McDonalds Formal Business Structure

The article “McDonalds Business Analysis” by N. Vijayarani explains McDonald’s formal business structure and business strategies. McDonalds is one of the largest food chain companies in the world and has much strength in its company that allows it to build a functional structure. McDonalds has around 40 million customers visiting the store each day. It has over 30.000 branches in 120 countries including Canada, Brazil, Germany, France, Japan, UK, Australia, and the U.S. It derives 80% of its revenues from these countries. One of there greatest strengths and missions is to create an image in the minds of the people and introduce them to the fast food culture. The company functions with great delivery speed, customer care and cleanliness.

McDonalds has a very recognizable corporate symbol and have been highly successful with their advertisements and establishing the brand image and logo in the minds of millions of people. Another strength McDonalds has is its product value. According to the article, customers know what to expect when they walk into the store, great emphasis goes to human resources by satisfying both the customer and the employees. McDonalds is very innovative with new product lines, new trends and new tastes. Its diversity into their new business ventures is also considered a strength of McDonalds. Unfortunately, McDonalds faces issues that many companies face and that help build a stronger business structure. The two main competitors of McDonalds are the other food chains, Burger King and KFC. McDonalds marketing strategy is concerned with the internal resources, external environment, and its basic competencies along with its share holders.

McDonalds faces competition as well as customers changing their trends and choices and this impacts the company’s business structure. People get tired of the same brand especially ones they are used to and ones that see everywhere. McDonalds is very over exposed. Another thing McDonalds has to be careful with as a large chain is making sure they maintain their standards and make sure they don’t lack in quality service or else it will affect the whole brand.

McDonalds has to be very careful with its competitors and other negative situations that will tear the company down. They have to have a strong business structure and have to implement business strategies to keep the company going. The article mentions sustainable competitive advantage (SCA) and relates it to McDonalds and its difficulties the company comes upon. The article defines SCA as the advantage a company has which is difficult or impossible for other companies to possess or break through. It can either be the brand, dynamic customer care, cost structure or its patent. The article lists three different aspects that help in SCA and they are:

1. The managerial and organizational process should share a good integration and coordination. The organization should learn and bring about changes according to the need of the hour and should always be flexible to changes in the environment such a customer trends, legal or government restriction and developments in the technology. McDonalds is presently concentrating on this.
2. Technological, structural and financial assets of a company are an excellent market position which helps in the SCA.
3. The vision or the dream with which the company was started. McDonalds was started out to help people who has very little time to cook or was too busy to get into a proper restaurant. The vision was to provide quick service, cheap products and quality satisfaction.

McDonalds started off as a success story but as like any company they have faced risks, competitors and major set backs. Its core competences and the SCA both internal and external make the company strong and ranked among the top businesses.

Personally, I think McDonalds is a strong company that has faced many risks and set backs but has learned and grown to be even stronger. They live by their vision and always strive towards being the best fast food chain. They use many of the marketing strategies to fix and help their issues. McDonalds is going for a new marketing concept focusing on the firms existing potential customers and seeks to earn profit through customer satisfaction with an integrated marketing program.

Rachel Wilhelm


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