With the increasing levels of globalization, there has been an increased entry of multinational companies in the local market an aspect that has resulted from the liberalization of markets and increased information flow. In order for McDonalds Company which is a fast food industry to remain competitive, it has to apply different tactics to position its products strategically in the markets (O'BRIEN 2012).
One of the strategies is to prevent entry of new companies in the market. This is through creating customer loyalty through an offering of high-quality products and intensive advertising in order to ensure that it expand its target markets. In addition, the company has been able to set lower prices which have been achieved through the use of technology to produce products an aspect that has made it hard for new companies to enter the market (O'BRIEN 2012).
The company has set up different strategies to reduce threats from substitute products and services. This is through product differentiation to satisfy different customer's interests, production of high-quality products and setting varying costs according to the competition levels in the market. This move has killed the substitutes in the market (O'BRIEN 2012).
In order to reduce customer bargaining power which could have put pressure on the company, McDonald's has strengthened its distribution channels and defined its supplying channels. This has made it hard for customers to have excessive powers over the company (O'BRIEN 2012).
Suppliers' bargaining power puts a threat to the distribution system of the products. In order to avoid increased supplier's power, the company has different reliable suppliers who are able to sustain the production system throughout the year. In addition, products differentiation makes it hard for a sole supplier to have full control over the company.
The company has reduced competitive rivalry in the market through innovation, intense advertising and setting up of powerful competitive strategies. This has ensured that the company remains competitive despite the changing customer behaviors.
