Question:
Choose any type of business and you need to analyze its market structure. You need to prepare
a report and slide presentation for this assignment. In your report, it must consist of:
a. Background of the business in Malaysia.
b. Characteristics of the business:
i. No. of firms in Malaysia
ii. Type of product (Homogenous, differentiated, unique)
iii. Barriers to entry
iv. Pricing power
Answer:
MacDonald's
in Malaysia and Its Competitors: A Market Analysis
Malaysia's fast food industry is a
highly competitive one, distinguished by an evolving market structure. Over the
years, McDonald's has had considerable impact as a well-established and dominating
competitor in this sector. In this thorough analysis, I will delve into the
intricate market structure of McDonald's in Malaysia, looking at a variety of
factors including the company's uniqueness, the sheer number of businesses
operating there, the types of products it offers, and the tactics it uses to
outwit its rivals in the fiercely competitive Malaysian market.
As a franchise, McDonald's has built
its reputation in Malaysia with a wide variety of locations spread out around
the nation, eventually reaching an astounding total of over 320 stores by the
year 2023. The stunning 13.5 million consumers this fast-food giant serves each
month are evidence of its steady attraction. In Malaysia, McDonald's has become
a household brand because to its famous menu items including the fabled Big
Mac, delectable Chicken McNuggets, and decadent McFlurry. There are other
strong competitors battling for consumers' hearts and taste sensations,
therefore McDonald's is not the only fast-food chain in Malaysia. These chains
offer similar types of products, targeting similar customer segments and
competing for market share. McDonald’s offer variety of food items and most
desired items to satisfy the customers. According to the findings of a study
conducted by Jian et al. (2021), the majority of respondents, accounting for
87.07%, expressed satisfaction with the current services provided by
McDonald's. Additionally, 69.83% of the respondents expressed satisfaction with
the food offered by McDonald's.
There is a distinct sense of strong
rivalry among these competitors as each one fights for the attention of
discriminating customers using a variety of techniques, including competent
pricing, ground-breaking menu innovations, attractive specials deals, and
prevalent advertising campaigns. McDonald's is a well-known brand across the
world with a strong presence in Malaysia, yet it is always up against rivals
from both abroad and within the country. Due to its unwavering brand awareness,
steadfast dedication to culinary quality, unrivalled service efficiency, and
unwavering marketing initiatives, it has successfully maintained a sizeable
market share. In order to attract customers that need variety and customisation
in their fast-food tastes, McDonald's uses a unique product approach. As a
result of the brand's consistent commitment to consistency and product quality,
Malaysian consumers have shown steadfast allegiance to it. Lafontaine and
Leibsohn (2005) study findings support the traditional profit maximization
argument for multi-market firms, such as McDonald's, results of the study also
showed that McDonald achieved desireable growth in the market of higher GDO per
capita nations.
How McDonald's Competes with its
Rivals
In Malaysia, McDonald's confronts
strong competition from rival fast-food restaurants, so they use a variety of
techniques to remain ahead of the pack. In Malaysia, McDonald's competes with
its rivals in a number of significant areas, such as:
a. McDonald's is renowned for its
powerful brand image and significant marketing initiatives. To build brand
awareness and draw clients, they make significant investments in advertising
and promotions. In order to connect with Malaysian customers, McDonald's also
launches regionalized marketing initiatives, such as the "Discover the
World with the Great Taste of McDonald's" campaign, which showcases
foreign menu items from several nations.
b. To remain ahead of rival
restaurants and adapt to shifting consumer preferences, McDonald's regularly
innovates its menu. To meet the wide range of preferences among Malaysians,
they present fresh, limited-time deals, seasonal dishes, and localised menu
items. This promotes curiosity among customers and helps them build buzz.
Numerous studies have demonstrated
McDonald's rapid global network expansion and dominance of the marketing
landscape. In their study, Toivanen and Waterson (2005) demonstrated how
McDonald's expanded its organisational structure around the world, particularly
in the United Kingdom. It demonstrates the success of McDonald's globally and
in Malaysia, which may be due to a number of elements, including its well-known
brand, reliable product quality, helpful staff, and successful marketing
techniques. MacDonald's has succeeded in building a devoted clientele in Malaysia
because to its ongoing efforts to comprehend and satisfy local customers'
tastes. To accommodate regional taste preferences, it has included localised
menu items such the Nasi Lemak Burger and Ayam Goreng McD (McD Fried Chicken).
References:
Jian, O. Z., Utama, A. G. S., Musa, W.
N. A. B. W., Hasly, W. B., Al-Rifae, R. F. B., Hussa, N. S. A. B. M., &
Andriawan, N. (2021). Effective Marketing Strategies of McDonald’s in Malaysia
and Indonesia. International Journal of Applied Business and
International Management (IJABIM), 6(2), 33-46.
Lafontaine, F., & Leibsohn, D.
(2005, June). Beyond entry: Examining McDonald’s expansion in international
markets. In in International Society of Franchising Conference
Proceedings (pp. 0-26).
Toivanen, O., and Waterson, M. (2000).
Empirical Research on Discrete Choice Game Theory Models of Entry: An Illustration, European Economic Review,
44, 985-992.
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