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An Evaluation of The Market Entry Strategies Adopted by Mcdonald
An Evaluation of The Market Entry Strategies Adopted by Mcdonald
company to start its operations with minimalistic roadblocks in their growth in this
country.
tapped and the same has been effectively addressed by McDonalds which enabled
them to gain the required market share.
The United Kingdom market with its strategic location enabled the company to
penetrate its operations into the European markets. In this regard, the entry and
sustainability of the United Kingdom operations has been of prime importance for the
companys success in the other markets that they have penetrated. In this regard it
can be seen that the company has been able to utilise the market position that it has
created in United Kingdom for its foray into the European market in general. This
added advantage has been derived by the company as the factors like cultural links
and the other commonalities enabled the company to effectively ensure that they are
able to reach the customer bases in different parts of the continent.
From the perspective of the new market entry it can be seen that there are two types
of approaches that were available for the company when they entered the market.
Firstly it is related to market development where new customers or new users are
attracted to the products. This process enables the company to ensure that they are
able to reach the desired target base and ensure that the organic growth is
sustained. On the other hand the other approach is based on the concept of
diversifying the product base. This has a distinctive challenge as the company would
be entering the new market and at the same time with new products which would
become critical as the new products are not tested in any market.
In the case of McDonalds the company had the advantage of negating the previous
challenge of new product and new markets. This process the company ensured that
the same existing products are marketed in the new markets that they have entered.
This new matrix differentiates between the organic and the acquisitive market
penetration. The former indicates reaching more of the target users through growth
in the core, existing product offering. Egan placed the concept of vertical integration
in the area of diversification. However, Aaker (1995) has differed from this view and
has placed vertical integration as a third dimension to Ansoffs Matrix. He implies that
vertical integration can occur alongside penetration, product or market development.
From McDonalds perspective the company has followed the strategy of new market
entry. They have not diversified their product offerings or other aspects of the 7Ps.
This has enabled them to sustain the market operations over long periods of time.
The competition is still not so robust as they lack the necessary process skills in their
operations. In addition the company has planned the location of the stores with
concentration in the urban areas where the growth is considered to be relatively
higher. This strategy in combination with the option of franchising the stores to
various entities has enabled the company to quickly grow in the markets and ensure
that they are able to reach the desired market position.
The market entry strategy especially pertaining to the franchisee option has enabled
the scaling up of the company activities in a fast way. The franchisee option has
ensured that the penetration of the stores is achieved in the market and thereby
enabled them to build the brand. The company in addition to franchisee operations
has opened some company operated stores to ensure that the quality standards are
maintained especially in larger and high footfall areas.
All the above factors have contributed to the growth of the company in United
Kingdom to its present state. The combination of the various factors have ensured
that the company is able to achieve the desired results in terms of engaging the
customers and also ensuring that the competition is handled in the best possible
way.
7.1 Recommendations
Based on the above conclusions the researcher has identified certain key
recommendations that need to be implemented by the organisation to ensure the
long term sustainability of the operations in United Kingdom.
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