Strategic management of MC DONALD and how they maintain their succeses Essay

Strategic management of MC DONALD and how they maintain their succeses over the years - Essay Example There are few challenges and problems that the company faces which would be discussed in this study. The biggest challenge for McDonalds is to overcome the increase in competition, maintain its quality and keep a strict check and balance on the customer satisfaction as the company has more than half of the business depends on franchising. In the SWOT analysis of the company it has been found out that McDonalds occupies a very strong position in the market. Special attention paid to hiring potential staff has been a key to its success. As we know in the food and hospitality industry the major role is to be played by the internal customers (that are employees) as they will be the source of satisfaction for the external customers (the real customers). So keeping the internal customers satisfied and properly training them is what McDonalds has been doing. This has been a key success factor for the company. The concept of franchising has also been fruitful for the company as it generates 60 percent of its sales through franchising (Gallagher, 2008). McDonalds focuses on five main things that are its drivers for success namely people, product, price, place and promotion. PESTLE Analysis Following is the Pestle Framework application to McDonalds. PESTLE framework includes the political, economical, social, technological, environmental and legal factors that relate to McDonalds. Political Factors While McDonalds plans to expand its business it has to keep a lot of political factors in mind like the taxation and licensing issues (Ghemawat, 1991). During international expansion the analysis of the political situation of the other country happens to be of critical importance. Economical Factors Economic factors are of concern to McDonalds, because they are likely to influence demand, costs, prices and profits. Amongst the economic factors the high unemployment levels are one the most influential factors as it reduces the demand for a lot of goods and also the food industr y. Inflation is one other thing that has impacted almost every business in the world and so is the case with the food industry. The economic factors mentioned above are mostly beyond the company’s control but at the same time their effects related to the marketing mix and performance can be reflective. Social Factors The awareness of the health issues is increasing amongst the consumers' day by day and the attitudes they hold towards food is continually changing. The quality that McDonalds has provided to its customers over these years has helped the company earn a good repute and thus a strong position in the society (Schlosser, 2008). Technological Factors New technologies profit company and the customers both. The adoption of the new technology by the company and always keeping everything updated has helped the company in attaining this strong market position (Vignali, 2001). Upgrading of its equipments and the machinery used have also served as a source of satisfaction fo r the internal and external customers both. Environmental Factors McDonalds has always focused on healthy and clean environment and this has helped the company in winning the trust of the customers. Legal Factors The policies of government in order to control monopoly and the reduction of power of buyers can lead to putting a limit to entry in this sector by putting controls such as license requirements and limitation to access the