McDonald’s Marketing Entry
Use of franchise method while entering the market led to creation of proper business profile for years though people claim that other modes of market entry such as joint venture or Licensing Agreement would have worked better for McDonald’s. Application of a different mode of entry by the company would have changed the variables though they might also put the company at risk especially if its entering a new market. Joint ventures would have given neither the partners full performance incentive and probably this would not have given Ray Kroc an opportunity to develop effective marketing strategies which helped the company to grow and become successful in 1950’s. Joint venture also brings the risk of arising and potential conflicts between the partners and this can lead to withdrawals. As much as other modes of market entry could have been applied by the McDonald’s, franchise seemed as the best market entry during the time since it helped the company acquire a large market share globally. Use of licensing agreement can lead the company to certain risks such as lacking control over the operations and it is also a potential way of creating a competitor.
Though McDonald’s has been having market issues in some countries, it is still recognized as the world leader in fast foods. The Company’s SWOT analysis describes very well that it has a large market share which makes it gain a competitive edge against its competitors. The company’s success was also contributed by effective and proper management by leaders such as Ray Kroc, Fred Turner and Michael Quinlan who led to the wide global expansion of the company. This is an advantage that will definitely help in building an international brand and is also an advantage for McDonald’s till now since it created brand royalty to many. The Company also faces a threat of people claiming that it is contributing to obesity globally most especially in America. This is a clear disadvantage that will prevent the company from succeeding in building an international brand. So many welfare organizations and individuals have been on the Company’s case trying to negotiate for its closure. In certain cases McDonald’s reputation has been highly affected by certain attacks especially those of anti-globalization attacks in Seattle which led to financial crisis.
The top five McDonald’s opportunities I would recommend are, opening of online services for customers to order online, joint ventures with retailers who they work with, discounts on all their food items which will give them more customers, provide extra benefits to those around them since McDonald is known as a socially responsible firm and introduction of hamburgers which are more healthy and also healthy drinks especially for those people who seem to be health conscious. The rationale behind my conclusion is due to the improving technology and also in order to help improve the company’s image which has been highly affected. This mostly applies in areas of health where there arose claims concluding that McDonald’s has highly contributed towards increase of obesity and therefore for them to change the belief and increase sales healthy foods and drinks must be developed.
This will help enhance the market shares of the company and also reduce competition. Providing extra benefits will help improve the company’s image in the society and help in attraction of new customers and help in attracting back those who were taken by competitors. Health is the major issue which has affected the growth and financial problems in McDonald’s Company. Introduction of healthier foods will bring a new perception towards the public and this is a big opportunity to increase the company’s sales and acquire more new customers in the long run. The Company has an opportunity of going back to its leadership role in fast foods if they try to go along with the demands of the customers.
A.Pearce, J., & Jr, R. R. (2011). Strategic Management. New York: McGraw-Hill.