Market Structure and Growth Strategies of McDonald’s and Hungry Jack’s

Marketing strategies are considered to be important aspects for the organisations to establish their business effectively in the high competitive market. According to Richards et al., (2015) it can be argued that in an intense competitive market the business organisations always intends to follow some special and unique methods that can provide them competitive advantage. As a matter of fact, the competitive advantages lead to innovation in the marketing and operational strategies of the organisations that fosters a better and healthy market environment (Schrempf, 2014). In this context, this report puts emphasis on the Australian fast food industry and for the purpose of procuring an in-depth analysis the report chooses McDonalds and Hungry Jacks as the primary business organisation and composes a comparative analysis on the growth strategies and the pricing and non-pricing strategies of both the organisations. In addition to this, the report also encompasses a section for the leading organisation that enjoys better marketing expansion and growth strategies. In this context, the McDonalds Australia is a renowned fast food company that has over 970 outlets across Australia (Mcdonalds.com.au., 2018). Moreover, the company is popular for its unique and mouth-watering food menu. On the other hand, Hungry Jacks is considered to be the master franchise in Australia with stores over 390 locations across Australia (Hungryjacks.com.au., 2018). Moreover, Hungry Jacks is the second largest franchise of Burger King in the World.

Based on this understanding, this report is puts emphasis on the market structure and growth and expansion strategies of McDonalds and Hungry Jacks with the objective to identify the competitive advantages of both the fast food organisations in order to establish a better business expansion in Australia. Moreover, the report encapsulates a clear perception regarding the role of the pricing and non-pricing strategies and the impact on their decision making process. In the end, the report will come up with selecting any of the organisations in order to establish its relevancy and authenticity with the help of the marketing statistics and data.

In the Australian Fast Food industry health consciousness is considered to be an important aspect that the companies are compelled to follow. In this regard, it can be argued that there most of the customers prefer healthier fast foods with less fat, sugar and salt. As a result of that the fast food companies are also putting more stress on the healthier fast food products to go with the market demands. The Australian Fast food industry is very dynamic and volatile because of the changing needs and preferences of the customers (Yamjala, Nainar & Ramisetti, 2016). Nevertheless, the market is growing steadily and as a result of that the expected market share of the will be rise from an annualised 3.7% through the financial years of 2017-2018 to $19.7 billion (Mialon, Swinburn & Sacks, 2015). As per the government report it can be stated that there are bulk of profits and revenue earned by the Australian food market at a rate of $20 billion approximately every year. In addition to this, it can be stated that a huge number of employment opportunities are there in the Australian fast food market where the existing report states that around 152,476 people are employed in both part time and regular basis (Sumaedi & Yarmen, 2015). This very nature of the Australian fast food market makes it promising and for the fast food companies to invest more in the country and generate more profit and prosperity in this regard. Henceforth, the market competitiveness is also prevalent in the Australian market with the purpose to dominate the market extensively (Mcdonald, 2016). There are big fast food companies in the Australian fast food market in the name of Domino’s, McDonalds, Subway and Hungry Jack’s and each of them perceives their unique marketing strategies in order to expand the business overwhelmingly.

Role of Pricing and Non-Pricing Strategies in Decision Making

As far as the market structure of McDonalds is concerned, it can be argued that there are over 90,000 employees working in McDonalds that is similar to the percentage of workers working in t6he Australian Café. Moreover, it can be identified that the McDonald’s outlets and restaurants are expanded over different locations of Australia with a large amount of 869 (Mcdonalds.com.au, 2018). Moreover, there are 1.7 million customer strength of McDonald’s restaurants everyday all over the country and the organisation is responsible to contribute to the Australian national economy a huge that is equivalent to the 0.2% of the Australian GDP (Das et al., 2015). In this context, it can be argued that that McDonald practices a healthier approach of relationship with its franchise, suppliers and customers so that the sustainable business environment will be maintained. This strategy is identified as the “three legged stool” that McDonald intricately imbibed imbibes in its business operation strategy (Abs.gov.au, 2018). In this context, it can be argued that there are over 9,000 suppliers in Australia on whom the McDonald relies heavily (Wang, Huang & Shou, 2015). Using the local suppliers with the purpose to facilitates substantial advantages to the local suppliers market and at the same time aiding more towards the new investments and managing volumes required by other restaurants are also identified important aspects on which McDonald puts focus on.

In case of the market structure of Hungry Jack is concerned, it can be stated that the company is highly successfully in expanding business in Australia despite of having enormous competition from other fast food organisations. Founded in 1971 presently the company enjoys an annual revenue turnover of AU$ 1.043 billion. The company is a subsidiary of the parent organisation of Burger King (Hungryjacks.com.au, 2018). As a result of that Hungry Jack got more strategic advantages in the intense competitive market of Australia. Moreover, it can be argued that the takeover by the Burger King makes Hungry Jack more acceptable and opens up a big market with lots of opportunities. Therefore, it can also be seen in the sales percentage of Hungry Jack. It can be stated that the sales percentage of the Hungry Jack has increased up to 7% in compare to the previous year (Hungryjacks.com.au, 2018). The company is succeeded to return $775 million to the stakeholders in the form of dividends and share repurchases. In addition to this, there are more than 25,000 employees working in different outlets of Hungry Jack across Australia with more than 300 outlets in Australia (Haynes & Grensing, 2016). As per the government report it can be stated that in the 2009-2010 financial year the company earned a tax profit of $32.1 million on the sales amount of $1.043 billion (Babin & Zikmund, 2015). Moreover, the company is presently looking for more expansion of its market both in domestically and internationally. In this regard, New Zealand is identified as the most preferred location for the products with an expectation of generating more profit for Hungry Jack.

Comparative Analysis of McDonald’s and Hungry Jack’s Marketing Strategies

The expansion of business by McDonald is based on the some strategies that the organisation incorporates into its business orientation. In this context, the retain and regain of customer policy is considered to be an important policy that the company puts focus on both in domestically and overseas expansion. As per this policy it can be argued that the regain policy is related to the regaining the trusts and beliefs of the customers where the company can improve its quality of foods and services on the basis of the customer reviews (Danziger, Hadar& Morwitz, 2014). Moreover, the retention policy is associated with the increase and retention of the existing customers and in this regard McDonald is willing to fortify and extend its areas of business and ventilating intentions to put emphasis on the families.

On the contrary Hungry Jack puts more emphasis on the product specifications and diversification in order to maximise the customers. It can be stated that the Hungry Jack products are famous for their tastes and quality. Innovation is the primary factor on which the company focuses more. As a result of that it is also resembled with the market demands of Australian fast food market where the customers are like to get quality products with healthier quality (Piercy, 2014). Therefore, it provides Hungry Jack more advantages to maximise more customers. Moreover, the promotional strategies are also identified as unique and exquisite that facilitates Hungry Jack market capitalisation in a robust manner (Balasubramanian, Bhattacharya& Krishnan, 2015). Using the local football teams as promotional tool can be asserted as one of the effective strategies for Hungry Jack.

Despite of all the efforts provided by Hungry Jack it can be argued that McDonalds have more market capitalisation in the Australian food market. There are a number of factors that are responsible in this regard to make a better market occupation for McDonald. In this regard, the dynamic product diversification with a huge number of food enlisted in the menu provides a competitive advantage to McDonald. Moreover, place and location of the McDonald outlets and restaurants all over Australia creates a better strategic advantage for the organisation in terms of volume and location (Carbó-Valverde, Cuadros-Solas & Rodríguez-Fernández, 2018). In case of the McDonald stores there are more than 900 outlets stretched over most of the cities and towns of Australia. Besides this, it can be argued that the promotional tools are considered to be an important factor for the success of McDonald. In this context, McDonald maintains four types of marketing strategies in terms of advertising, sales promotions, public relations and the direct marketing. Plethora of advertisements in TV and Social Media or opting for the traditional methods coupled with organising promotional campaigns are considered to be important aspects for McDonald. As a matter of fact, Li& Ma,(2016) opined that there are the role of the internal factors are also contributed emphatically into the business objectives of McDonald. In this context, the internal factors are comprised with the workplace environment and the transparent hierarchical model that helps the company to make a better place for the employees. There is no such issues regarding employee retention and as a result of that the employees can put focus on innovation.

Conclusion

The McDonald Company follows an unique pricing strategy in terms of the bundle pricing strategy and the psychological pricing strategy. As far as the bundle pricing strategy is concerned, McDonald offers meals and other food products at a discounted price. For an instance, the happy meal and the Extra value meal are very popular among the customers because the organisation often offers discounts in these products. On the contrary, Hunger Jacks have to compete with big fast food giants like the McDonalds or Wendy’s. As a result of that low pricing strategy is the obvious choice for the Hunger Jacks to follow. As a matter of fact, the Hunger Jacks also incorporates the bundle pricing strategy as the main pricing process. Therefore, it can be argued that in the Australian market both the companies face high competitiveness in terms of pricing.

Burger	AU$ 2/ Piece	AU$1.99/ piece (Psychological pricing)
Combo meal	AUD 6/ meal	AUD 5.99/ meal

The above chart implies that both the companies are tries to fix their price of food products nearly the same. The price of the food items follows a low pricing strategy and as a result of that the Australian customers becomes attracted to buy products according to their needs. However, in this context, the psychological pricing plays a significant role to attract the customers more accurately. In case of the Hunger Jacks’ products the prices are so low and easily affordable. On the other hand, McDonalds is not only pushing itself to maintain the bundle pricing strategy but make it more effecting by adding up the psychological pricing strategy in order to bring more accuracy in the pricing strategy. It is very unique and provides strategic advantage to McDonalds.

As far as the non-pricing strategy is concerned, it can be argued that the McDonald puts great emphasis on its non-pricing strategies as well. There are the non-pricing strategies such as service quality, ambience of the restaurants and the quality of foods that enables the customers to get attracted by the non-pricing strategies as well. In case of McDonalds, the ambience of the restaurants is too friendly and good for customers as a matter of fact, it can be argued that the McDonalds management sets the ambience of the restaurants fit for both the family and youths (Li & Ma, 2016). Moreover, the service quality is too frequent and professional and the organisation is popular for this. As far as the quality of the food products are concerned it can be stated that the quality of the food products are similar to the Hunger Jacks’. There are no such differences between the qualities of the products. However, it can be found that the restaurants of Hunger Jacks are not so well in compare to the McDonalds and the service quality is also less efficient in comparison with McDonalds (Piercy, 2014). Therefore, it is important for the organisation to put more focus on it.

In this context, it can be argued that the McDonald has more opportunities to procure a better market expansion in compare to Hunger Jack. The main reason is the pricing strategy that enables McDonalds to penetrate the psychology of the customers very accurately. Moreover, other factors like the non-pricing elements create more strategic advantages for McDonalds than the Hungry Jacks. For an instance, the ambience and the quality of service that McDonald provides are best known for its international standards. Moreover, the fast food giant also trains the employees so that they can deliver better services.

Conclusion

The above discussion clearly creates an in-depth analysis of different marketing attitudes of the companies associated with the Australian fast food market. In this context, choosing the McDonalds and the Hunger Jacks are pretty effective to understand the differences of marketing strategies. In course of the discussion, the report went through the market structure of both the companies in order to assess the strength of the organisations in Australian market. Furthermore, the report also cared to explain the growth strategy. As per the growth strategy, it can be argued that McDonald has more strategic advantages than the Hungry Jacks. In addition to this, the pricing and non-pricing strategies are also proved the competitive advantage of McDonalds over Hungry Jacks. In this context, it can be stated that despite of having equal quality products and price strategy McDonalds enjoys more strategic advantages than Hungry Jacks due to its unique marketing strategy and the aggressive growth in the existing market. The huge number of stores and the professional service approach provided by the employees also facilitates the process for McDonalds to gain more strategic advantage. Therefore, it can be concluded that despite of the high competition in the Australian market McDonalds enjoys more effectiveness and market capitalisation in Australia.

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