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.