What environmental trends have challenged McDonald’s?
The difficulties faced by McDonald’s in the late nineties can be explained by several trends. First of all, one should mention that at that time the fast-food industry became very saturated and the company had to face significant completion posed by other firms. Such businesses as Starbucks, Subway, and Costa Coffer expanded their fast-food chains and to some extent, they eroded the market share of McDonald’s (Jobber & Chadwick 2012, p. 297). Additionally, it should be noted many consumers became more aware of the dangers of fast-food, especially obesity (Jobber & Chadwick 2012, p. 298). Therefore, customers decided to change their eating habits and avoid going to McDonald’s. This was the main challenge faced by McDonald’s at that time. Thus, the profitability of this corporation declined and its corporate leaders had to develop new strategies.
What were the most important measures taken in the attempt by McDonald’s to reposition its brand?
On the whole, the management of McDonald’s succeeded in repositioning its brand. They included a variety of meals that could fit the needs of people who were more concerned about the health effects of food (Jobber & Chadwick 2012, p. 298). Moreover, they began to offer vegetarian meals. This is how they attempted to regain their competitive advantage. Their marketing campaigns were aimed at demonstrating that McDonald’s could offer healthy food to buyers. This is how this corporation repositioned its brand. As a result of these activities, the revenues of the company increased and its brand became more appealing to buyers who could purchase meals that conformed to their standards of a healthy lifestyle.
To what extent are the actions of McDonald’s likely to have an impact on its competitors?
The activities of McDonald’s are most likely to affect the strategies of their competitors such as Burger King, Kentucky Fried Chicken, and other businesses that operate in the United States and other countries. They have to find new ways of gaining a competitive advantage. First of all, these organizations are forced to differentiate their products and attract the attention of clients. For example, Burger King had to sell deluxe or premium burgers to buyers (Jobber & Chadwick 2012, p. 299). The management of these businesses understands that the increased revenues of McDonald’s mean that they are losing their customers (Jobber & Chadwick 2012, p. 299). So, the actions of McDonald’s produce significant effects on their competitors, especially if one is speaking about their financial performance. So, these companies have to change their strategies if they want to remain sustainable.
What are the challenges facing McDonald’s as it expands into emerging markets?
When McDonald’s enters a foreign market, this organization has to overcome several challenges. One of them is the necessity to adjust its menus to a particular cuisine. For instance, they can sell beer in the Czech Republic (Jobber & Chadwick 2012, p. 297). In this way, the management of McDonald’s strives to make it’s the brand more appealing to local clients. Apart from that, this corporation has to expand its supply chain. For example, they had to open a new plant in Russia so that they could grow their potatoes. So, one can say that this expansion into emerging markets requires significant investment. It is also possible to mention that the governments of foreign countries may have different policies regarding labor relations. These are the main problems that McDonald’s has to address when entering a foreign market.
References
Jobber, D. & Chadwick, E 2012, Principles and Practice of Marketing, McGraw-Hill Education, New York.