McDonald’s in relation to the market environment
McDonald’s has been a power house and a brand name recognized the world over. In the early 1990s it received a market scare with other companies emerging as potent competitors leading to a decline in its sales volumes and diminishing revenues. Burger King, Taco Bell and Wendy’s had been their main market rivals for a long time. Fast food chains Sonic and Ralls employed a simple strategy by targeting consumers whose needs were primarily to grab a quick simple burger and on the other side of the fast food market, the classy Olive Green and Taco Bell offered dinner menu services accommodating a larger clientele interested in quality fast food services. All this activity happened at a time when McDonald’s apart from trying to maintain its market share had to battle negative publicity from environmentalists campaigned against garbage generated by it restaurants on a daily basis (Barriaux, 2007). AT this point, the food chain decided to go green, partnering with the EDF (Environmental Defense Fund) to work hand in hand towards a cleaner environment through sustainable reforms in McDonalds operations (Nelson, 2010).
In a free market environment, competition serves to keep market players on their feet perpetually moving to the beat played by the market forces so as to move the masses. A proper and thorough understanding of the market forces is fundamental for survival and to stay ahead of the competition. This is two fold, which is to understand the consumers changing needs and the competitors next move and at the same time analyzing strengths to be capitalized upon and study and analyze on internal weaknesses to maximize on operations.
McDonald’s strengths give it a comparative advantage in its market environment with an unparalleled brand image, financial position, supply and demand correlation and is a market leader in the fast foods market segment. McDonalds enjoys a large global market share, with 30,000 branches operating in 120 countries. Revenues from McDonald’s food chains in developed countries Germany, Japan, Canada USA, the UK and France are at 80%. Quick delivery speeds, customer care and high quality standards are core competencies on which McDonald’s has thrived on. Very successful marketing campaigns have endowed McDonald’s with a superb brand image and dynamic corporate status with a logo which have combined to earn it a sizeable market share. With the appropriate knowledge of each of its many markets all over the world, McDonald’s has continuously made its customers be happy to associate with the McDonald’s symbol by gaining their trust and confidence.
By optimizing on internal resources, environmental friendly initiatives and shareholder value, McDonald’s has been able to capitalize on its overall product value.
Proper human resource management has been pivotal to greatly boosting employee morale and output and satisfied customers (Abdullah, 2009). Effectively planned research and development and Quality assurance had begun to lag behind as McDonalds sought to expand and target brand growth. This has also been appropriately remedied with improvements on communication, making comparisons with other market players through improved use of the latest I technology.
Demographic data, customer psychological and financial capabilities, associating with health conscious foods, are all projected in McDonald’s advertising campaigns targeting children and health conscious citizens (both young and old) and at the same time realizing the fact that these young children will be the future adults. A proper understanding of changing trends in the consumer requirement for each individual market environment has raised McDonald’s brand to iconic proportions (Abdullah, 2009).
External market weaknesses have also been analyzed adequately to understand consumer and government expectation of McDonald’s, Lawsuits and documentaries highlighting McDonald’s shortcomings have been quickly and effectively adhered to initiate environmental friendly programs and reformist agendas and a timely shift to production of health conscious products (Abdullah, 2009). Marketing campaigns targeting children were viewed adversely by the consumers which led to a shift towards appealing to teenage consumers this has led to an increase in revenues with young teens and adults dominating McDonald’s stores.
McDonald’s has lived through law suits and adverse publicity by listing to the consumers and granting them their wishes in a way that has enhanced market value and market share. His has been executed with a proper understanding of the marketing concept adequately matching the competencies of McDonald’s with the market requirements bearing in mind external and internal factors in the market environment. McDonalds has over the years viewed threats from other fast food market players, technological development, politically instigated changes and socio economic factors as effective challenges with which to better improve on its market share and consumer satisfaction and overall growth of McDonald’s as a corporation. They at McDonald’s understand that success is proportional to customer satisfaction to stay well ahead of the pack.
Quality, cleanliness and value have been related with McDonald’s for the last six decades and will propel them to an even greater future given that careful assessments of the market environments are done and appropriate measure taken to realign these changes within its operations.
Nelson, J, 2010 McDonald’s Case Study, Viewed 4 March 2011, http://home.comcast.net/~nelson1397/mcdonaldscase.htm
Abdullah, A, 2009 what are McDonald’s core competencies? Viewed 4 March 2011, http://www.maybenow.com/what-are-mcdonalds-core-competencies-q24006320
Marketing concept and orientation, tutor2u, viewed 4 March 2011,
The Ray Kroc Story, Our history, Viewed 4 March 2011,
Barriaux, M, 2007, McDonald’s goes green – but not all customers are lovin’ it, The Guardian, Viewed 4 March 2011, http://www.guardian.co.uk/business/2007/jul/05/lifeandhealth.consumerandethicalliving