I have selected Mc Donald’s as an organization on which I would be making this report. I would be discussing Mc Donald’s competitive advantages over other organizations by applying a Resource based view of strategy. This report would highlight the resources and capabilities Mc Donald’s has and how can it utilize those resources to gain competitive advantage over its rivals.
Introduction of Mc Donald’s
Mc Donald’s is world’s famous fast food restaurant chain consisting of 34000 local restaurants. It is present in 119 countries serving 47 million customers on daily basis. It is globally recognized by the Golden arches as its logo. In 1954, Mc Donald’s founder Raymond Kroc passed by a hamburger stand in San Bernardino, California and then he came up with an idea of forming a countrywide fast food chain.
Resource based approach for Mc Donald’s
First you need to identify the organization’s internal and external resources, organization’s strengths and weaknesses as compared to its competitors and the opportunities it has for better utilization of resources.
Resources
Resources are organization’s productive assets and capabilities are what an organization is capable of doing. The relationship between resources and capabilities of a company forms a competitive advantage. Capabilities and resources help in gaining value and competitive advantage over competitors.
Tangible Resources
Tangible resources include financial, physical, human and organizational resources. Restaurant location comes under Mc Donald’s physical resources. Their restaurants have an average capacity of 50 people. Mc Donald’s provides the facility of play area for children.
Human resource is the m...
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McDonald’s Corporation (MDC) known for its famous golden arches is the number one largest chain of fast food restaurant in the world. With headquarters in the United States and restaurants in 120 countries serving around 86 million customers a day. About 80% of the restaurants are operated by a franchisees or affiliates. McDonald's revenues come from the expenses paid by the franchisees such as fees, royalties, rent, as well as sales in company-operated restaurants. According to Hoovers, McDonald's Corporation in 2013 made and annual revenue of $28,105.7 compared to $27.5 billion made in 2012. Most of the restaurants are freestanding units offering dine-in and drive-through service, but McDonald's also has many restaurants located in airports, retail areas, and other high-traffic locations. The company has nine major markets – Australia, Canada, China, France, Germany, Japan, Russia, the UK, and the US – that account for 75% of sales. Although McDonald is a leading brand, the top companies that give McDonald competition include: Doctor’s Associates Inc., YUM! Brands Inc., Starbucks Corporation, Darden Restaurant Inc., and Burger King
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Firstly, there is a need to focus on the company competitive dimensions before embarking on the decisions. In this aspect, the Competitive capabilities are the Cost, Quality, Time, and Flexibility dimensions that a process or value chain actually processes and is able to...
According to Royle (1999) McDonald’s is a very large multinational enterprise (MNE) and the largest food service operation in the world. Currently the company has 1.5 million workers with 23,500 stores in over 110 countries with the United Kingdom and Germany amongst the corporation’s six biggest markets, and over 12,000 restaurants in the United States. In 1974 the United Kingdom corporation was established and in 1971 the Germany corporation was established, currently the combined corporation has over 900 restaurants and close to 50,000 employees in each of these countries (Royle, 1999).
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Resources entail intangible, tangible, and human resources. Capabilities to describe the environment and strategic environment. Core competencies include knowledge and technical capability. In this section, we will attempt to describe in detail the three segments: resources, capabilities, and core competencies. 4.2.1 Tangible Resources Tangible resources include four different areas of importance.
Wells Fargo first series focused on the geographical reach. Analyzing Wells Fargo strategy is great way to put in perspective the Industrial Organization and how Wells Fargo is an outperform organization. One main aspect of Wells Fargo strategy is the operational level strategy which is mainly about the fundamentals of how Wells Fargo runs its day to day baking operations and developing competitive advantages. In a way implementing these strategies is a like building a bridge that can help the organization reach its goals. The resource-based view has been criticize on a number of dimensions. Its previously had been discuss to be tautological, when a competitive advantage is define as a creating strategy, based on the resources that are valuable. When it comes to resource-based model is kind of a circular reasoning. The following is to find a resource that satisfies all four criteria and to limit practical prescriptive implications. Finally the resource-based focuses on the essence capacity of the firm which tends to under estimate the role of industry. (Hitt, M. A., Ireland, R. D., & Hoskisson, R. E.,
The McDonald's Corporation is the largest chain of fast food restaurants in the world. It is franchised in over 119 countries and serves an average of 68 million customers daily. The company started in 1940 as a barbecue restaurant operated by Richard and Maurice McDonald in the United States. They reorganized their business as a hamburger stand in 1948. In 1955, Businessman Ray Kroc joined the company as a franchise agent. He purchased the chain from the McDonald brothers and oversaw its global-wide growth (McDonald’s 2014).
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In an organizational theory, a dynamic capability is the capabilities of the organization to persistently adapt the organization 's resources baseline. Such concepts were defined by Pisco, Shuen and Teece (1997), paper a Strategic Management and also Dynamic Capabilities, as "an organization’s ability to establish, reconfigures and also integrate external and internal competence to focus dynamic changing environments (Barney, 1995).
“McDonald 's is the leading global foodservice retailer with more than 35,000 local restaurants serving nearly 70 million people in more than 100 countries each day” (About McDonald’s 2014).
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Difficulty increasing the company’s already massive growth. McDonald’s has over 30,000 restaurants in 119 countries and territories leaving very little room for growth (“AboutMcDonalds.com”). To resolve this weakness, McDonald’s needs to focus more on their existing locations and ways to improve them instead of looking at opening more locations.
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