Competitive Advantage

Striving to be cost leaders: prices cannot be matched by competitors.

The speedy delivery of the food.
Strong global presence and largest market share in fast-food industry.
Net competitive advantage.
They have been in the fast food business for a longer time than their
competitors.
Franchising requires less capital than other growth methods
Rapid Expansion
Market Dominance
Franchising puts a "business owner" in charge
Franchise locations may operate better and more profitably than
"company owned" units
Greater Buying Power
Increased Name Recognition
Increased Advertising and Marketing Budget
New revenue streams are created
Franchise Fees
Franchise Royalty Fees
Advertising and Marketing Administrative Fees
Services provided to Franchises
Sales of Products & Supplies
Training Fees
Sales of Promotional Items
Rebates from Suppliers

CPM Matrix
McDonalds Strategy
Focusing heavily on emerging markets

McCaf has been a big win

Offering a wider variety of food to attract more segments

Delivering food to customers in places that demand it

Making its stores more attractive to get customers in

Increasing its offering of snack items

Shortening its menu cycle

Importing more of its successful niche products internationally

Expanding its dollar menu to breakfast

And it hasn't been scared to take anybody on

Achieving the most powerful brand image

product innovation and development

Having the greatest market share in the ham burger industry

How McDonald reach every corner of this world

Using the 7Ps of marketing mix, McDonald earned business success at every
part of the globe.
1. Product
 2. Price
3. Place (International Distribution and Supply Chain)
4. Promotion
5. People
6. Process
7. Physical Evidence
External Environment and its effect on Strategic Marketing
Political/legal factors

Economic factors

Product lines and pricing

Customers preference

Competitors

Social factors

Technological factors

McMommy Blogging Society

Hamburger University

Strength
Internal Audit-Strength

Largest fast food market share in the world

Brand recognition valued at $40 billion
$2 billion advertising budget
Locally adapted food menus
Partnerships with best brands
More than 80% of restaurants are owned by independent franchisees
Children targeting
Strong Global Presence (located in over- 100 countries)
Strong Real Estate Portfolio
Revenue Growth 9% (Above Industry Average of 7.5%)
The Ronald McDonald House (Children Charity)
Systemization and Duplication (Consistency)
Internal Audit-Weakness
Negative publicity

Unhealthy food menu

Mac Job and high employee turnover

Public Perception (perceived as a contributor to societies

obesity problem)
Product Innovation

Advertising (targets young children)

Customer Service

Market Saturation (more difficult to add new stores)

Labor Turnover

S-O strategies

Introducing new nutritious menus

Expanding to Asia market
Taking advantage of brand name
McDonalds Plan to Win
Low-cost leadership

S-T strategies

Taking advantage of brand name

Giving back to community
Providing new healthier menu
W-O strategies

Minimizing the negative publicity

Increasing differentiation

W-T strategies

Using less Trans fat

Switching from HCFC-22 into HFC
Increasing Employee satisfaction

Nutritional issues
MCD taking away the traditional nutrition values
Replace the fresh and healthy food by mass production
Projection the product nutrition values
Comparison of daily consumption and MCD products
Serves 30million people daily
 Advertising Issues
2billion dollars for Advt annually
Concentrated on Children- Parental Concerns
MCD has a better advertising than its customers
Follows the advertising codes of each country
Making aware of MCDs charity activities, events and
learning programs
External Opportunities and Threats
External opportunities and external threats refer to economic, social,
cultural, demographic,
environmental, political, legal, governmental, technological, and
competitive
trends and events that could significantly benefit or harm an
organization in the future.
Opportunities and threats are largely beyond the control of a single
organizationthus the
word external. In a global economic recession, a few opportunities and
threats that face
many firms are listed here:
Availability of capital can no longer be taken for granted.
Consumers expect green operations and products.
Marketing has moving rapidly to the Internet.
Consumers must see value in all that they consume.
Global markets offer the highest growth in revenues.

Economic Forces Increasing numbers of two-income households is an economic

trend in the United States. Individuals place a premium on time. Improved
customer service, immediate availability, trouble-free operation of products, and
dependable maintenance and repair services are becoming more important.
People today are more willing than ever to pay for good service if it limits
inconvenience.
when interest rates rise, discretionary income declines, and the demand for
discretionary goods falls. When stock prices increase, the desirability of equity as
a source of capital for market development increases.
Social, Cultural, Demographic, and Natural Environment Forces Social,
cultural, demographic, and environmental changes have a major impact on
virtually all products, services, markets, and customers. Small, large, for-profit,
and nonprofit organizations in all industries are being staggered and challenged
by the opportunities and threats arising from changes in social, cultural,
demographic, and environmental variables. In every way, the United States is
much different today than it was yesterday, and tomorrow promises even greater
changes.
Political, Governmental, and Legal Forces Federal, state, local, and foreign
governments are major regulators, deregulators, subsidizers, employers, and
customers of organizations. Political, governmental, and legal factors, therefore,
can represent key opportunities or threats for both small and large organizations.
For industries and firms that depend heavily on government contracts or
subsidies, political forecasts can be the most important part of an external audit.
Changes in patent laws, antitrust legislation, tax rates, and lobbying activities
can affect firms significantly. The increasing global interdependence among
economies, markets, governments, and organizations makes it imperative that
firms consider the possible impact of political variables on the formulation and
implementation of competitive strategies.
Technology
The Internet has changed the very nature of opportunities and threats by altering
the life cycles of products, increasing the speed of distribution, creating new
products and services, erasing limitations of traditional geographic markets, and
changing the historical trade-off between production standardization and
flexibility. The Internet is altering economies of scale, changing entry barriers,
and redefining the relationship between industries and various suppliers,
creditors, customers, and competitors.
isition. Technological forces represent major opportunities and threats that must
be considered in formulating strategies. Technological advancements can
dramatically affect organizations products, services, markets, suppliers,
distributors, competitors, customers, manufacturing processes, marketing
practices, and competitive position. Technological advancements can create new
markets, result in a proliferation of new and improved products, change the
relative competitive cost positions in an industry, and render existing products
and services obsolete. Technological changes can reduce or eliminate cost
barriers between businesses, create shorter production runs, create shortages in
technical skills, and result in changing values and expectations of employees,
managers, and customers. Technological advancements can create new
competitive advantages that are more powerful than existing advantages. No
company or industry today is insulated against emerging technological
developments. In high-tech industries, identification and evaluation of key
technological opportunities and threats can be the most important part of the
external strategic-management audit.
Competitive Forces
Collecting and evaluating information on competitors is essential for successful
strategy formulation. Identifying major competitors is not always easy because
many firms have divisions that compete in different industries. Many
multidivisional firms do not provide sales and profit information on a divisional
basis for competitive reasons. Also, privately held firms do not publish any
financial or marketing information. Addressing questions about comp.