An Evaluation of the Strategic Plans of McDonald’s and Nintendo
Introduction
In this assignment I will be making comparisons of the strategic planning of McDonald’s and
Nintendo. By evaluating these companies and applying different decision techniques I will
examine how each company has used different methods to achieve their objectives.
McDonald’s is a fast-food chain that ‘has over 36,000 restaurants in the world, operating in
over 100 countries and territories’ [1]. McDonald’s System, Inc. (now known as McDonald’s
Corporation) was founded in 1955 by Ray Kroc after meeting the McDonald brothers, and
becoming their franchise agent. Since then McDonald’s has only grew becoming the leading
brand in the fast-food industry owning 21.4% of the fast-food market share globally (2019)
[2].
Nintendo are a multinational video game and electronics company who were founded in
September 1889 by a small Japanese firm that made playing cards. Since then they have
grown to become an international leader within the interactive entertainment industry with a
goal to make people smile and inspire customers around the world. Since being founded
Nintendo has sold over 4.7 billion video games thanks to many of the characters, they have
created such as ‘Pokémon’, ‘Mario’ and ‘Zelda’ [3].
1.2 & 1.3
Stakeholders are any person, group of people or company who have interest in a business
or can be impacted by a business. They can be internal such as managers and employees
or external such as customers and suppliers. It is important for any business to know and
understand who their stakeholders are due to how stakeholders can impact a business
depending on their aims.
McDonald’s define their main stakeholders as their customers, their suppliers, and their
employees however they engage with many others, as any business would, who have
interest in the areas that they operate [4]. Employees (internal stakeholders) of McDonald’s
aims would be for example opportunities for progression, job stability and also good pay. If
these aims are not met by McDonald’s, then their staff could leave to look for a better form of
employment, leading to a high staff turnover and also potentially a bad reputation as an
employer. This in turn could lead McDonald’s having to pay more for staff training due to
employing more people. Although McDonald’s ‘do not view our employee turnover as high’
[5] some researchers do not agree with this and see it as a weakness for the company [6].
McDonald’s could combat this issue by communicating with their employees and getting
feedback from them to see how they could improve as an employer.
Nintendo define their stakeholders as ‘Everyone Nintendo Touches’ with an aim to ‘to
respond to demands and expectations from both inside and outside the company.’ [7]. Their
list of stakeholders includes consumers, business partners, employees, future generations
(environment), communities, shareholders and investors. Consumer’s (external
stakeholders) aims would be to ensure they are getting good quality product/service
alongside value for money as well as good customer service amongst other things. With
regards to the consumers of Nintendo many of their games are aimed towards children such
as ‘Pokémon’ and ‘Nintendogs’ so many Nintendo consumers are parents. A parent’s aim
would be for safe gaming, a healthy environment for their children and also parental controls.
, With this in mind ‘Nintendo has integrated Parental Controls into all game systems released
in and after December 2006’ [7] effectively giving their consumers what they want. On top of
this they also have a section on their website called Information for Parents and are
spreading awareness of parental controls world-wide to ensure the safety of children. By
listening to the concerns of the consumer and giving them what they want Nintendo have
done an excellent job in what they set out to do which was again ‘to respond to demands
and expectations from both inside and outside the company.’ [7].
1.1, 2.1, 2.2 & 3.1
Every business should have a business strategy, a business strategy is a working plan for a
business to follow, so that they can reach their aims and objectives. Strategies are used to
determine the direction of the business, can help businesses understand their strengths and
weaknesses, how to combat competition and also determine the wants and needs of its
customers. In other words, a business strategy is a plan to help a business succeed.
There are many different tools a business can use when defining their strategy, I will be
focusing on the Ansoff matrix, the Boston Matrix and the marketing mix when looking into
McDonald’s and Nintendo.
Ansoff Matrix
The Ansoff matrix suggests businesses should try to grow depending on whether it markets
new/existing products in new/existing markets. It is a marketing planning tool that helps
businesses determine its product and market growth strategies. By using the Ansoff matrix a
business can find out the direction in which it should be going by using the four sectors the
Ansoff matrix defines. These are:
Market Penetration – focuses on selling existing products to existing markets, helps
to maintain/increase the market share of a business’s current products.
Market Development – focuses on selling existing products to new markets, can be
used as a way to expand such as expanding into new geographical markets, using
new packaging to attract new customers and even having new methods of
distribution.
Product Development – focusing on introducing new products to existing markets,
this can be used if a product needs to be differentiated to remain competitive, to be
successful in this there needs to be innovation within the product.
Diversification – having two pathways unrelated and related, focusing on new
products in new markets, this can be very risky.
Ansoff Matrix – McDonald’s
Market Penetration – Having an already highly established customer base McDonald’s
already has the most dominance within the fast-food industry. Always having cheap prices
for their food, notably using psychological pricing, heavily advertising their products in a
number of ways and having iconic and well-known meals such as the ‘Happy Meal’ for
children. McDonald’s do very well in maintaining their market share and ultimately ‘win’ at
market penetration.
