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Mo Final Project

Mo Final Project

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Published by Nipun Kesari

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Categories:Topics, Art & Design
Published by: Nipun Kesari on Sep 11, 2010
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02/05/2013

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1 JAGAN INSTITUTE OF MANAGEMENT STUDIES, ROHINI
Q.1 what opportunities and threats did McDonald¶s face? How did ithandle them? What alternatives could it have chosen?Soln.:-
 
OPPORTUNITIE
S
1)
 
L
ack of organized food retail chain or branded food items-
As McDonald¶s was the first food retail chain which started in 1955. At thattime there was no other food retail chain. McDonalds established the brand atthat time to get recognition in the market and started the organized food retailchain.
2
)
 
V
ast market availability-
The opportunities for expansion are great. For example, in China, with a population of 1.2 billion people, there are only 62 McDonald¶s restaurants. It has been realised that 99 per cent of the world population is not yet McDonald¶scustomers.
3
)
 
N
ew food items-
As McDonald¶s has already made a good impression on the minds of the peoplethere is a good scope for introducing new food items in order to have somevariation in the food item. They have the ability to add healthier lines of food.They have already gotten rid of super sizing and I think they have made their fries healthier.
 
2
  JAGAN INSTITUTE OF MANAGEMENT STUDIES, ROHINI
4
)
L
ow competition-
W
hen McDonalds was entered in the market there was very low competition.There were few players in the market like Burger king,
W
endy¶s Kentucky friedchicken etc. This didn¶t have the better quality as compared to McDonalds. Ithelped the McDonalds to attract the customers and established brand loyalty.
T
H
REAT
S1)
 
F
ranchisee-
It is a very big threat for selection of franchisee holders invarious area because it has main responsibility to maintain the image of McDonald¶s. There is one example where McDonald¶s revoked theFrench franchisees because the franchisee failed to meet McDonald¶sstandards for fast service and cleanliness, even though their restaurantswere highly profitable. This may have delayed its expansion in France.
2
)
 
C
onsciousness among people about their health-
McDonald¶s aimed at providing a good, fresh & healthy food. McDonald¶s largelyconcentrated about the fast food selling and most of the people of Europeand Asia specially think that fast food are not healthy. McDonald¶s havea great challenge in front of it to change the perception of the people.
3
)
 
F
ollow the local laws-
 
-
McDonald¶s had a very good and pre-plannedstrategy to enter in the market. They got very good market in US andwanted to expand their business, so they made plan according to the locallaw of that area, because if they didn¶t follow the local law it would hurtthe sentiments the people.
 
3
  JAGAN INSTITUTE OF MANAGEMENT STUDIES, ROHINI
4
)
 
P
eople dining behavior-
people of different area having different diningstrategy. Most of the people do not like fast foods especially in Asia andEurope and must have to convince the people about the fast food behavior.
 5)
 
T
hreats of Substitutes -
Substitutes are the products, which can performthe same function as the original product can perform. People go toMcDonald's for eating, and entertainment. This makes the list of substitute products quite long, mainly consisting of local and continentalfood, e.g., Karahi, Tikka, Kabab, Burger, etc.
6)
 
T
hreats of 
N
ew
E
ntrants -
Threat of new entrants will be high in fastfood industries because the entry barriers are very low in terms of lowcapital requirement and easy access to the raw materials. No organizationhas any kind of exclusive control over resources. Another factor thatincreases the threat of new entries is the high profit margins in theindustry. Any how some entry barriers exist in terms of productdifferentiation and economies of scale and McDonald luckily holds these barriers over the others.
 How McDonalds handled the opportunities and threats
McDonald¶s success was largely dependent on its strategy to handle theopportunities and threats. The time when McDonald¶s came, there weremany opportunities and threats present in the market and McDonald¶scorrectly matched its strengths with opportunities and worked on itsweaknesses to eliminate the threats.

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