Mcdonalds: Cost And Competitive Advantages

1. COMPETITIVE ADVANTAGE

Are cost and differentiation alternative strategies for achieving competitive advantages? Some firms, like McDonald’s, adopt hybrid strategies, integrating low costs (cost leadership) and differentiation.

In general, one firm possesses a competitive advantage over its rivals when it earns a persistently higher rate of profit.

4.1 Competitive advantage for McDonald’s: a dynamic process[22]

In determining competitive advantage it is important to have smart and prudent goals. Competitive strategies are needed by business company to achieve great results and gaining economies of scale. Operational efficiencies are the key elements for the organization. Furthermore, in order to be successful companies try to create a better

Its partnership with Coca Cola increased its reputation.

6. Appraising resources and capabilities through assessing the relative strength

McDonald’s has the unique ability to make the same type of burger with the same ingredients in every part of the world. This is due to the uniformity of his production procedures.

7. Financial and physical assets

McDonald 's has a big financial power and this allows it to be recognised everywhere

8. Good locations

The locations of McDonald’s restaurant is always accurate. They are normally near the places where many people go every day like a train station.

9. Strong value chain

The quick services and the logistic operations increase the values for its customers. McDonald 's ' value chain is powerful and make its competences grow up.

10. Franchising

Last but not least franchising is a profitable way for McDonald’s to sells its products in international and national markets.

4.6 Value chain and VRIO analysis[28]

We can divide McDonald’s activities in primary activities and supporting activities.

The primary activities are:

- Logistics: organizing the activities with the suppliers that gives products to the restaurants. Even the recycling system is part of

-Marketing: try to find a balance between short term and long term strategies is very important in dealing with marketing

The supporting activities are:

-General administration: is based on strategic planning to maintain a competitive advantage.

- After sales service: They conduct surveys and listen to the advice and complain of their customers.

- Other activities like the preparation of the menus are fundamental.

- Training: McDonald’s offers training and support to its employees. Every time they make a new product they need to provide the right training for all employees.

-Procurement: the ability to choose the right suppliers is difficult but important for a restaurant company.

The VRIO analysis of McDonald’s reflects its competitive positioning and advantage:

- VALUE: it’s value is the one that permitted its success from when it was created.

- RARITY: Even if there are many franchisees that works with McDonald’s, the control of the company is in the hand of the management team that give directions to the franchisees on how to act.

- IMITABILITY: The McDonald’s product can be easily imitated but the structure of the firm that is behind it is unique.

- ORGANIZATION SUPPORT: we can say that McDonald’s is well organized and it favours the operations with the