Question 1: Which company orientation (product, production, selling or market) can best describe McDonald’s activities? What makes you think so? In the case of McDonald’s activities the company orientation is selling and I will explain why. In first I’ll explain what is the selling orientation, and in second why it’s the McDonald orientation. If we look at the definition in the book “Marketing Management” the selling philosophy or orientation is “a focus on making sales rather than understanding the customers” and it’s based on an “aggressive selling and promotion effort”.
So we can understand that the selling philosophy is to sell, sell and sell and make money. Now that you know the definition, take a look on McDonald. Before to talk directly about McDonald let’s see the history of Ray Kroc and his dream. The dream of Ray Kroc was to become rich and make money, like we can read in the case he starts to sell milkshakes and the most than he could sell. The way of life and the wishes of Ray Kroc has been transmitted in his firm. When he created McDonald with the brothers they tried to impose McDonald all over the world with a lot of restaurants and to avoid the potential competitors.
It worked during a long time but today it’s not the case because the customer’s needs change and McDonald has some difficulties to continue in this way. So we can see that McDonald uses the selling philosophy. Question 2: To date, McDonald’s has avoided diversification into unrelated food retailing operations as well as non-food options. Discuss the desirability of such diversification efforts. McDonald’s has avoided diversification into unrelated food retailing operations as well as non food options cause of different things.
The image of McDonald in consumer’s minds is related to food and especially fast food, maybe McDonald didn’t have the skills to manage new products unrelated to food and to finish it’s more easier for McDonald to focus the resources on one way and the best way for them it’s simplify the system. Let’s talk about more generally about the diversification and especially about the advantages and disadvantages. The advantages are different by activity’s sector but let’s see some example.
The diversification can make a growth relay (after specialization) (Ex: Club Med in Club Med World or Club Med Gym in the past and now in a real estate program). It could reduce risk (Fram and hotels Framissima). It also could stabilize a seasonal activity. The disadvantages are a management more complex, news environments and competitors, it could make a dilution of the identity and image in consumer’s mind and workers and a dispersion of company’s resources. Question 3: How do you explain the reluctance of competitors to imitate the successful efforts of another firm in their industry?
Under which circumstances is imitation likely to be considered? Generally companies are reluctant to emulate the successful efforts of a company in their industry because it requires significant investment that does not necessarily guarantee a positive result. Moreover, it does not let the consumer realizes the imitation so as not to pass an imitator in consumer’s mind. But it’s possible to imitate in this way when there is a monopole on a sector to put some competition. In this case the company who imitates if she has a competitive advantage regarding the other firm can take a place in market.
In the case of high technology like in mobile phone market (imitations of the I phone). In the case the competitors comes in the market cause of the weaknesses of McDonald and the need of consumers. Question 4: What do you think is McDonald’s short-term and long-term potential? What makes you think so? McDonald is a really important brand all around the world and everyone knows it. It’s the second most important in term of number of restaurant all around the world behind Subway. Even if some persons criticized this firm I think it’s impossible for it to disappear even on long time.
The fact is in short term if McDonald doesn’t react to the consumer’s needs and the needs of the franchisees the firm will continue to loose money. They were too much time the number one and they have ignored the consumer’s needs. Now competitors appear on the market and win some market share. We can notice that McDonald was the first real fast food in consumer’s mind and that’s also why McDonald is the target of consumer’s associations and movies like “Super size me”. But every time McDonald reacts and is still alive. So in long term McDonald should be more attentive to the consumer’s need and it will be ok.
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