Question one: From a resource-based view, analyze and assess the unique resources and capabilities that contribute to McDonald’s success in the international market?
McDonald’s strategy focuses on matching the company’s resources and capabilities with the external environment’s opportunities. Generally, McDonald’s resources and capabilities are its strategy which enables it to thrive in the international market. Moreover, McDonald’s resources and capabilities give the company a competitive advantage. Some of the McDonald’s unique resources and capabilities that provide the firm with a competitive advantage includes;
Brand Image
McDonald’s popularity is a great resource. The firm is well known in the global market covering many countries globally. The company’s well-established trust level informs McDonald’s high brand image among the customers globally. McDonald’s is a widely known name, and this has created a high brand image. Brand image is vital in marketing and sales in that a sharp brand image translates to higher sales and thus profits. Globally, McDonald is known as the leading fast-food brand, and therefore, this informs the company’s competitive advantage.
Large Coverage
McDonald’s global presence is an excellent capability. The fast-food company is present in more than 100 countries as the company’s restaurants and through franchised restaurants. In 2017, McDonald had 37,241 restaurants, of which 34,108 of them were franchised restaurants while 3133 of them were owned and ran by the fast-food company.
Innovation
McDonald competitive advantage is attributed to the company’s innovative menu. The menu is very diverse, including Hamburgers and Cheeseburgers, Filet-O-Fish, Chicken McNuggets, wraps, Quarter Pounder with Cheese, Shakes, Salads, McFlurry desserts, soft serve cones, pies, coffee, McCafe among other foodstuffs. According to the McDonald Annual Report of 2017, McDonald restaurants engage in the selling of various products during limited-time promotions.
Customer Service
One of the most significant concerns of McDonald’s is quality service to its customers. This strength enables the company to retain and attract new customers. McDonald’s staff is a great resource, and in addition to various technologies employed by the company, customers are well engaged and served.
Exceptional Supply Chain Management
A robust supply chain management is one of McDonald’s great resources. Sources of raw materials for the company are sourced from global suppliers. Quality teams ensure that standards are maintained throughout the supply chain. Quality centers enable McDonald to acquire quality raw materials.
Question 2: Analyze the international business strategies used by McDonald using the integration-responsiveness framework. How does McDonald react to the pressures in cost reduction and local responsiveness?
In the wake of free markets, trade, and investment freedom, international markets are highly competitive. In response to the competitive nature of global markets, McDonald’s adopts a unique international strategy. McDonald’s adopts the international strategy in an attempt to create value through the transfer of its core competencies to foreign courtiers. McDonald’s international strategy derails in the franchisee system, maintaining an influential culture through laying all critical decisions in the centralized control of the head office. McDonald’s structure, outlook, service system, environment, and brands are almost similar across all franchised restaurants globally. Generally, the company has nearly the same organizational culture. Mostly, all the operating decisions are shifted to the company’s regional offices and, in some cases, to franchisees. The franchisees are less independent.
Other emergent strategies of McDonald include;
The Planned Strategy
McDonald’s ensures a stable, uniform, and a controllable environment free from external disturbances. This strategy aims to expand McDonald’s by speedy selling of quality and a reasonable amount of products. The company can maintain and open new businesses in other countries concurrently. The self-service technique aims to reduce the time spent in service.
The ideological strategy
The company’s key to success is the “think global and act local” strategy. McDonald’s focuses on the needs of the customers. The company’s mission is “customers’ favorite place and way to eat.”
Entrepreneurial Strategy
McDonald’s strategy changes from one country to another, and a top-level manager sets the company’s visions within the ventured market. Consumption habits are critical to the company, and this strategy enables the company to meet local demands based on customs and cultures.
How McDonald React to Pressures in Cost Reduction
Through leveraging, McDonald has been able to reduce costs. For instance, to get into other food businesses, McDonald’s company acquires significant shares in well-established food enterprises, which enables the company to diversify its core business, which is in the burger.
How McDonald React to Local Responsiveness
MacDonald is much sensitive to country-specific culture, languages, and traditions in its services. The company’s brands consider the customs of each region.