Strategy Management at McDonald's
Company: McDonalds
The McDonalds Corporation is the largest hamburger fast food chain in the world. It serves around 68 million customers daily in 119 countries. The company’s headquarters is in USA. The company has expanded its business across the globe through franchisee and affiliations and company owned outlets. McDonald’s revenue is not just from sales of the fast food but also royalties and rents i.e the company has many sources of other incomes as well. The company very well understands the changing customers need and accordingly alters its menu. To enter the Indian market McDonalds completely changed its menu to suit the Indian taste buds and has been very successful.
The company follows a low cost leadership strategy and thus is able to deliver a low cost happy meal. The company provides good quality fast food at very low prices that competitors find it very difficult to match. The company is able to deliver its products at low prices because firstly they have vertical integration for few of its raw materials plus they buy other ingredients in bulk which lets them take the advantage of economies of scale , secondly they employee people with just basic educational qualification as mostly everything is machine operated the art of cooking is not needed. Thus the employees cost is also low. McDonalds also has its own institute called the Hamburger institute where it trains employees. Since the employees are trained especially for the company operations they become more efficient and the advantage of learning curve also comes into the picture. The company also follows an ethnocentric mentality where it sources all its raw material from the country where its outlet is operating which also reduces the cost.
The company is able to achieve these low cost by having an appropriate control system. This control system has to be followed by all the outlets. The company follows a control measure called strategic thrusts. Here they calculate all the
The McDonalds Corporation is the largest hamburger fast food chain in the world. It serves around 68 million customers daily in 119 countries. The company’s headquarters is in USA. The company has expanded its business across the globe through franchisee and affiliations and company owned outlets. McDonald’s revenue is not just from sales of the fast food but also royalties and rents i.e the company has many sources of other incomes as well. The company very well understands the changing customers need and accordingly alters its menu. To enter the Indian market McDonalds completely changed its menu to suit the Indian taste buds and has been very successful.
The company follows a low cost leadership strategy and thus is able to deliver a low cost happy meal. The company provides good quality fast food at very low prices that competitors find it very difficult to match. The company is able to deliver its products at low prices because firstly they have vertical integration for few of its raw materials plus they buy other ingredients in bulk which lets them take the advantage of economies of scale , secondly they employee people with just basic educational qualification as mostly everything is machine operated the art of cooking is not needed. Thus the employees cost is also low. McDonalds also has its own institute called the Hamburger institute where it trains employees. Since the employees are trained especially for the company operations they become more efficient and the advantage of learning curve also comes into the picture. The company also follows an ethnocentric mentality where it sources all its raw material from the country where its outlet is operating which also reduces the cost.
The company is able to achieve these low cost by having an appropriate control system. This control system has to be followed by all the outlets. The company follows a control measure called strategic thrusts. Here they calculate all the
Citations: 1. "Implementing a Successful Business Strategy for McDonalds." Implementing a Successful Business Strategy for McDonalds. N.p., n.d. Web. 18 Aug. 2014. 2. "Functional Tactics & Implementation." OnStrategy. N.p., n.d. Web. 18 Aug. 2014. http://onstrategyhq.com/resources/functional-tactics-implementation/ 3. "McDonald 's Control System." King of Fast Food. N.p., n.d. Web. 18 Aug. 2014. .