Analysis of Mcdonald’s in Sustainable Competitive Aspect

Strategic Writing

McDonalds' Sustainable Competitive Advantage

Sustainable competitive advantage is the distinctive position that a company establishes with respect to competitors that enables it to consistently perform better than them (Grant, 1991). A sustainable competitive advantage comes about when a company is in possession of value-creating procedures and situations that cannot be replicated or copied by other companies (Baron, 1995). As such, it is imperative for a company to sustain its sustainable competitive advantage at all times and for as long as possible (Schuler and MacMillan, 1984). It enables the company to maintain and improve the competitive position of the company in the industry and in the marketplace (Mehta and Mehta, 2013). As a result, the company is able to ensure competition for lengthy periods or spells. In is imperative to take note that sustainable competitive advantage can be established and developed over a certain period on the basis of a number of distinctive capabilities and proficiencies (Foon and Nair, 2010). For instance, this can be centered on innovation, expertise, experience, and distinctive use of information. Overall, a company's competitive advantage is considered relevant and beneficial only if it is experienced in the market or industry and the disparity ought to be seen as a significant buying measure to a considerable consumer base (Mishra and Dwivedi, 2013). For that reason, such competitive advantage will only continue to sustain if no one is able to copy and replicate it (Vinayan et al., 2012). This particular paper will focus on the sustainable competitive advantage of McDonald's, and how it relates to organizational success.

Diversity, Corporate Level Strategy and Business Level Strategy

McDonalds is one of the well renowned international organizations that have multiple products and services across the world across different geographic boundaries. The global organization is perceived to be one of the most successful organizations in its industry of operation. This success as perceived in the following analysis is tied to diversity in its products and services and also with regard to its corporate level strategies and business level strategies.

McDonalds is well-known to be one of the biggest fast food restaurants in the world. One of its competitive advantages lies on the aspect of innovation. McDonalds constantly comes up with new product lines with the purpose of staying at par with the new trends, tendencies and also preferences or tastes of the consumers. Its great diversity into newfangled business ventures is deemed to bring a competitive advantage over its rival companies. One good example is the decision of the company to join the coffee market by opening and unveiling a sequence of cafes within their fast food restaurants and named them McCafes. This is also perceived as a business level strategy because regardless of the early cynicism, McDonalds' product offering was considered of having the capacity to beat the severe competition. In fact, according to a taste test report from a consumer survey established that McCafe's drip coffee was more valued and loved in comparison to rival companies such as Dunkin Donuts and Starbucks (White and Moraschinelli, 2009).

Perhaps this could be attributed to the business level strategy undertaken by McDonalds of pricing their coffee at a lower price compared to that of Starbucks. It is imperative, however, to take note that the prices set by McDonalds were not lower at all times compared to Starbucks and Dunkin Donuts prices for similar products. Nonetheless, McDonalds undertook a corporate level strategy of marketing and advertising their specialty coffees as frugal and economical, less ostentatious substitute to Starbucks coffee blend products. McDonalds' corporate level strategy of making the most of the coffee boom that was initiated by Starbucks gave it a competitive advantage in the market as the company made product offerings together with a distinctive in-store consumer experience (White and Moraschinelli, 2009).

One other competitive advantage of McDonald's lies in its corporate strategy level and business level strategy of expanding into several nations. For instance, according to Han (2009), McDonald's continues to be the biggest company in the fast food industry with over thirty thousand restaurants in over 120 nations. Han (2009) goes on to state that statistics indicate that in the year 2001, the company served over sixteen billion consumers across the world which was comparable to dinner as well as lunch to every human being in the globe. In addition, the sales revenue of the company amassed to over thirty eight billion dollars globally which made the company stand out as the biggest fast food service company across the globe. In addition, the company has a competitive advantage over other companies in the industry as its supply chain includes business operations of other restaurant brands. This includes, Chiptole Mexican Grill, Aroma Cafe, Donatos Pizza and also Boston Market (Han, 2009). Another competitive advantage related to the company's business level strategy, is how prominent the supply chain of McDonald's is owing to its personnel that are educated and trained in its unique operating processes and practices at the corporation's Hamburger University. In addition, about a few years ago, the company was ranked as being the biggest employer in the world with almost 400,000 personnel internationally (Han, 2009).

Diversity as a strategy has been key in the success of the business operations of McDonald's. The company employs this particular strategy to endeavor into other businesses that has given the company a sustainable competitive advantage. This is because, the company has been able to be at par with the changes in the market preferences and trends and more so in the incessant increase in competition within the food chain industry (Lim and Yazdanifard, 2013). This can be perceived in business actions undertaken by McDonald's such as placing emphasis on healthy meals by presenting new items within the menu such as salads. In addition, the company over the years has transformed and restructured the general appearance of the restaurants amidst espousing strategies that are newer and more innovative. Resultant of this, McDonald's has attained the capacity to have a sustainable competitive position within the market setting which is continuously becoming more competitive with the entrance of new players within the fast food industry (Lim and Yazdanifard, 2013).