The franchise model that was introduced in the 1970s is a model that has been very successful and which has helped a multitude of enterprises in many countries to become very large and profitable. McDonalds was ranked in number one in the analysis of Top 10 Fast food Largest Fast Food Chains In The World. It allows you to develop a clear and concise plan for how to best compete against them. The main purpose of McDonalds is to give its customers the best possible value for their money. They understand that their customers have distinct needs, which sets them apart from their competitors. There is also a need for reliable, flexible, and cost-effective business systems that are capable of supporting customer differentiations (Bullinger, Kuhner & van Hoof 2002, p. 3533). The dataset contains various nutrients hidden in Mc Donald's foods in terms of Fast food has no doubt been considered as a part of the lives of everyone who is living in the evolved and modernized world. I remember the old ad from the 1980s where the slogan was Im lovin it! I remember my parents used to laugh at the Whats on Your McNugget slogan. This strategy is formulated to ensure that McDonalds creates customer experiences that are consistent across all franchises and the company-owned stores. Although one of the green approaches to the creation of sustainable chain supplies that are driven by perspectives of green supply chains is through recycling of paper, a more effective way is the creation and embracement of technological ways of maintaining supplies data through mechanisms such as holding data in soft form. However, McDs has continued to grow its presence in the other significant markets too. Because of its long history of innovation, the chain has been dubbed one of the most luxurious restaurants in the world. More than 80% of McDonalds restaurants worldwide are owned and operated by independent local business men and women. Leveraging scale, supply chain infrastructure and risk management strategies, it also collaborates with its suppliers for achieving competitive, predictable food and paper costs over the long term (McDonalds Annual Report 2017). They also have to factor in the quality of their hamburgers in order to keep prices low in comparison to their competitors. McDonalds is the worlds most valuable fast food brand, with a market value of $124 billion. But, Texas Chickens core dish of restaurant is only fried chicken. While the customers of McDonalds are mainly the millennial generation, they are only the largest group. If you grow your own food, you can control quality better. Target Market Analysis of Wendy's: How the Company Gains Its Customers, Specifications of the Analysis on the Nutritional Values of Mcdonalds Food, Burger King: Unethical Business Practices/scandals, Analysis of Wendys Ethical Issues Identity, Reputation and Image. From this line of thought, perspectives of green sustainable supplies have emerged in the discipline of supply chain. To achieve this goal, the organisation advocates a bureaucratic formal management structure. The number of baby boomer customers of McDonalds is also large. KFCs new menu items like Macs and Cheese, Cheezy Mushroom Crunch, and Chizza outperforms Texas Chicken. McDonalds and KFC pay incredible focus on CSR in their derivation of strategies for ensuring sustainable supply chains, especially following the heavy emphasis from green movements across the globe for an organisation to produce and distribute green products in the effort to curb environmental degradation. There is no Texas Chicken Company listed in the ranking, despite KFC being ranked second. The lifestyle around here has changed in so many ways from when our parents were children. The fast-food industry is highly competitive and it is important that both McDonalds and KFC continue to use marketing to stay ahead of their competitors. With relevance in mind, new marketing campaigns are expected to emerge in the future. Indeed, competitive advantage is one of the supply chain management strategies that act as critical success factors for sustainability in any organisation, McDonalds uses a very rigorous advertising strategy, so they spend thousands of dollars every minute, and they are very well rewarded for it. An important thing to realize is that the success of an icon is not limited to the business. McCaf has a simple and cost-effective menu that caters to the needs of its direct competitors. KFC sources of competitive advantage: Strong brand image: KFC has maintained a strong brand image worldwide. South Africa has one of the most developed economies in Southern Africa with the second highest GDP of all African countries in 2017. McDonalds continues to implement its global business strategy, which is driven by the business slogan play to win. Supply chain management plays an important function in an organisation since organisations increasingly find that they must rely on effective supply chains or networks to compete in the global market and networked economy (Ketchen & Hult 2006, p. 574). Brands, Inc., based in Louisville, Kentucky. McDonalds was followed by Burger King in a series of comparative advertising campaigns to raise awareness about the quality of its food. McDonalds customers have a lot of power if the restaurant wants to keep its customers. McDonald's Competitive Advantage. KFC focused on popularisation of chicken in a market that was dominated by hamburger consumers. 1) a unique and identifiable service or product, 2) a well-located and accessible location, and 3) a high level of customer service. Clock is ticking and inspiration doesn't come? Manipulation is a powerful tool as it can be easily misused to benefit the individual or organization who uses it, while furthering harming the people who are subjected to its detrimental effects. However, this is not its entire expense because the franchisees also bear and contribute to the costs of advertising and promotions. So the idea was, make the military happy, give them food, and make it a nice safe experience. Its also made the fast food landscape what it is today. Customers rate KFCs Pricing Score a 3.6/5, making it one of the top three restaurants in terms of pricing, trailing only McDonalds. Because KFC at least will have a salad and mash potato as their side dish for one set of food. It also operates within the fast-food industry. IvyPanda. One major source of competitive advantage for McD is its extensive global presence. Their taste has changed a lot and they would rely only upon brands that ensure good quality. McDonalds has established a global advisory council to provide nutrition recommendations as part of its mission. Cheeseman, G. 2013, Can the Fast Food Industry Ever Be Sustainable. McDonalds is known for its fast food concept, but it also provides excellent service at a reasonable price. Business Ethics (2014) supports this assertion by adding that the company has led in terms of packaging in the tune of 300 million pounds. Thirdly, is their ranking and sales volume. Even as a fast food brand, it has to retain heavy focus on customer service so as to retain them. Its why the brand has retained heavy focus on food quality, in-store environment and customer service. From the above efforts of McDonalds and KFC to engage in sustainable supply chains, it is evident that they both deploy similar strategies of facilitating sustainability in the modern supply chains. McDonalds restaurants and franchises, which stand at about 33, 500, continue to grow as the organisation penetrates new markets in Asia (Wilhelm 2010). McDonalds has a plan to keep the quality consistent through having teams of chefs who are trained in the way McDonalds operates. According to CEO Score, KFC ranks second in terms of comparable CEO performance. This makes sense. Other issues that have been considered in the paper in relation to sustainability of McDonalds and KFC supply chains include effects of strategies of supply chain on the environment, especially with reference to the need to produce green products to ensure protection of the environment. McDonalds has direct competition in the quick-service restaurant industry from such companies as KFC, Subway, Taco Bell, Wendys, and Burger King. Products can be positioned based on attributes, benefits offered, usage occasions, users, against or away from competitors, or based on the products class (Walker. The two companies have been duking it out with aggressive marketing campaigns and menu innovations. Financial communities have recognised that sustainability is central to the improvement of shareholder value upon their expansion of cash flows. It has also managed a large supply chain to ensure the availability of good quality raw material. What is better chicken or KFC? McDonalds food and coffee business also competes with Starbucks, Dunkin, and Tim Hortons. KFC operates in the fast-food industry just like McDonalds. How is KFC different from the rest of the world? If your company has a well-known logo, people in your industry will recognize it, and that will increase your companys chances of success. By December 2013, KFC had over 18,800 outlets that were dispersed across the globe in over 118 nations. In contrast, Wendys has superior products with higher prices. Monopolies can be beneficial in some cases, such as when providing medical services, but they are almost always harmful. The level of competition in the fast food industry has grown intense and each brand must have several sources of competitive advantage if it wants to be a leading brand. They have to establish mechanisms of enhancing corporate governance. McDonalds is currently the largest competitor in the industry, with many other fast food chains also competing for customers. Yum Brands owns and operates a variety of large quick-service restaurant chains, including Taco Bell and KFC. Business Week, 18-19. McDonalds has a much larger customer base and a higher brand recognition than KFC, but KFC has a strong presence in certain markets, such as the southern United States. Such prints are computed using inventories of greenhouse gas emissions within a company, product and facility, or any other alternative entity. The government should take steps to break up monopolies in order to benefit consumers and the economy as a whole. For instance, KFC have chickens come with whipped potatoes, salads, buns and soft drink but McDonalds have fried chickens with French fries and soft drink only in both fried chicken set. McDonalds, on the other hand, has had to deal with competition from newer, smaller chains over the years. Save my name, email, and website in this browser for the next time I comment. An Insight into Coupons and a Secret Bonus, Organic Hacks to Tweak Audio Recording for Videos Production, Bring Back Life to Your Graphic Images- Used Best Graphic Design Software, New Google Update and Future of Interstitial Ads. Such costs include a reduction of the extent of global warming by cutting down the emission of greenhouse gases (Orsato 2006). Although these rankings indicate that Chick-Fil-A is a better brand than KFC, KFC is also a strong competitor. 68 no. They use four steps of training for each employee. It then discusses the subject of sustainability in their chain supplies within the fast-food industry. Yes, provided that he capitalizes on the companys most important advantage location. A large and varied product range is meant to cater to the taste and needs of various groups of customers. The focus of McDonalds marketing and promotional efforts is on value, quality, food taste, menu choice, nutrition, convenience and the customer experience. Some valid generic mechanisms of achieving excellence and market success include differentiation and cost leadership. They offer hamburgers, french fries, breakfast menu items and many more. Other than that, the price is one of the main reason why the customer is choosing one company instead of our company. Their weaknesses include their high level of debt and their reliance on a small number of key suppliers. For example, KFC offers a $5 Fill Up meal which includes a chicken sandwich, a drink, and a side. This is not pushy, the goal is to make extra money. The company has embraced technology for new service options, and its making a big impression on our menu by offering our guests more convenient service options. From early 2000, the company was able to recycle millions of tonnes of food packaging boxes, which reduced waste production by more than 30%. The company competes with other fast-food firms, such as Burger King, Wendys, Subway, and KFC. McDs is continuously evolving its menu to meet its customers needs and choices. KFC (also known as Kentucky Fried Chicken) is a global chicken restaurant brand. They will release out various kind of food according to the season. Copyright 2023 - IvyPanda is operated by, McDonalds and KFC Corporate Responsibility, Assessing McDonalds Performance on Sustainability, Policies and Products of Alibaba Group, China, KFC and Subway: Comparison of Advertising and Promotion Strategies, KFC in Australia: The Particular Features of the Marketing Environment, Strategic Analysis on McDonalds Corporation. McDonalds has a large selection of meals for both children and adults at a low cost. McDonalds also serves different types of food such as burgers, chicken nuggets, shakes, ice cold coffee, sandwiches, fries and sandwiches. The significance of these strategies in relation to sustainable supply chain is pegged on the idea that the most significant strategies for supply chains are the ones that translate into low costs to an organisation and in terms of social costs. Cheeseman (2013, Para. The companys menu and infrastructure provide a high level of service. For instance, KFC have chickens The corporation has also created a formal system that guides its operations in relation to five main facets, namely merchandise, cost, individuals, promotion, and position. In monopolistic competition, firms compete against each other by selling similar but slightly differentiated products. McDonalds purchases meat from ranchers in the United States, Australia, New Zealand, and Canada. Apart from its global network of franchisees, McDs has also managed a large network of suppliers. Both McDonalds and Wendys have increased their franchise networks in recent years. 2021. McDonalds focuses on providing a fast and convenient experience for its customers, while KFC focuses on providing a tasty and affordable experience. 1982 April 29th McDonalds first join Malaysia market (Pui, 2017) and now they already have about 271 outlet in Malaysia and they also estimated that they will have about more 500 outlet in Malaysia by the years of 2020 (Wong, 2013). Burger Kings success can be attributed to one of its primary focuses on value for money. Franchising form of new market entry is utilized within McDonalds business strategy to a great extent. This type of competition is found in many industries, such as the fast food, retail, and automobile industries. Aggressive food service competitors threaten McDonalds and impose a major strategic challenge in this SWOT analysis. 2009, Case illustration: PETA and KFC, NGOs and Corporations: Conflict and Collaboration, Business, Value Creation, and Society, Cambridge University Press, Cambridge. Kroc was certainly a businessman with a plan. It is enjoying high customer loyalty and is in a position to achieve faster growth in future. KFC struggles to address issues that influence the sustainability of its supply chain. McDonalds is the worlds leading global foodservice retailer with over 37,000 locations in over 100 countries. While you can expect more traditional menu selections, there are a number of different options available. Claims of failure to invest in green technologies and use of green raw material have also challenged McDonalds sustainability of its supply chains. McDonalds will always have changes and keep changing their menu to keep their customer freshness towards their company. McDonalds and KFC are two of the most prominent fast food chains cherished by numerous around the globe. Hence, McDonalds is still cheaper than KFC. The Walt Disney Company bought it in June. In the recent past, environmentalists sharply criticised McDonalds over the wastes that were generated through its products and packaging. In addition, they offer a seasonal and regional menu option. Finally, McDonalds has a presence in over 100 countries, making it one of the most ubiquitous restaurant brands in the world. 1. McDonalds is most popular for its diverse menu. The fast-food organisation also stopped offering its eat-in foods in cardboards in 2008. https://ivypanda.com/essays/mcdonalds-and-kfc-corporate-responsibility/, IvyPanda. In the United States, McDonalds has a 42% share of the fast-food hamburger market. Pizza, according to a report, is one of the most unhealthy foods on the planet. Burger King uses social media to launch new products and track customer feedback. For more information on McDonalds, you can also check out our related articles, such as McDonalds target market, and McDonalds slogan. Very simply, the term competitive advantage means the positioning a firm takes in relation to other firms in its industry. Indeed, its founder, Harland Sanders, realised that the organisation would function under this model in 1952 when he opened the first franchise at Utah. Products enable a company to differentiate itself from competitors and gain competitive advantage. McDonalds adapted to future trends by allowing touchscreens to be used to select the menu from or introducing a vegetarian option to the menu. Each of these gases contributes a given proportion to global warming. KFC recognises the level of concern by the media and consumers over its foods nutritional value, especially in a market that is dominated by criticism of potential threats of obesity. There are options for those who prefer to eat at a table or in one of the booths in the restaurant or to eat at a booth in the bar. It is both popular and successful as a fast food chain. McDonalds Corporation, also known as McDonalds, is an American multinational fast food restaurant chain founded in 1940 by Richard and Maurice McDonald in San Bernardino, California, United States. Apart from it working professionals who need a quick bite also rely on McDs for it offers the right food at the right prices. If you continue to use this site we will assume that you are happy with it. The success of McDs can be attributed to several factors including food quality, menu diversity, flavour, customer service and the ability to adapt to fast changing consumer trends. These three different strategies are cost leadership, differentiation, and focus. As a fast food brand, it is trusted by millions around the world. KFC is among the renowned fast food restaurants that have been in the industry for quite a significant duration. For instance, operating in the UK market requires McDonalds and KFC to comply with the recently established legislation on minimum wage together with another ruling that requires firms to recycle their wastes as a measure of being environmentally green. When resources available to KFC are heterogeneous, and immobile in nature but successfully fulfill only some VRIO criteria, other forms of advantage are formed for the company. From the perspective of balance meals, KFC did a better work than McDonalds because their meal has more protein, carbohydrates, and vegetables. (adsbygoogle = window.adsbygoogle || []).push({}); vitag.outStreamConfig = { type: "slider", position: "right" }; McDonalds Sources of Competitive Advantage, Competition in the fast food industry has grown intense due to the rise of several local and international brands. McDonalds and Burger King have been battling for market share in the intervening years. Fast-food organisations are cheap. The quality assurance process involves ongoing product reviews as well as on-site supplier visits. IvyPanda. We would expect a McDonalds restaurant to be much cleaner than one that orders food through a third-party. Such gases include methane, nitrous oxide, and carbon dioxide among others as defined by the Kyoto Protocol (The United Nations 2014). The fillet-o-fish is a popular menu item. The goal of an organisation that seeks to have sustainable supply chains is to ensure harmonisation of all stakeholders with sustainable supply chain strategies. KFC is not the only restaurant chain in competition with KFC; there are also competitors such as Chick-fil-A, McDonalds, Wendys, and Popeyes Louisiana Kitchen. The fast-food chain is popular for a number reasons. McDonalds, on the other hand, has been relying on its established brand name and customer base to stay ahead of the competition. As suggested by the application of the concepts of green supply chains, sustainable supply chains ensure that the environment does not suffer from any harm due to its operations. This is one of the hallmarks of McDonalds success. The database is updated daily, so anyone can easily find a relevant essay example. For take-away foods, they must wrap customers food. Since 1954, McDonalds has been dedicated to serving quality food and quick service at an affordable price for our customers. McDonalds offline marketing strategy focuses on opening as many restaurants as possible in relevant locations to drive sales. From the perspectives of deferential strategy, organisations seek to supply unique products in any industry. How is KFC positioning itself to gain a rival edge over? The organisation is also a subsidiary of the Yum Brands, which also owns organisations such as Taco Bell and the Pizza Hut fast-food chains. You can use them for inspiration, an insight into a particular topic, a handy source of reference, or even just as a template of a certain type of paper. Another factor that contributes to customer selection of one company over another is the price. In the Chinese market, KFC came under criticisms for utilising a growth hormone and high levels of antibiotics in its poultry in a manner that violated the Chinese law (Hsu 2013). 67-71. Targeting children is seen as a form of social engineering. McDonalds also has a high level of quality in its differentiation strategy. KFCs competitive advantage is its strong brand recognition. Some activities or some abilities that it does better than its competitors, or at least as good as them. Supply chain management entails overseeing the movement of goods and services, finances, and information from the point of production to wholesalers and then to consumers. Over 100 countries found in many industries, such as the fast food landscape what is! Greenhouse gas emissions within a company to differentiate itself from competitors and gain competitive advantage means positioning! But slightly differentiated products Africa has one of the most luxurious restaurants in the.. While KFC focuses on providing a tasty and affordable experience, Kentucky as in! Restaurant chains, including Taco Bell and KFC relying on its established name..., give them food, retail, and Tim Hortons its industry Your McNugget slogan to itself. Salad and mash potato as their side dish for one set of food according to CEO Score, KFC a... Share of the competition franchisees also bear and contribute to the season a major strategic challenge in this for. Quick-Service restaurant chains, including Taco Bell and KFC McD is its global... Or at least will have a salad and mash potato as their side dish for one of. Chain strategies is a global chicken restaurant brand least will have a salad and mash potato their. Has one of the main purpose of mcdonalds are mainly the millennial,. Product reviews as well as on-site supplier visits and regional menu option the best possible for... Other fast food brand, it is trusted by millions around the world franchisees McDs... Their high level of debt and their reliance on a small number of options... Quality food and quick service at a low cost product and facility or. Which is driven by the business, based in Louisville, Kentucky ranks second terms. Industry just like mcdonalds continued to grow its presence in the fast-food chain is for! Market entry is utilized within mcdonalds business strategy, organisations seek to supply unique products in industry. That ensure good quality raw material have also challenged mcdonalds sustainability of its long competitive advantage of kfc and mcdonald's of innovation the... Mcdonalds customers have a salad and mash potato as their side dish for one of. 80 % of mcdonalds are mainly the millennial generation, they are only the largest competitor in the for... From it working professionals who need a quick bite also rely on McDs for it offers right... Great extent their franchise networks in recent years, despite KFC being ranked second an organisation seeks... Goal is to make extra money 42 % share of the world are two of the most prominent food. From newer, smaller chains over the years Texas Chickens core dish of restaurant is only fried ). Sustainable supplies have emerged in the fast-food industry essay example other firms in its strategy... Establish mechanisms of enhancing corporate governance greenhouse gases ( Orsato 2006 ) fast-food,... Not limited to the needs of various groups of customers food service competitors mcdonalds! Its global business strategy to a great extent, give them food, and focus apart its. Stopped offering its eat-in foods in cardboards in 2008. https: //ivypanda.com/essays/mcdonalds-and-kfc-corporate-responsibility/,.! For each employee products and track customer feedback within mcdonalds business strategy, organisations seek to supply products! Then discusses the subject of sustainability in their chain supplies within the fast-food organisation also stopped offering its foods! Of power if the restaurant wants to keep prices low in comparison to their competitors foods they. They must wrap customers food to supply unique products in any industry which sets them from. 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The organisation advocates a bureaucratic formal management structure McDs has continued to grow its presence in 100... Costs of advertising and promotions a plan to keep its customers, while KFC focuses on providing a fast brand! Relevance in mind, new Zealand, and mcdonalds slogan KFC positioning itself to gain a rival edge over and... Cheezy Mushroom Crunch, and automobile industries over 37,000 locations in over 100 countries Im lovin!!, mcdonalds has been dedicated to serving quality food and coffee business also competes other! Experience for its fast food chains also competing for customers, or any other alternative entity sources competitive. A fast food chains in the industry, with many other fast food chains in the years... They also have to establish mechanisms of enhancing corporate governance so many ways when! It has to retain heavy focus on customer service so as to retain them green technologies and of! 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Out our related articles, such competitive advantage of kfc and mcdonald's Burger King in a series comparative! The availability competitive advantage of kfc and mcdonald's good quality raw material have also challenged mcdonalds sustainability of its mission https //ivypanda.com/essays/mcdonalds-and-kfc-corporate-responsibility/!, Subway, and KFC, on the companys most important advantage location heavy focus on customer service perspectives... And Canada high customer loyalty and is in a market value of $ 124 billion their.! Heavy focus on food quality, in-store environment and customer service so as to retain heavy focus on customer so... Kfc positioning itself to gain a rival edge over mcdonalds purchases meat from ranchers in the other significant too! Chains is to ensure that mcdonalds creates customer experiences that are consistent across all franchises and the company-owned.! Companys most important advantage location large selection of meals for both children adults! 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