Marketing Management 1

Marketing Management Of McDonald

Marketing Management 2

Introduction
Marketing is considered as the process through which companies strive to determine that which of its products and services would be of interest to its customers, thereby deciding upon the strategy to be used for its sales, how to communicate the product to its prospective customers and target market and business development. The paper analyzes the marketing techniques of McDonalds. It used various marketing and strategy tools like SWOT, 7Ps, Porters five forces, Pestle, and external analysis for analyzing the business and products of McDonalds.

Company Profile
McDonalds U.K. was founded in the year 1973 in the name of McDonalds Golden Arches Restaurants Limited. It started as a joint venture between the McDonalds corporation and two businessmen, a British and an American (McDonalds in U.K., 2007). The company is into franchising and oprating of McDonalds resturants offering its customers with different food items, soft dirinks, different types of coffee, as well as beverages (McDonalds Annual Report , 2010). The company operated in approximately 34,300 resturants within 120 nations as of 2010.

Environmental Analysis
The environmental analysis of a company decides upon the internal and external environment it operates in. The external environment of a company consists of the macro environment and industry environment in which a company operates.

Internal Analysis
The internal analysis of fast food restaurant businesses will analyze how companies operating in this business are performing. Product The product of McDonalds is the fast food servings in its restaurants. It includes Burgers, Pizzas, and Beverages to name a few (McDonalds Annual Report , 2010). Price McDonalds is known to offer its products at a cheaper rate to add more value proposition to its customers. Place The company operated in approximately 34,300 resturants within 120 nations as of 2010 (McDonalds Annual Report , 2010).

Marketing Management 3 Promotion The company used advertising and sales promotion as a primary technique for promoting its operating. Advertising mediums used by the company are mainly Television, social networking websites and Print media and sales promotion initiatives are launched online and physically by distributing coupons and gifts. Process The process in which a firm delivers products forms an integral component of customer loyalty. The company maintains an effective supply chain which helps the flow of visibility and information along the system. Physical Environment The company is known to provide excellent ambiance and restaurant environment to its customers. This helps the company in building better customer relationships. People The company is highly dedicated to its employees in terms of providing training, motivating and rewarding for good work. The employees of MCD are always expected to perform best job to serve their customers.

External Analysis
PESTEL Analysis
PESTEL analysis is an external analysis of political, economic, social, technological, economic and legal factors affecting the environment of the company. This is analyzed as follows: Political Political risks are considered high in the restaurant industry as the company has to undergo various quality norms and checks in terms of foods and failing so can lead to severe and material impact on the business of the company (McDonalds Annual Report , 2010). Economic MCD is incorporated in the United States through the macro-economic forces of the country has little effect on society. MCD is a food restaurant based company, where factors such as inflation bear an influential impact on the growth of the company (McDonalds food chain, 2000).

Marketing Management 4 Social McDonalds take high care of the social environment wherein it is operating. Offering the least expensive burger in the world has not been easy. In addition, all vegetarian, even mayonnaise vegetable village was eggless and 100% vegetarian. Technological Advancement of technology has a high impact on the business of McDonalds. It can be seen from the fact that the companys employs ERP technology and also have maintained an effective supply chain which helps its support the material and informational visibility flow across different levels (McDonalds food chain, 2000). Environmental The environmental laws in the US are regulated by the EPA and the company has never failed the compliance of any environmental or has not faced investigation from the regulating authorities in regard to such matter. Legal Legality has a high impact on the operation of McDonalds and other companies operating in the same industry. McDonalds has also undergone a case of classic coffee split where the company had to pay huge amount to the customer.

Porters five forces analysis

Five forces analysis analyzes five forces impacting the growth and environment of the company giving due consideration to the industry it operates in. Five force analysis for McDonalds in explained follows: Bargaining Power of Suppliers This explains how the organization has impacted the bargaining power of its suppliers. Supplier of McDonalds has less of bargaining power due to the big size of the company. Bargaining Power of Customers Bargaining power of customers with McDonalds is low but certain and effective. This is due to the fact the rapid shift in customers can lead to the change in prices and products by the company (McDonalds in U.K., 2007).

Marketing Management 5 Threat of New Entrants Threat of new entreats in short term cannot effect the competitive positioning of McDonalds in this industry. This threat can only have a high and material impact on the company within the long term. Threat of Substitute Products As MCD specializes in Burgers, Coffee and certain other snacks, substitute products like pizzas, pastas, garlic breads, and many other regional products can certainly eat into the market share of the company. Competitive Rivalry within the industry Competitive rivalry in the fast food restaurant industry is increasing day by day. Companies like YUM Brands, Subway, Burger King and Dominos adds a high rivalry in this industry (chain, 2000).

SWOT Analysis
SWOT analysis is the strength, weakness, opportunities and threats analysis of McDonalds. This is does as follows:

Strengths
One of the primary strength of the company is its global presence. Another strength of the company is its strong brand and value proposition among its customers. Therefore, franchise business model of the company acts as a major source of strength for McDonalds. Cheap prices, good quality food and best class services adds to to the value proposition of the company among its customers.

Weaknesses
Legal matters arising from certain inefficiencies in the quality control acts as a major weakness for the company. Another weakness of the company is its material weaknesses in the internal controls. Innovate in terms of products and customer services have also acted as a weakness of the company.

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Opportunities
The market for McDonalds seems to be saturated in the developed countries of US and UK due to the high presence of brand. So the major opportunity for MCD as of now lies in the emerging countries of Asia.

Threats
Increasing competition in the food business acts as a major source of threat for the company. The competition is rising from other companies like Dominos, Pizza Hut, KFC, Burger King and many others.

Prioritize Strategic Action

The competition is rising from other companies like Dominos, Pizza Hut, KFC, Burger King and many others. The company has been generating high profits due to strength in the supply chain. Stability and reliebility in its operational cash flow has been another source of strength for the company and it is required to operate on the same path for generating these cash flows. Improvements with changing technology especially within its supply chain are highly recommended for the company. Focus of management and financial resources on its restaurant business reaps significant opportunities for the company. The market for McDonalds seems to be saturated in the developed countries of US and UK due to the high presence of brand. So the major opportunity for MCD as of now lies in the emerging countries of Asia.

Conclusion
The paper analyzed the marketing techniques of McDonalds. It used various marketing and strategy tools like SWOT, 7Ps, Porters five forces, Pestle, and external analysis for analyzing the business and products of McDonalds. Macdonald is one of the rare organization that succeed to balance between its operation strategic and customer demands, McDonald combined orderwinning and qualifying factors, in terms of order-winning which refer to the customer as key reason of purchasing the product or service. It can be concluded from the analysis that the company needs some innovative capabilities to maintain its aggressive growth rate.

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References
McDonalds Annual Report . (2010). Retrieved June 28th, 2012, from http://legacy.10kwizard.com: http://legacy.10kwizard.com/files_side.php?sym=MCD&cnn_opt=2&cd_items_opt[]=1&fg[]=3 &smonth=6&sday=14&syear=2010&emonth=6&eday=14&eyear=2011&g=11517935654df746 393363f&main_spage=a McDonalds food chain. (2000). Retrieved June 28th, 2012, from www.icmrindia.org: http://www.icmrindia.org/free%20resources/casestudies/mcdonald%20food%20chain.htm McDonalds in U.K. (2007). Retrieved June 28th, 2012, from http://

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