Maintaining Competitive Advantage Through Effective Business Strategy: Case Study of McDonald's Stratford Restaurant

UWIC ID NUMBER: ST1009253

NAME: ABDUR RAHMAN KHAN

GROUP NUMBER: 1

GROUP LECTURE: HARRY CAMERON

WORKSHOP: WEDNESDAY

MBA JULY 2011

TOPIC

MAINTAINING COMPETITIVE ADVANTAGE THROUGH EFFECTIVE BUSINESS STRATEGY: CASE STUDY OF MCDONALD'S STRATFORD RESTAURANT

TABLE OF CONTENTS

INTRODUCTION 3

INTRODUCTION 3

WORKING TITLE 4

RATIONALE OF THIS STUDY 4

COMPANY PROFILE 5

RESEARCH PURPOSE 6

RESEARCH QUESTION 6

RESEARCH AIM 6

RESEARCH OBJECTIVES 7

LITERATURE REVIEW 8

SCOPE OF THIS PAPER 8

INTERNAL ENVIRONMENT 8

SWOT ANALYSIS 9

VALUE CHAIN ANALYSIS 10

EXTERNAL ANALYSIS 12

PEST ANALYSIS 12

COMPETITIVE ADVANTAGE IN MARKET 14

MARKETING MIX 14

PORTERS FIVE FORCES 16

CONCLUSION 18

RESEARCH METHODOLOGY 19

LIST OF REFERENCES 21

1.1. INTRODUCTION

Today's business environment is changing day by day even in a second. Competitiveness of business organization is the main basis of sustaining in this business environment. At the same time culture, behavior, and perceptions of customers are also changing with the change in time (Hill and Jones, 2009). People are engaging themselves on service profession and most of the families in developed countries particularly UK have parents service holder. These families rely more on fast food restaurants for the arrangement of their food. McDonald is a well known fast food restaurant in the world. It is operating is business successfully world widely. For this reason, McDonald needs more competed business strategies that may suit every country whether it is developed or under developed. Generally an organization is operated under both internal and external environment. Based on internal and external environmental factors strategic analysis is done that has influence on business growth.

According to Henderson and Hooper, (2006) for gaining sustainable competitive advantages and continuous business growth, managers develop long term business planning by analyzing strategic polices and plans. Corporate and business strategies are developed by evaluating both internal and external environmental factors. This paper will analyze the business strategies of McDonald particularly McDonald's Stratford Restaurant. This topic has been adopted by the researcher because organizational success and growth are shown as a road map by strategies planning. Local branch of a multinational organization particularly McDonald's Stratford restaurant has been chosen for this paper. For analyzing and discussing strategies of McDonald, data will be collected from McDonald's Stratford Restaurant to identify the competitive strength of this organization. Current business strategies of McDonald will be analyzed with the help of various analyzing tools. For identifying competitive strength in literature review various theoretical framework of models and their significance will be analyzed and discussed. Data will be collected from both primary and secondary sources and data will be analyzed based on qualitative research approach.

1.2. WORKING TITLE

Maintaining competitive advantage through effective business strategy: a case study on McDonald's Stratford Restaurant

1.3. RATIONALE OF THIS STUDY

Strategic view is so significant in case of business purposes. Today's business does not go without strategic view because competition bound them to be strategic. Strategic management provides the business man strategic view to be crafted in business operation. In competitive market it is worthless to go without strategic planning. Strategic planning helps manager to follow appropriate strategy to face changing or any challenging. It is very important to develop business or corporate strategy for sustaining competitive advantages (Hitt et al., 2010). If a strategy that has been developed by one company is copied by other company then the value worthiness of earlier one is very low because it had to spend huge amount on developing this strategy. Because strategy crafting and executing is not a simple work, it requires sweats of managers. For this reason, mangers of an organization must be aware in crafting and executing a strategy that cannot be copied by other organization easily.

Managers can get the solutions of problems that are created in business operation in the way of fulfilling organizational goals and can identify the business requirements of an organization through business strategy analysis. Business strategy analysis has some objectives such as;

1. Business strategy analysis makes managers aware about the market competition at the time of preparing effective strategy in countering the competition.

2. It makes dashboard regarding the present company situation in the market

3. It leads the managers and analysts to reduce external threats' risk and to pay attention more on benefits.

4. Weakness and strengths are identified by strategy analysis

Since these objectives are fulfilled by strategy analysis, then an organization can be aware of organizational strengths, opportunities, weakness and threats. If an organization can identified its threats and weakness prior then it can formulate new strategy to reduce or minimum these threats or weakness. Today's organizations pay more on strategy execution and implementation and getting the outcomes of this expenditure positively. Not only multination or international organization but also local organization takes strategies planning for sustaining competitive advantages over rival.

McDonald is a multinational fast food restaurant. It has well reputation throughout the world. It also achieve significant market share in each international market. Moreover, it is unknown to everybody the real cause of their success. This paper will analyze the implementing process of business strategies for achieving sustainable competitive advantages in case of McDonald's Stratford Restaurant.

1.4. BACKGROUND OF THE COMPANY

In global business world the name of McDonald is well-known to all. It is a fast food chain restaurant that is the world's leading and largest restaurant. In 1940, two brothers Dick and Mac McDonald started this restaurant in California, USA. Only one item was the starting menu of this largest restaurantand 25 items were added to this menu later. Teen customers are very much attracted by McDonald that helped two brothers to earn huge profits. This returned was revamped in 1948 and menu was confined to fries, milkshakes and hamburgers.

Today, McDonald is providing its services to the people of 118 countries by 33000 local restaurants. It can serve about 64 million customers at its all local restaurants in a day. Its latest menu is big Mac, fries, chicken McNuggests, quarter pounder and McMuffin etc.

Since it operates its business in 118 countries then it has to craft and execute various strategies to achieve sustainable competitive advantages. It also adopted a unique strategy that is the local ownership and operation strategy that is franchising to local people to operate this restaurant.

1.5. RESEARCH PURPOSE

The purpose of this research is to explore the business strategies of McDonald for maintaining competitive advantages.

1.6. RESEARCH QUESTIONS

• Why it is significant to craft and execute a business strategy?

• What is the relationship between effective business strategies and competitive advantages?

1.7. RESEARCH AIM

• To explore and critically evaluate the relationship between effective business strategies and competitive advantages

1.8. RESEARCH OBJECTIVES

• To analyze critically the impact of internal and external environment on business strategies

• To make SWOT analysis of McDonald comparing with other organizations

• To evaluate critically the business strategies of McDonald

• To assess the market strength of McDonald