McDonald’s Leadership and Competitive Advantage

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Abstract

The paper focuses on the assessment of McDonald’s in terms of the company’s approach towards leadership and its competitive advantages, as well as proposes strategies for growth. It was found that McDonald’s has developed notable leadership procedures that contribute to its overall success. Decency, professionalism, and team decisions are claimed to be a foundation for management affairs in the company. The competitiveness of the corporation is affected by a number of negative factors. The crucial one is the perceptions of potential customers that the consumption of McDonald’s food promptly and inevitably results in drastic consequences for their health. However, it is not so, and the discussion shows that McDonald’s compensates such an aspect by a significant marketing strategy. The latter is claimed to be the company’s competitive advantage, as well as a strategic focus on innovations. The analysis allowed proposing the following growth strategies – market penetration and strategic alliances. These may contribute to the enhancement of the current success of McDonald’s.

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Keywords: McDonald’s, leadership, competitive advantage.

Introduction

The catering industry has been particularly challenged in recent times. Today catering enterprises are gaining momentum every year: the number of establishments is growing, the forms of service are getting better, and unique recipes are being developed. All of this has a huge impact on heightened competition in the foodservice sector. McDonald’s is a leading actor in the industry, and the analysis of its case in terms of leadership, competitive advantage, and growth strategies seems a relevant option to undertake.

Analysis of McDonald’s

Personnel management in the company is based on a number of principles, among which the following should be stressed. First, these are decency, honesty, and compliance with the rules and regulations of McDonald’s, as well as respect for the company’s affairs and employees are encouraged. Then, it should be noted that the speed of decision-making and the speed of their implementation without losing the quality of the result – the key factors for success. Therefore, McDonald’s pays great attention to the efficiency of solving various tasks. Team decisions are essential for the company as well – despite the value of each person’s individuality and personal opinion, McDonald’s has taken team decisions. Finally, it is professionalism; McDonald’s expects its employees to effectively perform their tasks, use 100% of the available knowledge, experience, and abilities (McDonald’s, 2021). To improve this aspect and additional motivation, the company conducts employee training. Hence, in terms of leadership, McDonald’s has created quite a balanced approach that takes into account employees’ strengths, encourages development, and creates a foundation for significant performance.

At this point, it seems reasonable to turn to the assessment of the company’s competitive advantages. A significant impact on the competitiveness of the McDonald’s restaurant chain is the belief of a large part of the population that among the ingredients used in the production of McDonald’s dishes, there are many chemical food additives (flavors, stabilizers, preservatives, dyes, etc.) (McDonald’s, 2021). However, according to current medical opinion, these concentrations are below the level that poses a danger to humans. Fried and baked at high temperatures starchy foods, widely represented in the menu of McDonald’s restaurants (such as french fries), are also rich in the carcinogen acrylamide.

Moreover, McDonald’s is considered a negative example of globalization by many researchers. Often these restaurants become the issue within the scope of anti-globalization conversations. Then, McDonald’s restaurants are often the target of terrorist attacks. All these are negative factors that harm the competitiveness of the company to an exact extent. Nevertheless, McDonald’s is the most profitable organization on the market. It currently operates in over 119 countries and 36,000 stores (McDonald’s, 2021). It has increased market power by increasing its visibility in developed markets, such as in the UK and Brazil, by supporting activities such as football to increase volunteering and grassroots influence. It should be noted that the company is very active in distributing advertising on television, on billboards, in cinemas, on the Internet, etc.

McDonald’s has also expanded its menu to include carrot sticks, fruit bags, and drinks like Fruitzz, semi-skimmed organic milk, and mineral water. To increase consumer reach and offer better choices, McDonald’s UK has adopted a product development approach where the Big Mac is accompanied by high-quality coffee and healthy drinks, as well as the best quality food. McDonald’s efforts to reduce the salt content of French fries are one such strategy option. Another clear example of a product strategy is a partnership with Disney for Happy Meals (McDonald’s, 2021). McDonald’s has taken a global approach to penetrate various markets and is currently the most recognizable fast food logo in the world. Nevertheless, the network continues to expand, and every year more and more McDonald’s branches appear, including restaurants and corner cafes. The organization goes beyond its fast food options to offer healthy alternatives.

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McDonald’s partnered with Starbucks and Closed Loop Partners to create a recyclable and compostable glass. The new coffee cup is part of McDonald’s innovative pursuit of packaging and waste reduction. Then, McDonald’s is looking for ways to use waste oil for frying in its business; the answer is biodiesel. In several countries, McDonald’s restaurants recycle used cooking oil for reuse in a variety of products, including the creation of biodiesel, environmentally friendly diesel fuel made from recycled vegetable oils (McDonald’s, 2021). Some of the markets in which the chain is represented (for example, Austria and the UK) have gone even further – and now use some of their recycled oil to fuel McDonald’s trucks.

Competitive advantage is central to a company’s operations in a competitive marketplace, and innovation is the source of gaining and consolidating it. Initially, the concept of innovation covered only a small part of the company’s scope; innovation was represented by an idea/practice/product recently developed and adopted by the company (Moreira et al., 2018; Caiza et al., 2017). Now, in line with the expansion of competition and the perception of innovation as an important source of creating and maintaining competitive advantage, it was possible to see an opportunity to expand the area of professional knowledge from achieved products to means of obtaining such products (Sel et al., 2017). Thus, all activities that play a role in obtaining a product within the company were involved in the competition.

Conclusion

Based on the above, it can be said that despite the undoubted popularity that McDonald’s dishes have won, the key reason why this fast-food chain remains relevant years later is that McDonald’s has never stood still, adjusted to the changing world, and led a continuous innovation strategy. Thus, it might be assumed that the crucial competitive advantages of the company are the strategic focus on innovations, as well as a creative and significant marketing approach.

The abovementioned facts allow assuming that the company’s current strategy is great, given that it is a leader in the industry. McDonald’s should not change its innovative way of operating and develop in this vein. Hence, the corporation can pursue a penetration strategy and sell its products into untapped markets without any fluctuations in terms of management, operations, and other business aspects. Moreover, acquisitions can also be beneficial, given that the experience and good other significant actors could even diversify McDonald’s current services to a greater degree.

References

Caiza, F., Parmentola, A., & Tutore, I. (2017). Types of green innovations: Ways of implementation in a non-Green industry. Sustainability, 9(8), 1–16.

McDonald’s. (2021). McDonald’s homepage

Moreira, A. C., Ferreira, L. M., & Zimmermann, R. A. (2018). Innovation and supply chain management. Springer.

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Sel, C., Pinarbasi, M., Soysal, M., & Cimen, M. (2017). A green model for the catering industry under demand uncertainty. Journal of Cleaner Production, 167(1), 459–472.

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BusinessEssay. (2022) 'McDonald’s Leadership and Competitive Advantage'. 17 September.

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BusinessEssay. 2022. "McDonald’s Leadership and Competitive Advantage." September 17, 2022. https://business-essay.com/mcdonalds-leadership-and-competitive-advantage/.

1. BusinessEssay. "McDonald’s Leadership and Competitive Advantage." September 17, 2022. https://business-essay.com/mcdonalds-leadership-and-competitive-advantage/.


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BusinessEssay. "McDonald’s Leadership and Competitive Advantage." September 17, 2022. https://business-essay.com/mcdonalds-leadership-and-competitive-advantage/.