Competitive Strategy
Executive Summary
This report is designed to offer an understanding of competitive strategies in the context of the contemporary market environment. For this purpose, this study has supported to offer detailed understanding regarding the research topic while taking the examples of the firms of the food industry and airlines industry. This study has supported to give consideration towards two arenas, i.e. global strategy as business model change and target markets and modes of entry. For this purpose, the researcher has considered two industries. The utilization of various concepts and theories remained supportive to increase the reliability of this study.
Introduction
This report is based on secondary data analysis and has supported to offer in-depth knowledge regarding the market strategies. In this context, the researcher has considered two arenas, i.e. global strategy as business model change and target markets and modes of entry. For this purpose, the researcher has considered two industries. To get a detailed understanding regarding global strategy as a business model change, the researcher has utilized the food industry. In like manner, for the purpose of getting an understanding regarding target markets and modes of entry, the researcher has taken the airline industry. This study is based on secondary data analysis and has selected those firms which have successfully applied the chosen theory.
Global Strategy as Business Model Change
Under this concept, the researcher has taken the food industry and has included McDonald’s and Burger King as firms to analyze the components of the business model, global strategy as business model change, value disciplines and business models and choosing a value discipline and market leadership.
Components of the Business Model
There are four components of the business model they are value proposition, market participation, value chain infrastructure and global management model.
Business Model of McDonald’s
Value proposition:
McDonald’s is a highly famous organization which is dealing with the food chain industry. Its quality products and quick service enable it to create a competitive advantage in the industry. The company has a wide range of products and has great product lines (Mc. Donald’s, 2017). The company targets children and focus to provide quick breakfast to this target segment while giving concern to tasty meals.
Market participation:
The firm’s stores are mainly situated in the city market areas so that the students, employees, working professionals and middle-class families can be easily addressed. Moreover, the firm has shown a huge presence on social media and digital marketing (Mc. Donald’s, 2017). McDonald’s also give concern towards various campaigns and offers which enables the firm to attract its target consumers, i.e. children and family.
Value chain infrastructure:
The value chain infrastructure of the McDonald’s includes the primary activities and support activities. Under primary activity, McDonald’s purchases the raw materials from pre-defined suppliers. In the secondary activities, its infrastructure is modern to attract the young generation. It changes the themes of the restaurant according to the changing market need (Khanagha, Volberda and Oshri, 2014). The infrastructure is also sophisticated due to the advanced use of IT and focused on maintaining green activities. It provides an eco-friendly environment to the customer and employees.
Global management model:
McDonald’s has its marketing and sales all over the world and currently it is operating in more than 100 countries and serves millions of customers per day. For global management, the firm utilizes the local market spices and major ingredients and designs the menu according to the preference of the local market (Ghezzi, Cortimiglia and Frank, 2015). In like manner, the firm also gives the focus on the taste parameters of the local market.
Business Model of the Burger King
Value proposition:
To create value for its products, the firm is highly focused on offering quality products. In like manner, the firm gives consideration towards great taste & affordability which enables the firm to increase brand loyalty and supports to create long-term sustainability in the industry (Saebi and Foss, 2015). Consistency and quick delivery enable the firm to increase customer satisfaction.
Market Participation:
The target market of Burger King is young adults, specifically young males. However, the firm is focused on other demographic sectors too. The firm has created its restaurants at a dense location which enables to increase the approachability of the firm (Lambert and Davidson, 2013). In like manner, the firm is focused on online presence which supports the firm to attract a huge population.
Value chain infrastructure:
The value chain infrastructure of Burge king supports presenting every step of the business activities to deliver a valuable product or service in the market. The firm is focused on waste management, the recycling process and CSR activities which enables the firm to create sustainable infrastructure. Under primary activity, the firm focuses on procuring quality raw materials. The firm is focused on effective marketing and sales activities (Cummings and Worley, 2014). In like manner, firm infrastructure is designed with advanced techniques. The human resources of the firm are highly experienced and trained and are focused on customer satisfaction. The firm uses advanced technology in production and overall operations and procure most of the ingredients from the local market.
Global management model:
Burger King is dealing in around 100 countries and has more than 15,243 outlets. Burger King product lines vary from place to place (Greenspan, 2015). The firm gives concern towards utilizing different strategies to deal in different markets. In like manner, internet advertising remains highly assistive to attract global consumers. The firm utilizes local language in the advertisement which supports the firm to promote in the global market.
Global Strategy as Business Model Change
Mc. Donald’s
In the context of McDonald’s due to the increase in the issue of obesity on a global platform, the firm has increased concern towards developing healthy products. In the current scenario, the firm has increased the concern towards digital marketing as at present most of the consumers spend their huge hours on the internet so digital marketing enables the firm to influence the consumer buying behaviour (Tongur and Engwall, 2014). In like manner, the firm offers time to time discounts, offers, coupons, etc. to boost the consumers to buy more. At present, the company has increased its focus on the value proposition. In this perspective, the firm gives concern towards attracting the consumers through offering various offers, quality products and services. On-time delivery, use of real ingredients, great taste, transparency in production, etc. strategies enable the firm to promote the firm products.
Burger King
At present due to increased concern of the consumers towards CSR practices, the firm has given consideration towards scholarships and financial assistance for educational programs and for this purpose, Burger King donates a huge amount of funds to McLamore Foundation (Hanlon, 2016). It enables the firm to create positive word of mouth in the industry. To create a competitive advantage at a global market, Burger King deals in fewer product lines which supports the firm to achieve economies of scale and enables the firm to achieve cost leadership in the industry. In like manner, Burger King uses market-oriented as well as bundle pricing strategy which enables the firm to increase the customer attraction.
Value Disciplines and Business Models
McDonald’s
McDonald’s uses various strategies to differentiate it from its competitors. For this purpose, while designing the advertisements firm gives concern to this segment. Moreover, the firm uses the attractive slogan “I am loving it” supports to attract this segment. It enables the firm to increase customer intimacy (Sinkovics, Sinkovics and Yamin, 2014). Moreover, the firm is highly active on social media and has given chance for kids to be a Player Escort UEFA Euro 2016 in France. Moreover, the firm has also developed a campaign on Instagram such as the “CelebrateBetter” campaign. Additionally, there are various other campaigns that are run by the firm from time to time. Happy meals, happy hours, etc. strategies are used by the firm to increase the target market intimacy.
The target customers of McDonald’s are families and kids. The firm is focused on providing low cost, family-friendly products to increase the value in the target market which enables it to differentiate itself from its competitors. Moreover, it provides the facility of free Wi-Fi to attract adults (Grant, 2016). In like manner, the firm runs different experiential and digital activity campaigns which enable to increase the interaction with the families which enables the firm to provide operational excellence. To achieve product leadership, firm uses local market spices and gives concern to offer the products according to the local market taste. Firm is focused towards research and bring new product according to the changing market need. Corporate vision and objectives of the firm is to offer the best quick service restaurant experience while focusing towards outstanding quality, service, cleanliness, and value which will remain supportive to increase customer satisfaction and to effectively target family and children (Cortimiglia, Ghezzi and Frank, 2016). It will enable the firm to increase the discipline and market leadership.
Burger King
Burger King is focused on effective CSR practices to attract consumers. The target customers of the firm are young adults. This is the segment that gives huge concern to the environment. Due to this reason, the firm gives focus on social activities. In like manner, the firm utilizes the branding strategies of the name of the firm on caps, t-shirts, etc. (Rodrigo, 2012). This organization gives huge concern towards R&D which supports the firm to create a global presence and to increase customer intimacy (Cortimiglia, Ghezzi and Frank, 2016). The corporate vision and objectives of the firm are to achieve the leading position in the quick service while increasing the franchise system to grow, which will enable the firm to increase the market presence.
Choosing a Value Discipline and Market Leadership
Mc. Donald’s
McDonald’s is focused on offering operational excellence to the customers while offering quality products at an affordable price while offering quick services and home delivery options. The firm uses advanced technology in its restaurant and offers time to time discount offers to the consumers which enable the firm to achieve the parameters of operational excellence which also enables the firm to meet the standards of customer intimacy and product leadership. To meet the consumer need, the firm introduces new meals and also does changes in the existing range.
Burger King
In like manner, Burger King is the firm, which is highly focused on achieving economies of scale. For this purpose, the firm focuses to deal with fewer product lines which enable the firm to create price leadership. It supports the firm to achieve the standards of customer intimacy and product leadership too.
Target Markets and Modes of Entry
Target Market Selection
British Airways (BA)
For targeting the market selection, British Airways uses a single-segment concentration marketing strategy which enables the firm to offer four different service packages to different customer segments. In this context, BA uses different strategies to target different customer segments and offer its services on four levels, i.e. economy, premium economy, executive and first-class (Kraus, et al., 2015).
Virgin Atlantic Flights
This airways industry targets the low price consumer and offers low price services (Virgin, n.a.). Its targets the audience who are price-sensitive consumers who prefer to avail themselves of the airline’s services at low cost with good quality.
Measuring Market Attractiveness
British Airways (BA)
To attract global citizens, the firm is focused on offering quality services. For this purpose, the firm gives concern towards offering effective dining facilities and to offer quality services to the consumers. In like manner, to attract the global agnostics, the firm offers its services at lower prices to its customers, which enables the firm to attract the price-conscious consumers and the consumers who are not brand loyal and can shift to another brand easily (Brouthers, 2013). Majorly firm attracts the consumers who are highly quality seekers and willing to pay for premium quality.
Virgin Atlantic Flights
Its market attractiveness is high quality with low price which remains assistive to create competitive advantage in the industry and differentiate it from its competitors (Ang, Benischke and Doh, 2015).
Entry Strategies: Mode of Entry
British Airways (BA)
BA is a large firm and has a huge amount to invest, due to this reason, this firm will utilize FDI (Foreign Direct Investment) strategy while entering the new market (Musso and Francioni, 2014). Acquisition strategy will remain assistive for the firm to create a competitive advantage in the new market.
Virgin Atlantic Flights
Virgin utilizes FDI (Foreign Direct Investment) strategy to enter the new market (Musso and Francioni, 2014).
Entry Strategies: Timing
British Airways (BA)
BA deals in the economy, premium economy, executive and first-class segments, due to this reason firm create the entry barrier for the new entrants. BA was established in the year 1974 when there is low competition due to which firm has gained the advantage of first-mover (British Airways, n.a.).
Virgin Atlantic Flights
This firm has not got the advantage of first-mover as this firm was established in the year 1984 (Virgin, n.a.). However, due to effective pricing and quality strategies firms become able to create recognition in the global market.
Conclusion
This study has supported the conclusion that firms need to use different competitive strategies to sustain themselves in the contemporary market environment. In like manner, it has enabled us to understand that firms change their market strategy while dealing in the global market as it is essential to survive in the situation of fierce competition. Additionally, while targeting a market, it is essential to give focus towards market attractiveness and entry strategies in the context of modes of entry and timing parameters. Utilization of Mc. Donald’s, Burger King, British Airways and Virgin Atlantic Flights are well-known firms and are highly focused on creating long-term sustainability in the industry. From the above study, it can be recommended that firms need to increase concern towards the changing market need while effectively analyzing the demand of the local market as customers demand are highly unpredictable in nature. Moreover, firms should also focus on cultural influence, language barrier and cultural diversity as these are the major challenges that are faced by the firm while dealing in the global market.
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