Question one (282 words)

In any business setting, organizations face many challenges in implementing many of their operational capabilities and in the achievement of their strategic plan in an adequate manner. Failure to adequately address these issues may make a company fail in implementing most of its activities, hence potential failure while also meeting it on the competitive hedge. McDonald's has tried as far as possible to make line up its strategic activities in response to ever-changing economic unit and competition. However, there are still a few critical issues that the company should address to continue its competitive advantage. In the wake of increased price sensitivity and economic meltdowns facing customers from across the globe, one potential and current challenge is setting and keeping low prices which is in line with their business-level strategy.

As evidenced in the article, current customers require healthier and better quality foods than previously. In pursuit of this, the company must factor in products which are high in cost to correspond to such requirement. Thus, this high cost of materials is likely to reduce the profit margin when prices do not offset such price increases in prices of ingredients from suppliers. Keeping that in mind, it is only making sense for the company to optimize its production process to achieve competitive prices. Moreover, the fast-food industry is highly competitive, unlike the period of the company's inception (Tien, 2019). Thus, McDonald's must strive to embark on innovative and diversification strategies that align with its activities for attracting and keeping more customers, like offering coffee in its stores, as illustrated in the article. 

Question Two (324 words)

Analysis of the external environment is key to knowing both internal strengths and potential challenges that a company is prone to face in implementing its strategies. In so doing, both threats and economic moot of an organization can surface, creating an avenue for making strategic decisions. In line with the relative importance of environmental analysis, current trends in McDonald PESTEL analysis that correspond to the company's external environment should follow suit and address the millennial eating preference that favors restaurants that offer fresh and healthy menus. Failure to address this millennial eating trend is likely to have the greatest impact on McDonald's ability to achieve and sustain a competitive advantage (Anderson, 2014). It is a great challenge considering that millennials are one of the key target markets in fast foods given their frequency of visiting the restaurants to take lunch and breakfast meals. For instance, it is possible to find these target segments visiting a store more than once or twice, thus deriving a great revenue stream to the company.

Based on the article, it is true that Mcdonald's has failed to address this particular challenge because of the healthy habits in their quest to enjoy themselves in a restaurant of their choice (Healthy and Fresh) Menus. Apart from their taste preferences, this segment of consumers also has a higher affinity towards companies with sound social awareness. As such, it means that the company must address its reputation as its current reputation does not align with millennials' requirements, hence the low number of millennials who dish in their restaurants (Anderson, 2014). For instance, lack of social awareness has had a wide impact on the company's ability to attract more customers. One practical example is shown in the article is the decrease of 12.9% of total customers who were millennials who had visited the company over the last couple of years. McDonald's should therefore strive to satisfy this challenge to remain competitive.  

Question Three (351 words)

As one of the largest fast-food companies worldwide, key competencies are required to run the operations while also meeting up competitor's level. The company's core competencies lie in the continuous consistency of quality, food production, and raw material use worldwide and how they can leverage such areas to achieve the high-efficiency level and institutional operations. Similarly, the company has young, quality, and skilled employees derived from the labor market through extensive human resources management (Haseeb et al., 2020). Product line enhancements are also one area where Mcdonald's boost some critical competency area is product line enhancements. Here, the company offers many products in widely diverse products and segmentation in such products.

Apart from skilled employees, McDonald's also has highly trained and experienced members of staff of which they can then boost greater performance level and productivity. Conveniences provide customers with what they require when they require it and in the best way possible. As such, the company can leverage the best value provision for monetary value spent by the customers when purchasing the company's products. Speedy delivery of food, advanced technological, operational level, reputation, and product developments are also key competencies that the company has leveraged (Haseeb et al., 2020).  Lastly, the brand name and excellent locations are also core competencies that the company has for a competitive advantage.  All these competencies help in adding value to the customers, thus creating a long-lasting impression.

 McDonald's company has two primary revenue streams, which consist of company-operated restaurants and franchise fees from those restaurants that are not operated remotely via the company's direct management. Revenues derived from franchised restaurants relate to rent and royalties tied to a percentage of sales, initial fees, and minimum rent payments (Schramade, 2019). On the other hand, licensed revenue sources are tied to royalty-based sales volume percentages and royalties. It is good to note that such fees vary depending on the type of site, company investments, and prevailing business conditions.

Question Four (292 words)

Unlike corporate-level strategies of a business, business-level strategy, its goals, action plans, and other strategies aimed at utilizing value to their customers to stand out in the race for attracting customers and competitive hedge. As such, its forms a link between the corporate levels and the organization as a whole.  Here, the company's primary strategy lies in the combination of cost leadership and also international expansion. For example, the company has undertaken license and franchising as new market entry modes to a larger extent (Singireddy, 2020). To meet up with these current strategies, the company has a strategy of value creation by reducing the prices to the minimum to lure customers through a low pricing strategy.

Unlike traditional means where the company targeted high-priced item value, the company realized that it was not working and shifted focus to low-priced products within their chain. Moreover, the company also focuses on greater customer service by providing speedy provision of high-quality food in a cleaner environment. In so doing, the company has achieved high customer excellence (Singireddy, 2020). Moreover, there is brand marketing through increasing its level of trust between customers and the overall business. The company should pursue digital marketing and menu standardization to enable the company to reach a wider audience. 

Despite having a cost leadership strategy and reducing the customer base willing to buy the company's products, cost reduction through low pricing is of great importance towards customer attraction (Singireddy, 2020). However, reducing prices below the current minimum is not necessary as prices are more excellent generators of revenue, and instead of doing that, the company should take extensive promotion and diversification.