Paper Example on Innovation and Competitive Advantage: Changing Environments

Paper Type:  Essay
Pages:  4
Wordcount:  900 Words
Date:  2022-08-10


The competitive advantage of an organization is created by the ability of the company to produce al its products and services with more market value than its competitors. When an organization attains a competitive advantage, they can sell all their products and services at a price that is more compelling thus generating larger margins on the company's sales. The process of gaining competitive advantage requires to be made as the core part of the approach and must be instilled within the company's management philosophy (Hisrich & Kearney, 2014). In this way, the business will continue with producing innovative and entrepreneurial ideas essential to create its market share and culture. This paper will discuss how McDonald's maintain its competitive advantage, its leadership philosophy on the innovation utilized by the business, the activities that McDonald's is involved in the process of sustaining its competitive advantage, and R&D strategies which are applied to attain a competitive advantage that is long-term.

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McDonald's Philosophy of Innovation

During 1961, McDonald's had its name changed to McDonalds Corporation. McDonald's became the first fast-food chains operating in different parts across the globe. By 2015, McDonald's business had 36, 525 outlets across the world having total assets accumulating to $37.939 billion. As a result of operating for many years and acquiring a history of success enables the company to develop innovative strategies to position itself in the competitive market. The philosophy of McDonald is positioning itself as a fast-food restaurant that is low-cost and family friendly.

The company has a firm belief in its employees and franchisees who work together to attain a common goal which enables McDonald to become the leading fast service restaurant brand around the globe. This is achieved through recognizing available opportunities and developing new ideas which will maximize the company's bottom line. The organization also searches for several radical ways of innovation to concentrate on the needs of the customers as part of its success. McDonald's has a reputation for supporting freedom across its framework. The company is determined n paying close attention to all of its consumer locations which help it in determining the appropriate way to market its products, management involvement and management of the local business. The development and research team of McDonald's usually process various partners with significant suppliers, engaging customers and seeking different inputs from the franchisees. It often is fundamental to the business model of McDonald's and making sure that the company attains the correct balance that exists in the services and products that it is offering.

Sustainability/Competitive Advantage

Every day across the world, McDonald's is involved in putting people, practices and process into place which enables sustainability of the new norm of the business in the society at the many locations around the world. Competitive advantage may be defined as the position which an organization normally takes about the other businesses that are in the related industry (Hisrich & Kearney, 2014). There are different ways that McDonald's uses to sustain its competitive advantage. There are three major strategies that McDonald's use; cost leadership, customer focus and differentiation. The main objective of the cost leadership strategy is providing costs that are not comparable to the bottom-line of its competitors. One way that the company uses to attain this competitive advantage strategy is making sure that the stores of the company are economical and they assure the daily costs of its operations are maintained as low as possible. McDonald's has concentrated on the progress against its 202 aspiration objectives which sources 100% of its fiber-based packaging from the certified sources that are recycled. This is a useful example of attaining sustainable packaging which provides the company with a major competitive edge over its main competitors. The goal of McDonald's is to enhance the quantity of packaging used and to make use of the sourced products that are sustainable.

R&D Initiatives the Organization is Involved in for Long-term Competitive Advantage

McDonald's is known to be among the most successful businesses in the world dealing with fast-food chains. McDonald's practices useful management and international approaches for its expansions in the new markets thereby acquiring shares in the overseas markets. Furthermore, McDonald's operates typically together with its suppliers and customers which enable the company to become aware of the theoretical developments that it should undertake to establish new standards of improving quality. Development and research is a primary step in the entire process. The company often communicates with all its consumer bases and taking input value as a way of elaborating on the business' brand. The principal objective that is behind its research is attaining strategic purposes of planning. The company normally conduct its research concerning performance in the main regions; tidiness, quality, and value. The long-term objective of the company regarding the competitive advantage is remaining as a leading fast-food franchise globally. McDonald's first business approach is utilizing some cost leadership strategies and approaches for expansion in the global market. McDonalds's products and services regularity is the principal foundation of the business strategy utilized by the company.


In conclusion, maintaining and having a competitive advantage is the primary objective of McDonald's in the industry dealing with fast-food. It is critical to preserving the standardization of the business' services and products. The company considers the local taste and preferences during engaging in the market efforts as well as the changing environment.


Hisrich, R. D., & Kearney, C. (2014). Managing innovation and entrepreneurship. Sage Publications.

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