Competitive Factors of McDonalds UK - Case Study Example

Business Introduction The study is based on the analysis of the competitive factors of McDonald’s restaurant in the UK. It is a largest fast food chain restaurant serving near about 68 million consumers across 119 countries. They have almost 35,000 outlets worldwide. This organisation is established in the year of 1940 by Maurice and Richard McDonald and it is headquartered in Illinois, US. The product category of McDonald includes hamburgers, French fries, breakfast items and milkshakes. The organisation has a huge number of competitors in the market such as Burger King, Dominos, KFC, Pizza Hut and Subway (McDonalds, 2015). These organisations possess certain uniqueness which helps them to create competitive advantages in the market. The study has also evaluated the differences in the competitive factors of McDonald’s with two major competitors such as KFC and Subway. KFC is also a well-known fast food chain which is specialized in fried chicken items. It was founded in the year of 1930 by Harland Sanders. It is headquartered in Kentucky, USA. This organisation has its presence in 118 countries through 18,875 outlets (Marketline, 2013). On the other hand, Subway has positioned its business in almost 108 countries across the globe through 43,035 outlets. The product chain of this organisation is specialized in salads and submarine sandwiches. Subway was established by Peter Buck and Fred DeLuca in the year of 1965 and it is headquartered in Connecticut, US (Franchise update media group, 2015). Finally the report has described the influence of these competitive factors in the structural and infrastructural decision of their operational strategy. Competitive factors of McDonald’s UK McDonald’s had launched its first outlet in the UK in the year of 1974. From the beginning of their business in the UK they have maintained profitability by serving their traditional menu to the customers (McDonalds, 2015). Their major success factor in the UK is their uncompromising standard of consistency. Other competitive factors include their willingness to adopt aggressive business goal, valuing approach toward customers and pricing strategy (McDonald’s corporation, 2008). Uncompromising standard of consistency The most influential factor for the successful execution of McDonald’s initial set up in the UK is their extreme commitment towards their targeted standard of consistency. Their motto of successful business is continuous maintenance of the standard of product quality, service, values and cleanliness. The cleanliness standards of McDonald outlets need no explanation (McDonald’s corporation, 2008). The organisation has increased the nutritional value of their menu by adding low fat foods. They have maintained standard of nutritional food throughout all the outlets in the UK. They have standardised the product and service quality of all the outlets worldwide. These efforts towards efficiency have also provided help to the organisation to stay on top (McDonalds, 2015). Aggressive business goal McDonald’s is very committed towards building the strongest and superior operation firm throughout the UK market. The organisation has witnessed several successful events since the last few years. Their major business goal is to deliver excellent services to all the customers in each of their restaurants. To achieve their business goals and keep up with the growth of their business, they have decided to increase their operation in the UK by opening 40 new restaurants by the end of the year. They are also focused to create near about 2,400 job vacancies only in the UK (McDonald’s corporation, 2008). Every level of employees of the organisation has been rigorously trained to love their customers and to provide the best possible services. Their aggressive business goals ensure that all the business operations are providing benefit to the customers as well as the organisation. It also ensures their employee satisfaction (McDonald’s corporation, 2008). Willingness to adopt The success of this business is hugely dependent on their willingness and capability to adopt the requirements and demands of the customers. McDonald is the first franchise business who has included nutritional information and food value to their menu. They have also offered healthy foods and salads to their consumers (UKessays, 2015a). The organisation has maintained a global standard of their product, services and quality but on the same time they have customised their menu as per the preference and food habit of the local community (McDonald’s corporation, 2008). They have re-launched McRIB and introduced “Free Fruit Friday” as per the preference of the UK customers. The organisation believes in reducing food waste and they have introduced improved ordering system and stock control programs to closely monitor their production method (McDonalds, 2015). Valuing approach toward stakeholders McDonald’s approach towards a successful business involves their valuing approach towards stakeholders. The organisation believes in high maintenance of customers, suppliers and employees. They prefer to negotiate better deals with small suppliers to fulfil their hunger for emerging business. The top management of McDonalds is very supportive and patience towards their franchisees. They are focused to provide proper training and distribute adequate guidelines to all the employees of all their franchisees (UKessays, 2015a). Pricing Strategy McDonalds focuses to attract the young consumers such as school and college students. They have designed their product pricing as per the affordability of their targeted group. The organisation follows competitive pricing policy to provide reasonable price to their consumers (Fagansusanto, 2012). Competitive factors of KFC UK In the year of 1997, KFC has launched its first outlet in the UK. The organisation has near about 1,000 outlets in the UK and last year they have created almost 1,700 job openings. The critical competitive factors of KFC, UK are its innovative range of products, service and clean ambiance, pricing and quality and their promotional activities (Marketline, 2013). Innovative range of products The innovative ranges of products of KFC are very well known across the world. The organisation has considered all the local demands to create a diversified product category. The organisation has introduced various ranges of chicken recipes to satisfy different taste preference of consumers. They have also added low calorie food range and salads to its menu for children and health conscious population (Marketline, 2009a). Service and clean ambiance All the outlets of the organisation strictly maintain the cleanliness and sanitation in their operations through personal and equipment hygiene programme. They also maintain the friendliness in their service management throughout all their franchisees across UK. The outlets provide comfortable ambiance for the customers. These restaurants are the best place to hang out with friends and families. All their outlets in the UK provide free Wi-Fi facility to their consumers. The organisation provides uniform services throughout all its franchisees. Their services also include free home delivery system (Marketline, 2009b). Pricing and quality KFC has adopted the price skimming strategy for their products. This strategy helps them to increase their profit margin by introducing new products in the market. Their pricing policy helps them to attract a wide ranges of consumers. KFC has been ratified ISO 9000 for their sustainable product quality and services. KFC follows all the quality measurement recommended by World Health Organisation (WHO) (Marketline, 2009a). Promotional activities KFC’s promotional activities involve offering different add-ons to their existing menu and gift coupons. They use almost all channels of advertisement of their products. They mainly focus on the television and internet ads for their products. Their new product advertisement procedure through LCDs available in their outlets influences their customers to try out new products (Marketline, 2009b). Competitive factors of Subway UK The first Subway store in the UK was opened in the year of 1996. By the end of the year 2012, the organisation has opened near about 1,400 stores in the UK and created 6,000 new jobs. The major competitive factors of Subway to run a successful business in the UK are their offering of healthy and nutritional food, unified standard, innovation, value services and pricing, powerful system support and their competitive organisational goal (Subway, 2015). Healthy food offering Subway maintains their standard to provide tasty yet nutritionally rich food materials to all their outlets worldwide. To support the “5 A Day Programme” by Department of Health in the UK, Subway is offering nutritional fruit and vegetables recommended by the Department of Health to all those consumers who are selecting all the salad ingredients available in the menu. Subway has endorsed several responsibility pledges of the UK Government such as reducing the salt limit in food, eliminating trans fats, displaying all the nutritional information on the menu board and reduce calorie from their offered product range (Mishra, 2013). Unified standard The organisation has entered the UK market with unified menu, service concept and design to provide a taste of global unification to the UK consumers. Subway has strictly maintained their services and product standard over a period of time. They have ensured customers from all communities to find similar nutritional values in all their outlets worldwide (Leng, 2015). Value services and pricing All their franchisees ensure the customization of all the food items as per the requirement of the consumers. This procedure assures the customers about the health content and cleanliness of the product. The organisation mainly offers price as per the value of their products, service and ambiance. They also offer low priced “sub of the day” to increase the number of consumers (Studymode, 2012). Powerful system support The organisation provides all the minute details in their website to impart a clear idea about their operations and offerings. Customers can often gather the information about the celebrity endorsement toward different outlets of Subway. Subway provides the power to the customer to choose their preferences over the internet. They also provide Wi-Fi facilities to their customers. The organisation uses all possible channels of communication with their consumers such as television commercials, radio, newspaper advertisement, country-specific websites, brochures and leaflets. Their product advertisement influences consumers to consume healthy foods (Leng, 2015). Innovative Subway is well known for their innovative product line. They always offer something new to different categories of their consumers. Their offerings differ as per the age and lifestyle of the consumers. They have also designed their menu for the customers with diseases like diabetes and hyperlipidemia. The range of healthy fast food, encourage a number of professionals in the UK to change their eating habits (Mishra, 2013). Competitive organisational goal The organisational goals of Subway brand indicate their competitive attitude in the UK market. Subway is focused to win the fast food market of the UK by providing healthier food in lowest price. The organisation is rapidly opening a number of new branches in the country. Subway has also introduced SUBCARD, which is UK’s first mobile enabled loyalty card. This competitive step has helped them to increase their customer database in no time (Studymode, 2012). Difference between the competitive factors of KFC, McDonalds and Subway Category KFC McDonalds Subway Product Main food offering is chicken. They believe in localization of their product. Product range focuses on the age and occupational back ground of customers (Marketline, 2009a). Main food categories only involve hamburger and beef products. The organisation follows product standardisation throughout all their outlets. Their localization tendency is weak (McDonald’s corporation, 2008). They mainly offer submarines and sandwiches. Subway also follows standardisation strategy for their products (Leng, 2015). Market positioning KFC is focused on attracting families to their outlets. They have created warm dining environment for their customers (Marketline, 2009b). The organisation mainly attracts young people. Their products and offerings are mainly focused towards children (McDonald’s corporation, 2008). Subway is totally focused on attracting busy professionals and health conscious customers. Their outlets offer work atmosphere to their consumers while they are enjoying the food (Leng, 2015). Innovation KFC believes in rapid innovation of products as per the need of the customers in different locations (UKessays, 2015b). Though McDonalds is adopting as per the changing local demand, they still believes in the traditional value of their products (McDonald’s corporation, 2008). Subway is also focused on innovating new products as per the market demand (Leng, 2015). Promotional activities The promotional activities of KFC focus on attracting families. Most of the commercials indicate the warmth of family (Marketline, 2009b). Most of the advertisement and promotional activities of the organisation is very vibrant which advocate the passion of young population (McDonald’s corporation, 2008). Subway’s promotional activities mostly focus on the health conscious consumers. Their advertisement influences new customers to change their food habits by consuming light weight, healthy food (Leng, 2015). Service Standard The organisation follows certain parameters of hygiene and cleanliness in their outlets. Lately they have faced few complaints regarding the sanitations of the washrooms in few outlets (UKessays, 2015b). The organisation follows a strict service standard throughout all its outlets all over the world. The cleanliness of their restaurants is appreciated by their customers (McDonald’s corporation, 2008). Their products and ambiance are widely appreciated due to their obedience towards cleanliness and usage of healthy products (Leng, 2015). Pricing strategy KFC generally introduce their new products at a high price range. Their price skimming strategy helps them to earn maximum profit. The organisation mainly offer product in reasonable prices so that they can attract their targeted customers (McDonald’s corporation, 2008). They mainly follow value based pricing strategy for their products to ensure that customers are paying as per the product and service quality (Leng, 2015). Supplier management They have built strategic partnership with their suppliers (UKessays, 2015b). McDonalds is involved in independent partnership with their suppliers (McDonald’s corporation, 2008). Subway also follows independent partnership strategy in terms of their relation with the suppliers (Leng, 2015). Talent They follow the localisation strategy in terms of their work force management that involves recruitment and promotion of local employees in the corporate management system (UKessays, 2015b). The organisation believes in recruiting the right talent. They also focus on the employee diversity across all their outlets (McDonald’s corporation, 2008). Subway also follows localization strategy in terms of recruitment and promotion (Leng, 2015). Importance of different competitive factors in their operation strategy McDonalds operation strategy Structural and infrastructural dimension Strategy Capacity The aggressive organisation goals help them to follow its desired growth by establishing additional store across the UK. The organisation always increases its production capacity to cope up with the demand of the market (Rathi, 2014). Facilities The operation strategy follows uniform distribution procedure throughout all the facilities of the organisation. Their facilities are very similar to each other and all of them are focused toward same menu. They have started to change their uniformity as per the demand of the market (Fagansusanto, 2012). Process technology The operation strategy ensures their leadership in the field of fast food delivery technology (Rathi, 2014). Vertical integration The independent partnership ensures long term relationship with their suppliers which help them to promote quality improvement and innovation (Rathi, 2014). Workforce All the franchisees of the organisation focused on hiring right talent for the right position. The carefully selected talents ensure the increase in the efficiency of their process (Fagansusanto, 2012). Organisation Their adaptation capacity and strict standard maintenance help them to provide uniform guidelines across the entire organisation. Nowadays franchisees are pushing the customization view in terms of their products and services (Fagansusanto, 2012). Control systems Their centralized pricing policy and market positioning policy helps them to gain customer loyalty. It also helps them to accrue bulk contract (McDonald’s corporation, 2008). KFC operation strategy Structural and infrastructural dimension Strategy Capacity Their growth strategy helps them to accrue the largest number of stores in the UK (UKessays, 2015b). Their capacity of innovation helps them to transform the old operational systems into a new and attractive one (UKessays, 2015b). Facilities The localization of the service standard and their product categories help the operations of multiple outlets to customize as per the need and demands of the consumers (UKessays, 2015b). Process technology The innovative attitude of the organisation helps their operation strategy to adapt all the technological advances (Schröder and McEachern, 2005). Vertical integration The strategic partnership with their suppliers helps them to gain mutual benefits. It also helps them to collect high quality raw materials for a better product development (UKessays, 2015b). Workforce The localized recruitment strategy helps them to find right talent for certain locations which will help in the successful execution of their operation (Schröder and McEachern, 2005). Organisation The strict maintenance of their hygiene standard is helping their operations to neutralize all the customer complaints. Control systems Their pricing strategy is helping them to have a strong hold on the market. It is also providing help to increase the financial standard (UKessays, 2015b). Subway operation strategy Structural and infrastructural dimension Strategy Capacity The innovative and personalised products of Subway help the organisation to match their capacity as per the demand of the market. Facilities The standardisation of their services and cleanliness system help their operations to follow and uniform procedure. This also helps their customers to experience the best in all of the available outlets of the organisation. Process technology All the outlets of the organisation are technologically advanced. These facilities help the operation strategy of the organisation to provide better facilities to their customers. It also helps them to introduce quick and improved operations throughout all their franchisees. Vertical integration The independent partnership with their suppliers ensures a steady delivery of high quality raw materials. This partnership also helps them to improve their operational strategy through timely delivery of products and services to the customers. Workforce The recruitment of the local talent helps the organisation to design their operation strategy in such a way that helps the organisation to attract more local customers. Organisation Subway has arranged their organisational resources in an innovative way that their customer can see the preparation of their meals. This operation strategy has led them toward excellent business operations. Control systems Their pricing policy and promotional activities help them in formation of their successful operation strategy. This strategy helps them to influence their customers to pay for the value of the products and services. These strategies also help them to accrue their desired customers in the local market. Conclusion The report has described various competitive advantages of the three leading fast food chains of the UK. The comparison of these competitive advantages suggested different operational practices of these organisations in the UK market. Their operational practices differs in terms of their product and service standardisation or localization, innovation, talent acquisition, pricing policy, promotional activities and supply chain management. These differences in their operational strategies help them to hold a unique position in the market. Therefore, it ensures a successful execution of their business throughout different communities of the UK market. Reference List Fagansusanto, 2012. Value chain and competitive advantage of McDonald’s. [online] Available at [Accessed 12 January 2015]. Franchise update media group, 2015. Subway business overview. [online] Available at [Accessed 12 January 2015]. Leng, C. H., 2015. Marketing plan for new product of Subway. [pdf] academia.edu. Available at [Accessed 12 January 2015]. Marketline, 2009a. KFC launches griddled chicken products in UK. [online] Available at [Accessed 12 January 2015]. Marketline, 2009b. KFC to expand presence in UK. [online] Available at [Accessed 12 January 2015]. Marketline, 2013. KFC Ltd.: Company overview. [online] Available at [Accessed 12 January 2015]. McDonald’s corporation, 2008. Marketing at McDonald’s. [online] Available at [Accessed 12 January 2015]. McDonalds, 2015. Company profile. [online] Available at [Accessed 12 January 2015]. 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