Competitive analysis & Company Essay
Buyer Power: – The Company faces the threat of buyers shifting their loyalty to other rival companies. This phenomenon according to porter is referred to as backward integration. To curb this threat, MacDonald has come up with three generic strategies to counter this threat. a) Cost leadership: – It has reduced the price of some its foods including the cost of offering Burgers. b) Differentiation strategy: – The Company has come up with foods that are differentiated from the rival firms. These foods should be economical and are user friendly in fighting obesity. c) Diversification- diversifies in various areas.
Supplier Power: – MacDonald is faced with the threat of the suppliers being able to control the price of some of the equipment they use. The manufacturers of various foods and spices that may come up with stringent price control measures. The labor laws are also stringent and the workers are so unionized that treating of employees in a fair and equitable manner is inevitable. To counter this force, the company extends its supplier chain making the prices of for instance of low foods to come down. Barriers to Entry: – The other force challenging the industry is entry of new companies
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This would pose the threat of neutralizing the company’s profits as well as its market share. The generic position that the company has taken has been cost leadership. Rivalry: – This force emanates from other companies within the same industry. The threat here is these companies capturing the market. However, the company’s framework/ strategy have been reducing prices whenever faced with such a threat. Threat of Substitutes: – From the economist point of view, threat of substitutes arises when the demand of that good is likely to be affected when the price of the substitute changes.
This elasticity of price has formed a real force that the company has to fight if it has to be sustained in the near future. Effects on the Leadership and Culture and Stakeholders In the strategic plan for McDonald’s integrated marketing communication, it can be said that their change process will have a minimal effect on leadership, culture and their stakeholders. It can be said that because of the change plan or strategic plan, the leader of McDonalds has been able to create a establish mission and vision by constantly being involved in the strategic plan approach.
The strategic plan enables the leader to change not only the way they convey’s information but also their aim on changing their corporate image to be the number one choice of customers. Furthermore, the strategic plan also affects culture because, as part of the plan, the company would try to create corporate image which may not be suitable for their diverse populations. Hence, it is important that the management ensures that they have contingency planning for these effects.
Aside from that, it can be said that the strategic change also have effects on stakeholders since they are the one who will be directly influence by the said integrated marketing communication approach. It is also noted that the strategic plan may also affect the stakeholders positively or negatively. It is said that negative effect may be considered if the McDonald management will not effectively disseminate important information to target market. On one hand, positive effect may take place if the management has been able to disseminate information to their target market and other stakeholders