1. Identify McDonald\'s principal competitors and describe the kind of competiti
ID: 425723 • Letter: 1
Question
1. Identify McDonald's principal competitors and describe the kind of competition they currently present (traditional, potential, and oblique). 2. Generate at least three strategic options for mcdonalds. 3. With your strategic options defined, suggest at least three specific criteria to evaluate these options. Provide a rationale for each of the criteria. 4. Choose the best strategic option based on your evaluation criteria. (If your criteria require quantitative considerations, it is only necessary to make rough estimates. You do not need to make a detailed quantitative analysis). 1. Identify McDonald's principal competitors and describe the kind of competition they currently present (traditional, potential, and oblique). 2. Generate at least three strategic options for mcdonalds. 3. With your strategic options defined, suggest at least three specific criteria to evaluate these options. Provide a rationale for each of the criteria. 4. Choose the best strategic option based on your evaluation criteria. (If your criteria require quantitative considerations, it is only necessary to make rough estimates. You do not need to make a detailed quantitative analysis). 1. Identify McDonald's principal competitors and describe the kind of competition they currently present (traditional, potential, and oblique). 2. Generate at least three strategic options for mcdonalds. 3. With your strategic options defined, suggest at least three specific criteria to evaluate these options. Provide a rationale for each of the criteria. 4. Choose the best strategic option based on your evaluation criteria. (If your criteria require quantitative considerations, it is only necessary to make rough estimates. You do not need to make a detailed quantitative analysis).Explanation / Answer
1.
McDonald's and Burger King controlled by Restaurant Brands International principally compete with each other in the fast food segment. However with much bigger size and larger market share of 19% against 5% as per 2015 estimates McDonald is clearly the market leader. Royalty rate of the franchisee offered by both burger giants is similar which is around 4.5% however Restaurant Brands International plans to offer remodeled incentives to its Burger King U.S. franchisees.
Thus limited incentives can indeed have a negative impact on McDonald’s royalties. However McDonald expects royalty revenues to increase at a faster rate compared to Burger King as company anticipates attracting more customers through implementing effective business policies and strategies such as menu innovation, technology initiatives and better branding.
2.
McDonald utilizing market penetration as its primary intensive growth strategy would indeed facilitate through market expansion reach more consumers where it already has operations. Market development as global business strategy in fact would help McDonald to capture the international market where it has no presence.
McDonald’s product development would indeed support the growth strategy by indulging into developing new products over a period of time thus it can be either facilitating with variations to existing products or entirely new products.
3.
A strategic objective connected with market penetration intensive growth strategy can be either locally or globally indeed can facilitate the market expansion strategy through new locations. Thus generic strategy would facilitate to support the intensive growth strategy because of low costs and prices which would empower the firm to easily penetrate markets.
Market development as strategic objective for intensive growth strategy would indeed involve establishment of new locations in new markets for instance McDonald restaurants in African or Middle East nations where company presently has limited operations. Based on its generic strategy of cost leadership McDonald could support the intensive growth strategy by using low prices to compete in new markets.
Product development as the strategic objective for intensive growth strategy would involve capturing more consumers by attracting them to new products. This intensive growth strategy would facilitate McDonald’s broader differentiation generic strategies in terms of new products which would help company being distinct from their competitors.
4.
McDonald’s generic strategy of cost leadership would facilitate the company to sustain its market leadership through sustaining the broader product differentiation strategy which indeed would help to attract more consumers. However a possible strategic alternative for McDonald’s consistent growth is to establish more locations in developing economies and in nations where the firm has no market presence.
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