Applications of strategic management tools

1. Introduction

In the recent years, with the development of globalization and world economy, the market competition becomes fiercer and fierce. Modern corporations are paying attention to their external and internal environment, as well as the achievement of corporate social responsibility. In this way, they can improve themselves according to relevant analysis. This essay will use SWOT framework to analyze Google’s external and internal environment, use PESTE framework to analyze MacDonald’s and the influence of social responsibility on Fonterra’s decision making. At last, an overall conclusion will be made.

2. SWOT analysis for Google

Google is an American multinational high-tech corporation and devotes itself to internet search, cloud computing, advertisement technology and other fields. It develops and provides large number of products and services based on internet. Its major profits are from advertisement services. After about twenty years’ development, it is recognized as the largest global internet search engine with billions of users. SWOT framework is used to confirm the corporations’ competition strengths and weaknesses, external opportunities and threats so that they can connect the internal resources with external environment together (Kurttila, M., Pesonen, M., Kangas, J., & Kajanus, M. 2000).

• Strengths. The most powerful strength lies on its brand image. According to the most valuable brand list, Google was rewarded as the most valuable brand around the world with another 40% growth last year. In the past few years, Google ranked in the top of the brand list. In order to maintain its brand value, it manages to improve itself all the time. For example, Google X lab even tried to use fire balloon to provide Wi-Fi service for remote areas. Such creativity idea has inspired its brand value. In last year, Google Project Glass made great progress (Friesner, T. 2011). And Google would promote more revolutionary products for commercial world and its clients which indicated its brand value. The second strength is its people-oriented service and it is the best reason for Google users’ selection. Its search results are not prejudicial because it refuses payment for ranking and insists on offering search results which are closest to users’ psychological demand. The interface of Google remains clean and neat with quick loading rate. And searching results are not involved with any commercial operation and people would not see any mandatory advertisement. In addition, Google cares about details. Its logo looks like a little nifty. The colorful circle letters seem quite amiable (Jian, X. 2007). The humorous that Google shows anywhere makes users relaxing.
• Weaknesses. The appearance of search bomb exposed the cynicism of Google. It was out of some internet joke from politics or entertainment. When users type WMD in the search box, Google page may show presentation of “error”. The title may show “unable to display mass destruction weapon”. But Google does not intend to make any measures. Brin and Page stated they would not influence information searching. However, such attitude will result in loss of some users because they doubt Google’s problem resolving ability. In addition, the relaxed work environment and loose lifestyle are not suitable for everyone. Some old workers complaint they are discriminated because the environment tends to be personalized and full of youthful spirit (Halligan, B., & Shah, D. 2009). In addition, such environment could not motivate its employees to a large extent.
• Opportunities. Exploring other fields is possible direction for Google’s future development, just like Baidu entered into B2B market. With strong infrastructure base, Google is able to launch new products and services for its users. For example, it introduced Android’s software to update its platform for mobile services. Google TV, Google glass, Double Click for Publishers, and other products have stimulated its users (Moussa, S., & Touzani, M. 2010). It is widely regarded as a creative corporation. In this way, it can expand its market share now and then. In addition, Google can transfer its internet search into entity search. For example, Google can build its entity book database with books contents instead of only book’s cover and price. Although it will increase its cost, it can help people access what they want. As a result, Google can expand its market share and win users’ hearts.
• Threats. Leaders with talents have created the wonderful brand. But can Google maintain its initial core value when the leaders leave away? The humanism and creativity are from inspiration of Brin and Page. It is critical for Google to find proper successor to maintain its brand value. When Microsoft is using operating system to bundle browser to promote its IE system, now it is paying great attention to search engine. It will pose great threat when Microsoft bundle the search engine with its operation system. Google will lose great number of users. It has to take active measures to improve its customers’ brand loyalty.

3. PESTE framework on MacDonald’s

As the largest multinational chain restaurant, MacDonald’s has more than 30,000 branches around the world. It mainly sells hamburger, chips, fried chicken, soft drink, salad, fruits and other fast food. However, its external environment is changing so that MacDonald’s has to make some measures to maintain and develop its business (Bivolaru, E., Andrei, R., & Purcaroiu, G. V. 2009). PESTE framework can help analyze its macro environment effectively.

• Political factor. Political stability is critical for MacDonald’s normal operation. As a typical and widely recognized American culture, it can represent American flag in some degree. Since September 11 event, America became the leader of anti-terrorism which made itself the major target for terrorism activities (Yeu, C. S., et al 2012). With strong chain network around the world, adding that its restaurants always have intensified customers, it has large possibility that terrorists will regard it as the target. According to the global media press, explosion events occur in MacDonald’s restraints every month. In this way, it will damage its brand image and result in potential loss of customers.
• Economic factor. In the United States, competition in fast food market has turned white-hot. The financial crisis has influenced negatively in the fast food industry. On the one side, brands without competitiveness and brand value have to exit the industry while MacDonald’s itself will suffer more negative impact from shrinking consumption power. With limited market capacity, the owners open more and more branches. Every fast food restaurant is trying to attract potential customers by continual products creation and marketing creativity. MacDonald’s strongest competitor, Burger King is aggressively promoting its management reform. Wendy’s restaurant has promoted new salad production line. In addition, the number of chain stores under the brand of Mike Walls is more than the MacDonald’s. What are worse, railway fast food restaurants and other Sandwich restaurants are increasing by 12% every year (Paul, R., & Roy, S. K. 2014). Under such circumstance, it is hard to maintain its current market share.
• Social and cultural factor. With so many chain stores around the world and gaining profits in every region, MacDonald’s takes responsibility as well, such as the conflicts among different regions and ethics. With different cultural backgrounds, people’s values and consumption customs varies too much. For example, in May 2001, about 500 protesters held activities in MacDonald’s in New Delhi and other largest commercial cities. They threw cow dung toward MacDonald’s restaurants and looted one of them. And they asked Atal Bihari, president of India to shut up all the chain stores in India. The cause of the protest was MacDonald’s used beef ingredient to make fried chips but most Hindu believers regarded cattle as holy article. Hence, MacDonald’s has to compensate for India believer, vegetarians and other relevant institutions (Kulkarni, S. S. 2012). Besides, such event damaged MacDonald’s economic loss and brand image as well.
• Technological factor. The modern technology develops quite fast and the productivity is increasing as well. The scientific inventions and new technology application can shorten the new product development circle. When the product updating accelerates fast, MacDonald’s has to develop new products faster. In addition, with advanced and standardized chain operation model, MacDonald’s can establish its market by qualified products, amiable service and clean dining environment. It can arrange scientific training plans to improve its staff quality as well.
• Environmental factor. Consumers now are inclined to pursue green and harmless products. Hence, MacDonald’s attaches great importance to green and healthy dietary. Simultaneously, people are caring about environmental protection and putting an end to white pollution. For example, in the last year, bird flu was found in Beijing Restaurant and many customers did not dare to have dinner in its restaurant which damaged its brand image in some degree (Azim, P., & Azim, S. 2012). In addition, MacDonald’s was accused of producing white pollutions and many environmental protectors protested its action. As a result, MacDonald’s exchanged its plastic into paper package.

4. Corporate social responsibility analysis on Fonterra

Fonterra Co-operative Group was founded in October 2001 with head office in Auckland New Zealand. Fonterra is a merger of the two largest diary corporations in New Zealand. Now it is the largest corporation in New Zealand and the sixth diary producer around the world with annual sales of $8 billion. On August 2, 2013, Fonterra claimed that one factory found clostridium botulinum in its whey protein concentrate which caused brand damage to Fonterra (Gray, S., & Le Heron, R. 2014)Although Fonterra concentrated on establishment of corporate social responsibility, there are still many aspects that it should make measures to improve. When Fonterra is creating benefits and shouldering legal responsibility on shareholders, it must be responsible for its employees, consumers, community and environment (Greening, D. W., Wall, J., & Elias, S. R. 2012, December).

4.1 Fonterra’s social responsibility analysis from the classical viewpoint

Although the primary is to implement economic responsibility, Fonterra must obey all the laws and regulations and drive its employees, partner, suppliers and other relevant parts to act behave as well. Ethics responsibility is the expectation from the society. Fonterra should reduce its negative impact of its operation activities, products and services. Dairy products are critical for people’s health so that Fonterra must take 100% attention to concentrate on its products quality. The optimization of industrial technology updating and industrial structure, development of Green Corporation, capability of a large employer, protection of environmental protection and social security must be attached great importance to (Kong, D. 2012). In addition, Fonterra should take active part in public interest and support community education, health, humanism care, culture and art, urban construction etc which can make it a good citizen.

4.2 Fonterra’s social responsibility analysis from the socio-economic viewpoint

The economic benefits that Fonterra can bring are cost reduction and government grants. Firstly, Fonterra can raise the payment for its employees’ welfare standard which can improve their working enthusiasm and increase productivity. Simultaneously, the good image that Fonterra has can attract more talents and investors and increase its competitiveness. In the long run, Fonterra can reduce its operational cost and improve its sustainability. Secondly, Fonterra can bear social responsibility to increase its market value and gain the government grant or tax preference. The contribution toward employees, government, investors, public benefits and environmental protection is positively correlated with corporation value (Fu, S. 2014). Information users will expose relevant information to the external world to indicate its good performance and increase its market value.

Speaking of the social benefits, it is reflected on corporation image and organizational culture. Hence, Fonterra can shoulder social responsibility to improve its social reputation, build brand loyalty among customers group. Good image will increase the trust and independence toward Fonterra’s products, especially for Dairy Corporation. Customers will consider the social responsibility together with its commercial reliability (Stahl, G. K.et al 2013). The implementation of social responsibility will expand to its product design, manufacturing period, product quality test and after sales service. In addition, by providing its employees with safe and comfortable working environment, building good labor-capital relationship, Fonterra can build a stable and loyal employees team and it can enhance their responsibility as well. Organizational culture will be built.

5. Conclusion

This essay has analyzed Google’s internal strengths and weaknesses, MacDonald’s political, economic, environmental, social and cultural, technological and environmental aspects and Fonterra’s social responsibility. In this way, readers can get a better understanding of their marketing environment and social responsibility issues.

6. Reference

Azim, P., & Azim, S. (2012). Impact of Constructive Marketing Strategies on Return (Revenue & Profitability): A Case Study of Mcdonald’s. Journal of Asian Business Strategy, 2(7), 153-169.

Bivolaru, E., Andrei, R., & Purcaroiu, G. V. (2009). Branding Romania: a PESTEL framework based on a comparative analysis of two country brand indexes. Management & Marketing, 4(4), 101-112.

Friesner, T. (2011). History of SWOT analysis. Marketing Teacher, 2000-2010.

Fu, S. (2014). The role of Chinese social media in reputation management: the case of Fonterra (Doctoral dissertation, Unitec Institute of Technology).

Greening, D. W., Wall, J., & Elias, S. R. (2012, December). Developing Theory in Corporate Social Responsibility and Social Entrepreneurship. In Proceedings of the International Association for Business and Society (Vol. 23, pp. 91-97).

Gray, S., & Le Heron, R. (2014). Globalising New Zealand: Fonterra Co‐operative Group, and shaping the future. New Zealand Geographer, 66(1), 1-13.

Halligan, B., & Shah, D. (2009). Inbound marketing: get found using Google, social media, and blogs. John Wiley & Sons.

Jian, X. (2007). The Google Development Mode of the Library. New Century Library, 2, 005.

Kong, D. (2012). Does corporate social responsibility matter in the food industry? Evidence from a nature experiment in China. Food Policy, 37(3), 323-334.

Kulkarni, S. S. (2012). McDonald’s ongoing marketing challenge: social perception in India. Online Journal of International Case Analysis, 1(2).

Kurttila, M., Pesonen, M., Kangas, J., & Kajanus, M. (2000). Utilizing the analytic hierarchy process (AHP) in SWOT analysis—a hybrid method and its application to a forest-certification case. Forest Policy and Economics, 1(1), 41-52.

Moussa, S., & Touzani, M. (2010). Ranking marketing journals using the Google Scholar-based hg-index. Journal of Informetrics, 4(1), 107-117.

Paul, R., & Roy, S. K. (2014). Case Study 11: Marketing of Services: The McDonald’s Way. In Marketing Cases from Emerging Markets (pp. 99-112). Springer Berlin Heidelberg.

Stahl, G. K., Pless, N. M., & Maak, T. H. O. M. A. S. (2013). Responsible global leadership. Global leadership: Research, practice, and development, 240-259.

Yeu, C. S., Leong, K. C., Tong, L. C., Hang, S., Tang, Y., Bashawir, A., & Subhan, M. (2012). A Comparative Study on International Marketing Mix in China and India: The Case of McDonald’s. Procedia-Social and Behavioral Sciences, 65, 1054-1059.

Appendix.

Google’s brand value