Compare and contrast your organisation (Mc Donalds) against another one (Wendy's)

Table of Contents 1.0 Introduction 4 2.0 Literature Review: 5 2.1 Application of the literature to Mc Donald’s 6 2.2 Analysis with respect to Neoclassical microeconomics: 7 2.3 Analysis with respect to Evolutionary economics: 8 3.0 Research Methodology: 9 3.1 Case study method: 9 3.2 Data Collection: 10 3.3 Presentation of findings: 10 3.4 Analyzing the data: 11 4.0 Data Analysis and Reflections 11 4.1 Presentation of data 11 4.2 Reflection on findings and implications: 12 5.0 Conclusion and Recommendations: 14 5.1 Addressing social changes with differentiation strategy: 15 5.2 Recommendation: Improved Promotional Strategy: 16 5.3 Conclusion 16 References 18

1.0 Introduction

With the increase in the trend of globalization and the increasing competition in global markets, companies work day and night to come with effective strategies. Some of the multinational companies are known for the strategies they use and practice. In this paper, two of the companies operating in the United States of America will be discussed and compared along with the suggestion of a competitive strategy for McDonald’s. One of the companies that was researched in this paper name is McDonald's. This company operates internationally while the opposition organization which is Wendy’s also known as a fast food restaurant operates in the United States of America. As far as McDonald's is concerned, McDonald's was established in the year 1940 by Richard and Maurice McDonald, in San Bernardino, California, United States. The organization's business structure depends on three basic axes: representatives, franchisees, and suppliers. This business structure made by the founder of the organization, Ray Kroc, is known as "the three-legged stool", an idea that characterizes the cozy relationship that exists between the three individuals from the McDonald's System (Bader, Ailshire, Morenoff, & House, 2010). This fast food chain is viewed as a standout among the best fast food chains in the world. Its incredible showcasing procedure has made the evolved way of life emerge in the tremendous challenge. The brand is working effectively since they are keeping the execution dimension of their items continually. Other than the evolved way of life is utilizing the key idea of institutionalization since no other natural way of life has had the capacity to pick up this much notoriety all through the world. McDonald's is associated with the specialized supply chain which is one of the basic parts of the organization. With the company focusing on applying social responsibility strategy and care for the environment, potential customers of company are increasing worldwide. Contrary to this, Wendy’s is another well-known food brand operating the region Ohio since the year 1996. This restaurant is known for ham burgers and many other meals produced by the restaurant. In comparison to McDonald’s, Wendy’s operates in the state of Ohio only. Although the company holds a lot of tendency to spread in the international region as well, however, the restaurant prefers its home town more in comparison to others country’s operating in the world (Yan, 2000). Wendy’s potential for growth is hidden in the extensive fast food industry along with the experience of the company in the region. With a strong brand image like McDonald’s, the company depicts lower diversification which raises high concerns of the stakeholders. Currently, the recipes followed by the restaurant are the ones that can be easily duplicated as they believe in conventional methods. Most of the revenue generated by Wendy’s is from the area of North America. In comparison to the region of North America, other regions are producing less revenue which shows the non-feasible atmosphere of the company for internalization. Keeping in view this perspective, this company is unable to maximize its performance in the global market. Hence, Wendy’s is less famous in the international market in comparison to that of McDonald’s.

This research paper will contain information from the Strategic Management module of the MBA program. Johnson et al. (2008 p. 11) states “The term strategic management underlines the importance of managers with regard to strategy…. Strategy involves people especially the managers who decide and implement strategy”. However, Michael Porter suggests that a competitive strategy is about being different. It’s deliberately choosing a different set of activities to deliver a unique mix of value. With the number of restaurants and fast food chains increasing in the international world, the researchers came up with various ways for the fast food chain to develop and promote growth in the fast food industry. While Wendy’s is still a well-established brand with known brand image, researchers have mentioned that McDonald’s has an edge on Wendy’s with respect to its position in global marketing. With the increase in the concept of franchising in the fast food industry and its efficient use by McDonald’s, the fast food chain is progressing well. In one of the Article, ‘Cross‐cultural competitive bench-marking of fast‐food restaurant services’, the author Hokey Min explained that fast food restaurants are successfully penetrating the foreign market and serving good quality food by understanding cross-cultural differences (Min 2013). While explaining the penetration of fast food restaurants in the global market, Min has mentioned that McDonald’s is one of the greatest examples in the fast food industry as the fast food chain is progressing with their different strategies. As per the analysis of McDonald’s competitive strategy the fast food chain is focusing on cost leadership strategy while struggling hard to maintain the standard of food and hygiene in the low price they offer.

While one of the competitive strategy Wendy’s is implementing is cost leadership however, the strategy giving edge to the fast food chain is differentiation. Differentiation is one the generic competitive marketing strategy. Item uniqueness is among the fundamental emphasis in this conventional system. For instance, Wendy's advances its square-molded new ground meat patties that are fundamentally greater than those of McDonald's and other inexpensive food cheeseburger chains. Wendy's variety of plate of mixed greens menu things likewise separates the organization from rivals as far as well-being concerns. Such undertakings show the separation nonexclusive procedure for Wendy's upper hand (Thompson 2017).

While explaining the importance of target market strategies which is known as a particular group of consumers at which a product or service is aimed, Yang in one of his articles mentioned (Yang, 2005) that with the increase in the consumption of hamburgers in the initial time, McDonald’s was emerging as one of the better options with its defined market. First, it ought to be noticed that the McDonald's plan of action is to a great extent set apart by its worldwide employment, just as by endeavoring to attempt in all nations where a technique is found of fast development (Yang, 2005), which in the meantime enables it to ensure the nature of its administrations and items. In this sense, a standout among the most utilized frameworks, as a result of McDonald's as well as by and large all through the inexpensive food division, for the opening of new eateries, is the establishment. On the off chance that of the North American organization (McDonald's Corporation), of the all-out eateries it has, about 80% of them are they are kept running under this methodology (Min and Min 2011). As it tends to be consistent, the great execution of the premises isn't enthusiasm for the establishment, yet additionally for the distinction and notoriety of the brand McDonald's. Along these lines, the profile of contender to open an establishment has very requesting criteria appearing quality support strategies of the evolved way of life. Another objective market methodology the organization is utilizing the savvy strategy that is giving quality sustenance in sensible costs (Yang, 2005).

Although McDonald’s is progressing with its defined market strategy and competitiveness, there are still some aspects of the fast food chain which need to be improved in comparison to its biggest competitors like Wendy’s. This has been explained by Rowley in his article (Rowley, 2004). Other than focusing in a single region and serving quality food in that region, Wendy’s is utilizing intensive growth marketing strategies which help the fast food chain to fan out in the North America easily (Min and Min 2011). With the use of market penetration Wendy’s is emphasizing more sales among the consumers in the region the fast food chain is operating. Additionally, Charles Hill suggests that when a company concentrates on expanding market share in its existing product markets, it is engaging in a strategy of market penetration. As such, this type of strategy is a short-term objective and focuses on how Wendy’s can sell their existing products to their existing customer. With this being said, the target market based on demographics, is confined yet effective for the proper working of the fast food chain.

Neoclassical economics that is used in relating the supply and demand of the individual rationality and the ability of the individual to maximize the profit. In this case, both McDonald’s and Wendy’s will be assessed based on the basis of Neoclassical economics aspect as in this way the supply and demand of both the fast food chain can be assessed easily. While assessing the demand curve of McDonald’s, it was found out that fast food chain drops its prices 5-6% overall while the sales growth seems to be reducing on an international level (Ficksheiner 2017). As figure 1 shows, the demand supply graph of the company, it can be easily depicted that with the increase in the price of the menu never really works as the demand tends to fall. Hence in case while the demand seems to fall, the company focuses on lowering its sales price as well.

Figure 1: Demand and supply graph of McDonald’s (Min, 2013).

In case of Wendy’s the fast food chain has an edge over McDonald’s since for now the fast food chain is operating in a single region and have no plans of expanding on an international level. With their focus on single region and narrowed target market, Wendy’s supply and demand graph is well managed as they manage their supplies according to the demand of the people living in single region of Ohio (Ficksheiner 2017).

Evolutionary economics aspects recommend that monetary procedures advance, and economics conduct is controlled by the two people and society all in all. This is not quite the same as conventional economics hypotheses which see individuals and legislative establishments and altogether judicious performing artists. Evolutionary economics aspects try to clarify monetary conduct and advancement in connection to development and evolutionary human senses (Mottram, 2011), for example, predation, copying and interest. evolutionary economics matters investigate how human conduct, for example, our feeling of decency and equity, reaches out to economics aspects. With respect to McDonald’s, the evolution of McDonald’s with respect to keep their customers satisfied is noteworthy. While Wendy’s is making the customers of their region happy, McDonald’s is making the customers from all over the world happy and contented (Ram, 2004). However, one of the aspects that might pose to be an issue in the aspect of evolutionary economics and McDonald’s is the slow services of the fast food chain which has till some room for improvement.

A research methodology is a precise arrangement for leading examination. Sociologists draw on an assortment of both qualitative and quantitative research techniques, including tests, overview inquire about, member perception, and optional information. Quantitative techniques plan to characterize highlights, check them, and make measurable models to test theories and clarify perceptions. Qualitative techniques go for a total, itemized portrayal of perceptions, including the setting of occasions and conditions. In this paper, two of the research methodologies will be used which include analysis with the help of case study and data collection with the help of journal articles and newspaper articles. In this paper, no primary data collection is used or examined. Major focus lies on the secondary data collection and the outcomes gained with the help of secondary data.

There are four main types of methodology methods which basically comprises of quantitative research, qualitative research, pragmatic approach, and the advocacy/participatory approach. This paper will use a case study method. A case study method can be described as an account of activity, event or problem that contains a real or hypothetical situation and includes the complexities one may encounter in a workplace (Swanburn 2010). The main advantage of conducting a singular case study method is that the case study has often been more of an interpretivist and idiographic tool, it has also been associated with a distinctly qualitative approach. (Bryman 2009). The data given in the case study explains the progress of McDonald’s so far. Currently McDonald’s is working in a reputable position yet there are some aspects related to the fast food chain which need consideration. With the increase in the need and wants of the customers, there is an increase in the competition as well. The increase competition depicts that there is a need for McDonald’s to come with an updated competitive strategy for their own chain.

The main method that was used to collect data for this research paper would be secondary data. For the purpose of data collection, online websites, newspaper articles and journal were considered. With the help of journal articles the previously collected information related to the working of both the organizations was considered. Since both the companies are operating internationally with their different yet competitive strategies, hence journal articles and the research done by various marketers was a good way to get to know about the current position of the companies in international and national market.

In this section, a summarized perspective of all the findings that can help in coming with a strong competitive strategy suggestion for McDonald’s. For instance, with all the informative data hat was properly scrutinized and gathered, it was entered to Microsoft Excel which was used to develop proper grids and charts to help form the demand and supply of the numerous stakeholders throughout the globe. After this was done, it assisted to accurately visualize the downfalls of Mc Donald’s managing structure to help contribute in formulating a good competitive strategy.

McDonalds has new things in their menu like smoothies, espressos, and substantially more. With Strong food portfolio, McDonald has left retreat from its own pay. Company did not depend on one money or economy since it is spread the world over. While the company has maintained its position in the global market, there are some short comings as well which are analyzed with the help of secondary data collected. It is a lot harder to locate a decent area to construct an eatery because U.S.A is soaked as of now, so development is viewed as taken outside of the states by presenting for the most part potential changes. The development of profit is moderate since origin, so it is likewise be taken as moderate in future advancements of offer market. However, in comparison to minimal diversion of Wendy’s towards global market, there are some potential opportunities for McDonald’s that easily help in the long run. There are numerous open doors for eateries outside the USA. China is another incredible open-door organization has. Innovation to their menu isn't just restricted by creative ability. The idea of introducing nutritious food items in their menu will prove as a good investment. However, the constant threats are always there. A likewise a solid opportunity to clash with contenders to keep the benchmarks coordinated constantly exists in the operations of the fast food chain. Price changes in wares additionally influence the breaking points McDonald has in any nation which can influences the offers of the organization.

The diagram below clearly shows that using secondary data that was gathered, Mc Donald’s has proven to gain its competitive advantage against Wendy’s having a high quality of products with the lowest prices in the market in recent years. Therefore, enforcing differentiation into the market can make a drastic change in consumer demand.

McDonalds has new things in their menu like smoothies, coffees, and significantly more. With Strong nourishment portfolio, McDonald has left retreat from its own compensation. Organization did not rely upon one cash or economy since it is spread the world over. While the organization has kept up its situation in the worldwide market, there are some weaknesses also which are dissected with the assistance of optional information gathered. It is significantly harder to find a better than average zone to build a diner in light of the way that U.S.A is doused starting at now, so advancement is seen as taken outside of the states by showing generally potential changes. The improvement of benefit is moderate since source, so it is similarly be taken as moderate in future headways of offer market. Nonetheless, in contrast with insignificant preoccupation of Wendy's towards worldwide market, there are some potential open doors for McDonald's that effectively help over the long haul. There are various open entryways for restaurants outside the USA. China is another unimaginable open entryway association has. Development to their menu isn't simply limited by innovative capacity. Introducing nutritious sustenance things in their menu will demonstrate as a decent venture. Notwithstanding, the consistent dangers are dependably there. A moreover a strong chance to conflict with contenders to keep the benchmarks facilitated continually exists in the activities of the cheap food chain. Value changes in products moreover impact the limits McDonald has in any country which can impacts the ideas of the association.

To the extent McDonald's is concerned, McDonald's was begun in the year 1940 by Richard and Maurice McDonald, in San Bernardino, California, United States. The association's business structure relies upon three fundamental tomahawks: agents, franchisees, and providers. This business structure made by the author of the association, Ray Kroc, is known as "the three-legged stool", a thought that portrays the comfortable relationship that exists between the three people from the McDonald's System (Bader, Ailshire, Morenoff, and House, 2010). This cheap food chain is seen as a champion among the best inexpensive food chains on the planet. Its inconceivable exhibiting strategy has influenced the advanced lifestyle to rise in the gigantic test. The brand is working viably since they are keeping the execution measurement of their things constantly. Other than the advanced lifestyle is using the key thought of organization since no other regular lifestyle has had the ability to get this much reputation all through the world. McDonald's is related with the specific store network which is one of the essential pieces of the association. With the organization concentrating on applying social obligation methodology and care for the earth, potential clients of organization are expanding around the world.

Wendy's:

Despite this current, Wendy's is another notable sustenance brand working the district Ohio since the year 1996. This eatery is known for ham burgers delivered by the eatery. In contrast with McDonald's, Wendy's is working in the area of Ohio as it were. Even though the organization holds a great deal of propensity to spread in the universal locale also, in any case, the eatery inclines toward its main residence more in contrast with others nation's working on the planet (Yan, 2000). Wendy's potential for development is covered up in the broad inexpensive food industry alongside the experience of the organization in the locale. With a solid brand picture like McDonald's, the organization delineates lower broadening which is the worry of the general population as of now. At present the formulas pursued by the eatery are the ones that can be replicated effectively as they put stock in ordinary techniques. Most of the income produced by Wendy's is from the territory of North America. In contrast with the area of North America, different locales are delivering less income which demonstrates the non-attainable air of the organization for disguise. Keeping in view this point of view, organization is unfit to amplify its execution in the worldwide market. Subsequently Wendy's is less popular in the global market in contrast with that of McDonald's.

With the expansion in the pattern of globalization and the expanding rivalry in worldwide markets, organizations work day and night to come with powerful techniques. A portion of the global organizations are known for the procedures they use and practice. In this paper, an investigation of two association McDonald's and Wendy's was done to think of a successful aggressive procedure for McDonald's. To the extent McDonald's is concerned, this fast food chain is seen as a champion among the best inexpensive food chains on the planet. Its mind-blowing displaying methodology has influenced the developed lifestyle to rise in the huge test. The brand is working successfully since they are keeping the execution measurement of their things ceaselessly. Other than the advanced lifestyle is using the key thought of systematization since no other common lifestyle has had the ability to get this much reputation all through the world.

McDonald's is related with the specific production network which is one of the essential pieces of the association. With the organization concentrating on applying social duty procedure and care for nature, potential clients of organization are expanding around the world. While Wendy's is yet a settled brand with realized brand picture, specialists have referenced that McDonald's has an edge on Wendy's regarding its situation in worldwide advertising. With the expansion in the idea of diversifying in the fast food industry and its productive use by McDonald's, the inexpensive food chain is advancing admirably. In contrast with McDonald's, Wendy's is working in North America with a characterized market. Wendy's is working in the locale of Ohio as it were. Although the organization holds a ton of inclination to spread in the global area too, in any case, the eatery leans towards its main residence more in contrast with others nation's working on the planet (Yan, 2000). Wendy's potential for development is covered up in the broad fast food industry alongside the experience of the organization in the area. With a solid brand picture like McDonald's, the organization portrays lower expansion which is the worry of the general population right now. At present the formulas pursued by the eatery are the ones that can be replicated effectively as they have faith in customary techniques. The greater part of the income created by Wendy's is from the region of North America. Wendy's is executing is cost leadership however the technique offering edge to the fast food chain is differentiation. Differentiation is one the conventional aggressive showcasing system. Based on the data analyzed and the comparison with Wendy’s, some of the recommendations for McDonald’s for improving their competitive strategy will be mentioned in this section. The recommendations for McDonald’s to implement include the following:

McDonalds should build a structure, a field-tested strategy in the future, that tends to the social changes led by the legislature and shopper bunches which fringe empowering a decent eating regimen and therefore get ready sorts of foods that on the nourishment of the client just as their solid ways of life. With more and more people getting conscious about their nutrition and balanced diet, McDonald’s can clearly take advantage in this situation. Basically, it can likewise build up a joint endeavor with different associations, for example, the grocery stores in that a portion of its sustenance is sold in the general stores. This accompanies the promoting database which will push it to more precisely connect with explicit target gatherings of customers. The client recognizable proof could be based on displaying and customers profiles; a factor which will upgrade the anticipation of band exchanging. Moreover, McDonalds should concentrate on the corporate social duty and edge nearer to those associations with an esteem sway on the general public. With the help of differentiation strategy, the company will be able to come up with nutritious rich food which will give McDonald’s an edge over the other fast food chains. Diet and nutrition conscious people will be able to enjoy their food easily.

McDonalds should understand that promotion of its items isn't simply a publicizing capacity. It should think of both publicizing efforts and limited time methodology that is characterized by the idea of the market, the span of the market and the preferences just as inclinations of the clients. In this manner, McDonalds should structure on the promotional mix that address the component of value, item and market in the way the client will feel obliged to expend the item. With the help of improved promotional strategy of their rich nutritious food, the fast food chain will have more ways to excel in their respective industry with higher understanding of the working of the industry. Other than this, the promotion of the new products and addition in the menu with the help of differentiation strategy will help the fast food chain to come up with a strong competitive variable in comparison to Wendy’s and other fast food chains that hold the tendency to excel in the fast food industry. For instance, while operating in a place like India McDonald’s can come up with more diverse menu so that both the vegetarian and non-vegetarian people in the country can be treated with their diverse menu. A lot of scope lies for the fast food chain in countries like China where people will enjoy their taste.

In conclusion, constant change is necessary to ensure that Mc Donald’s would sustain their competitive advantage. As such, this organization has been successful because of the value the company provides for their customers. Nevertheless, as the economy has been drastically increasing in demand it is highly recommendable to implement these strategies that was mentioned in this report for this company to stay at the maturity stage of their products life cycle without having to face a decline like most fast food outlets.

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Ficksheiner, Lisa. 2017. "Mc Donald’s Sales Rise on Strong Demand for Cheap Menu Items". Nypost.Com viewed 03/15/2019