Employing Strategies in a Competitive

Employing Strategies in a Competitive Environment

Create an environmental scan for McDonalds indicating the most significant environmental threats and discuss how the company should respond to each threat to ensure that the impact to the business is minimal.

The environmental scan, both internal and external, gives a picture to the company that what needs to be done and what can be done (Rowel, Moore, Nowrojee, Memiah, and Bronner, 2005, p. 527). The external environment of the McDonalds i.e. Political, Economic, Social, Technological and legal environment is such that the country celebrates capitalism and supports competition. The economy of the country has faced some challenges in the past yet it is above almost all other countries in the world. People have enough buying power and they like fast food items and eating out. The technology is not as much critical as it is in media and Telecom companies yet the technology and procedures help McDonalds improve its processing. Finally the legal system of the country is tight and there is sufficient tax, environmental and quality assurance laws that need to be abide by.

The internal environment analysis of McDonald shows that it has always valued its people and promoted them fairly. The company encourages creativity and new ideas and developed a culture of friendliness. Besides people, McDonald's brand name is its biggest strength as well as asset.

Threats:

The social demographic analysis of McDonalds revealed that the population that adopted the culture of fast food is aging. Besides that, the overall population of the country is aging too. The young customers are decreasing that were the basic target in the ads of McDonalds.

The public opinion, besides aging population, is also a threat for McDonalds. The people are taking fast food as the source to gain weight since it is all junk. The customer opinion, based on his experiences, is that they need to move to healthy food and to have junk food only occasionally.

Responding to Threats:

The company should know that the aging population means more people have pension than salaries thus McDonalds needs to offer customized deals particularly for aged people so that they feel valued. Also the price of deal should be affordable for them. The McDonalds should also work to improve people perception by making the burgers healthier.

2. Based on the environmental scan, evaluate McDonalds' strengths and evaluate how it can leverage these strengths so as to yield a competitive advantage in the marketplace.

Environmental scanning helps in strategic planning as well as decision making and the companies that make plans after environmental scanning have higher growth rates and profits (Rowel, Moore, Nowrojee, Memiah, and Bronner, 2005, p. 529). It tells the company about its strengths that can be used to grow and earn profits. The growth of McDonalds since 1955 to become one of world's largest fast food chains is owed to the sincere appraisal and appreciation of its people. McDonald promoted thousands of restaurant workers to the managerial posts. And people say that the minorities find it work place heaven since there is diversity in the company. McDonalds can take advantage of loyal team to increase its profits. The company does not face critical levels of turnover thus turnover cost is low. Also the cost of external recruitment is controlled at managerial level. The company can choose to make the workforce its advertisers by being much more welcoming to the clients and customers particularly to the aging population so that they remain loyal customers.

McDonald knows that American law and well as society like social work. Thus it can start socially responsible activities to penetrate farther in the system. The company's brand name is enough to support the social and CSR projects.

3. Identify a significant competitor for McDonalds and assess how your company will compete against it to maximize profits and create value for stakeholders.

McDonalds is tied up to KFC and Starbucks in the competition. These companies are always in the race of top rankings in the fast food industry. Particularly McDonalds and Starbucks fight daily on sales as well as share prices (Brush, 2011). The Starbucks growth has been slow during last some periods yet it offers a tough competition to the McDonalds by offering extensive sale points. The two companies are in competition war yet the customer base of the two is totally different. The Starbucks customers are more affluent and the McDonalds customers are more price sensitive (Shaughnessy, 2013).

The company can work on the customer pool that lies between total affluent and totally price sensitive. The company, like it has done before in 2012, can float the videos of its hygienic processes on YouTube. It can show that McDonalds operates cleaner that the clean companies and that eating at McDonalds mean eating healthy and quality. Thus there should be deals and sitting areas designed for middle and rich class too so that a big customer base is not overlooked.

McDonald's play areas are a fun for the kids thus the families like to come to McDonalds than going at other restaurants. The company can improve its play areas by offering 3D motion experience in the toy areas so that it is an unforgettable experience for the kids and the family feels entertained too besides eating their favorite burger.

4. Assume that the U.S. economy is in a state of decline requiring modifications to the strategy. Evaluate how the strategy should be modified. Provide a justification of how this will help the company continue to compete in the marketplace.

The company's business directly depends on the buying power of the consumers. As the consumer gets more buying power or the income, he eats out more and the company revenues increase. In the face of supposed decline in the economy of the country, there will be fewer sales, less revenue and less income. To deal with that the company can take measures to compete by either dropping the prices of deals or by cutting its costs.