
The fact that McDonald operates in various regions of the world makes it experience competition from a broad range of food products retailers concerning prices differentiation, variety, and convenience among other critical competency issues.
More health conscious consumers
With the high rate of obesity experienced in most parts of the world, it important to appreciate that consumer behavior is rapidly changing as most people consider taking a healthy diet. There is a sudden shift to organic food products, fruits, and vegetables not offered in most fast food organizations like McDonald (Harding, 2015).
Strategic Fit of the Market Opportunity to the Company’s Capabilities
As evidenced from the above environmental analysis of the company, it is justifiable that the sudden changes in demographics and socio-economic conditions give rise to opportunities that the business should capitalize on to experience significant growth. Moreover, the fact that there is increased money supply into the market and increase of the young generation, it will work to the benefit of the business. Moreover, based on the fact that college students are among the people who often take fast food, the organization should consider building more restaurants in such areas.
Conclusion
The fast food industry is rapidly growing based on the environmental analysis, an aspect that provides McDonald with an opportunity to expand its business share across the globe. However, although the company experiences a lot of competition from other established firms like Baristas, it can emerge as the market leader especially due to its competitive advantage in the market. It is worth concluding that one of the significant issues contributing to the development of the fast food industry is the increased demand for the readymade food rather than cooking.
References
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Dubuis, A. (2015, July 1). McDonald's launches all-day breakfasts to the delight of fast food fans: We’re one step closer to being able to get McDonalds breakfast 24-hours a day. Retrieved March 10, 2016, from World news, http://www.mirror.co.uk/news/world-news/mcdonalds-launches-all-day-breakfasts-delight-5979730
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