McDonald’s is a fast-food industry whose enormous success is based on essential innovations. As the world’s first significant global fast-food restaurant, the firm regularly tests new ideas by outsourcing drive-thru orders. The company was founded by two brothers, Maurice and Richard McDonald, in the 1940s. It has over 38,000 outlets in over 100 countries, where burgers and fries are the company’s signature items. Still, they provide fish, chicken, coffee, milkshakes, breakfast, soft drinks, and a few regional specialties that differ per nation (Nizam et al., 2022). The worldwide behemoth has introduced healthy options such as grilled sandwiches, apple slices, and salads. This paper will assess the efficacy of the firm’s leadership, the competitive advantage, and possible threats to its strategy to understand better how the organization operates and examine its expansion plan.
Effectiveness of the Company’s Leadership
The effectiveness of leadership can significantly influence the turnover, happiness of the customers, the income of the workers, and productivity, among other factors. Good leadership boosts the employee’s engagement and enthusiasm, which helps win loyalty, service, and innovation of the customers (Nizam et al., 2022). The firm’s management has a significant influence on its employees, resulting in three critical outcomes, the first of which is self-growth. McDonald’s corporate management emphasizes training and leadership at all levels, as seen through on-the-job training at Hamburger University, where workers may progress their careers (Hamza & Karabulut, 2021). Employees gain confidence and self-esteem as a consequence of this training. Employees are motivated and can inspire others hence achieving the second outcome, which is happiness.
It emphasizes horizontal communication among managers and workers, enabling subordinates and leaders to debate and share ideas openly. This means staff is not terrified of their bosses, allowing them to form strong bonds and trust (Hamza & Karabulut, 2021). Consequently, employees feel valued and appreciated at work hence having efficiency as the ultimate result. McDonald’s employs transformational leadership to inspire employees to find innovative solutions to problems at work (Jian et al., 2021). As a result, employees are more successful in dealing with everyday duties and issues. They can reach self-actualization as a result of this feeling of achievement.
To combat the job’s low motivating aspects, the ideal manager creates a pleasant workplace for their employees. The manager’s role should be geared towards production increase and excellent customer service delivery. The McDonald’s company leader is a coach who acts directly and supportively (Kee et al., 2021). When things are not in order, the leader finds a solution by adopting a leadership style of coaching the workers by giving staff advice on attaining a particular objective. They would intervene and guide their subordinates if they overheard or saw someone doing anything improperly, and they would never insult them. The corporation has developed to become one of the top worldwide companies due to outstanding leadership, demonstrating why leadership is critical to any organization’s success.
The focused leadership of the firm came up with a strategy whose goal was to motivate and empower the workers who come to work on time because of how they value their workday. Their supervisors’ respect and team spirit will suffer due to failure to follow the company’s guidelines and rules, leading them to reevaluate their choice (Kee et al., 2021). Even if a typical employee may not need additional talents or even abilities, the strategies ensure that the significance and uniqueness of such an employee are respected (Jian et al., 2021). Employees’ self-esteem grows when they are allowed to give their views regarding the company and any issue that arises instead of forcing them to go against their ideas.
Competitive Advantage and the Potential Challenges
Since its inception in 1940, McDonald’s has gained an edge over all other rivals as a fast-food pioneer. The industry has been the leading in designing the idea of drive-through since the 1940s (Cassidy et al., 2021). It is among the first firms of food that established a worldwide presence in the 1960s hence gaining a competitive edge in many areas, including affordability, worldwide company, and franchising, by using a product diversification approach as an overall cost leadership strategy.
The company has obtained a competitive advantage over rivals like Wendy’s, Taco Bell, and Burger King in affordability. It has been able to attract consumers and keep them coming back because of the cheap costs of its products. Unlike rivals like Chick-Fil-A, the industry offers a dollar menu (Cassidy et al., 2021). McDonald’s has a competitive advantage since its goods are less expensive, making them more appealing to customers searching for a cheap meal. Many businesses will find it challenging to match the ability to offer things at affordable prices.
McDonald’s has used its worldwide network to obtain a competitive edge by having a far more significant worldwide presence than its fast-food rivals. According to the case study by McDonald’s Corporation, McDonald’s is almost twice the size of its next biggest global competitor (Singireddy, 2020). Furthermore, its worldwide presence contributes to global brand loyalty and draws consumers from all over the globe, resulting in increased sales and, eventually, profits.
It developed a differentiation strategy to be the preference of many nations throughout the globe, which has helped the corporation achieve worldwide success. The company’s substantial worldwide presence and its differentiation strategy are both one-of-a-kind and difficult to replicate, allowing them to remain ahead of the competition. Competitive advantage has been achieved through franchising, where McDonald’s owns around 45,000 outlets worldwide, inclusive of 27,000 located in the United States (Singireddy, 2020). It has a considerably more significant number of outlets than virtually all of its rivals due to its ability to franchise effectively. Burger King owns 25,000 stores in 100 countries, while Wendy’s has 6,500 in 28 states and 47 states. Chick-Fil-A has just 2,200 (Singireddy, 2020). The industry has a competitive edge over its rivals. It makes its stores more accessible to consumers and has boosted revenue, brand recognition, and customer loyalty thanks to its massive franchise network in the United States and internationally.
Every business will have difficulties and handling them will decide whether the film succeeds or fails. McDonald’s has had to overcome many obstacles to acquire, repair, and sustain its success. Human resource issues in the international market are the first potential challenge the company faces due to the placement of the firm’s franchises in countries other than the United States (Opait, 2019). Another challenge is developing new business models due to the changing market and the issues inflow of cash and management of finance. Resistance to change due to the risk involved is not having a new business model.
According to the course pack, language barriers and new trends within the American culture are other drawbacks faced by the company. In addressing the issues facing the company has adopted several measures such as properly training employees. In opening a new restaurant, the company had to learn and understand the new culture in which the company wanted to open restaurants (Opait, 2019). Another measure opted for was to hire local workers to help the company’s growth. Changing the menu to accommodate the tastes of other countries solved the problem of the changing healthy eating trend. They were able to keep on top of buyer expectations and achieve worldwide success by remaining engaged with the company’s consumers.
Growth Strategies Pursued by the Company
The McDonald’s company can pursue several intensive growth strategies to ensure long-term business viability. First, applying market penetration can help expand the business by reaching more customers in areas where it has already established operations. This can be done through opening new restaurants by franchising, using corporate ownership, or joint ventures. Additionally, the company should seek to build a stronger connection with the communities it has served for many years by continuously listening to them and finding opportunities to create cultural moments. Secondly, market development in areas with no operations, such as most parts of Africa and the Middle Eastern countries, can help further the company’s growth. This would guarantee more profits and the general success of the company. Product development is crucial in capturing more consumers by attracting them to new products (Cassidy et al., 2021). These new products can be developed over time and may comprise entirely new products or variations of existing products. They would make the company more distinct in its services.
Fourthly, the company can further invest in its digital operations to ensure easy access by customers. It can do this through enhancing mobile ordering and payment services, using rewards and fun promotions, technological innovations, and testing new concepts. This will provide customers with the fast and easy experiences they love, making it easier to retain them. Lastly, the company can improve its delivery and drive-through services by investing in staffing, positioning, and order assembly. Moreover, the benefits may include a restaurant concept that offers takeaway and delivery only and a new drive-through express pick-up lane for customers with digital orders. The company will continue to grow to greater heights by applying the above measures.
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