This report is based on an evaluation and selection of differentiation as a strategy that McDonald’s should pursue in order to realise growth and competitive advantage in the fast food industry.
As the business environment changes, businesses are forced to change their strategies in an attempt to adapt to the changing environment neither as a means of survival, or in order to prosper. In such a case, determining the strategic position of a firm is crucial. Johnson, Scholes and Whittington define strategy as “the direction and scope of an organisation over the long term, which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations”.
The three key generic strategies that a business can use are: differentiation, focus, and cost leadership. McDonald’s is a leading multinational player in the fast foods industry that is famous for providing basic fast-food items at low cost. The firm has been very successful in implementing this strategy by taking advantage of its high bargaining power to acquire raw materials cheaply thus passing the benefits of costs savings to the end-consumer. While this strategy worked during the introductory phase of the company's business operations, McDonald’s has now been forced to pursue a growth strategy by ensuring quality and product differentiation.
Table of Contents
- Introduction
- MacDonald's Macro environment
- PESTLE analysis
- Suitability of Strategy: MacDonald's Micro environment
- Porter's Five Forces
- SWOT Analysis
- TOWS Matrix
Objectives and Key Themes
This report assesses the strategic position of McDonald's and analyzes the feasibility of a differentiation strategy for the fast-food giant. It aims to determine how differentiation can help McDonald's achieve growth and competitive advantage in the industry.
- The changing business environment and its impact on strategic positioning.
- The application of Porter's Five Forces framework to analyze McDonald's micro-environment.
- The use of a SWOT analysis to identify McDonald's strengths, weaknesses, opportunities, and threats.
- An evaluation of the TOWS matrix as a strategic planning tool.
- The suitability of differentiation as a growth strategy for McDonald's.
Chapter Summaries
The introduction outlines the importance of strategic positioning and the three key generic strategies available to businesses. It highlights McDonald's previous success with cost leadership and the need for a growth strategy based on differentiation.
The chapter on McDonald's macro environment analyzes the political, economic, social-cultural, technological, environmental, and legal factors affecting the fast-food industry. The PESTLE analysis provides a comprehensive overview of these external factors.
The chapter focusing on McDonald's micro-environment examines the five competitive forces identified by Porter, including rivalry among competitors, buyer bargaining power, threat of substitutes, threat of new entrants, and supplier bargaining power. The analysis explores the specific implications of each force for McDonald's.
The SWOT analysis chapter identifies McDonald's strengths, weaknesses, opportunities, and threats. This analysis provides valuable insights into the company's internal capabilities and external environment.
Finally, the TOWS matrix chapter examines the implications of McDonald's strengths and weaknesses in light of external opportunities and threats. This framework provides a strategic planning tool to guide decision-making.
Keywords
This report focuses on strategic management, competitive advantage, differentiation strategy, PESTLE analysis, Porter's Five Forces, SWOT analysis, TOWS matrix, fast food industry, McDonald's, growth, and competitive advantage.
- Quote paper
- Apakshit Sachdeva (Author), 2015, Evaluation and selection of differentiation as a strategy for McDonald’s, Munich, GRIN Verlag, https://www.grin.com/document/337921
