2. Organisational Profile
3. Market Analysis
Porter’s Five Forces
4. Identification of Strategic Alternatives
The following is a report on the fast food market and more specifically McDonalds. This report aims to establish the strength of the fast food market and the strength of McDonalds within this market. It will help to establish what objectives McDonalds can strive towards in the future. The report consists of: a look at the organisation itself; an analysis of the market with the help of PEST analysis and Porter’s five forces; identification of strategic alternatives with the use of SWOT analysis; short, medium and long term recommendations for McDonalds.
2. Organisation Profile
The fast food market is extremely competitive and will continue to be so due to the constant demand for quick and convenient burger-based meals. Within this market McDonalds is the Worlds largest food service retailing chain with over 31,370 fast-food restaurants in over 118 countries. On top of this McDonalds has 1206 branches in the UK. At this current moment in time there is a shift towards healthier eating, however McDonalds still continues to be successful with the help of various innovations. Although McDonalds is the largest fast food retailer in the World it is not without competition from the likes of Burger King, KFC, Gourmet Burger Kitchen and Starbucks.
3. Market Analysis
In order to stay on top of the fast food market McDonalds needs to be aware of changes within the market and its movements. Therefore there is a need to be aware of the ‘Macro’ and ‘Micro’ elements. The ‘Macro’ environment is a number of broad forces that affect not only the company, but also the other actors within the ‘Micro’ environment. Major ‘Macro’ factors that impact a business can be analysed through PEST analysis.
3.1 PEST Analysis
Political Environment: The political environment covers external forces controlled by government regulations, some of which are enforced by law. There are Health and Safety regulations that need to be adhered to in every restaurant. For example the working conditions for staff, storage of food, preparation and cooking of food and general cleanliness within restaurants. There are also many ethical issues within the market such as trading standards and the quality of the product. McDonalds offers fair trade coffee and organic milk in all stores as well as running their delivery lorries on bio-diesel which is made from recycled chip oil. McDonalds also ran a pilot scheme in South Yorkshire using its recycled waste to heat and power 130 public buildings in the area.
Economic Environment: The economic environment covers both micro and macro economic conditions which will affect the structure of competition within the market and the cost and availability of money to invest in new products. Government policy is the main economic influence of industry; their economic policy affects interest rates which has a direct impact on both consumers and business. A major factor that is affecting the economic environment at the moment is the ‘credit crunch’. As a result McDonalds is has recently had to make adjustments to its prices along with every organisation in the fast food market.
Sociocultural environment: The sociocultural environment is of particular concern to marketers as it has a direct effect on their understanding of customers and what drives them. Not only does it address the demographic structure of markets, but it also looks at the way in which attitudes and opinions are being formed. The new healthier eating campaign has had quite an effect on the fast food market as a whole. In order to adapt with customers needs McDonalds has introduced chicken meals, fruit...
References: • UNIVERSITY OF THE WEST OF ENGLAND, 2008. University of the West of England [online]. Available from: http://www.uwe.ac.uk/ , Accessed [15/08/2008].
• MINTEL, 2008. Mintel [online]. Available from: http://www.mintel.com/ , Accessed [15/08/2008].
• David Jobber, 2007. Principles and Practice of Marketing. 5th Edition. Published by McGraw-Hill Education.
• Blythe, J. 2006. Marketing. Sage Publications.
• Mark Sweney, June 30th 2008. The Guardian [online]. Available from: http://www.guardian.co.uk , Accessed [15/08/2008].
Please join StudyMode to read the full document