The Market Entry Strategies Marketing Essay

Published Date: 23 Mar 2015

The McDonalds is the worlds second largest fast-food chain. McDonalds has stores in 119 countries. The vast majority of businesses has not own by the company, other businesses operated franchise. The hamburger has become a very popular dish in the United States due to its low cost. Richard and Maurice McDonald brothers in 1937, began to sell hot dogs. Business was so good in 1940, Monrovia opened the first McDonald's restaurant under their name. During the Great Depression hamburger became even more popular. The greater part of the revenue came from the sales of burgers. The 1950s onward, consumption has become more and more intense. 1955 the brothers opened a McDonald's fast food restaurant in Chicago. McDonald's also pioneered the introduction of the drive-in service, which means that the customers stays in the car seat without to get out can receive service (Mc-Drive)

Trademarks: M (figurative, arch-shaped), a Big Mac, Ronald McDonald clown character inscription.

Mc-Drive etc. serves 70,000,000 people almost on a daily basis around the world.

TASK 1.

1.1 State the mission, vision, objectives, goals and core competencies of your chosen organisation

Mission:

It is important to provide customers with a clean environment, friendly, quick to serve up fresh food anywhere in the world. The company must ensure to pay for good quality and reasonable price to hold. Constantly take into account the developments of customer experience, it also increases the popularity of the restaurants.

Vision:

McDonald's does everything to ensure that the world's best quick-restaurant chain continues. Clean environment, quality fast service, customer satisfaction is an important strategic aspect of the company.

Need to develop a good relationship with the customers, the suppliers, the manufacturers, and it is equally important that the media's input in the public consciousness.

Objectives:

The cheap prices of McDonald's have to be changed to the objectives.

Keep compete with other fast-food restaurant where guests' can buy healthy food on more similar price. Keep in mind new alternatives for developing the customer's health in mind. Keep the usual prices to the healthier menus in order to maintain popularity.

Goals:

To keep the popularity of fast-food chain, the food must be healthier. So today we have less fat, less sugar in a menu containing drink. The nutritional value of the products on the packaging, so you see your food intake in order to keep their customers calories. Trying to keep the customers in order to maintain the normal price and quality. Healthier food marketing to attract new customers in restaurants.

Core competencies:

A dynamic strategy to achieve future goals. The recipes are encrypted because the competitors cannot mimic the products which benefit greatly from the company. Well-trained managers and employees are constantly trained, well-organized team work so they can continue to maintain their position of leadership in the world market.

Describe three issues involved in strategic planning in your chosen organisation.

Internal analysis problems:

What they don't make clear is that a diet high in fat, sugar, animal products and salt (sodium), and low in fibre, vitamins and minerals - which describes an average McDonald's meal - is linked with cancers of the breast and bowel, and heart disease. This is accepted medical fact, not a crank theory. Every year in Britain, heart disease alone causes about 180,000 deaths. This sort of fake food encourages over-eating, and the high sugar and sodium content can make people develop a kind of addiction - a 'craving'. That means more profit for McDonald's, but the constipation, clogged arteries and heart attacks for many customers.

http://www.mcspotlight.org/case/pretrial/factsheet.html

External analysis problems:

As the market leader McDonald's body count in all areas of competitive advantage, to gain a market precedence retain them. New product launches and classy packaging and keeping the price level, try to stay successful.

Trying to get the market research and customer satisfaction-emphasis. Since there is a big enough threat on the subject as a popular restaurant chain can not afford to ignore these factors leave me. The single-minded consumers to switch over is essential to staying alive in the body with healthy food.

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Business level: Porters 5Forces

-Threat of new entrants to a market: In some countries, the government also requires the sale of healthy foods so you have to take up the fight to their competitors that they will not be able to displace the body from the market.

-The bargaining power of suppliers: McDonald's carefully selects the reliable suppliers. Strict observance of delivery and payment deadlines can maintain a successful business in achieving long-term relationship.

-The bargaining power of customers ("buyers"): Customer Satisfaction to be kept low and the price of McDonald's menus, pay attention to the continuing high quality. Efforts should be made to the buyer for a clean environment and always politely delivered.

-Threat of substitute products: Because of the food chains like McDonald's has developed a unique flavor and encrypted in the recipes so you can stay competitive in the market for its products

-Degree of competitive rivalry: Currently on the market for competing companies to stay competitive is not easy because some restaurant chains are trying to McDonald's taste and temékeit leutánozni. Amióta Subway overtook McDonald's professionals are trying new strategies developed.

1.3 Select two different planning techniques which you could apply to your chosen organization.

BCG matrix:

BCG matrix growth /share/ identifies four main groups of products. Stars, Question Marks, Cash Cows and Dogs. Purpose of evaluating strategies used for each product .The BCG matrix is the company`s products services and examine the market share of a growing market.

1. Picture

BCG Matrix of McDonalds

Stars:

This group in a strategic position in the company`s best products or services within the business unit share, with a high share of the market. Because the profit is not high, the competitors are attacking these products. The company should strive for growth or maintenance level.

Question Marks:

Belong to this category of new products. These products have not produced immediate profits since the launch of high costs, because it can be a positive event stars. If you run into a further expansion of the product can be used where it is not advisable to withdraw the product.

Cash Cows:

The products, services, business are included, which are already on the market is not at all or only a slight increase in market share is relatively high. These products, the cash flow is positive, so this status is maintained.

Dogs:

This category of the company`s product, services, shops, offering the most unfavorable position. The market cannot be expanded or only slightly so that the share would be extremely low. It is appropriate at this time to withdraw them from the market, just remember that your competitors do not only dominate the field. Is this case, the withdrawal or the possibility of maintaining the level is at the top.

PIMS:

The PIMS program (Profit Impact of Market Strategic) knows of so-called portfolio analysis. Comprehensive statistical analysis can be explored in the independent sector and the factors that determined the evolution of the cash flow and profits. The gain is influenced by several factors.

- Investment package

- Productivity

- The quality of the products and services

- Innovation

- Vertical integration

- Market position

- Market growth

- Program managers emphasize that the main difference in spite of companies in the same market forces is exposed.

PIMS program of market growth and profit trends identified relationship between positive shifts.

TASK 2

2.1 Select an organizational audit for your chosen organisation.

SWOT

Strength:

-The McDonald's brand is among the world's 10 largest.

-Smooth aiming for growth in the global market. I

-Introduction of in-car services.

-Highest-profile fast-food chain.

-Introduction of new products and flavors of the merits of retaining customers.

-119 world countries.

-Expect a stable predictable revenue.

-Almost everyone in the world knows the McDonald's logo.

-The ever-expanding range of menus such as increased sales results in the blender.

-Much of the cost of staff training.

-On the product packaging showing the nutritional information

Weaknesses:

-Market saturation.

-Increased health problems such as child obesity.

-Packaging waste - packaging waste pollution.

-Will not sponsor charity events.

-In order to remain in the market for a dividend cannot confined or raise prices.

-Most of the E-coli food poisoning is caused by bacteria found in McDonald's.

-Bacterial infection is not unusual due to improper storage.

Opportunities:

-McDonald's is fighting for its own strategy in the market.

-Cheap labor, students are usually employed. For staying.

-While the current strategy will continue to remain the leading fast-food chain.

-McDonald's sees great opportunity for expansion to Asia.

-Low interest rates, an increase in insured capital.

Threats:

-Market saturation.

-Increased price competition.

-More and more fast food chains trying to break into the market.

-Migrating purposeful consumption of healthy foods.

-keep the price competitive with other chain stores.

-put toys in the food for children - trying to lure kids in the restaurants. Many people consider this unethical business.

2.2

I chose PESTEL analysis as a macro environmental framework to understand the external impacts of McDonalds.

Political:

In some countries, the public condemnation of the government that allows the marketing of unhealthy products. The marketing of unhealthy food as good business sell a product cheap nags benefit. Need to develop good relations with the governments of the countries that are able to stay in the market. An example of insurance, lease, labor laws, compensation and training, and environmental protection.

Economic:

In some countries, inflation is expected to be a price change of this product. If your country is not possible to establish if the material to be imported from neighboring countries, this may result in significant volatility. The prices should adapt to the country's economic situation. The store should be open before the market research covering the country's economic, legal, social, and environmental control.

Social:

The country may have to be changed in order to succeed in the normal strategy. The way we learn about the local culture that a company's products are sold in most of the population that will consume. Market research should be to know what goods to ingratiate buyers for our products.

Technical:

Ads, advertising good marketing strategy is essential. The world famous McDonald's ad I love it. Popular tailored to the guest hours of operation, the card payment. The great popularity of the drive-thru service. Good relations with suppliers and manufac-

turers. For ease of liaison, business management, communications, inventory of great help to the Internet. The production technology is state of the art technical equipment should have a major role.

Environmental:

The company should take care of the environment and the destruction of the waste. McDonald's uses non-biodegradable materials such as Styrofoam cups or boxes, they should ensure the destruction of. If the company fails to comply with environmental regulations is a large amount of penalty shall be paid and the right to operate, withdraw the Environmental Protection Agency

Legal:

McDonald's has a history of several decades by the fame must continue to meet obligations. The tax system in the country, employment standards, quality standards, these are to be met. You must follow the prescribed procedures and regulations. You have to keep the confidence of consumers and to provide a service which is most favorable to them. It is important to comply with the tax system, labor rights, to regulate hours of operation, quality and environmental standards (ISO).

2.3 Explain why the a) stakeholder analysis, b) strategic positioning is important within your chosen organization.

a. STAKEHOLDER ANALYSIS

Internal stakeholders are internal to the organisation: managers, directors and employees. Their objectives are likely to have a strong influence on the company.

Their interest include: jobs, careers, salary, promotion, benefits, job satisfaction.

Directors: McDonald's Board of Directors engage in all duties and responsibilites. However, in order to achieve the goals of the organization management and teams must work together well.

Managers: Managers are directly connected with the Board and shall perform the functions quite extensively. The work organization of the evaluation process is supervised by almost all the work, following their superiors' expectations.

Employees: McDonald's employees are available to carry out the instructions of the management.

External stakeholders include governemtn and interest/pressure groups. Their interest include: government: jobs, training, tax, Interest/pressure groups: pollution, rights.

At McDonalds the government interested about the company paying its taxes, keep tle laws and regulations. At pressure groups they interested about environmental issues, animal welfare, human rights.

Connected stakeholders are shareholders, bankers, suppliers and customers. Their interests are:

Shareholders: increase in shareholder wealth, risk

Bankers: security of loan, adherence to loan agreements

Suppliers: payment for goods, long term relationship

Customers: quality products/services, suitable price, future benefits

b. STRATEGIC POSITIONING

Strategic positioning is the process of deciding what market position the company will adopt to gain sustainable competitive advantage, and then adopting a strategy to achieve it.

Market leadership and market share are important aspects of strategic positioning.

McDonalds is a market leader in the fast food, catering industry. The company dominates its competitors in customer loyalty, distribution coverage, image, perceived value, price, profit and promotional spending. To achieve this position McDonalds must keep a track record of stability and growth.

TASK 3

3.1 Describe how your chosen organization could undertake the following strategies: a) market entry, b) substantive growth , c) limited growth , d) disinvestment

a, MARKET ENTRY STRATEGIES

Delivering services and goods to customers is the main subject of the market entry strategy.

Organic growth strategies are business development techniques that a company grows via increased output and larger sales volume.

A company might move into a new geographic region or use a new sales channel but still using its original business model.

The company does not force growth by making outside investments therefore the rate of growth is natural, organic.

Organic growth have four main bases:

Revenue (most important thing for a business is money),

Headcount (hire more qualifing employees)

PR Public relation and advertising (get customers attention)

Quality (keep customers satisfied with quality products)

Growth by merger and acquisition are also forms of growth of an organisation.

When a company takes over another one completelly and became the new owner, the purchase called an acquisition.

Mergers means when two companies agree to continue together into the future as a single new company. This called merger of equals.

All mergers and acquisitions are happening because of one common goal: to create synergy (2+2=5) that makes the value of the combined companies greater than the sum of the two parts.

Strategic alliences is when two or more companiesjon together for a set period of time. Franchising is a business arrangment that allows for innovation, technical experts to be mixed with the industry and investment of another party to direct the business successfully for selling goods and services. To be successfully franchised the one company is reliant on the other.

b. SUBSTANTIVE GROWTH

Related and unrelated diversification

Diversification means that the business grow by developing new products and new markets.

Diversification is must useful when the products are at the end of their life cycle or themarket is full of competing products.

Related diversification is when the products or markets grow into similar industries (forward, backward) within a company's existing supply chain.

Unrelated diversification is when the business penetrates a new area for business and at the same time developing new products.

c. LIMITED GROWTH

Market development

Market development involves introducing existing products or services to new markets. The business may enter a new city, state or country. Also means the business may change the their trget market.

Product Development

Product development meand creating new products to serve the same market.

d. DISINVESTMENT STRATEGIES

Turnaround strategies

Divestment

Liquidation

Disinvestments (divestments) are processes utilized by companies when there is a need to initiate a redution in capitalinvestment.

The process includes selling off current investments.

Also businesses use disinvestment when they want to change the direction of the company in order to meet changing consumer needs andremain competetive.

Divestment is a form of retrenchment strategy used by business when downsize their business activities. The process involves eliminating a portion of a business, sell or close a unit, a major division, or product ine.

A retrechment strategy which considered the most extreme and unattractive is the liquidation strategy that involves to closing down a firm and selling the assets.

It is considered as the last resort because it leads to serious consequences such as loss of employment for workers and other employees, termination ofopportunities where a firm could persue any future activities and a significant sign of failure.

3.2

Predict an appropiate future strategy for your organisation

McDonalds is very likely able to grow organically more by adding a new service to its list: serve people with food allergies. This procedure does not require outside investors or mergers with other companies. Within the organization McDonalds needs to discover and order from suppliers who will provide organically grown (not in the business term but mean: naturally without chemicals and add hormones) produce row food items such as beef meat, chicken, eggs, and greens. Then the restaurant will be able to provide service for those who suffering from allergies.

Nowadays, more and more people are affected by food allergies. McDonald's is considered the weight of the different food allergies and determined that it is very important to recapture customers.

Currently the busiest restaurants experimentally introducing the flour free, gluten free and lactose intolerance developed menus for customers. Raw materials needed to be produced for this special menu.

The price to produce is high; therefore the company must plan a strategy that will satisfy customers with different allergies. Need to create new products to attract a large number of customers to the restaurant. The new products must be equally priced as other regular products, and it will gain more popularity as healthier products. In result the popularity of the organization is maintained or is likely to grow. We need to develop a strategy, which, considering the price is not too much different from the usual low price. By having new allergy free products available in the restaurants it will open doors for a wide range of new customers who will chose McDonalds over the competitors restaurants.

TASK 4

4.1

2. Picture

SMART Objectives

When initially evaluating and setting goals for a project a business can use the SMART objectives. A set of goals that the company want to achieve are characterized by being Specific, Measurable, Achievable, Realistic and Time-bound.

SMART

S > SPECIFIC • Details of exactly what needs to be done

M > MEASURABLE • Achievement or progress can be measured

A > ACHIEVABLE • Objective is accepted by those responsible for achiving it

R > REALISTIC • Objective is possible to attain, important for motivational effect

T > TIMED • A specific time period for achievement is clearly stated

In the catering business every restaurant that operates after everything else its all coming down to the food what the restaurant sells. Food is the must important objective of McDonalds. The company is responsible for the food that serves for millions of customers world wide. Responsbile food can be viewed from different aspects such as nutrirional values, health risks, allergy risks.

I suggest for McDonalds a new allergy free food products line that will provide food for those customers who suffers from different kind of allergies.

Some of the SMART objectives to mention:

S = Specific: McDonalds will create new food products like: gluten free, flour free, MSG free, egg free, nut free, soy free, or milk free for those who suffers from lactose intolerancia.

M = Measurable: McDonalds can monitor the progress of targeting new customers

A = Achievable: Management is sett on being responsible for researching and discovering and ordering from new suppliers for organic, allergy free raw materials.

R = Realistic: Millions of people suffers from different food allergies including children. Allergy free products by McDonalds is a realistic plan.

T = Time frame: In six months a new product line can be developed and introduced to customers.

The activities that required to achieve this goal:

Make an extensive research that what type of allergies are most commonly occur in the population including children,

Find suppliers who able to provide organically grown raw materials,

Create new food products

Promote, advertise the new allergy free products

Introduce new products to customers

Managers, supervisors, consultants, trainers, and employees are all part of the team at McDonalds. They are the backbone and face of McDonalds. They are the ones who make it all happen: employees who care, who are motivated and committed to develop and improve. Employees are the foundation for any company's success.

In the case of bringing a new product line of foods into alive each and every member of the restaurant have a significant role.

4.2

From market entry strategy McDonalds very likely can continue grow organicaly without any external investment, merger or acquisition.

The resource requirements are:

Human

Financial

Natural

At McDonalds all three types of members of the workforce are required: manual workers, skilled workers and management. The company continuosly recruit for skilled workers and continue training new employees for their roles in the restaurant.

McDonalds have been operating profitably since many years. They able to finance their chosen strategy. They can invest in new products, distribution channels.

At natural resources that requires we can mention of all the raw materials that the restaurant requires in order to produce the new allergy free products. Resources can be brought by suppliers from farmers who are keeping cattles, chickens, and produce greens such as lettuce, tomatoes.

4.3

The strategy I suggest for McDonalds its diversification. Diversification is the most radical form of growth. It involves to create a totally new product (allergy free, organic) for a completely new market. It may sound like a risky business but there is a potential demanding target audience (people, children with food allergies) that waiting to be satisfied. There is always risk when a company ventures into new challenge but also there is a potential of a high payoff may be worth the risk to try.

To implement this strategy at first step need to research what type of food allergies are most commonly occur in people including children. Evaluate results and accordingly continue. Discover suppliers who are able to provide natural allergy free raw materials to the restaurant. Create new products. Promote and advertise the new allergy free food and. Introduce the new food for customers who suffers from food allergy.

This project can take about half a year to accoplish, each individual activity requires about month.

Below see the Gantt Chart that shows the time frame of following activities.

PROJECTS

01/2013

02/2013

03/2013

04/2013

05/2013

06/2013

Research

starts

XXXX

Suppliers

contacted

XXXX

Products

created

XXXX

Products

promoted

XXXX

Products

introduced

XXXX

Follow ups

Feed backs

XXXX