The food and beverage sector is one of the most competitive businesses and as such, new restaurants are being set up on a daily basis. Companies involved in these sectors, therefore, have to plan strategically so that they can maintain their current customers and increase their daily sales. The rival companies have to constantly advertise their products so as to enhance their product quality and create new markets to achieve high returns.
McDonald’s still remains the leading food chain operator in the whole world and its bitter rival; Burger King Holdings have resorted towards the same strategy so that they cope with the competition (McDonald’s, 2010). McDonald’s has achieved success over the years because of its utilization of the franchise business model since 92% of its stock value is attributed to the contribution of its franchised stores while the other percentage comes from its own stores. McDonald’s strategic plan is to win by being the best food restaurant. The company has achieved great success because of its improved customer service since they ensure that their system is comprised of the best employees and franchisees. Due to increased earnings, the company has been able to pay shareholders more than $ 5billion in dividends.
McDonald’s further seeks to expand its market to many parts of the world through the creation of about 2000 stores in China by the end of 2013. It has also penetrated through the Indian and Russian markets and its major aim is to be better than all of its competitors. To realize this goal, McDonald’s provides its customers with a variety of foods to choose from, created ample environments and improved its operations. It also intends to extend the working hours so that breakfast and late-night meals can be offered. By so doing, they will optimize their efficiency and increase their returns. The company intends to introduce into its market cappuccinos, espresso and specialty coffee drinks (McDonald’s, 2009). The well-established chain of McDonald’s enables it to get its ingredients at reduced prices and therefore this gives it an advantage over its competitors. The increased consumer base of the company is attributed to its strategic marketing plan. Their marketing campaigns also include the kids and their brand name of “I’m loving it’ has deepened affection with its customers. The company meets the needs of each consumer needs like for instance exclusion of hamburgers from Indian restaurants because of the belief that animals are sacred (Associated press, 2009).
Because of the saturation of the food industry, many companies are aiming at attracting new customers and maintaining the old ones since the lack of extensive promotions and marketing may make the customers shift bases. The CEO of McDonald’s should therefore invest in extensive advertising so that the products of his company reach the market. The CEO should counter the criticisms regarding the effects of McDonald’s food on human healthy by making sure that their menus promote healthy nutrition.
Based on my analysis, McDonald’s is not pursuing an effective strategy and therefore, the Chief Executive Officer of McDonald’s should promote consumer education so that the consumers cannot fall victim to the negative publicity being spread by its competitors. The continued negative publicity from McDonald’s competitors will result in reduced demand for their products and therefore lead to lower sales and income. In addition, the CEO should make quality service and deliverance priorities since this will ensure that their services are at par with the modern consumer needs.
Associated Press. (2009). Coffee Clash at McDonald’s. Morningstar Inc. Web.
McDonald’s. McDonald’s Annual Report 2008. Web.
McDonald’s (2010). It is all About Delicious Choices. Web.