Abstract
Both McDonald’s and Burger King are fast food companies that most specialize in selling burgers and other delicacies. The two firms have, over the years, dominated the market for a long time. The two firms have also been competing on quality rather than price, intending to attract more customers and remain at the top of the competition. However, in recent times, the consumer taste has been changed, where many are according to healthier options due to the increasing health risks. Hence, this study seeks to compare and contrast different factors, both internal and external, which affect the two companies. The study also thoroughly analyses the two firms’ legal, social, and economic environments, where the similarities and differences between them are noted. Other issues addressed include the managerial, operational, and financial issues that have affected the two organizations. To conclude the study, the areas that the two firms can improve on are comprehensively addressed.
Comparison between McDonalds and Bugger King
Introduction
McDonald’s is an American fast-food firm, which was founded in 1940 as a restaurant. The company mostly majors in selling burgers, which is a favorite delicacy among many Americans and other people worldwide. McDonald’s owns about 38,000 restaurants, where it serves close to 70 million customers in a year, mostly serving burgers, fries, and chicken nuggets as quickly as possible (Kwinta, 2018). One of MacDonald’s rivaling companies is Burger King, which also specializes in the selling of similar products and has been a critical competitor for an extended period (Rubenstein, 2017). The rivalry between the two firms has mostly been due to the pricing of the products, the convenience of selling, and the type of menus each company has, where they both have sought to pursue consumer loyalty over time.
The basic legal, social, and economic environment in which the organizations operate
Legal analysis
For McDonald’s, health regulations in workplaces and schools impose limits on the availability and accessibility of fast food. As a result, this has limited the revenues for the company. There are also multiple animal regulations, which has led to an increase in the firm’s supply chain costs. Nevertheless, this factor has created an opportunity for improving the business through the implementation of a comprehensive animal warfare policy, which as a result, has led to the attraction of more consumers who are interested in the matters of animal welfare. Another legal factor facing McDonald’s is minimum wage requirements, which has resulted in higher costs and prices.
For Burger King, there are also legal factors that affect its operation. A first legal opportunity by Burger King is its opportunity to grow based on export and import regulations, which support new international trade agreements (Meyer, 2017). Nevertheless, GMO regulations, especially in Europe, are a significant threat to the company since it limits its performance, considering the widespread availability of ingredients used in the industry.
Social factors
There is an increasing cultural diversity, which as a result has affected the consumer base of McDonald’s. Many consumers are opting to buy fast foods rather than cooking at their homes, which is advantageous to the firm. Nevertheless, a large number of consumers prefer to have a healthy lifestyle, which could pose a significant threat to the company due to the adverse health lifestyle effects that the firm’s products are accused of. Most of these social factors are similar to Burger King’s. The issue of a healthy lifestyle amongst the consumers also affects the company, where most of its food is classified as junk, and hence a large number of people tend to avoid the products (Kwinta, 2018). There is also an increased population diversity, which presents an opportunity for the company to be more innovative to attract consumers from varying backgrounds.
Economic environment
Both Burger King and McDonald’s have been affected by international trade agreements, where they have been able to grow through global supply chain enhancements. The two have also enjoyed the United States’ economic stability, which enables them to grow and expand continually. There has also been stable economic growth for the developed nations, which poses an excellent opportunity for both firms to grow and increases their stability.
Company Culture and Performance
The culture of McDonald’s emphasizes its human resource development and also encourages efficiency. MacDonald’s culture mostly entails supporting business growth and success in the international fast-food industry. A vital characteristic of the firm’s culture is that it is people-centric. It mainly focuses on prioritizing its employees’ needs and development, where it encourages them to engage the management to assist in improving the processes and procedures. The culture also focuses on individual learning, which promotes productivity, quality, and business effectiveness (Москальков, 2020). It offers training and development opportunities through training and development programs for its workers (Duggal & Alexander, 2018). Another characteristic of the firm is organizational learning. It aims to use individual learning to develop organizational knowledge to push the business forward to new heights of performance. McDonald’s is also known for its diversity and inclusion. The firm recognizes the need for diversity and inclusion in optimizing the HR capabilities in dealing with an increasingly diverse market.
As for Burger King, its organizational culture is based on the goal of the firm to continue
with its global growth. A vital characteristic of the firm’s culture is that it is bold, empowering employees to achieve high performance (Musonera, 2019). The culture allows the firm to maintain resilience, which is needed for is continued global growth. Accountability is another crucial characteristic of Burger King, where the employees are accountable for their actions. The employees are required to follow the rules and face the consequences of the decisions they make. Fun is another feature of Burger King’s organizational culture, which boosts the morale of the workers. The workplace is enjoyable and fun and helps reduce workers’ turnover rate, and ensures that workers are effective in their various roles. The culture is also Meritocratic and Performance-Driven, where it encourages the employees to maintain a high performance.
Promotion Policies
Burger King employs various tactics to promote its products. The firm mainly adversities the products, both on mainstream and social media platforms, to target the prospective consumers (Rubenstein, 2017). It is also involved in sales promotions in coupons and other offers, mostly through its website. Personal selling is also used to encourage consumers to purchase more products. The firm is also involved in Public relations, which helps in promoting and strengthening its brand. McDonald’s uses sales promotion strategies such as the use of menu upgrades giving out gift cards and having digital initiatives (Москальков, 2020). The firm also advertises its products on mainstream and social media platforms to promote its products to prospective consumers.
Strategic Decisions Making and Decision-Making Style
Burger King has a democratic style, where there is less gap between the management and other employees. Each employee participates in the role of decision-making. Employees must work with their strengths and provide input on how to delegate work within their respective teams. For MacDonald’s, the firm encourages teamwork within employees, who then consult the management for decision-making.
Leadership Style
For McDonald’s, there is autocratic leadership. The style involves the team leaders and managers making unilateral decisions (Mozammel, 2019). This type of leadership hence does not involve the junior employees making any decisions. On the contrary, for Burger King, the leadership style is the Free Rein leadership style. The style involves a leader allowing employees to make decisions. However, the leader is still responsible for the decisions made by the employees.
Management Style
McDonald’s, just like many other prominent business organizations, has several top-level and C-level executives. The executives are the firm’s management, who are responsible for making decisions, setting goals, managing finances, and making sure that there is smooth functioning. The top executive of the firm is led by the CEO and the board of management. As for Burger King, its management style entails a centralized functional organizational structure (Ramakrishnan, 2020). After its merger in 2014, the firm changed its structure where it has a global centralization, where the management team makes most of the significant decisions.
Communication Style
Communication is a vital tool for the success of any company. Both McDonald’s and Burger King are very keen on their communication process. They both have constant meetings between the management and employees where issues affecting the company or any briefings are made in person. The two firms have also adopted modern technology where emails, online meetings, and social media platforms are used for communication.
Operations Strategy Framework
McDonald’s business strategy involves making fast food available to its consumers at low and competitive prices (Kwinta, 2018). Nevertheless, the firm seeks to maximize profit generation and also by expanding the business worldwide. Some of the products by McDonald’s are minimized in size to ensure that they are more affordable. On the other hand, Burger King has employed a differentiation strategy to boost its profit margins (Rubenstein, 2017). Its strategy is to ensure that the firm maintains a good position in the global market.
Areas in which improvements are needed
One area of improvement that McDonald’s should focus on is its pricing, where it should consider maintaining the quality of its products but making them affordable. The firm could also add healthier diets to its menu as a way of promoting a healthy lifestyle. On the other hand, there is a need for Burger King to improve on its diversification efforts as a way of addressing its current product mix limits. The company also needs to improve the quality of its services to ensure that it keeps up with the competition. A final area of improvement that Burger king should consider is focusing on more healthy products to target the changing lifestyle of a majority of its consumers.
