Essay Sample on McDonald's Leverages I/O Model to Accrue Above-Average Returns

Introduction

The I/O model is an indicator that there will be accrual of the above-average returns to the companies that successfully implement the relevant strategic actions. They enable the company to leverage its strengths, such as the skills and resources to meet the demands and pressures of the industry that they compete. The I/O model would be ideal for a company like McDonald's.

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The external environment of McDonald's has significant ecological external factors. The employees of the company set strategies that are meant for maximizing the benefits of the opportunities in the industry environment. There is a competitive rivalry among other firms such as Subway, Burger King, and Starbucks. However, McDonald's is a big fast food restaurant chain that uses its strengths to adapt to the changes in the business environment (Schramade, 2019). Their adaptation is necessary for their long-term survival as well as the business growth amid the aggressive competition. Decisions made by the management of the company help to focus on significant trends in the industry of food-service.

The structural characteristics of McDonald's suggest above-average returns. The distribution of revenue as generated by the company from the year 2005 shows that it is above the average. They have strategized the revenue model to be from franchising mainly. How the model works is primarily based on the utilization of money of small investors where their general purpose is to rapidly and efficiently expand. Generally, the revenue model of the company is the adoption of a three-legged stool strategy that includes the suppliers, franchisees, and McDonald's.

The strategy formulation of McDonald's is one that is linked to above-average returns in the food-service industry. They have had a global diversification of their operations, often known as "McDonaldization." The company has been successful in more than 120 countries, which is all attributed to the organizational structure. The orientation of the business model for McDonald's has helped in the international build-up of the network.

The company has put up assets and skills that are required to implement a chosen strategy for growth to ensure above-average returns. Their approach has not only been to satisfy its customers but also spread its wings. They work hard to retain their old customers, regain their trust as well as convert casual customers to regular ones. They have adopted three accelerators, which are Digital, Delivery, and Experience for immense growth.

The strategic implementation for McDonald's has been through support for its employees. They, in turn, get their needs satisfied and thus motivated to work towards the success of the company. At McDonald's, there is a positive work atmosphere, and they promote healthy relationships.

McDonald's has gained superior returns, as seen in its revenue model. The business model is centered on the master plan to win (Schramade, 2019). Their mission statement is about providing quality service, cleanliness, and also value. They have been able to adhere to each of their qualities. This way, the sales have grooved through the well-organized sales channel that ensures customer satisfaction.

Conclusion

Firms can beat Amazon in the market place if they put in more hard work and better strategies to win customers in the provision of services. Google is quite a formidable competitor for Amazon because the company itself relies on Google for its website. The significant strengths of Amazon include excellent business management, the satisfaction of customers and employees, and an above-average business model.

Reference

Schramade, W. (2019). McDonald's: a sustainable finance case study. Erasmus Platform for Sustainable Value Creation. From https://www.researchgate.net/profile/Willem_Schramade/publication/336308912_Sustainable_Finance_Case_study_McDonald's/links/5d9b2d04299bf1c363fd5bcc/Sustainable-Finance-Case-study-McDonalds.pdf