Franchise business model was a success because it allowed franchisee to uniformize and standardize operations, and provided predictability and stability. While McDs mainly serves a uniform menu globally with no substantial variations except for small regional ones, its menu is still quite large and diversified. Customer service and convenience are critical factors in differentiating businesses that offer efficient services and convenience. Icons are like the logos in any other business. According to the most recent data, as of July 30, 2021, the companys market cap was $52.3 billion, and its share price was $1863. It is why McDs spends a significant sum on marketing every year. The total number of McDonalds restaurants globally rose to 37,241 in 2018. Its focus on quality and customer service has resulted in strong brand equity. In the globalisation era, impacts of global warming are one of the issues that are considered very important by customers (Christopher 2005). Advertising is the most fundamental way KFC promote its products. This is correct. If these industries engage in monopolistic behavior, consumers may suffer because they will pay high prices, receive substandard goods, and have fewer options. In the fast-food industry, such risks include changing the attitude and sensitisation on the sustainability of fast-food organisations and sourcing strategies from consumers and communities in which the organisations operate. McDonalds food has dominance over the market with its cost effectiveness and availability. They are the leaders of the industry and provide training to their franchisees. McDonalds food has dominance over the market with its cost effectiveness and availability. However, it is still a leading fast food chain and has achieved a strong and leading position in the industry. This tradition and the companys ability to change has allowed McDonalds to be one of the few companies that have continuously held on to their competitive advantage. The international fast food chains like McDonalds, KFC and Burger King have opened multiple outlets across Pakistan & gained massive popularity due to their signature You should have an apostrophe before the apostrophe in the word system. Analyzing other companies who provide the same products or who can meet the same needs in various ways is one way to look at other companies. Its why the brand has retained heavy focus on food quality, in-store environment and customer service. Upon noting the various sustainability problems in the supply of raw material and finished products, McDonalds and KFC have now focused on developing organisational policies for enhancing their corporate citizenship. Brands, Inc. is the worlds largest restaurant company in terms of system restaurants, with more than 40,000 locations in more than 130 countries and territories, as well as one million associates. Its restaurants serve a substantially uniform menu except for minor regional variations. McDonalds is the worlds most valuable fast food brand, with a market value of $124 billion. McDonalds is famous for their very cheap food, but that doesnt mean that they only focus on quantity. All of these have been successful for the company. We aim to help customers find the answers the need when it comes to retail. KFCs core competency is we can just come up with one. 49 no. McDonalds worldwide serves 6.5 million burgers per day or 75 burgers per second. McDonalds, a global real estate company, owns and operates its brand, operations, suppliers, and know-how as part of its global expansion plan. McDonald is always successful in sustaining a good image in hearts of its customers. Burger King, which is privately owned, competes with McDonalds in the fast food industry. The rivalry between McDonalds and Burger King is a classic example of business. The Burger King cheeseburger contains more protein and sodium than the McDonalds cheeseburger. For instance, its strategic marketing plan has the objective of instilling a strong belief that including fruit salads as additional products that are served alongside the regular hamburgers and other products that are offered by the company responds to the call for people to embrace good eating habits. IvyPanda. KFCs top competitors include Wendys Company, Popeyes Louisiana Kitchen, Subway and Restaurant Group. So in this comparison, KFC is much more cheaper then Texas chicken. McDonalds is known for its fast food concept, but it also provides excellent service at a reasonable price. You can use them for inspiration, an insight into a particular topic, a handy source of reference, or even just as a template of a certain type of paper. After a pandemic, the fast-food industry will be unable to survive for at least a year. McDonalds has long been the most visited restaurant in Germany, as evidenced by its popularity. KFCs new menu items like Macs and Cheese, Cheezy Mushroom Crunch, and Chizza outperforms Texas Chicken. Burger King, which competes with McDonalds, provides high-quality food and memorable service. Quality, choice and nutrition are highly important to the modern customers who are health conscious people. ), Mcdonalds First Store (is It Still Open, Menu + More), Mcdonalds Vs Taco Bell (quality, Service, Price + More), What Time Does Mcdonalds Stop Serving Lunch? The joint venture that has been going on for over fifty years. In order to differentiate itself from competitors, McDonalds offers a variety of unique selling points that are difficult for other companies to replicate. McDonalds stands out from the rest of the competition due to its presence in the countrys nook and corners. The corporation has also created a formal system that guides its operations in relation to five main facets, namely merchandise, cost, individuals, promotion, and position. McDonalds Business Strategy and Competitive Advantage. The competitive strategy of McDonalds is to provide a fast, accessible, and affordable dining experience for its customers. When McDonalds restaurants see donations in boxes, they collect the donations and give away the donations to Ronald McDonald Houses to help children with serious illnesses. More than R100 000 in prizes have been distributed to winners. McDonald's and KFC Corporate Responsibility. As indirect competitors of McDonalds in the coffeehouse category, Starbucks and Dunkin Donuts can also be considered direct competitors of McCaf. Indeed, its founder, Harland Sanders, realised that the organisation would function under this model in 1952 when he opened the first franchise at Utah. KFC (also known as Kentucky Fried Chicken) is a global chicken restaurant brand. Texas Chicken have branches more than 1,700 locations worldwide in 23 countries. What Is KFCs Competitive Advantage? KFCs competitive advantage is its supply chain and distribution system. This allows the fast food giant to cultivate relationships with business partners and establish a footing in regions where the competition is still struggling. It is enjoying high customer loyalty and is in a position to achieve faster growth in future. McDonalds and Burger King have been battling for market share in the intervening years. Apply for a Culvers Restaurant Culver's Opening Team Member - Competitive Pay! Wilhelm, R. 2011, McDonalds Formal Business Structure. KFC may not be considered as the direct competitor to McDonalds as it does not specialize on the burgers and fries. Finally, McDonalds is well-known for its Ronald McDonald character, which helps to create a sense of fun and excitement around the brand. Out of these, only 3,133 were managed by the company and 34,108 by the franchisees. They are also sensitive to regional differences in taste, so KFC spicy chicken is much hotter in Sichuan than in Shanghai. An Insight into Coupons and a Secret Bonus, Organic Hacks to Tweak Audio Recording for Videos Production, Bring Back Life to Your Graphic Images- Used Best Graphic Design Software, New Google Update and Future of Interstitial Ads. They also McDonalds customers have a lot of power if the restaurant wants to keep its customers. KFC also made a commitment to being environmentally friendly by using recycled materials and using antibiotic-free chickens. No plagiarism guarantee. Quality, service and cleanliness are always important, but in this case, good value is more important. This process has the aftermath of reducing carbon prints for many organisations. McDonalds has over 34,000 locations in more than 120 countries, making it one of the worlds most popular fast food restaurants. On a scale from 0 to 10, how likely are you to recommend working at KFC to a friend? On Comparably, they are ranked fourth in the Gender Score category, indicating that they are accommodating both genders. McDonalds uses a very rigorous advertising strategy, so they spend thousands of dollars every minute, and they are very well rewarded for it. In 1987, it was amongst the first western-based organisations that opened new business branches in China. 2, pp. Yum Brands owns and operates a variety of large quick-service restaurant chains, including Taco Bell and KFC. McDonalds and KFC managers remain susceptible to challenges of enhancing sustainability in their supply chains while doing their businesses in a modern globalised business arena. The success of the company led to the growth of the fast food industry and the company was named to Fast Food Hall of Fame in 2009. As time passed James McLamore and David Wendys is an international fast-food restaurant chain that is famous for its hamburgers, french fries, Frosty, chicken nuggets, sandwiches, and even its Twitter account. Independent franchisees own and operate more than 90% of McDonalds restaurants around the globe. I remember the old ad from the 1980s where the slogan was Im lovin it! I remember my parents used to laugh at the Whats on Your McNugget slogan. It is because apart from helping them build higher customer loyalty and driving customer retention rate high, it also helps the business maintain a strong image and grow its popularity. These efforts have helped the company maintain its position as the largest fast food chain in the world. McDonalds has been trying to get into the breakfast market for sometime, but they have come under criticism about their treatment of their workers. For example, while McDonalds and Burger King both sell burgers, McDonalds offers a Big Mac while Burger King offers a Whopper. 3, pp. Idle, T. 2011, How can KFC be a responsible business when you are fuelling child obesity? The chicken business responds. The company has a strong financial position and Each of these gases contributes a given proportion to global warming. For example, KFC offers a $5 Fill Up meal which includes a chicken sandwich, a drink, and a side. - Caitlyn Johnson. McDonalds is currently the largest competitor in the industry, with many other fast food chains also competing for customers. Additionally, McDonalds has a strong focus on families and offers a play area for children at most locations. KFC is ranked fourth in the world in terms of gender score, while Taco Bell is ranked 130th. Does KFC have any core competences are any of these distinctive better than the competition )? The Latest Innovations That Are Driving The Vehicle Industry Forward. Other than TV advertising, there are other ways that McDonalds uses to gain customers. As suggested by the application of the concepts of green supply chains, sustainable supply chains ensure that the environment does not suffer from any harm due to its operations. Its ability to penetrate to different types of markets is also a plus because it makes it easy for many people to have a close association with it. Monopolies can also reduce competition and stifle innovation. August 2, 2021. https://ivypanda.com/essays/mcdonalds-and-kfc-corporate-responsibility/. 4. Brands and Dominos to secure that accolade. One major source of competitive advantage for McD is its extensive global presence. McDonalds restaurants are mainly run through independent franchisees in more than 100 countries. The franchisees own and operate more than 90% of McDonalds restaurants globally. They often result in excessive food wastes and accumulation of packaging waste. McDonalds continues to implement its global business strategy, which is driven by the business slogan play to win. 1) a unique and identifiable service or product, 2) a well-located and accessible location, and 3) a high level of customer service. It is essential to keep the customers engaged and retain them so that they do not switch brands. A large and varied product range is meant to cater to the taste and needs of various groups of customers. Indeed, within the last few years, KFC and McDonalds have strategically focused on programmes for creating sustainable supply chains. In this context, Aronsson and Brodin (2006) confirm that sustainability in the current supply approaches that are deployed by McDonalds initiates with simple but also significant practices that seek to optimise supply chain decisions. ), Mcdonalds Vs Subway (price, Quality + Whos Better), Mcdonalds Vs Hungry Jacks (quality, Service, Price + More), Does Mcdonalds Have All-day Breakfast? Operating in an environment of criticism concerning McDonalds degree of sustainability of supply chains makes it pursue various success strategies. Such gases include methane, nitrous oxide, and carbon dioxide among others as defined by the Kyoto Protocol (The United Nations 2014). Supply chain management entails overseeing the movement of goods and services, finances, and information from the point of production to wholesalers and then to consumers. Customers rate KFCs Pricing Score a 3.6/5, making it one of the top three restaurants in terms of pricing, trailing only McDonalds. However, apart from that it has some other sources of competitive advantage too. Save my name, email, and website in this browser for the next time I comment. McDonalds has access to a number of raw materials suppliers, including chicken and meat. 35-52. The fast food industry is highly competitive. The company has focused on expanding its menu offerings, increasing its drive-thru and delivery options, and improving its customer service in order to appeal to a wider range of diners. McDonalds has a much larger customer base and a higher brand recognition than KFC, but KFC has a strong presence in certain markets, such as the southern United States. It has quality centers around the globe which ensure that the high standards company has set are consistently met. McDonalds has more locations than KFC. Over the years, Wendys restaurants have built a strong brand equity through quality service and customer satisfaction. Please note! McDonalds was named the worlds largest fast food chain based on an analysis of the top ten largest fast food chains. Its key competitive advantages have included nutrition, convenience, affordability, innovation, quality, hygiene, and value added services. They will have more seasonal menu and promotion such as recently FIFA World Cup they had released Rio series of menu set, Durian season come out with durian McFlurry, CNY with Prosperity set, Mix and Match with cost only RM 5.50 one set and now with Mexicana Chicken burger. McDonalds has a large selection of meals for both children and adults at a low cost. KFC is well-known for its fried chicken, which is made from their own Customers can rely on them for expert knowledge in delivering a specific type of experience. Apart from that McDs works closely with suppliers for encouraging innovation, best practices and to drive continuous improvement. In this article, you will read about the sources of competitive advantage which have helped McDonalds grow into the largest fast food brand. Other restaurants in addition to McDonalds include Burger King, Wendys, Taco Bell, KFC, and Subway. McDonalds uses a mix of traditional and digital channels for advertising and promotions. Beside that, KFC company was ranked in number two in the analysis. The goal was to initiate a programme for phasing out the use of polystyrene food packaging to raise the number of recycled food boxes and containers. Consequently, sustainability in a supply chain can be enhanced in an organisation by aiming to be the lowest cost leader within any industry. However, if compare with Texas Chicken, KFC have a better innovating menu, because the core dish of Texas Chicken is just focus on fried chicken. This is where McDonalds purchases all the raw materials for its menu items, such as tomatoes and lettuce, from the same supplier. 2 piece chicken ala carte in KFC cost RM 7.20 while Texas chicken cost RM 9.10. McDonalds is famous for their very cheap food, but that doesnt mean that they only focus McDonalds is a worldwide fast-food franchise with hundreds of restaurants throughout the world. In spite of strong competitors likes KFC Subway etc. United States are the largest market for McDonalds accounting for more than 30% of the companys revenue. A zero tolerance policy that addresses the sourcing of poultry that are fed by soy that is grown in the newly cleared Amazon forest also constitutes another measure that helps in presenting McDonalds as a corporation that is environmentally friendly and supporting the conservation of natural habitat. KFC notes its weaknesses in communicating sustainability efforts to consumers and other parties that have stakes in its operations. It also operates within the fast-food industry. McDonalds may have to reconsider its product quality as customers become more health-conscious. McDonalds restaurants were opened in 1948 in San Bernardino, California, by two brothers named Maurice and Richard McDonald. KFC is among the renowned fast food restaurants that have been in the industry for quite a significant duration. McDonalds has a competitive advantage in terms of speed of service. Such prints are computed using inventories of greenhouse gas emissions within a company, product and facility, or any other alternative entity. 17-19. McDonalds has a competitive advantage in terms of cheating prices. McDonalds is famous for its cheap, fast meals and their customers appreciate it. Aronsson, H. & Brodin, M. 2006, The environmental impact of changing logistics structures, The International Journal of Logistics Management, vol. In McDonald's case, such standardization is one of the reasons, along with the sheer ubiquity of its operations, why the company has become a symbol, and to some Competitive Advantage offers a beneficial position to business organisations over rivals in regards of some measure like expense, quality, or velocity. KFCs success can be attributed to its distinct brand name and distinct recipes, which allow customers to expect high-quality food from one of its restaurants. Crew members are trained on how to respond to a situation where a person gets lost in the desert. Such legal provisions have the impact of raising the cost of running the business of both organisations. Web. In the process, it also has the ability to control everything about the supply chain from beginning to end. A third strategy that McDonalds employs in its supply chain are whats known as vertical integration. The KFC mission or vision statement is as follows: To sell food in a fast, friendly environment that appeals to price conscious, health-minded consumers. KFCs major competitors include Wendys, Subway, McDonalds, and Burger King. The most preferred direction is the one that will ensure that supply chain approaches become cost effective to the extent of making an organisation experience competitive advantage. The idea is to give customers a more natural product. August 2, 2021. https://ivypanda.com/essays/mcdonalds-and-kfc-corporate-responsibility/. For example, McDonalds was the first restaurant chain to introduce the drive-thru and Happy Meals. From the perspective of balance meals, KFC did a better work than McDonalds because their meal has more protein, carbohydrates, and vegetables. Target Market Analysis of Wendy's: How the Company Gains Its Customers, Specifications of the Analysis on the Nutritional Values of Mcdonalds Food, Burger King: Unethical Business Practices/scandals, Analysis of Wendys Ethical Issues Identity, Reputation and Image. Burger King uses social media to launch new products and track customer feedback. These changes have taken place following changes in the business environment, excessive anxiety for climatic changes, and concerns of energy security from various stakeholders and advocacy groups across the globe. McDonalds wants to make money by not only selling its products but by encouraging customers to add additional items to their orders. The mcpizza and mclobster are two failures of the mcdonalds. The focus of McDonalds marketing and promotional efforts is on value, quality, food taste, menu choice, nutrition, convenience and the customer experience. June 20, 2022. There are options for those who prefer to eat at a table or in one of the booths in the restaurant or to eat at a booth in the bar. IvyPanda, 2 Aug. 2021, ivypanda.com/essays/mcdonalds-and-kfc-corporate-responsibility/. Supply chain costs go beyond the costs of distributions of products, which are often reflected in the final prices of commodities and services. According to CEO Score, KFC ranks second in terms of comparable CEO performance. McDonalds, on the other hand, has had to deal with competition from newer, smaller chains over the years. KFC is not the only restaurant chain in competition with KFC; there are also competitors such as Chick-fil-A, McDonalds, Wendys, and Popeyes Louisiana Kitchen. The statistic showed KFC cost RM13.90 including the 20 cents of plastic bag, while McDonalds costed RM13.85 for both regular sets. Originally in 1962, no military base in the United States had drive thrus at restaurants. They strive to produce high-quality products, services, and processes. While these fast-food giants have a Every employee is trained in working tirelessly to keep a clean environment for all guests. I believe were going to see a new chapter in the Burger Wars in the coming years. The company focuses on making the supply process as efficient as possible. KFC also has a strong presence in China, which is a key growth market. From this perspective, this paper deploys the concepts of supply chain to discuss various supply chain sustainability issues in the US fast-food industry with reference to KFC (Kentucky Fried Chicken) and McDonalds. Can they constitute good examples of corporate citizens in the US fast-food industry? Even though they are same but KFC meal is much more cheaper than Texas Chicken. Barnett, M. 2010, Colonel Sanders New Modern Army of Outlets, Marketing Week, 4 March, pp. However, McDs has continued to grow its presence in the other significant markets too. Due to intense competition in the fast food industry, marketing has become more important than ever. It allows you to develop a clear and concise plan for how to best compete against them. Hence, sustainable supply chain management concepts that are deployed by KFC and McDonalds persuade organisations to become green. In 2017, McDonalds incurred advertising expenses of 532.9 Million dollars and other marketing related expenses of around 100 million dollars. 7 How is KFC different from the rest of the world? Brand equity is an important competitive strength that helps businesses even in economically challenging situations. Indeed, competitive advantage is one of the supply chain management strategies that act as critical success factors for sustainability in any organisation, KFC and Taco Bell are two private-owned fast-food chains that focus on chicken. McDonalds strategy is to differentiate itself through efficiency and quality. The company cares about the health of its customers. IvyPanda. If you need this sample, insert an email and we'll deliver it to you. This figure escalated to $142 billion in 2006. To achieve this goal, the organisation advocates a bureaucratic formal management structure. Franchising improves the brand value of the company hence bargaining power along with improving its revenue and visibility. Burger King and McDonalds are two of the biggest players in the game. McDonalds has always tried to achieve higher customer satisfaction. 10-11. KFC China tends to introduce more new products than its competitors (Jeon et al. This means appealing to families who love our iconic Happy Meal, to workers grabbing breakfast on-the-go or eating in. One major source of competitive advantage for McD is its extensive global presence. Would you like to have an original essay? In the recent past, environmentalists sharply criticised McDonalds over the wastes that were generated through its products and packaging. Gone are the days when McDonalds enjoyed competitive advantage simply because of their unique product line. McDonalds, on the other hand, is known for its high-quality food and excellent customer service. The franchisees own and operate more than 90% of McDonalds restaurants globally. The fillet-o-fish is a popular menu item. Burger King globally generated more than $20 billion in revenue during the fiscal year ending in 2020. Web. Ciliberti, F. 2009, Codes to coordinate supply chains: SMEs experiences with SA8000, Supply Chain Management: an International Journal, vol. The organisation is also a subsidiary of the Yum Brands, which also owns organisations such as Taco Bell and the Pizza Hut fast-food chains. McDonalds sells a wide variety of food. What is better chicken or KFC? McDonalds is a famous fast food brand with operations around the world in more than 100 countries. It also encompasses coordination and integration of flow of materials among organisations. McDonalds (MCD), Burger King (BKW), Carls Jr., Papa Johns, and Pizza Hut are among the companies that must supply Shanghai restaurants, according to a government statement. KFCs training program for its employees is based on the development of technical, managerial, and communication skills.