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‘In the 1990s managers will be judged on their ability to identify, cultivate, and exploit the core competencies that make growth possible – indeed, they’ll have to rethink the concept of the corporation it self.’

C K Prahalad and G Hamel 1990

Organizations do not exist in vacuum. They operate within a competitive industrial environment. Analyzing its competitors not only enables an organization to identify its own strengths and weaknesses but also help to identify opportunities for and threats to the organization from its industrial environment. SWOT analysis is a systematic analysis of these factors and the strategy that reflects the best match between them.

Let us analyze these principals in relation to the core competence of McDonalds, one of the largest food chain companies in the world. Let us first start with the strengths and the positive aspects which define the performance of this company. How can we define the company’s strengths? Strength is a distinctive competence that gives the firm a comparative advantage in the market place. For instance financial resources, image, market leadership and buyer supplier relations etc

McDonalds is the no: 1 fast food chain stores with a 40 million customers visiting it per day. It has over 30,000 branches in 120 countries. It derives 80% of its revenues from eight countries like Canada, Brazil, Germany, France, Japan, UK, Australia and US. The greatest strength was creating an image in the minds of the people and introducing them to the fast food culture. Delivery speed, customer care and cleanliness are the core strengths on which these stores expanded. They created a corporate symbol and their advertisement campaigns were highly successful in establishing the brand image and logo in the minds of the millions. Two main competitors generally identified with McDonalds are the Burger King and the KFC. McDonalds marketing strategy is concerned with the internal resources, external environment and its basic competencies along with its share holders.

McDonald’s product value is also its greatest strengths. Customers know what to expect when they walk into a McDonalds store. It gives great emphasis to human resources by satisfying both the customer and the employees. Next is the innovation aspect wherein new products line up to catch up with the new trends and tastes of the people. Its diversity into other new business ventures can also be considered as its strengths.

How effective are these strengths to the company in the long run? McDonalds today is not that amendable as it was during its inception. What are the driving factors which results in its present decline in terms of sales and services? To analyze this factor we have to look at the weaknesses part of the companies business and marketing strategy. What can generally be termed as a weakness of a company? The same factors which were considered as strengths also become a weakness if it impedes the overall performance of the company.

Customer trends change and so does their choices. People are generally tired of the same brands that they had been using over the years, so when they do not see the expected innovation they migrate to new brands. Moreover people see McDonalds every where and this over exposure might also be a reason for abstinence. Moreover maintaining the standards of such a huge chain becomes feasible and when there is lack of quality service in one store it effects the whole brand.

The secret of any marketing strategy is to reach the target audience. And here again the target audience should be chosen carefully. In the case of McDonalds as projected in its ads, the targeted audiences were the kids. Demographics and customer financial and psychological aspects define a business concerns success. Health conscious women and senior citizen comprise the major population but kids soon grow out to become adults. Recent law suits and documentaries resulted in the companies recent innovation and a major change related to health related product ranges and this switch over as per the needs of today’s trend and needs has increased the lost popularity of McDonalds a bit.

All the above factors point out the external strengths and weaknesses. There are also internal factors which affect the performance and overall benefits the company stands to enjoy. Kids based marketing strategy which was earlier a weakness has changed since 2003. Now more teenagers and adults rule the McDonalds ad world. The research and develop which lacked earlier is also looked into and the brand quality is being defined with various research and development options today. McDonald at one stage started concentrating on expansion and growing big that it missed out on key factors like quality maintenance and R&D.

One major threat to any brand is its relationship between the management and the franchise dealers. Organization strength is the back bone of any concern and when that starts shaking the whole system will collapse. But slowing McDonald is recovering from all these weaknesses as its brand managers can easily communicate, compare and improve their services through the latest technological developments wherein they can use the internet to motivate, compare and improve upon other centers performances.

The overall analysis of all the external and internal strengths and weaknesses on this company should be linked in order to draft a sustainable plan for the companies’ further improvement. For any improvement or expansion the internal resources must be readily available. And thus analyzing this aspect can lead to a modified strategy to suit its vision. Keeping in mind the available resources the planner should think globally. Hence making use of all the core competencies the firm can definitely sustain in the competitive market.

The change in the top managerial level has creating a new wave in its performance and major changes have been implemented to retain and sustain the brand quality and innovation. As the new CEO rightly quotes,

“The world has changed. Our customers have changed. We have to change too.”

James R. Cantaloupe, Chairman and CEO, McDonald’s, 2003

Now let us analyze the sustainable competitive advantage of the company. What is sustainable competitive advantage? How can it be related to McDonalds? SCA is the advantage a company has which is difficult or impossible for other companies to possess or break through. It can either be the brand, dynamic customer care, cost structure or its patent. Whatever the advantage in order to be considered as sustainable it should either be proprietary or distinctive. Other than this three different aspects that help in SCA are,

o The managerial and organizational process should share a good integration and coordination. The much needed ‘value’ is created thereby as everyone strives to work for a common goal. The organization should learn and bring about changes according to the need of the hour and should always be flexible to changes in the environment such as customer trends, legal or government restriction and developments in the technology. McDonalds is presently concentrating on this advantage by concentrating on organizational behavior and managerial expertise. Previously this advantage was ignored as the organization was more into expansion of its outlets over the globe than strengthening its core advantage. As the result the revenue did not see much of a change while newer outlets were open. The company suffered a massive loss first time since their inceptions which further lead to the change in the managerial heads.

o Technological, structural and financial assets of a company are excellent market position which helps in the SCA. McDonalds no doubt is abundant with such aspects like structure, technology and finance. To identify and implement these assets in the proper direction towards the improvement of the company is all that is needed. After 2003 the company has really started to concentrate on its greatest advantages.

o Most of all the greatest advantage is the vision or the dream with which the company was started. Sustaining this dream over the years is any companies’ greatest advantage. A brand usually revolves around this vision sustaining this vision and working in lieu with it is a great SCA. McDonalds was started out to help people who had very little time to cook or was too busy to get into a proper restaurant. The vision was to provide quick service, cheap products and quality satisfaction. Keeping this vision in mind the company which slackened a bit because of incompetent franchise holders is being weeded and new and better people are put in this place as the torch bearers of the company sustaining and living the vision.

To sum it all up SCA means implementing the best value based strategy using all the advantages which are unique to the company and that which cannot be copied or replicated by other competitors. The importance of this SCA can be evident by the reply the great investment guru Warren Buffet gave when asked about how he evaluates his investment portfolio. He simply answered ’sustainable competitive advantage’. Hence based on the dynamic integrated and intelligent human resources can always be the only dependable and sustainable SCA.

Outsourcing boom or doom in today’s business environment

Today everything is outsourced from employee appointment to finance and customer care. No organization is best enough to handle all kinds of work. Moreover concentrating on every detail is not possible with a big concern especially like McDonalds. But great care should be taken not to outsource the core competences of the company. General advantages of outsourcing are cheap service, knowledge of markets offshore, flexible resources, speedy operations, expansion in supplier relationship etc. most of all the company can concentrate on its core competencies and outsource rest of its operation. Recently McDonald has tested its drive through order facility. Wherein it makes sure that the order placed with the outlet is accurate. The order taken by the outsourced company is reverted back to the home restaurant. These call center has a digital camera which clicks the vehicle you drive through and the delivery man back home can integrate the order and the person who placed it using the image of the car. Outsourcing thus helps in the increase of the external suppliers and fills up the difficulties faced because of the lack of the latest technologies and other innovations.

What started of as a success story with McDonalds had to face a number of risks, competitions and major set backs. What makes it still strong and ranked among the top business concerns is its core competences and the sustainable competitive advantages both internal and external. Of course keeping up with the changing times the company has also set foot in outsourcing but the point to keep in mind here is not to be driven away by this outsourcing mania. This company has started to revert back to its golden glory recently because of large scale revamping of its organizational and structural changes being implemented.

Conclusion:

No particular competitive strategy is guaranteed to achieve success at all times. Risk attitudes can change and vary by industry volatility and environmental uncertainty and several internal conditions also might be involved. Thus the “four P’s” of marketing (product, price, place and promotion) provide a good starting point for consideration of the requirements of strategy implementation in the marketing function. The mix of these marketing elements should be appropriate and the plans for each of the elements should also be appropriate.

The marketing function is consumer oriented and hence marketing decisions are based on the careful identification of consumer needs and on the design of marketing strategies to meet those needs. The distribution system brings the product or service to the place where in can best fill customer needs. Access to distribution can mean all the differences between success and failure for a new product. Because many products require support from distribution channels in the form of prompt service, rapid order processing etc the choice of distributors, wholesalers and jobbers is extremely important.

Promotion is more than advertising. The location, size and nature of markets which the business strategy defines will guide promotion mix decisions and should indicate the content of promotional material as well. Pricing is a complex issue because it is related to cost, volume, trade offs etc and because it is frequently used as a competitive weapon. Pricing policy changes are likely to provoke competitor response. Using price to jockey for position can lead to price wars, which usually hurt all participants.

Marketing has received increasingly greater attention in the competitive business since the early modern era. The old concept of marketing focused on the firms existing products and considered marketing to consist of selling and promotion to maximize sales at a profit. The new concept however focuses on the firms existing potential customers and seeks to earn profit through customer satisfaction with an integrated marketing program.

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One of the great increasing mysteries of today’s modern boatbuilding is the amount of hi-tech gobble-de-gook that the average home boat builder is expected to wade through when the time comes to paint the boat after the horrendous amount of sanding, fairing and hard work is (mostly) over and the fruits of your labour now require a shiny deep lustre that the painting now promises to bring. This part, to my mind at least, is one of the best parts of boatbuilding, the finish! (Well, at least the start of the finish!)

Painting a boat used to be a reasonably simple task. All one needed was a fine dry day, one of Dad’s paintbrushes, some turps, a roll of masking tape, a bit of pink primer left over from the decorating and a half gallon of shiny blue enamel paint from the local hardware store…they were the days!

Not so today, my friends! The unsuspecting boat builder who toddles off to the local chandlery or superstore best be prepared for the very worst- not only will he (or she) face a huge financial onslaught on their wallet but a mind boggling array of hi-tech whiz wow balderdash that the (generally) uninformed shop assistant will proceed to throw in their general direction in the faint hope that you will give in under the stress and buy several litres of the latest polurethanicalslitheryaminomolecular goop that’s just come in. For example, you’ll be faced with trade names like ‘Interlux Interthane coating’. I mean, come on, it sounds like a new space invaders game! This is bloody paint! There are many others but I’m sure you get the gist of what I’m saying.

Another example of the kind of thing that drives me nuts is that you can expect to buy several litres of a iso-cyanate two pack marine polyurethane paint only to be cheerfully told its illegal to spray it unless you have a proper licenced premises to do so, drone drone!! I suppose they have to make up new names to go with the new paint company policies of charging up to $150 a litre for some of these new fangled paints! What the hell have they discovered that’s so expensive to put in this stuff? I was under the impression that paint was a few litres of linseed oil, turps, some drying agents and a few ounces of pigments for colour…can I really be so out of touch?

BACK TO BASICS

So, why do we paint wooden boats? Or any other boat for that matter? The first part of that question is easy. Boats look much smarter and better if they shine and gleam a bit… it’s only human nature after all. The second part to that question is: We want to protect it. Ok, from what? Well, wood rots if you don’t paint it, right? – wrong! Wood left to its own devices does not rot. Wood only rots as a result of its environment. There are multiple cases of how, plain untreated wood can last for centuries as long as it is in the correct environment. There are basically only a few elements that start wood rotting. Biological attack from spores, fungi, temperature, high humidity or total absorption, physical attack from marine borers and crustaceans that allow ingress to all the other elements aforementioned.

Don’t let’s forget that polluted waters can degrade timber to the point where it will rot….we’ll add chemical attack to that list too. So, in view of all these very compelling reasons we protect our boat by painting it to coat it fully against these assaults.

PREPARATION OF TIMBER

The actual preparation of timber can cover a range of differing requirements. If your boat is a new build you won’t have to go through many of the preparatory stages that an older boat may have to go through. With some forms of boatbuilding where a boat has been built by a different method such as strip planking or cold moulding, we paint the boat as if it were a fibreglass boat, due to the fact that either layers of fibreglass cover the timber or that the timber has been coated with epoxy that does not allow conventional paints to adhere to it properly. However, if we wish to protect bare timber then we use a different tack. Timber in its bare natural state has millions of thin hollow tubes running through it, constructed of cellulose in its natural form. We have to seal these tubes to prevent the ingress of water into them. Therefore we seal and coat the timber first of all.

The first thing we do is to clean and remove any loose and flaking or damaged paint plus any dirt that remains on the hull – sounds easy if you say it quick but it must be done! If necessary (and most times it is) degrease the hull using a proprietary paint degreaser after removing all dust preferably with a vacuum cleaner. Don’t forget it won’t be absolutely necessary to get all the hull back to bare wood just dry, clean, grease and dust free.

FILLING AND IMPERFECTIONS

Obviously, not many timber craft are perfect on the outside. There are many blemishes, cracks, imperfections and splits both large and small to deal with by filling them and sanding them flush before priming the boat. It’s a bit of a chore but time spent here will reward you with a boat that will certainly look better plus have a longer life. Some folks fill these holes and imperfections in timber with epoxy filler but it is not a good idea. Sometime later, for example, when the boat has to undergo a repair, it will be the very devil of a job to remove the epoxy from a fastening hole. It’s best to use some kind of proper timber filler that dries hard and fast but is never that hard that it can’t be removed later on. For example, painter’s glazing compound is a fairly hard setting soft paste that can be quickly applied then sanded and painted satisfactorily. Carvel boats usually have their seams filled fair with a special seam compound AFTER the boat has been primed. Once the boat has been filled and faired smooth and all dust removed we are ready to put some actual paint on. Remember, the difference between a professional paint job and an amateur is the PREPARATION!

WOOD PRESERVATIVE

There are two schools of thought about treating bare timber with wood preservatives. I’ve heard stories that primers and paints don’t adhere to many of them. In my case, I have never personally had that happen to me, so I am generally in favour of using them. Nevertheless, I am convinced that in many cases where the paint refuses to stick to timber is because the wood has not properly dried out after application. There is a definite percentage of humidity level that every timber has (and most of them differ slightly) where paint of any description simply won’t stick. It can be up to fifteen per cent in some timbers. Above all, ensure that your timber is dry enough to allow any paint or filler to adhere to it. Remember too that salt deposits on timber will readily contain water and keep it damp…. if your boat was in salty water wash it off in fresh before commencing painting. When and only when, your timber preservative is dry the next stage is:

PRIMER

The first coat of primer to go onto your hull is metallic grey primer. It is a good primer to use because it is made up of millions of microscopic flat metal (aluminium) plates that lie on top of each other giving water a very hard time to pass though it…Pink primer for example, has circular molecules of substances therefore allowing water to ingress a lot quicker…fact! Grey primers also contain certain oils and most have anti-mould agents contained within (biocides to you and I) We put two coats of grey primer above the waterline and three, no less, below it.

SOME OTHER OBSERVATIONS ABOUT PRIMERS

There are a whole world of paint primers out there and confusion about their qualities are very common. For basic dry timbers, the grey metallic primers are good as previously explained. Also many oil-based primers from well-known companies are also very good and will do the job perfectly well. Hi-build primers however must be approached with caution and I must say that I have never personally got on too well with them. Most of them contain Titanium Dioxide (that’s talcum powder to us lot) and even when it is fully cured can absorb copious amounts of moisture that can prevent really good paint adhesion. To avoid this only paint hi-build primers on good clear dry days and avoid excessive atmospheric humidity levels. Then, as soon as is possible apply the topcoats to seal them in. Note too, that hi-build primers are a soft type of paint and can suffer badly from scuffing over stony or shingly beaches and even when launching from boat trailers. When sanding these primers remember that huge clouds of white dust are released so be aware of where you sand and wear appropriate safety masks.

TOPCOATS

Once again, there are many types to choose from. Let’s get the two- packs out of the way first. TWO-PACK POLYURETHANES have to be applied over a two-pack epoxy undercoat first of all. They have a fantastic finish and that’s fine but you must be absolutely sure that the timber underneath is not going to move because the paint cures so hard that it can and will crack (strip plankers and cold moulded boats are your best bet here…apart of course from glass boats). The primary reason is that timber constructed boats move or ‘work’ as it is known. You may well get away with it if your timber boat has been glassed from new….not glassed over later as a preventative method to stop leaks. Rarely boats treated thus dry out properly and are still susceptible to movement as the timber inside the glass either rots because it was wet or it dries out too much and shrinks. Also boats that have been chined properly, that is, strips of timber glued in between the planks instead of being caulked, stand a reasonable chance of not moving.

Ok, what else? One pack or single pack polyurethane paints can be a good choice for a topcoat…they are almost as glossy and as durable as the two-packs but not quite! They are however, less expensive and far easier to apply than the two-packs… there are a multitude of them out there, so a bit of research is required plus your own personal choice…I’m not going to get involved in a slanging match about which ones are the best! However, remember most major well-known paint manufacturer’s products are usually ok! It’s your call!

So next on my list are marine enamels. Once again, it pays to remember that anything with MARINE in front of it is usually expensive…a good place to avoid in this quest is the large hardware chain stores that sport one or two paints in this category and I’ve fallen for it myself before now. It’s the Name we are looking for!

Even with decent quality marine enamels some of the whites have been known to yellow with age and the way round this is to buy the off-white colours such as cream or buff. My last choice in Marine enamels proper, is a relative newcomer…a water-based enamel. I personally have never used any but I have heard some good reports and there has to be a few advantages with them, quick cleanup for one and you can even drink the thinners!

ASSORTED CHOICES

There are a few types of paint systems that are different to the abovementioned and as usual they probably will draw a lot of flack from those types that love writing to the editor for some reason or the other. Mainly I suspect, because something isn’t quite conventional. Each of the following paints has their different uses and attributes.

HOUSE PAINT ENAMELS

Over the years the quality of house paint enamels has been increasing dramatically to the point where many yachties I know paint their boats with it. It’s a bit softer (and definitely cheaper) than most single pack polyurethanes and some colours, mostly the darker hues, tend to fade earlier than others. However, the fact remains that they can be an excellent choice especially if you own a small boat and don’t mind repainting it every couple of years….cheap to buy, easy to apply!

WATER BASED ACRYLICS

A few years ago you wouldn’t have dreamed of painting your boat with acrylic paint….it would have peeled off in great strips. That does not apply today however. My own boat, The NICKY J has been painted using Wattyl’s Acrylic semi-gloss “CANE” and it is really amazing. I used gloss for the hull and semi-gloss for the decks over white epoxy primer single pack and it has been really good. Never once has it even looked like delaminating. I paint the boat once a year with a roller and it takes less than a day…and she’s forty two feet long! It is yet another choice!

Well there’s your main paint choices but I urge you to remember one thing…preparation is King… it will save you plenty of money in the long run, for sure.

HOW TO APPLY YOUR PAINT

There are of course, three main methods of applying your paints; Spraying, brushing and rollering. There’s another that many people use, a combination of the last two, rolling and tipping, we’ll deal with that one later.

Let’s take a look at spraying. There are several pre-requisites for a decent spray job. These usually are a decent workshop complete with suction fans and half decent ventilation using good spray gear (cheapo underpowered stuff just doesn’t cut the mustard) and most importantly, adequate and proper safety gear. There are always exceptions to the rule and there’s one chap who works in Edge’s boatyard outside in the weather and he does a fantastic job…imagine how much better he might be if he worked indoors!! You will also have to watch the weather, high humidity is not good and also where the overspray goes…not over anyone’s car as is so often the case! A good excess of paint is lost and wasted in the process. If you have a driving need for you boat to look like your car then sprayings for you! Oh yeah, it quick(ish) too!

Brushing by hand can yield incredible results if you are patient and also know what you are doing. I’ve seen boats that at first glance look like they have been sprayed only to find out that they were hand painted by brush…….Dust free atmosphere and bloody good brushes (I mean expensive) are an absolute must here.

Last of all, rollering especially the ‘roll and tip’ method. This requires two people working together as a team. One rolls the paint on thinly and the other follows closely with a decent brush and ‘tips’ out the bubbles left behind by the roller – unbelievably good finishes can be obtained by this method.

A word of warning, no matter which method you use. Don’t be tempted to retouch runs or sags in the paint or you will ruin the finish….wait until the paint has fully dried then deal with it! It’s tempting but paint always seems to gel quicker than you would think!

A SUMMARY

There are many facets to the successful painting of a boat. We can’t be good at all of them and you have to choose the method most suited to you own particular capabilities. A lot depends on the facilities that you have available at your disposal. Some people have the garden to work in others may have huge sheds and even access to a warehouse! I will say that a few basic rules apply to painting even the smallest boat. Often, too much, too clever or too sophisticated is often detrimental to what you are trying to achieve.

I have seen boats that cost twenty grand to paint and they were just really average…why? Wrong choice of painter, that’s why. If you are going to choose a painter it’s not a crime to ask him to show you some examples of his work. If he’s any good there should be plenty…there are plenty of chancers and cowboys about, rest assured. All boats, every single one of them will need retouching or even a repaint within years. Just how long you get for your money is the trick. Unless you put your freshly painted boat in a museum or garage and lock it away you can bet that from day one, it will collect nicks, dings, scratches and scars, it’s inevitable. Beware the painter who tells you, ‘yes it will be ten grand, but it’ll outlast you and me’. The need for repainting is directly proportional to how badly the boat is treated over the years. The only way of keeping your boat pristine and perfect is never to actually put it in that dirty old water once it’s done! Be realistic about your own abilities and your expectations. Simple can be better in many cases.

A SIMPLE FORMULA FOR CALCULATING HOW MUCH PAINT YOU NEED (FOR ONE COAT)

This is interesting if not exactly exact! But it gets very close indeed. This is applicable to brushing and rolling only NOT spraying. There’s a different formula for that and I don’t know it!

THE FORMULA

ONE COAT = The boat’s length overall x the beam x 0.85

Divided by square feet covered per litre listed on the paint can instructions.

If you can’t work it out the paint manufacturer will tell you if you ring the company hotline.

Over the years, wooden boats have survived the elements in spite of very crude and primitive forms of paint. Many early vessels were simply daubed in pitch, bitumen, turps and beeswax. An early Thames barge had survived for over a hundred years in perfect condition as she was originally used as a bitumen tanker!! The dark brown shiny finish was the most perfect example of preserved wood that I have ever seen. One of the most interesting boats I ever saw was painted with fence paint…the owner reckoned he’d only ever painted it once in thirty years! Another old boat builder I knew once told me the secret of painting a wooden boat was to paint it with as many coats of paint that you could afford!

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