McDonald’s is a global public corporation that operates in the food industry. The company has a network of restaurants around the world and is highly competitive, including from a strategic perspective. Notably, in 2021, “McDonald’s posted a 41% year-over-year operating profit growth to surpass $10 billion worldwide” (“McDonald’s Reports Fourth Quarter,” 2022, para. 3). The history of the company’s development is a path from a network of local restaurants to the creation of a full-fledged global business that confidently holds its position in the market. This paper aims to analyze how the strategic management tactics helped McDonald’s gain a strategically competitive position.
How Globalization and Technology Impacted the Corporation
McDonald’s began as a franchise of the Speedee car restaurant concept, the McDonald brothers’ first business in San Bernardino. In 1948, the original menu was limited, including hamburgers, smoothies, and fried potatoes (“McDonald’s History,” 2022). The restaurants initially began to operate under a franchise scheme, with 9 locations owned by the brothers and another 10 active franchises in California. In the following decades, the franchise network expanded, part of which was owned by Ray Kroc, the company’s franchising agent. The first steps to entering the global market led to the creation of a chain of 1,000 restaurants in the US, and expansion to Canada and Puerto Rico starting in 1967 (“McDonald’s History,” 2022). The franchise idea proved so simple and effective that today the chain has more than 36,000 eateries in more than 100 countries (“McDonald’s History,” 2022). Interestingly, world-famous companies like McDonald’s can be considered the initiators of globalization processes.
The ideas that emerged from McDonald’s set the tone for the big food business for decades. Despite the consistency of somewhat old-fashioned logos, the delivery of services, which was always based on technology, has become even more automated over time. The first technologies introduced into restaurants were cash registers, coffee and milkshake machines, and fries and burger makers. The systematization of food preparation processes and the supply chain’s hi-tech approaches are unique features of the corporation, which helps to easily open new locations and continue to conquer the global market.
Industrial Organization Model vs. the Resource-Based Model
The corporation uses the theory of strategic management to be competitive and earn above-average returns. First, under the Model of Industrial Organization, McDonald’s corporation pays considerable attention to the external environment. According to the theory, the external environment creates pressure that motivates companies to be competitive, which is true for McDonald’s. McDonald’s is competing for market power with other similar companies such as KFC and local franchises. These companies control a similar resource, ensuring relative equality between competitors in the market. The success of McDonald’s is related to the monitoring of new market participants and interaction with them, as well as the principle of the franchise, when the company constantly attracts new forces, being in an active state of expansion.
No less interesting, the resource-based model is also applicable to describe the activities of a corporation. McDonald’s has unique resources, including years of experience in the market, which guarantees well-established work processes, supply chains, and quality checks. Therefore, McDonald’s strategy is to keep the market; the company also goes through crises, entering new rounds of development (“McDonald’s History,” 2022). Unique resources include the vision and mission of the company, which determines the attitude toward hiring and career advancement of employees and the organization of work processes.
Vision and Mission Statement and Overall Success
The mission of the company is consistent with its vision and is to satisfy the needs of customers. McDonald’s also sees its mission as ensuring that employees enjoy their work and communities get support from the company. The corporation has developed a unique policy that considers affordability, time availability, choice, personalization, and speed (“Our Mission and Values,” 2022). In general, the company’s mission is to create a special atmosphere of ease, reliability, unpretentiousness, and hospitality.
The mission and vision of the company are consistent with its values, such as service, inclusion, honesty, and attention to family and community values. McDonald’s puts people first and provides opportunities for support and career growth to all who are ready to work for the good of the company. Equally important, honesty is a priority, as is the support of the community and families. Family values imply friendly relations in the team, which helps the corporation to achieve success (“Our Mission and Values,” 2022). The practices of corporate social responsibility are part of the mission and vision, which testifies to its modern and global approach. The main contribution is the career development and financial provision of employees, based on inspiring leadership and transformational leadership, and growth strategies such as ‘Accelerating the Arches.’
How Stakeholders Impact the Overall Success
McDonald’s values all stakeholders, from investors, franchisors, and shareholders, to employees, customers, and communities. Each of the stakeholders makes an input to provide for the company’s overall success. Loyal communities can become new team members, customers, or even shareholders. McDonald’s Corporation pays enough attention to its corporate image, and the fairness of relations within the company is ensured by a system of cross-leadership and a system of balances in management.
This can be evidenced by an interesting document published on the SEC website in 2020. According to the information in the document, Dieter Waizenegger, the CEO of a CtW Investment Group that owns a significant stake in McDonald’s, calls on the remaining shareholders to help take sufficient measures to punish former McDonald’s CEO Steve Easterbrook, and deprive him of money that he officially got after his dismissal. Potential outstanding fees are $44 million, plus Easterbrook’s actual $675,000 in severance pay (“Notice of Exempt Solicitation,” 2020). The former CEO received the money after a scandalous dismissal as a result of claims of employees of the company sexual harassment by other employees that had a real basis, as well as complaints about employees drinking in Florida restaurants. The presence of a document in the public domain demonstrates the publicity and transparency of the company’s policy, as well as concern for its stakeholders, such as shareholders, investors, employees, and customers, which, as a result, benefits the business as a whole.
Thus, it was analyzed how the strategic management tactics helped McDonald’s gain a strategically competitive position. Globalization and technology changes have allowed the company to reinforce its market leadership position as McDonald’s, in many ways, is a company supporting and pushing the globalization process. The use of technology, at the same time, makes it possible to stabilize production processes. The corporation satisfies the requirements of strategic models by paying sufficient attention to the industry and competitors, as well as relying on unique resources and qualities. The mission and vision of the company are implemented in practice based on the values of honesty and service to communities and other stakeholders.
McDonald’s history. (2022).
McDonald’s reports fourth quarter and full-year 2021 results. (2022). Web.
Our mission and values. (2022).