Sample Business Studies Essay Paper on McDonald’s Corporation and Walmart Analysis

McDonald’s Corporation and Walmart Analysis

Environmental Scan Analysis

McDonald’s Corporation is a global leading chain of humbugger and fast food restaurants, serving averagely 69 million customers globally (Aboutmcdonalds.com, 2015). The organization is headquartered in the United States and operates either as a franchisee, affiliate or the organization itself. McDonald’s internal and external environment is analyzed in terms of macro and micro environment basis. Macro environment entails the political, economic, social, technological, environmental and legal factors that enable it to compete in an effective manner (Yuece, 2012). The micro or internal environment of MacDonald’s involves the internal elements within the organization that influence its operations through a SWOT analysis. This environmental scan of the organization provides an account for the restrictions that McDonald’s needs to adapt to provide smooth operations of its businesses across its different chains. Furthermore, the environmental scan also provides opportunities that the organization utilizes for its future development and attainment of objectives.

An organization’s competitive advantage refers to the positioning the firm takes in relation to other organizations. McDonald’s applies the concept of universality of taste as one of its major competitive advantages. Products, such as Big Mac tastes the same across the globe as a result of using similar ingredients and cooking standardization. This form of constituency is effective in maintaining customer loyalty. Cheat prices ensure that the organization provides foods and services at prices that cannot be compared with other competing firms, which makes it superior. The organization’s speedy delivery of goods and services also forms another cornerstone competing advantage that is attained through quick and simple production of foods by the employees to all customers.

In the strategy to create value and competitive advantage, McDonald’s utilizes both cost leadership and international marketing expansion strategies (Annual Report, 2014). Through franchising and licensing forms, the organization creates new market entries in its business strategy. Furthermore, McDonald’s applies product and service standardization in its uniform menu across its chains globally. Alongside product standardization of the products, the organization also serves local tastes and other preferences as a way of enhancing its market strategies.

As one of the leading organizations globally that also face stiff competition, it is apparent that McDonald’s aims at building its brand and verifying its strategic effectiveness. Nonetheless, to attain strategic effectives, its consistency is core. An organization’s strategic effectiveness refers to the efficiency with which it attains its objectives, that is, producing desired results within the planned expenditure. The main measure for verification of McDonald’s strategic effectiveness is determined by the net profits as compared to the target profitability. Furthermore, McDonald’s evaluation and measure of its strategic effectiveness is done through a marketing research and survey by analyzing extensive information about its clients. After obtaining the information, the organization then determines the best products that are well received, prices that consumers are willing to pay, and the most frequently visited restaurants among others. The organization’s survey enables it to determine if the number of customers is expanding or shrinking and ascertains the customers’ future behavior. Generally, McDonald’s strategic effectiveness revolves around the buying decisions of customers. Therefore, through extensive marketing research and financial information, the organization is able to verify whether its strategies are effective.

Walmart

Walmart is a multinational retail corporation that runs a chain of discount department stores and warehouses. It was also founded in the United States. Walmart’s main focus is making a difference in the lives of its customers and helping them save money to have a better life. Walmart’s environmental analysis helps it in gaining a competitive advantage. The firm’s activities are influenced by both macro and micro environments. Externally, Walmart environmental forces are political, environmental, social, technological, legal and environmental. The organization is also influenced by the internal environmental forces in the SWOT analysis. The environmental forces that impact Walmart also affect its marketing strategy in numerous ways, and the scanning is significant in minimizing their implications. For instance, the changing technology, economic changes, and social cultural environment microeconomic indicators and other macroeconomic forces provides an avenue that Walmart incorporates in its planning to attain its objectives.

The main competitive advantage of Walmart is on cost leadership focus, which has associated it with a competitive advantage in its pricing (Basker, 2007). Walmart strives to provide a wide range of products at the lowest possible price with assortment and experience. Moreover, the organization, through Doug McMillan, has concentrated on customer services. For instance, in 2015, Walmart invested a total of USD 1 billion in providing increased wages and training to strengthen its careers (Annual Report, 2015).

Walmart’s competitive advantage also stems from its improvement in the provision of groceries because of being conscious of its consumers’ health. It offers more organic supplies and fresh produce. In addition, the incorporation of digital business in the firm enhances flexibility of both physical stores and digital business.

Another business strategy that Walmart applies is the multinational business through having numerous customers who are treated differently, thus enhancing profits through Different Stores for Different Folks philosophy (Walmart: An Analysis, 2008). These strategies are significant in ensuring that the organization gains a competitive advantage.

One of the main objective of Walmart is maximization of productivity to support the minimization of costs that is found under the cost leadership strategy. In verifying its strategic effectiveness or productivity measures, different measures that are entailed pertain the human resources and other business processes (Smithson, 2015). The most common measures are revenues per sales unit, stock out rate and duration of order filling.

Generally, the revenues per sale involves the sales revenues per store and sales returns per sales team. Walmart focuses on maximizing revenues per sales unit. On the other hand, the stock out rate refers to the frequency of stock out, which provides an analysis for financial statements of products. Walmart aims at decreasing the stock out rate. Finally, the duration of order filling involves the amount of time spent to fill records entreaties at the stores. Walmart focuses on minimizing the period of order filling (Smithson, 2015). The gratification of these intents verifies the strategic effectiveness of the organization.

The measurement guidelines by the two organizations are effective. For McDonald’s, it is apparent that at times, the organizational strategic effectiveness can be difficult to be expressed in a single formula. Nonetheless, by assessing the goals through survey and financial information, the organization is able to transform the ineffective areas to be beneficial to the firm. This is vital in enabling McDonald’s to come up with a concrete strategy in the future. In Walmart, the measures are also significant in enabling the organization to weigh its strategic effectiveness and reorganize future strategies to help it attain its objectives.

References

Aboutmcdonalds.com (2015). Official Global Corporate Website. Retrieved from http://www.aboutmcdonalds.com/mcd.html 

Annual Report (2014). McDonald’s Corporation. Retrieved from

http://corporate.mcdonalds.com/content/dam/AboutMcDonalds/Investors/McDonald’s%202014%20Annual%20Report.PDF

Annual Report (2015). Walmart Stores Inc. Retrieved from http://s2.q4cdn.com/056532643/files/doc_financials/2015/annual/2015-annual-report.pdf

Basker, E. (2007). The causes and consequences of Wal-Mart’s growth. The Journal of Economic Perspectives21(3), 177-198.

Smithson, N. (August 2015). Walmart: Operations Management 10 Decisions, Productivity.

Yuece, I. (2012). SWOT Analysis of McDonald’s and Derivation of Appropriate Strategies.