Introduction
The main goal of the McDonald’s fast-food cafe is to provide high-quality catering services to customers with medium and low incomes, taking into account diversity. At the same time, modern society’s size, scale, and complexity are such that there is a demand for services and loyalty related to the differences between cultures and taking them into account in their work (Chandra, 2019). The goal of McDonald’s is to focus on the polyethnic, polyreligious, and, accordingly, multicultural features of the client communities, each of which is distinguished by its unique material and spiritual culture.
The current strategy of McDonald’s to achieve that goal is to combine several cultural trends in a fast-food cafe. The restaurant offers its customers both a traditional American menu and exotic dishes of the cuisine of the country in which the branch of the institution is located. In addition, part of the strategy is to consider the environmental and social problems that McDonald’s focuses on during advertising campaigns, promotions, special offers, and charity collections (Abdelali & Ngah, 2019). Thus, the strategy allows the company’s owners to expect to reach the growing and multinational population of various ethnic regions by offering them authentic national food.
Internal Environment: VRIN Analysis
Value
The sources of competitive advantage and the main value of a fast-food restaurant are taking into account the cultural characteristics of the country where its branch is located. Unlike most competitors, the range of restaurants includes not only hamburgers, sandwiches, French fries, desserts, and drinks. The advantages of the company, based on its values, reflect the cultural and national specifics of customers in the menu. For example, this is why the Muslim branches of McDonald’s have a halal menu, and the Indian ones have a spicy one (Rothaermel & Kim, 2019). Taking into account the characteristics and preferences of the population of different ethnicities is a fast-food restaurant’s main value, distinguishing it from its competitors.
Rareness
The rareness lies in the fact that various promotions apply to the national special menu, which makes it profitable for customers. Most often, competitive fast-food chains are limited to a standard set of promotions for all branches that do not differ from region to region. Even if competitors include elements of national cuisine in the menu of fast-food cafes, it is always profitable to buy them because special promotions rarely apply to them (Mozammel, 2019). At McDonald’s, special offers are developed separately for each country and region, which is rare.
Imitability
An ideal resource that computing business cannot obtain is close cooperation with branches in other countries for cooperation. It also allows the creation of special promotions and offers for representatives of minorities who are expats in a particular country (Tien et al., 2020). Competitors usually consider only regional specifics since cooperation with branches in other countries is expensive and time-consuming in terms of logistics. However, McDonald’s can gain this cooperation due to the large number of fillets closely related to each other.
Non-Substitutable
An ideal resource that any other resource cannot substitute is secret recipes that give McDonald’s dishes uniqueness. For example, these are characteristic sauces or burger patties that differ from competitors in taste and are the hallmark of McDonald’s (Song et al., 2019). Many customers prefer this fast-food restaurant precisely because of the taste of food that compares favorably with competitors, so recipes are an indispensable resource.
The first core competence of McDonald’s is technology; due to proper organization, the process of ordering and cooking fast food is brought to maximum automatism. Cooking is a complex task; it is necessary to ensure maximum manufacturability of the product in the existing technical conditions in the kitchen (Poluan et al., 2018). This McDonald’s core competency acts as a foundation for its success in the fast-food industry as it allows it to optimize the costs of material and labor resources at all stages of the production of dishes.
The second core competence of McDonald’s is customer orientation; employees and management of the company can identify the needs and desires of customers in time to satisfy them with maximum benefit. A fast-food restaurant is also customer-centric: the company first receives customer feedback and then creates a product according to their preferences (Ashenfelter & Jurajda, 2022). Customer feedback, which comes from various sources such as reviews, communication with support, or brand mentions in social networks, is necessarily considered. McDonald’s is able to compete in the fast-food industry because to its fundamental competency, which leads to ongoing efforts to improve the quality of its products and services and enable prompt responses to shifts in the market.
The third core competence of McDonald’s is high product quality. The company cooperates with local suppliers, purchasing a high-quality farm product (Grant et al., 2021). This core competence is critical for McDonald’s to succeed in the fast-food industry, as high food quality affects the popularity of a fast-food restaurant and the customer’s desire to purchase and consume fast food again.
External Environment: PESTEL Analysis
Political Factors
Introducing new regional educational support programs for small businesses is a political factor that positively affects McDonald’s activities. For example, they include training conferences with franchise owners. The government’s support for medium and small businesses and the adoption of laws providing benefits for producers of this type of services can also benefit the company’s activities (Onyusheva & Salim, 2022). The tightening of sanitary standards for food outlets may have a negative impact, which will entail the need to reorganize the work. Political factors such as elections at any level of government, changes in legislation on the organization of fast food, or the customs code can have both a beneficial and negative impact on the activities of McDonald’s.
Economic Factors
Among the economic factors that will benefit McDonald’s activities are tax incentives for small businesses, the growth of the dollar, and a decrease in the inflation rate. Among the negative economic factors are the global financial crisis and the unemployment rate (Hourigan, 2020). Depending on the economic situation, McDonald’s may be influenced by rent, taxation, and the overall level of economic development of the region where the fast-food restaurant branch is located.
Social Factors
The social factors that affect McDonald’s are, first of all, the growth of the pace of life. On the one hand, this increases the role of fast-food outlets, which brings new customers, and on the other hand, new cafes are opening in connection with these, which are potential competitors of McDonald’s (Lyashenko et al., 2022). Social factors such as improving the population’s living standards and, accordingly, the growth of the middle class, which is the main segment of McDonald’s consumers, also affect company activities.
Technological Factors
Technological factors are crucial since the speed of improvement and implementation of digital tools is extremely high. Those technologies that are currently only at the development stage will change shortly. If McDonald’s does not consider this aspect, the company may become obsolete and be forced out of the market (Chandra, 2019). Therefore, factors such as the development and automation of technologies used in cooking and customer service have a strong impact on McDonald’s activities.
Environmental Factors
Elements directly or indirectly related to the environment are also currently becoming important. Environmental factors have come to the fore only relatively recently. They are important to McDonald’s because of the growing shortage of raw materials and pollution targets set by governments. In addition, due to the growing trend of paying attention to the ecology of McDonald’s, it is necessary to adapt production technologies (Hourigan, 2020). Trends in policy changes in the direction of ecology, standards, and the relationship between society and the target audience affect the medium-term perspective of the company.
Legal Factors
Aspects related to the obligation to comply with established laws and regulations also affect the activities of McDonald’s. It is necessary to monitor any changes in legislation and what impact this may have on the business operations of a fast-food restaurant. Such legal factors for McDonald’s include labor law, consumer law, health and safety, international, trade regulation and restrictions (Onyusheva & Salim, 2022). Since fast food cafes trade worldwide, the process becomes especially difficult since each country has its own set of rules and regulations.
The primary external factor that is expected to significantly influence McDonald’s ability to maintain its competitive edge is the environmental aspects of climate change. Its aspects include environmental impacts such as climate and weather change, which may particularly affect industries such as tourism and agriculture. Tourists make up one of the major customer segments of McDonald’s, and the state of agriculture affects the quality of dishes in fast-food restaurants (Abdelali & Ngah, 2019). Therefore, the company is becoming increasingly involved in practices such as corporate social responsibility and environmental sustainability.
The second trend in the external environment likely to impact McDonald’s ability to stay ahead of the competition is the trend toward automation. Currently, the pace of technological innovation and development that affects the fast-food industry is extremely high. Changes in digital or mobile technologies, automation, research, and development can give competitors a significant advantage (Rothaermel & Kim, 2019). The tendency to focus on developments only in digital technologies is not enough. It is also necessary to consider new distribution, production, and logistics methods.
Strategic Analysis
The advantages of selecting ‘franchising’ as a vehicle to grow McDonald’s consisted of earning royalties. By using this strategy, McDonald’s had the opportunity to monetize its intellectual property and save on opening new outlets, as franchisees take on most of the opening costs. With the help of franchising, the fast-food restaurant has developed its network faster than if it had opened its own branches (Tien et al., 2020). It increased brand awareness due to the rapid growth of the network and improved his business model due to the experience of franchisees, especially in other regions and cities with smaller or larger populations.
Franchising has served McDonald’s well in its strategy, so the company has the opportunity to give franchisees advice on how to do business. Thus, it was possible to preserve the values of the fast-food restaurant and its corporate strategy (Lyashenko et al., 2022). In addition, McDonald’s, as a franchisor, already has a ready-made list of counterparties from whom it is necessary to purchase equipment and semi-finished products for the entire network. This guarantees quality control in all branches of the fast-food restaurant.
Key Issues
However, there are possible weaknesses of franchising for McDonald’s in tackling current challenges. In particular, this is the loss of exclusivity: a fast-food restaurant shares its intellectual property with each franchisee, and it becomes increasingly difficult for him to track the dissemination of information (Song et al., 2019). It is quite possible that some exclusive information will be publicly available without McDonald’s knowledge, and it will be difficult to find the culprit in the data leak.
Conclusion and Recommendations
To improve its strategy and achieve its goal, McDonald’s must apply a long-term strategy of marketing promotion. Photogenic room design and interesting decoration of dishes should be displayed in greater quantity and volume on various social networks, as they are actively used by the target audience. This will significantly reduce the risks of loss of exclusivity, as customers will have a clearer association of certain aspects of the company with a personal brand. The use of new marketing tools will allow us to analyze competitors and identify technological gaps in time. In addition, the new marketing strategy will make it possible to actively pursue a policy of environmental protection, which is one of the factors affecting the company’s activities.
References
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