Capstone Assignment 3 Business & Marketing Essay Paper

Week 8 Assignment 3
Student Full Name
Strayer University
BUS499 Business Administration Capstone
Date
 Week 8 Assignment 3
This report discusses the business level and corporate level strategies of McDonald’s in the context of its external market and the nature of its industry. The business functions in the fast food industry, which, in turn, is composed of various small and large players. At the same time the company is highly growth-oriented and devised a successful development plan to grow its operations regarding products offered, and geographies served. The company understands the influence of customers on its operations and develops its strategies reflect this understanding. 
Although it started its operations as a conventional fast food manufacturer, it developed its product standards and the menu is a way that reflected consumers’ choices and behavior. Pricing is its key marketing strategy which points towards a company’s responsiveness towards its customers’ needs. In the end, the company keeps its business culture flexible so it can respond to new opportunities within the local and international market despite standardized product structures in most countries. 
Business-Level Strategies
Modern businesses have to compete against numerous international and national level players to maintain or enhance its market share. A business’ response towards the competition it faces depicts its business level strategies (Hitt, Ireland & Hoskisson, 2013). These strategies vary from company to company within an industry and depend not only on the requirements presented by the customers but also on the internal culture and structure of the company. 
McDonald’s operates in the food industry with its focus on fast food and beverages provided to consumers. Its nature of business keeps it in especially competitive environment because of low barriers to entry and high market demands. However, the company has established its brand by offering some attractive features, or competence, such as courteous customer services, standardized products, health-focused efforts towards menu development to attract customers. Although the company relies on various values and features to gain customers, its central marketing tactic lies in its ability to manipulate its offered products according to customers’ demands for healthier foods. Previously, the primary focus of the company was towards the provision of low-cost food items to those individuals and families who cannot afford to cook their meals because of time and budget constraints. This marketing strategy was a perfect choice for the business because the fast food industry was evolved around the sole purpose of offering affordable meals for working individuals. 
However, recently, the company is witnessing a declining trend in its revenues, and this decline can be attributed to newer and healthier options available to customers to experience. The changing customers’ behavior means that only those food businesses would remain competitive and appealing to the majority of customers, which become more conscious about their customers’ health and make this commitment clear. Till now, McDonald’s has failed the criterion of healthy food choices. However, its recent move towards adding more items in its menu to represent low fats and sugar as an appropriate food choice for daily consumption has earned some respect from its customers. 
This simple move on the company’s behalf, together with its ability to understand market needs for fast food before starting the business, shows that the only business level strategy pursued by the company is focused on customers’ demands. The business is innovative and responsive towards the changing trends and requirements. Although it took more time than was necessary to understand the changing trend, it had to face a decrease in its brand credibility before it developed a new component of its products, yet it succeeded in adequately responding to the market and developing its innovative brand name around this trend. 
Corporate-Level Strategies
Corporate level strategies show a business’ method to grow its operations. In the initial years of their operations, most businesses focus on organic growth. However, in later years, once the original business has reached maturity within its industry niche or geographical area, they grow by acquisitions and mergers. McDonald`s has pursued a unique growth style throughout its life history. It developed franchises first across the USA and then worldwide. Like its business-level strategy, McDonald’s will find it extremely helpful for its long-term growth to pursue adaptation as its primary corporate level strategy. Since its incorporation in 1948, the company has expanded exponentially and has established its franchises in various countries around the globe (McDonald's, 2018). Currently, it operates more than 36000 restaurants worldwide (Rosenberg, 2018). Its business model is based on franchising which enables it to expand rapidly without incurring huge initial investments in the new location. In essence, franchising is a secondary strategy that supports the primary strategy of growth in new markets. By becoming one of the first world-class fast food restaurants in most countries, McDonald’s reduces the market share, which is available for other players who are introducing their services after it. However, in fulf...