Marketing In a global age:

McDonalds Company in Thailand

Executive summary:This report has dealt with the dynamics of the external and internal environment of the

McDonalds Company vis-à-vis the marketing strategies devised by it over the time. The report

has been successful in shedding light on the aspects related to the strengths, weakness,

competences, threats and opportunities of the company and the ways advantages can be

harnessed for better business performance in Thailand. At the culmination of the report

meaningful findings and observations along with recommendations have been provided for the

McDonalds Company to revamp its marketing strategies for better business performance and

organizational output.

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Contents

Introduction:................................................................................................................................................4

Choice of company:.....................................................................................................................................4

The industry:...............................................................................................................................................4

PESTEL analysis of McDonalds Company:................................................................................................4

Porter’s Five Forces Analysis:.....................................................................................................................7

TOWS matrix of McDonalds Company:.....................................................................................................8

STOW analysis of McDonalds Company:...................................................................................................9

STP analysis of McDonalds in Thailand:..................................................................................................10

SMART objectives for Company:.............................................................................................................11

Conclusion and recommendations:............................................................................................................13

References:................................................................................................................................................14

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Introduction:

Choice of company:

The McDonalds Company is the one of the leading retailer of foodservice in the world with

prominent presence in more than 100 countries spread across the world and caters to as many as

69 million people.

The industry:

The food and restaurant sector of the UK has shown impressive trends in spite of the economic

stagnation and the ill-effects of recession and this particular sector has continued to experience

growth and developments when other prominent sectors suffered body blows. The burgeoning

food and restaurant sector of the UK is marked with the essential features of the constantly

changing and evolving tastes and preferences, demands and expectations of the consumers with

the aspects of brand value, value for money and quality of products reigning supreme so far

purchase decision making on the part of the consumers is concerned,. This fact bears testimony

to the intense cut-throat competition among the rivals to gain the upper hand over the others in

the industry.

The food and restaurant sector is marked with stiff competition and the sector’s one of the most

illuminated features is its diversity ranging from high-end dining establishments to quick service

outlets and also on the basis of the cuisines as well as chain restaurants, specialty restaurants, fast

food outlets, café and restaurant cum bars (Solomon, 2003).

This particular report would deal with dynamics of the marketing strategies and assessment of

the McDonalds Company on its operations in Thailand.

PESTEL analysis of McDonalds Company:

The PESTEL is regarded as a potent tool that helps in effective and efficient strategic assessment

so far the forces of the political, environmental, social, technological, economic and legal factors

are concerned and helps the management of the business organization to have a better

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understanding of the mentioned variables and ultimately leading to meaningful and essential

inputs into the decision making process of the companies.

The PESTEL analysis of Thailand vis-a-vis the McDonalds Company would enable in effective

assessment of the external environment embedded in which the company would operate and

function (Ellickson & Misra, 2008).

Political factors:

The political factors of Thailand can be related to the aspects of the taxation, employment

policies, tariffs, duties, the extent of the government intervention, regulations, spending power or

the disposable income of the customers and the overall political stability of Thailand would form

the main aspects for the McDonalds Company so far the political factors are concerned.

Moreover, the aspects of the regulation policies, social and environmental policies, wage and

labor policies, funding and grants, role and activities of pressure groups et cetera are the main

aspects of the political factors that the management of the McDonalds Company must take into

account for effective and efficient strategy making and implementation from time to time.

The peaceful environment of Thailand and the resolution of the internal disputes and conflicts

with nations like Cambodia serve as positive signs for business prospects. Moreover, the

relaxation of entry barriers, policy incentives and government spending contribute to the well-

being of the political factors for the McDonalds Company in Thailand (Solomon, 2003).

Environmental factors:

With the increasing awareness and education about the protection of the environment, depletion

of natural resources and sustainable business activities, the rules, regulations, standards and

codes of best and ethical practices as well as the clauses of accountability and responsibility on

the part of the various business organizations have assumed magnified importance in the national

as well as international stages.

Thailand has strived to keep pace with the developments and advancements in this field and urge

the business organization to strictly adhere to the rules and regulations standards and codes of

good practices for accountable and ethical business practices and compliance with the

sustainable business activities and processes. As such, the McDonalds Company have to keep

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note of the environmental requirements an codes of best practices in Thailand and have to devise

and implement the strategies accordingly for sustained business performance (Solomon, 2003).

Social factors:

The social factors also constructs a vital portion of the external forces that influence the business

performance and organizational output in a given business destination. The social factors can be

related to the aspects of social corporate responsibility, brand image vis-à-vis the participation

and engagement of the community where the company operates and the larger audience into

various well-being activities promoted by the brand. In the context of Thailand, the management

of the McDonalds Company needs to take steps in the direction of being a good corporate citizen

and promote the band as one that strives for the betterment and upliftment of the society and the,

members of the larger community through responsible, ethical and accountable business

practices and ensuring the engagement and participation of the members in the well-being

programs. Specifically speaking about the societal settings of Thailand, the McDonalds

Company has been able to identify itself with the local particularities and preferences of the

people and have been able to cater to their expectations and demands from time to time (Raverty,

2002).

Technological factors:

The technological factors vis-à-vis the particular business destination pertain to the aspects of the

technological infrastructure, technological development and the technological advancements

made by the people of the business destination and the facilities that would be accessible to the

organization for the application of the same into the activities and processes of the business

organization. The people of Thailand, with the advent and spread of globalization, the internet

and the technological advancements have become tech-savvy and are adept in social networking

and smart gadgets. The technological aspects of Thailand, though lags behind those of the first

world nations, is commendable and would be beneficial for the business processes and

operations, both within and outside the organization for the McDonalds Company (Raverty,

2002).

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The string online presence and the access to the state of the art technologies for the management

of the internal dynamics of the organization attribute golden opportunities for better business

performance for the business in Thailand (Pride and Ferrell, 1999).

Economic factors:

The economic factors for business operations in business destination are related to the economic

health and stability of the economy. The global financial crisis, recession and the decline in the

disposable income in the hands of the people are significant factors in Thailand that are relevant

and crucial for the business prospects of the McDonalds Company. The economic factors have

been crucial for the business operations and strategies of the McDonalds Company in Thailand

and the company has responded efficiently by offering value-meals at discounted prices and has

devised and implemented strategies with absolute emphasis on the aspect of price-affordability

however, not compromising with the quality of products or the quality of service provision

(Paley, 2005).

Legal factors:

The legal factors can be related to the aspects of the law of the land including the policies of the

government pertaining to the employment policies, wage rates, hours of work, safety and

protection of the employees and workers, government intervention, et cetera. The legal factors of

Thailand commensurate to the above mentioned aspects need to be taken account of on the part

of the McDonalds Company for effective and smooth business performance in the nation on a

sustained and ever improving basis (Luther, 2001).

Porter’s Five Forces Analysis:

Threat of new entrant: The threat of the new entrants for the McDonalds is low in the fast food

segment of the market and the fast foods market of Thailand is all the more saturated. With the

prominent brand name and dominance of the company in the food sector, it is less likely that the

new entrants would have a good position to enter the market or to have any considerable gains

from their ventures.

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Bargaining power of the suppliers: The bargaining powers of the suppliers is also low as

McDonalds is quite a large brand and there are numerous outlets of the McDonalds in most parts

of the world enabling the McDonalds Company to have better arm-twisting over the price

negotiations and other agreements with the suppliers (Ellickson & Misra, 2008).

Bargaining powers of buyers: The bargaining powers of the customers are high as there are

number of other fast foods brands are there in the market and also due to the issue of the health

consciousness among the people. The factor of obesity and health awareness is of special

importance for the McDonalds Company and the McDonalds Company would need to cater to

the demands of the health conscious customers as well.

Threats of substitute products: The threats of the substitute products are quite high for

McDonalds due to the increase number of other fast food businesses or the bands in the market

and there are other healthier options given to the customers at large.

As such, the McDonalds Company needs to diversify into other product lines so as to

compensate the threat posed by the substitutes and alternatives (Krstic and Becic, 2011).

Threats of competitions: The competition is quite high as the fast food industry is highly

competitive due to the increased number other bands in there in the market and the variety of

food items which are offered by those business organizations.

TOWS matrix of McDonalds Company:

TOWS Matrix for the

McDonalds Company

STRENGTHS

1. Global Brand

2. Good revenue growth

3. Innovative products

with standardization of

the same.

WEAKNESSES

1. Legal Issues

2. Quality of products

3. Core products are not

in line with recent

trends.

4. Advertisements that

target Children

OPPORTUNITIES

1. They can now open

SO STRATEGIES

1. Expansion of menu to

WO STRATEGIES

1. Can do More

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more stores through

franchisee mode in

various locations

across Thailand.

2. Use Health Conscious

Trend to their benefit

by introducing more

low-carbohydrate and

less fatty meal.

3. Can enter into Joint

ventures with various

supermarkets.

include much more

healthier food items

2. 2. McDonalds is still

new in Thailand so the

craze is still high.

3. Can go for CSR

activities and Green

Campaigns by utilizing

the brand name

promotions

2. Invest in innovative

design of products to

attract customers.

3. Inclusion of healthier

food in menu

especially for children

THREATS

1. Very strong

completion from the

likes of KFC, Burger

King etc

2. People are more

concerned about

obesity

3. Changing

demographics

ST STRATEGIES

1. Develop products that

are differentiated from

competitors and thwart

the competition.

2. More promotional and

attractive offers that

lure the customers.

WT STRATEGIES

1. Try to create more

franchisees across the

country, especially in

the tourist destinations

where footfall is high.

2. Include special offers

for people above 60 so

that they also feel like

having some of the

healthier food options

with lesser money.

STOW analysis of McDonalds Company:

Strengths:

The brand name, fame and brand image the main strengths of the McDonalds Company and

added to it are the aspects of its strong global presence, solid experience and research and

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development acumen that are reflected in the product lines, the outlets and in the customer

services.

Moreover, the flexibility and adaptability of the policies and processes of the McDonalds

Company adds to its strengths. For example, offering low-carbohydrate and low-fat meals and

burgers in the wake of the obesity-related awareness and health consciousness serves as a bright

example of the same (Jeyarathnam, 2008).

Threats:

Rising prices of raw materials and entry of new entrants into the market

The popularity of the local food chains

The shifting trends of customer behavior in the detriment of the McDonalds Company

Instances of legal suits being initiated against the company leading to the tarnishing of the brand

image and fluctuations in currencies and prices are the most potent threats faced by the

McDonalds Company (Jeannet, et al. 2004).

Opportunities:

With the increase in health consciousness and awareness, the demand for healthy food options

has also gone up which serves to be a golden opportunity for the McDonalds Company to

capitalize on in the upcoming days

Moreover, the option of home delivery can add to the popularity of the brand and with the

adaptation of the restaurants outlets showing impressive trends serve as opportunities for the

McDonalds Company.

New customer groups and the speed of life have increased the demand for ready to eat meals and

food stuffs which have further added to the chances of prospect for the McDonalds Company

(Ellickson and Misra, 2008).

Weaknesses:

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The increasing rates of employee turnovers, lack of segment-specific marketing strategies, low

differentiation and instances of negative publicity are the main factors of weakness for the

McDonalds Company.

STP analysis of McDonalds in Thailand:

Segmentation:

The segmentations strategies of McDonalds in Thailand would be based on the segmentation

done on the basis of age, the income levels of the customers and on the basis of the professional

status of the target customers (Dess and Miller, 2003).

Targeting:

The target customers of the McDonalds Company in Thailand is vast and varied and one of the

most glaring factors that attribute the company the special status is its efficiency in devising

effective marketing strategies for each of the segments, in perfect sync with their expectations,

aspirations, demands and requirements (Williams, 2009)..

Pricing:

The pricing strategies of the products meant for each of the target segments are devised keeping

in mind the particularities of the segments. For example, the products are strived to be kept

pocket-friendly for those products that are meant for college and university students and the

prices of the products meant for corporate personnel are higher in price (Arnold and Springer,

2001).

SMART objectives for Company:

In order to meet the business goals and objectives the McDonalds Company must devise a set of

SMART objectives which stand for Specific, measurable, achievable, and relevant and time

specific.

Specific:

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The specific objectives can help meet the objectives within the year end for that the management

needs to devise specific targets. For example, the company can set a target of serving the food

within two minutes of order being placed.

Meeting of marketing objectives by McDonalds reflected in the revenues in world wide

scale

Source: (McDonald, 2005).

Measurable:

The objectives have to be measurable so that the extent to which it has been met can be

measured. For example, the management can set a time frame of two hours and check what

percentage of customers was served within the specified two minutes time frame (Davidson and

Simonetto, 2005).

Achievable:

It is absolutely vital for the objectives to be achievable. The achievable objectives for the

McDonalds Company can be related to catering to the varied tastes and preferences of the

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customers and reducing the time between ordering and delivery or serving. The feasibility of the

objective via-a-vis the training and efficiency of the staff and the availability of the resource

available at the disposal of the company are essential variables so far this clause is concerned.

Relevant:

The relevance of the objectives in meeting the aims pertaining to delivering value for money to

the customers and catering to their demands and expectations are necessary to render the venture

profitable. For example, reduction of the time from order placing to serving can enable serve,

more number of customers and also make them happy about the services (David, 2005).

Time–framed based:

The deadlines are essential for effective meeting of the objectives. For example, the management

of the McDonalds can provide a time of two months for at least 80 percent of the staff attain the

two-minute serving time.

Conclusion and recommendations:

The McDonalds Company need to make, adjust and improve the strategies according to the

dynamics of time and in response to the changes and developments in the external as well as the

internal environment. The building on the strengths, capitalizing the opportunities and addressing

the weaknesses and threats would see the McDonalds win another feather to its hat so far the

Thailand case is concerned (Arnold, et al. 2001).

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increase revenues and profits. Strategy & Leadership, 33(6), 25-33.

doi:10.1108/10878570510631639

Dess, G. and Miller, A. (2003). Strategic management. New York: McGraw-Hill.

Ellickson, P., &Misra, S. (2008). Supermarket Pricing Strategies. Marketing Science, 27(5), 811-

828.

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