McDonald’s company is a top organization whose function is to provide food service. It started as a small restaurant owned by two brothers in California. Their vision was to provide fast, high quality and clean service to customers. They mainly sold chicken products, hamburgers, cheeseburgers, french fries, soft drinks, milkshakes and breakfast items. It was incorporated by a dealer of multi mix milkshake machine who saw the opportunity, took advantage and expanded the business despite challenges. Since then it has turned out to be the largest organization dealing in quick service restaurants.
Macdonalds has employed a number of corporate strategies in the running of the business (Wheelin et al., 2015). The first strategy is expansion strategy. Mcdonalds has employed market development strategy in order to expand into countries whose economies are still growing, especially the Asian markets which have the potential for high income. Secondly, the McDonalds company has adopted a franchising strategy in order to implement the expansion strategy. The company has more than 31000 restaurants which are in different parts of the continent. It has managed to replicate its business model successfully across the globe. About 9000 of the restaurants are owned and run by the company while the remaining are operated through franchisees which contribute to total revenues of the business. The third corporate strategy employed is the adaptation strategy. There are different rules and regulations in different countries and therefore adaptation is necessary for the success of the business. It is a process that has been done to meet cultural and legal requirements. This issue was a challenge in Russia during the purchase of raw materials and there used to be a McCenter where the raw materials were acquired. However, most materials are now obtained through wholesalers. The existing challenge came in terms of maintaining quality as well as the cost for all restaurants in Russia and thus affects, quality, profit, market share and food cost.
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Corporate business undergoes stages during life cycle namely; birth, growth, maturity, decline and death (Miller & Friesen, 1984). Startup stage is where the business is established. Challenges faced in this stage include lack of capital and market. Therefore, strategies employed include understanding market needs and designing products to meet the market’s needs as well as building awareness in the targeted market. The second stage is growth where business products growth rate is depicted by an increased revenue. The strategy employed in this stage involves increasing marketing expenditure. The business strives to prolong this stage as possible through the creation of new products or looking for new markets. The third stage is maturity where revenues grow at a declining rate. The strategy adopted in this stage is improving the efficiency of operation to ensure that profit margin and gross margin and sales percentage increase. Besides, the company can find new uses for existing products. The fourth stage is the decline stage where sales fall. Challenges include the introduction of competitors with superior products. The business may try to change customer perception by changing the packaging of the product or having a new market campaign. Moreover, the strategy of exploiting geographic expansion can also be adopted. The final stage is death or revival. It is characterized by declining sales which may cause a business to fail. The owner may decide to close down the business, sell it or reverse the decline and turn the company back to the maturity stage. Therefore, the life cycle can be extended by the use of strategies in each stage.
Each stage has each own challenges and therefore calls for different strategies to ensure maximum profitability. Mcdonald’s company is at the maturity stage. It has reached it market threshold and growth in sales is declining and also faces competition on from other upcoming companies. The company is thriving in maintaining its gross and margin profits as well as the sales. It is profitable and has a powerful brand image. Besides, it has a large market share.
Strategic implementation is the process of converting strategies into actions in order to attain the desired objective (Gupta & Govindarajan, 1984 ). It is a documentation that has details on steps that need to be taken to reach the objectives and also feedback to track the progress. To begin the implementation process, strategy makers must ask the following question; who will be in charge of carrying out the implementation and who will assist? Are resource required available? Where will the strategy be carried out? When will the process start, and how will the objectives be attained? These questions will help in getting the right management, the right people to assist, necessary resources required, the environment in which the workplace is set to take place, the timeline for the implementation as well as a strategic map which identifies ingredients needed to achieve results. When considering strategy-culture compatibility, I think strategy follows culture. McDonald’s company strategies have been affected by the culture in Russia due to local regulations. McDonald’s company had to adapt to meet cultural demand. They were forced to purchase raw materials from McCenter until they started obtaining them from wholesalers.
Six Sigma is a management methodology which employs statistical analysis to improve the processes of business and eliminate defects (Anthony & Banuelas, 2002). Six Sigma is important as it assists organizations to map and track processes. Mapping processes help to document aspects of business processes such as decision making and employee role. It also helps in eliminating variations and unnecessary issues in business which does have a positive effect on the production of goods or services. Besides, it aids in identifying problem and issues which affect the quality of products or service and allows room for improvement of business as employees would have the necessary skills in pinpointing problems that brings underperformance in production.
References
Gupta, A. K., & Govindarajan, V. (1984). Business unit strategy, managerial characteristics, and business unit effectiveness at strategy implementation. Academy of Management Journal, 27(1), 25-41.
Wheelen, T. L., Hunger, J. D., Hoffman, A. N., & Bamford, C. E. (2015). Concepts in strategic management and business policy: Globalization, innovation, and sustainability (14th ed.). Upper Saddle River, NJ: Pearson.
Antony, J., & Banuelas, R. (2002). Key ingredients for the effective implementation of Six Sigma program. Measuring business excellence, 6(4), 20-27.
Miller, D., & Friesen, P. H. (1984). A longitudinal study of the corporate life cycle. Management Science, 30(10), 1161-1183.
