Business Model by McDonald’s

Q1: Critically Analyze the Business Model operated by McDonald in terms of its Advantages and Drawbacks? The Business Model in Mc Donald is operated by franchisees. They pay about 4% of revenue in addition to rents. If we looked at the model we will find that the company has lands and buildings. So the company keeps its revenue, but the franchisees bearing some risks. Strengths of McDonald’s model

The benefits and advantages of this model can be seen by some features that determined the success and excellence of execute model of franchise. The company’s stability during financial crisis and how it overcomes it. The rate of revenue stream from franchisees is going on to rises highly. The income oriented investors who are holding the stock as an offset for continues income investments and be away of loses. Franchisees are required to meet stringent up-front requirements for capital contributions and management experience. The last benefit of this model is the chance of the company to identify and develop the locations, polices quality, and develops new products. Operations are large scale and efficient.

Weaknesses of McDonald’s model
Sharing profits McDonald and the franchisee seek to earn profits over a long period of time so the revenues must be fixed and sufficient to share profits among them. Loss of absolute control MacDonald doesn’t have the complete right to manage or take decisions alone. So it will deal with the partner who has approved and accepted to process the store by following your training and instructions. Lawsuits with unprofitable stores or uncooperative franchisees if any franchisee was unable to gain or earn money or he has any other reason to be disgruntled, you can be in for a convicted person. State and federal franchise disclosure laws Franchisors are regulated by both federal and state laws. A lawyer is needed to run and manage all documents in business.

Q2: Critically analyze the promotion of Dynamic Innovation by Mc. Donald in Context to Stakeholders. McDonald pays great consider and value for its general public or stakeholders – its staff, suppliers, distributors, shareholders and the consumer itself. The company studied some factors that had a great influence on its business, so it concluded that what market you are in but, and how to assess whether the corporate image of the company is functioning in a positive manner. Public understanding of products and if these products are suitable and required target market and, therefore it can determine the ration of succeed. If you view your product as portraying a certain image that is at odds with the public perception of it, obviously your marketing strategy is not functioning properly. Likewise, if your business itself is viewed in a negative light by actors both internal and external to the company, steps need to be taken including the design, quality, marketing and strategy of what is offered to correct this and therefore create a feel good factor.

Having a good relationship with all publics is highly considered by McDonald’s. Stakeholders of McDonald’s have its own Stakeholders and suppliers. It runs very good relationship with stakeholders and Stakeholders. McDonald’s classifies its Stakeholders into two parts. They are direct Stakeholders and indirect Stakeholders. If we explain the indirect Stakeholders who deliver the components and amounts of food and profits to the direct Stakeholders and the direct Stakeholders produce the food for McDonald’s. McDonald’s paid a great attention and big importance of its Stakeholders and always co-operates with professional manners. This warranty a good chance to develop and earn more stockholders and keep the rate of revenues. McDonalds struggle to promote a good habits like the healthy diets that benefit its customer. Research shows that fast food products are not good for the health, especially for the heart as well as the liver. However, McDonalds debate this matter by try to produce a good food that is immune of cholesterol, fat that causes dangerous and fatal cardiac diseases that threats the human health.

In last decade, McDonald’s made great efforts to get back its corporate fame by releasing the “Fast and Convenient” campaign. The “fast” and “convenient” elements of the McDonald’s campaign were discuss and supported by the “healthy” and “more natural” element, by adding good ingredients like salads, fruits, and carrot sticks to the menu in addition to other elements from nature. These menu innovations give a good chance for the customers who all the time looking forward to changing their meals and like to find new and healthy meals during the day.

Q3: Analyze the Directional Policy Matrix and International Strategies pursued by Mc. Donald. There two kinds of international strategies first one is a global strategy that treats the world as a unit or as a single market. This allows the consumer electronics market. The second kind is the multinational strategy that treats the world as a portfolio of national opportunities. It is applied where forces for global integration are weak and force for national responsiveness is strong. So this is true of branded packaged goods business for example strategy pursued by Unilever. It is applied where forces for global integration are weak and force for national responsiveness is strong. Some urgent factors determining strategy like the global Strategy, Multi Domestic Industry, and Structure Worldwide Uniform. McDonalds is a good example of a company that followed a multi-domestic strategy.

This strategy resulted in: 1. Local need is at first priority. The customer get something that he only desired according to their needs. 2. This strategy of McDonald’s gives more autonomy to the subsidiary, it enables individual subsidiaries of a multinational firm to contest independently in the domestic markets. 3. Innovation from local R&D For Example McDonald’s put in eight years in some countries before its first restaurant came up in 1996. Finally the price determine a lot of things, so the Maharaja Mac confirm that McDonald’s main offering was its competitive price. Of course McDonald’s has set up itself as the pioneer favorite quick-service restaurant. Last years it swept up by careless or reduce the attention to the nutrition habits in some countries which follow different system in feeding and presenting meals.