Competitive Strategy of McDonald’s and Nike †MyAssignmenthelp.com

Question: Discuss about the Competitive Strategy of McDonalds and Nike. Answer: Introduction McDonalds and Nike are well renowned organizations whose headquarters are located in the United States. They are known for their excellent skills in their own industries. McDonalds is the worlds largest chain of restaurant and Nike is a world famous athletic sport shoe retailer and manufacturer. This report focuses on the business models of these organizations as well as the competitive strategies that are followed by these companies to attain success. There are certain strategies that give these companies a competitive advantage in the market. This report gives a brief idea about the companies. Nike Inc. Nike Inc. is a multinational corporation whose headquarter is located in United States. This company is involved in designing, manufacturing and developing mainly footwear (Nike.com 2017). It is also engaged in marketing and selling of footwear along with apparels, accessories and equipments. The reason for selecting this organization is because it is considered to be one of the largest suppliers and manufacturer of athletic or sports shoes in the world. This company has excelled in its field in a tremendous manner. The brand value in 2014 was around 19 billion dollars and was regarded as the best brand among sport businesses because of its innovative products. The online clips gave a brief idea on successful business models and business strategies. Few steps are needed to be followed by any organization in order to gain success in its field. This paragraph describes various steps that have been followed by Nike, linking the online clips to show the reason behind its success. One of the main strategies of Nike is its continuous innovation focus on the RD department (Oh and Doo 2015). Nike believes that innovation forms the core part of their business. They follow a type of pricing strategy that helps to create customer loyalty and customer satisfaction. They have a clear idea of who their customers are like children, women and men. They know what they have to deliver to their customers. Different products are offered to different clients like female accessories and apparels are different from the male apparels. They follow premium pricing strategy to generate revenue. Their value proposition is created by innovative and safe products. Nike is known to be a dominant leader in the sports and apparel industry since several years. Their business model is based on an aggressive approach towards relationship building with customers as well as celebrity athletes (Lueg, Pedersen and Clemmensen 2015). Michael Jordan had entered into a contract with the company which helped the company to get a hike in its sale of apparels and sneakers. Nike started spending more in social media marketing rather than traditional media. This led to an enhancement in the return on investment (ROI) of the firm. Nike has been able to get more number of fans through Facebook and Twitter that has helped them to generate huge revenues. The innovation of fuel band by Nike has transformed the brand into a digital platform and force. The price of the band is 150 dollars and it is able to measure the movements of the user throughout the entire day whenever he is playing, walking, running or jogging. Simple color cues are used in order to track and find ou t the activity of the user in the entire day. Another innovation of Nike is the shoes that are feather light in weight and gives the feeling of wearing a sock. The innovation in the manufacturing process also leads to the success of this company (Carr 2013). They have led to the emergence of environmental friendly shoes that are also cost effective. McDonalds McDonald'sis a restaurant chain that is known for selling fast foods and hamburgers. In the year 1940, it started as barbecue restaurant in California (McDonalds.com 2017). The reason for selecting this company is its huge success and revenue in the field of restaurant industry. In present time, McDonald is considered to be the largest chain of restaurants in the world. They serve over 100 countries and around 69 millions of customers on a daily basis. In the year, 2016 there were around 36,900 food outlets generating huge profit. 1.5 millions of the population works in this organization. They are the second largest employer in the private sector. The video links have mentioned about the reasons behind the success of several industries. They have pointed out the successful business models as well as the strategies that are required for the success of the businesses. These points mentioned in the videos are linked with the success of McDonald in this paragraph. McDonald uses a strategy that is transnational in nature in terms of global integration and local responsiveness (Shen and Xiao 2014). They realized that the markets that are located outside USA need high level of responsiveness from the locality plus a strong global management team is required for managing the issues across the globe. They have constructed a value chain that takes the local culture, economic and environmental factors into consideration (Osman, Johns and Lugosi 2014). They also follow a growth strategy that is based on three new elements like improving profitability across the world, expanding the number of restaurants and increasing the sales in existin g restaurants. Improvement of sales and profit are done by improving the operations at the existing restaurants and developing the products. Effective marketing strategy is followed across the world for generating more revenue. They have lower developmental and operational cost. The growth and sustainability of McDonald is based on its suppliers, customers and franchisees (Crawford 2015). The two main source of earning for this company is its home country and the foreign markets. Globalization has played a major role in the rapid growth and development of the organization. The business model followed by McDonald answers four main questions. It recognizes who their customers are. Their target customers are mainly the younger generation but it also consists of customers belonging to any age. The next point that they focus on are the products that they will deliver. They are also clear about the value proposition of the company. They have created value by delivering tasty and inexpensi ve food. Their source of revenue is through the chains of restaurants that are located worldwide. They offer the meals in an innovative way that attracts customers to buy more from their restaurants. Their strong management has a high control over all the outlets located in several locations. They have created goodwill across the world. Their level of customer loyalty is so high that they are able to generate huge profit throughout the year. McDonald is trying best to achieve more success with time. Conclusion This report concludes that the strategies that are followed by the mentioned companies are innovative and different from the rest. This is the main reason behind their success. They are able to generate huge revenues by following a successful business models. They are focusing to improve their strategies even more. They are successful and excellent in their respective fields because of consistency and continuous improvement. References Carr, A., 2013. Nike: The no. 1 most innovative company of 2013.Fast Company,11. Crawford, A., 2015. McDonald's: A case study in glocalization.Journal of Global Business Issues,9(1), p.11. Lueg, R., Pedersen, M.M. and Clemmensen, S.N., 2015. The role of corporate sustainability in a low?cost business modelA case study in the Scandinavian fashion industry.Business Strategy and the Environment,24(5), pp.344-359. McDonalds.com,2017. Available at: https://www.mcdonalds.com/us/en-us/ [Accessed 10 Aug. 2017]. Nike.com, 2017. Available at: https://www.nike.com/us/en_us/ [Accessed 10 Aug. 2017]. Oh, S.J. and Doo, I.C., 2015. Analysis of Relevance of Myth-motif Brand'Nike'using Big Data of Portal Sites, Twitter and Blogs.International Information Institute (Tokyo). Information,18(5 (A)), p.1555. Osman, H., Johns, N. and Lugosi, P., 2014. Commercial hospitality in destination experiences: McDonald's and tourists' consumption of space.Tourism Management,42, pp.238-247. Shen, Q. and Xiao, P., 2014. McDonald's and KFC in China: Competitors or Companions?.Marketing Science,33(2), pp.287-307.