McDonald’s is one of the influential fast-food chains having the worldwide functions. McDonald’s is selected in order to assess its strategy in action. McDonald’s originated in the United States in the year 1940 and improved its functions which resulted in more than twenty-three thousand eating places which have a span of more than one-hundred and seventeen economies and the company’s recruitment is around four-hundred thousand individuals across the globe. McDonald’s remarkable development may be subject to numerous variables, excluding from its franchise model of expansion, which gained extensive appeal globally, an expansion model was significantly acknowledged through its numerous counterparts and adopters. McDonald’s promotion of franchises may be acknowledged through its model of executing six-thousand three-hundred and ninety-nine restaurants under its personal administration while considering the franchise model for twenty-six thousand three-hundred and thirty-eating outlets as uncovered in its 2010 report. The foundation of the Ford Motor organization was made by Henry Ford in the year 1903 at the Dearborn, Michigan, United States. Ford Motor acknowledged the unique business practices which were not very significant in that period. The automobile manufacturer is popular for its influential “Model T” and the peculiar novelty of interchangeable spare parts in carrying out production lines which makes it probable to assemble automobiles in appealing value along with extreme dependability. Ford Motor Company formed an appealing monetary track record while the twentieth era. The purpose of this report is to compare and contrast the different commercial strategies of McDonald’s and Ford Motor. The assessment of the strategies of independent companies is made through identifying strengths and weaknesses, the influencing factors for each segment, impact on strategy and the difference between them.
The strengths of McDonald’s involve the brand recognition and value that the company established over the periods. The McDonald’s human resource (HR) rules are few of the significant acknowledged and famous worldwide, a datum which is obvious through the exertions that McDonald’s undertook in delivering “exclusive options are considered for workers”, according to the declaration of Richard Floersch, who acted as the Executive Vice President and Chief HR Officer, on twin of its schemes that are expected to rejoice highest functioning McDonald’s workers and its global category counseling and human resource growth , on the event of London Olympics 2012. Separately from individual and brand, McDonald’s global distribution network and its dominance over the price and share of market are the strengths .
Weaknesses include deficiencies in delivering services and commitment of errors when it comes to customer fulfillment, as this is a sector that promotes rapidity and capacity. A further difference is related to the variation between customization and standardization which means to emphasize on the global marketplace and to aspire for standardization which refers to a confounding blend that needs to be substantial for a confusion to be administered. The plentiful charges that negatively impacted on the McDonald’s image and the tendency that heads towards favorable appetite tendencies in order to be stabled and shaped are variables that are not expected to improve enough with the McDonald’s philosophy of the product. Moreover, the extreme turnover tendencies of workers who are the trademarks segments of the fast food sector are factors that need to contribute in substantial botheration for the department of human resource.
The corporate structure of McDonald’s is dependent on the structure of geography. An individual is required to fill in the information pertaining to the selection of the country when it is logged in with him or her on the company’s website. Really, the division of McDonald’s functions is made into five geographical bases.
Figure 1: McDonald’s Geographical Division
The above-mentioned diagram shows that approximately sixty-five percent of McDonald’s restaurants and about seventy-five percent of its profits are made through Europe and United States. The highly significant strategic tool of McDonald’s in order to manage its leadership status is to retain their chief marketplaces at the similar period spanning their commercial activities into the extra appearing marketplaces. Nevertheless, varied clusters of consumers in multiple economies may possess quite varied preference of tastes and/or provisions. Therefore each comprehensive operational geography segment of McDonald’s needed to comprehensively address for manufacturing and promoting its goods in that zone. McDonald’s with the help of this regional structure may not solely fulfill the domestic requirements of its customers in varied geographical zones nevertheless as well seeking optimum domestic growth. Truly they develop and promote insignificantly multiple forms of products in varied zones, and they even retain dissimilar prices. According to Jim Skinner, who acted as the vice-chairman of McDonald’s declared that if one is engaged in searching for a command center while having a single push key that function McDonald’s outlets globally, it is certain that one would be unable to locate it. Nevertheless, McDonald’s service and value show similarity worldwide. McDonald’s is involved in focusing the comparable consumer sections that require instant service, effective benchmark hygiene, and inexpensive price. Hence the fundamental goods are same in numerous economies, where McDonald’s delivered services involving bread potatoes, beef, milk, and chicken. The consumers of diverse economies which keep distinguished meals provisions, McDonald’s equipped it to continuously induct innovative products for its regional consumers. For instance, the economies of France and China show the influential instances.
Impact on Strategy
McDonald’s in the year 1990 established its initial outlet in Shenzhen, China. Nevertheless, McDonald’s already executed a five – year corporate investigation and every aspect of information accumulation like the salary bracket of the Chinese employees and the sort of meals they have etc. before really initiating its trading activities. Furthermore, the renovation of McDonald’s in terms of design of its counter, desks, and chairs as well showed its emphasis on the body shape and height of the inhabitants in China. McDonald’s exerted extensively to market its American burgers and interested to establish the similarity influence in the market of China as it did previously somewhere else. Due to hard luck, McDonald’s was unable to emerge a successful company compared to KFC, which is the giant competitor in China. Numerous cases exist to explain the subject recent scenario, for instance, a significant problem which was discouraged by McDonald’s is the preference of Chinese individuals towards extended consumption of chicken instead of beef burgers, and they are the fundamental products of McDonald’s. Just after the investigation of this issue, McDonald’s attempted to familiarize with the advanced customers’ preference through incorporating extra chicken assortments into its menu for the purpose of appealing a significant amount of customers.
McDonald’s in France improved its sales revenue where consumers showed a resentful attitude of the fast-food meals invasion through remodeling its outlets including wood-beam ceilings, hardwood grounds, relaxed armchairs, and as well through incorporating innovative product additions in its menu like brioche, espresso, and extra fashionable sandwiches. McDonald’s in real terms favorably address to the provisions of the local zone . In contrast, the scenario in additional economies is similar, for example, McDonald’s in Canada launched different Canadian feature breakfast; the Mac-Chicken Premiere in the Belgium’s economy was incorporated into the list of McDonald’s products though the company was considered as the final instance of calibration globally.
There is a doubt in a statement that McDonald’s may invariably be the number one. The yearly customer fulfillment investigation revealed that McDonald’s has been able to achieve the last rank amid the fast-food diners since 1992. McDonald’s in the last quarter of 2002 uncovered its initial – ever quarterly unfavorable financial position, a single cause as to why McDonald’s made efforts and the customers started to purchase its competitors’ products including Subway, Burger King, and Wendy’s. These organizations promoted a different range of hotter, fresher, and extreme-quality products at an appealing price with instant service. McDonald’s in the year 2003 provided the Mac-Griddles sandwiches in the Canada feature breakfast and the United States and during the similar period, McDonald’s introduced zesty chicken and Mac-Chicken Premiere in Italy, United Kingdom, Belgium, and France. In sum, McDonald’s exerted good efforts to fulfill the demands of customers by offering premium range of products with appealing prices. Furthermore, McDonald’s differentiated itself through developing very pertinent engagements like enabling the consumers for internet access with an advanced technology platform which discourages wire, and this unique attempt has not solely appealed the teenagers nevertheless as well adequately addressed the provisions of contemporary professionals.
Ford Motor Commercial Strategies’ Analysis
Ford Motor is engaged in providing innovative technology and warning processes, including sole vendor model, virtual assembly-line, and the centralized worldwide management outline. The company is also committed to the environment-defense through creating technologies that discourage emissions. The frequency of technologies is reflected in the strategy of Ford Motor that the company utilizes the similar spares in its numerous models which are deemed as virtual assembly lines. Ford Motor is proficient in engineering and manufacturing employees having worldwide skills also the competencies of products’ localization in different economies. The advanced info competency and analytics of the worldwide marketplaces enabled Ford Motor to establish into an influential worldwide organization. Ford Motor has the strength to arrive in growing economies for instance India, Indonesia, etc. and to manage with independent economy’s domestic demographic situations. The company possessed appealing brand equity with bequest influences along with extreme extents of self-respect of its brand’s inheritance worldwide.
The strategy of Ford Motor is not attractive when it comes to withstanding against the Japan’s rivalry including Toyota. Ford Motor experienced dropout in its sales revenue as the company reported approximately 5 ½ billion dollar loss in the year 2001 compared to its competitor’s loss of 2 billion dollars of Jaguar and Land Rover and the adverse monetary situation continued for a couple of years. Ford Motor is unable to address prospects in insignificant and average segments where the existence of the automobile market is substantial. The company has incapacity to form sustainable marketplaces in extreme end automobile brands that promoted the sales revenue of Jaguar and Land Rover’s automobiles. Ford Motor is unable to manage its strengths in the domestic marketplaces of the United States, which ultimately diminishes the company’s control over prospects. Ford Motor unfortunately possesses no diversification as its whole corporate dealing is based on automobile production and procurement excluding Ford Finance which is not substantial to protect the Ford Motor through disorder. Ford Motor unluckily has no parent organization, therefore every liability of production or nonproduction rests with the company itself.
Ford Motor has the professional HR team who is engaged in administering worker associations and independent economies. The fundamental objective of the HR team is to induct, train, and retain professional workers, according to the provisions of the company. The company provides attractive golden handshake and health care advantages to their workers in every economy where its operations are. This attempt enabled Ford Motor to attain extreme levels of worker fulfillment. Furthermore, the company keeps an open worldwide strategic network that impacts the company to manage its business model by keeping in view the domestic factor situations including structure, conveyance, public rules, statues and principles, emolument/salary, healthcare amenities, provident funds, emission benchmarks, association with domestic financial institutions ; .
Impact on Strategy
According to an investigation of that organizations showing satisfaction in their attempts start to decrease their share of the market compared to their influence and active rivalries. The authors investigated that few sector dominators incline to corrode their personal appearance market with the help of developing novelties that execute a distinctive Schumpeter’s artistic devastation of their present shares of the market. It is established to fulfill that they strengthen their shares of market with contemporary novelties and enhanced customer importance before fresh rivalries employ and then execute it. A research of cited Lord Alex Trot-man, Ford Motor to show influential engagement through acknowledging this strategy in order to attain the vision of number one rank of Ford Motor globally. Nevertheless, Ford Motor was unable to address influentially the drop of the bargaining strength of its vendors that remained centralized extensible to advocate the company’s notion of interchangeable spares in open assembly lines. It seems that the notion of age old novelty of Ford Motor does not function for the vendors and it is evident that the company’s strategy of supply chain appeared quite expensive for vendors. The consideration of the worldwide market landscape of the automobile sector, the danger of innovative associates is at extreme as numerous extreme worth regional automobile producers throughout the world that are engaged in contacting innovative marketplaces globally. The singularities of the Japanese organizations contacting the marketplaces of the United States and allowing substantial periods to domestic actors, for instance Ford Motor is acknowledged through individuals throughout the globe.
Toyota Japan launched its alternative products in Europe, United Kingdom, and the United States and eroded Ford Motors’ shares of market as Toyota appeared influential and technologically oriented compared to Ford Motor in these marketplaces. The Tata Motor emerged an exclusive organization which is established enough to contact worldwide marketplaces and reflect dangers to the domestic market actors with its novelties for instance Tata Nano. The Tata Nano models of Tata Motor are able to diminish the domestic rivalry of price appealing automobiles in numerous promise which is subject to the management of engineering optimization which has been shown in the trial drives of the company automobiles. Tata Motor was successful in administering the bargaining strength of vendors with the help of influential practices of supply chain management in the back end and ultimately are able to provide implausible automobile price to its customers and did not concede vendors to locate any space for bargaining .
It is apparent from the debate that McDonald’s emphasized on the cost-dominant strategy to enjoy the sharing of market in an extremely competitive sector, and achieved its leadership rank in the marketplace through utilizing its franchise model of distribution and the strengths. McDonald’s utilized its strengths in benchmarking of functions, supply chain management, and through promotion of its brand. McDonald’s strategy needs to appeal extra target market, promote current clientele to arrive at the outlets of McDonald’s frequently, establish loyalty of brand, and eventually develop continuing profitable development for the organization. Michael Porter in the year 1980 declared the five forces that outline rivalry in the sector for any corporate company, including competition within present actors, dangers of innovative entrants, the bargaining strength of vendors and purchaser, and danger of alternative services or products. These strategies proposed by Michael Porter help in analyzing the competitive ranking of Ford Motor. The report discussed each of the mentioned strategies and associated them with Ford Motor. The investigator found that if any of the strategies are influential then it would be complex for Ford Motor to attain different competitive benefits and gain appealing revenues on investments.
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