Strategic Planning Process of MacDonalds Company in Australia - Example

Running head: Marketing Student name: Student number: Course title: Lecturer: Date: Table of Contents Table of Contents 2 Strategic planning process MacDonald Company in Australia 3 Mission and Objectives 4 Environmental Scan 6 Strategy Formulation 9 Strategy Implementation 9 Evaluation & Control 10 Marketing Research 11 Pricing strategy 11 Bibliography 12 Strategic Planning Introduction McDonald’s company is the world’s largest fast food organization which operates the best food producing restaurants in Australia and other parts of the world. The organization operates about 30,000 food outlets in several countries; in Australia alone, it has close to two hundred outlets. The history of McDonalds can be traced back to the early 1940s and 1950s. During these years Ray Kroc, an old man aged 52, became one of the distributors to this company. This man is thought to have brought the idea of expanding the company to several other countries apart from concentrating in Australia alone. The first of its restaurants to diversify was in Des Plaines, Illinois in 1955 and this gave room for the development of several other restaurants across the world. McDonalds utilizes several strategies so as to achieve a competitive advantage in the market. One of the strategies is setting high marks for itself which have to be met at the end of the day, month or year. This goal however, is often not met because of the differences in the perception of outsiders about this organization (Armstrong, G. 2009. P 126). Through their successful branding campaigns, McDonald’s Ltd has a target of minimizing the cost of their products yet meeting their goals and objectives. Strategic planning process MacDonald Company in Australia Due to the high competition in the market, budget oriented planning in MacDonald Company or even forecast-based planning has proof to be inadequate for the company to maintain its competitive advantage in the market. The management of the company has therefore resolved to strategic planning so as to improve their performance in highly competitive market environment. This method works effectively because it defines some key issues such as objectives of MacDonald Company and the internal and external situation in the company (Kotler, 2009. P 79) Furthermore, the method, strategic planning, is used to implement and evaluate the progress in the company. It also assist in making the necessary adjustment in the company so that it can enable the company to maintained its positive image and also improve the quality of food they provide to the market segment they served in the market. The summary of the strategic planning is shown in the diagram below. Mission and Objectives Mission statement is very important to any organization because it explain the purpose of the company and the visionary goals that direct the company on how to achieve its goals. The company’s vision helps the management of the company to achieve its financial objectives and strategic objectives. Financial objective of McDonald Company is to increase the amount of sales made in a day and also increase the number of the customers served per day. On the other hand, target objectives help the company to meets it market position i.e. market leader and improve its image. This can also embrace some important factors such as positioning of the company in the market and reputation of the company (Armstrong, 2009. P 149). The Strategic Planning Process Environmental Scan This will comprise various issues affecting the company. Environmental scan entails the analysis of the internal factors affecting the company and the external microenvironment which is commonly known as PEST analysis. Internal analysis is generally carried out to identify the strength and weaknesses of the company while the external analysis help the company’s management to identify its opportunities and strength. This analysis can be done effectively by using SWOT analysis. Other psychologist such as Michael Porter developed a framework that can be used for industry analysis. SWOT Analysis A SWOT analysis is an integral component of the strategic planning process of any company and is used to study the strengths, weaknesses, opportunities and threats of that particular organization. The central theme for the SWOT analysis of McDonalds Company is to identify the strengths that the company has and how it utilizes these strengths so as to compete effectively in the market. By identifying it strengths, the organization will be able to rate the performance of its product in the market. The following SWOT analysis shows MacDonald’s current position in the market place, their core competences and possible improvements which can be utilized so as to advance the strategies of the business. Strengths The first strength is that the company has a recognized brand name. Since the company has been in place for a long time, many people have come across their products and therefore they can identify with them. Their global local presence is also strength in that it serves many countries and therefore has gained a competitive advantage over many regions. It utilizes a strong advertising and promotional campaign which has been made possible by the recent developments in the use of the internet. This has made sure that the product can be viewed over the internet making it possible for a greater percentage of individuals to be reached at. The company offers a variety of products and varied features of the product therefore appealing to a diverse group of people (Cateora, 2009.p 135). The Similarity and uniformity of quality across geographical locations makes the company to experience a greater market share. The company offers convenience and timeliness services thus making sure that their customers enjoy them to the fullest. The affiliation with other bodies like heart to heart foundation and Coca-cola corporation ahs also enabled the organization to gain an upper hand with it customers. Weaknesses The company has over the years experienced a negative public perception that its products are of low nutritional value. Because of lower disposal income, people have resorted to spending less on fast food. The affiliation of McDonald’s with the American obesity epidemic gave a negative picture for the company. Social changes and lifestyles of people have made the company less flexible. Because of affiliation of McDonald’s with the American obesity epidemic, the sales have been so low over the past years. Opportunities Further investment in charities such as Ronald McDonald’s house has made it possible for the company to expand its operations and made its brand name well known. Creativity and innovation within the product development and variety of choices in store has made the company to design new and more personalized products. New greener policies and conversation with regard to disposal of wastes and packaging of products has necessitated the company to influence a greater market. The current trends in technology have proved to be an opportunity since in trying to be in a brace with technology, many have been forced to purchase the new products of this company. Threats There has been a shift from fast food to healthier operations in the world today thus posing a threat to products of this company. The products that MacDonald’s company offers are highly substitutable product thus a threat in terms of its products not obtaining an upper hand (Parrott, 2009. P 131) The highly competitive and mature marketplace today is also a threat to the company. The continued inventions and innovations are a threat to this product since new and appealing features are being introduced, a scenario which may mean substituting this product. Strategy Formulation This is normally done after careful environmental scan. The company should therefore maximize on in strength and opportunities and developed strategies of handling threats and weaknesses in the company. Macdonald have attained superior profitability due to the quality of the food they provide to its customers in the market, in addition, the company have implemented various competitive strategies so as to developed a competitive advantage over the competitors in the market. The main strategies which McDonalds Company has been using are differentiation strategy and the use of cost. This has left the customers with no other option since they get the best in McDonald Company, other find it so expensive to leave the company for competitors. Strategy Implementation The most effective strategies which have been selected are put into practice by means of programs, budgets, and procedures. The implementation in McDonald Company has been done through the use of resources and motivation of the employees in the organization so that they can offer quality food and other services such as accommodation. The effectiveness of the plans and strategies which has been adopted depends on the way they have been implemented. For example, McDonald is an international company, and therefore, the people implementing the proposed strategies are different from those who are formulating them. Due to this, the implementations must be communicated in order to obtain enough reason for implementation of such program. Communication is very important because it allow everyone who will participate in implementation to be aware on what to be done. Furthermore, it will enable all the managers especially the line managers to understand what to be done in the company. Evaluation & Control For the implementation process to succeed in every company the management should appoint some people who will be monitoring the whole process to ensure that implementation is done as per the initial plan. MacDonald can ensure effective implementation of the selected strategies by following the procedures. The first step is defining the parameters to be measured in the company and this should be followed by defining the target values of the implemented parameters. The third step is performing the measurements which have been adopted in the previous stages. Lastly, the actual result should be compared with the planned or expected results so that effective strategies are identified and those strategies which do not work are eliminated. The managers should exercise enough care to ensure that the company is maintaining only the effective strategies in the company (Hill, Jones, Galvin and Haidar, 2008. P 168). Marketing Research The marketing department of McDonald Company carried out researched and obtained various results. Some of the result they obtained includes the high demands for certain products in the market. The researchers found out that sweeter breakfast foods attracted many customers in the market. These indicate clearly that sweeter breakfast foods have high demand. The marketing departments had come up with a brilliant idea of merging the sweet taste of pancakes with the salty taste of sausage or bacon; this helped in attracting all classes of customers in the market increasing the market share of McDonald Company. The human resource manager of McDonald has also trained chef to find the perfect mix which has attract the customers and even create positive relationship between the company and the customers. McDonald ensures that their suppliers are international so as to improve it image. For example, Coca-Cola Company is the main suppliers for McDonald Company and many other organizations all over the world. The company prefers the suppliers with good reputations. The director of McDonald has suggested that the company needs top adopt products which takes less time to prepare because the objective of the company is to serve customers in the quickest way. Pricing strategy Pricing is very important marketing tool to McDonald Company, the company has been using this tool to position its products well in the market. The following are the pricing strategies which McDonald Company has planned adopt so that they use when setting its prices in the market. These strategies are competitive pricing, cost plus mark-up, loss leader; close out, versioning, bundling and quantity discounts (Schlosser, 2007.p 77) For McDonald Company to retain its competitiveness, it should use competitive pricing in the following means. The management of McDonald Company should observe what the competitors are doing then priced their products slightly below that of competitors. This scheme should be used carefully because the strategy is illegal in some countries and is termed as collusion. Furthermore, McDonald Company should use cost plus pricing when pricing their products, this is done by just reviewing the amount of profit they planned to make and priced their products. In other instances, it is essential for McDonald to use close out strategy especially when there is excess stocks in their stores. This strategy aims at minimizing the losses instead of maximizing profits. The marketing department has proposed that the company should offer trade discount as a means of attracting heavy users group of customers in the market. This strategy works just like the bundling and quantity discounts. The only different is that bundling is a strategy whereby the company set a price for a customer who purchases goods in large quantities. Bibliography Armstrong, G. 2009. Marketing: An Introduction. Financial Times Prentice Hall 5th edn. P 124-127 Kotler, P. 2009. Marketing Management. Prentice Hall 4th edn. P 78-82 Armstrong, G. 2009. Principles of Marketing. Pearson. 13th edn. P 148-153 Aaker, D. 2009. Marketing Research, Wiley India Pvt. Ltd. 9th edn. P 456-463 Cateora, P. 2009. International marketing. McGraw-Hill 6th edn. P 133-136 Parrott, C. 2009. Kaplan AP Macroeconomics/Microeconomics. Kaplan Publishing. 4th edn. P129-134 Hill, CWL; Jones, GR; Galvin, P; and Haidar, 2008. Strategic Management: An Integrated Approach, John Wiley & Sons Australia Ltd, 3rd pp.165-198 Schlosser, E. 2007. Fast food nation: McDonald’s contribution to quality food production, Houghton Mifflin Harcourt Press, 2nd pp. 67-83 Read More