McDonald’s began as a small restaurant run by the McDonald’s brothers, with a limited menu, concentrating on just a few items – burgers, fries and beverages – which allowed them to focus on quality and quick service (McDonald’s, 2022). The McDonald’s brothers were looking for a new franchising agent and Ray Kroc saw an opportunity. In 1955, Ray Kroc founded McDonald’s System Inc., a predecessor of the McDonald’s Corporation, and six years later bought the exclusive rights to the McDonald’s name and took over the operating system (McDonald’s, 2022). 70 years later, McDonald’s is now a global brand, with a 23.22 billion US dollar turnover in 2021 (Statista, 2022).

In 1993, McDonald’s executives were looking for an opportunity to generate some organic business growth. McDonald’s saw a possible opportunity to grow revenues through the coffee segment of the market. By 2002 the McCafé concept had spread to 13 countries, and the first McCafé opened in SA in 2008. McDonald’s knows it needs to stay innovative to maintain its strong position in the market. McDonald’s has shown this by introducing new award-winning McCafé coffee drinks and implementing effective loyalty programmes in some markets. An extended menu includes some new trendy offerings like ice-brewed coffee and more.

According to Lock (2017), McCafé is planning to transform some of its sites into fast- casual venues. A new concept that will serve fresh and healthy foods fast for customers on-the-go. In the future, we may have a fast-food concept mixed with a premium-level restaurant approach.

Question 1
Provide a thorough explanation of strategic fit, provide McDonald’s’ vision and mission, and evaluate McDonald’s’ strategic fit. Please remember to reference and cite your sources correctly.
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Two (2) marks will be awarded for providing a thorough explanation of what strategic fit means in relation to McDonald’s.
One (1) mark will be awarded for providing McDonald’s’ vision. One (1) mark will be awarded for providing McDonald’s’ mission.
Five (5) marks will be awarded for an evaluation of McDonald’s’ strategic fit. This evaluation should include the role of the vision and mission (1 mark) and what the
focus should be when McDonald’s is formulating its marketing strategies (4 marks).

Question 2
Provide a thorough explanation of the role of the internal environment in gap analysis, by explaining McDonald’s’ internal environment, correctly presenting examples of McDonald’s’ resources and capabilities, and evaluating McDonald’s’ internal environmental fit. Please remember to reference and cite your sources correctly.
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Two (2) marks will be awarded for compiling a thorough explanation of what strategic fit means for McDonald’s, in your own words.
Two (2) marks will be awarded for demonstrating a clear understanding of resources, through the use of McDonald’s examples.
Two (2) marks will be awarded for demonstrating a clear understanding of capabilities, through the use of McDonald’s examples.
Three (3) marks will be awarded for an evaluation of McDonald’s’ internal environmental fit. This evaluation should include the role of the marketing strategy (1 mark) and alignment with McDonald’s’ existing resources and capabilities (2 marks).

Question 3
Provide a thorough explanation of the role of the external environment in gap analysis, then correctly present examples of external environmental trends that are currently affecting McDonald’s in the South African market. Evaluate McDonald’s’ external environmental fit by applying the concept to McDonald’s and providing your opinion on whether there is a strategic fit based on the analysis of the environmental trends. Please remember to reference and cite your sources correctly.
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Two (2) marks will be awarded for compiling a thorough explanation of the role of the external environment in McDonald’s’ gap analysis.
Two (2) marks will be awarded for demonstrating a clear understanding of the six external environmental factors, through the use of McDonald’s examples.
One (1) mark will be awarded for an evaluation of McDonald’s’ strategic fit with the external environment within which it operates.

Question 4
Provide a thorough explanation of gap analysis, and then make use of the gap analysis to discuss if the opportunity for McDonald’s to expand into fast-casual venues is appropriate for McDonald’s. Use information gathered through your previous analyses as supporting evidence in your discussion. Please remember to reference and cite your sources correctly.
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Two (2) marks will be awarded for compiling a thorough explanation of the role of gap analysis in McDonald’s, strategic planning.
Two (2) marks will be awarded for stating whether the expansion opportunity is suitable for McDonald’s, with a brief justification.
Two (2) marks will be awarded for applying each of the elements included in the internal and external analysis as supporting evidence for the evaluation you have provided of the expansion opportunity, totalling sixteen (16) marks.

Question 5
Provide a thorough explanation of the role of the strategy formulation in gap analysis. Prepare an appropriate marketing strategy for the McDonald’s expansion opportunity, including the product market, market segment and marketing mix (4Ps). Apply the concept of strategy formulation fit to the McDonald’s scenario. Please remember to reference and cite your sources correctly.
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Two (2) marks will be awarded for providing a thorough explanation of the role of strategy formulation in McDonald’s’ gap analysis.
Nine (9) marks will be awarded for preparing an appropriate marketing strategy, including three (3) marks for application of the product market, two (2) marks for application of the market segment, and one (1) mark for application of each of the 4Ps.
One (1) mark will be awarded for applying the concept of strategy formulation fit.

Question 6
According to West, Ford and Ibrahim (2015), an organisation’s pricing strategy involves key decisions related to buyer behaviour – how much, where, when and how the buyers pay. Individual pricing decisions are also made under the guidance of an organisation’s objectives and the desired market position.
Through the use of application and examples, provide a thorough explanation of each of the key elements of pricing in relation to McDonald’s’ current McCafé market offering in the South African market. Please remember to reference and cite your sources correctly.
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Two (2) marks will be awarded per key element of pricing. One (1) mark will be awarded for applying the key element to the McDonalds scenario and one (1) mark will be awarded for providing a detailed example.

Answers on Above Questions on McDonald Case Study

Answer 1: Strategic fit is defined as achieving a proper balance between the strategy of a company and the resources and capabilities it has. A company can achieve significant success by having a proper strategic fit as it allows the company to significantly exploit the opportunities available in the market by way of leveraging its strengths. In the given case scenario of McDonald, the strategy of the company is identified from its vision which states that it wants to be a quick service restaurant and become a favourite place for its customer to eat and drink. Considering this strategic choice, the resources available to the company are in terms of a huge network available worldwide where by it can include its McCafe to reach out its goals.

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