essay about mcdonalds

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McDonald's Sample Essay

Introduction 

McDonald’s Corporation is undoubtedly the largest fast food restaurant chain in the world. Currently, the restaurant chain has established its presence in over 115 countries. Furthermore, it serves a wide variety of customers estimated around 70 million every year. Despite numerous economic challenges, McDonald’s has always remained firm in the fast food industry, annually registering impressive results. With its headquarters in the Oak Brook, Illinois United States, McDonald’s operates numerous successful restaurant chains under its brand name (Porter, 1998). The corporation’s success in the ever-challenging fast food industry can be attributed to the fact that McDonald’s has a formidable strategic plan and an outstanding management team (McDonald’s Corporation, 2001). This essay focuses on McDonald’s and looks at some of the factors that have enabled the company to become a household name.  Over the decades, managers at McDonald's have continued to succeed, as a result of two factors which one will discuss in this essay. The first factor that one will discuss is the proper planning factor, and the second is the organization factor. These two factors are very important in any organization or business that aims to succeed in the market today.

Planning is the most important to any industry, and McDonald’s is not an exception. Planning is important because without planning, a company can end up in serious chaos. Planning is, therefore, the function of management, whereby the objectives of the firm are set, and the course of action aimed at the achievement of these goals is determined. Managers must, first of all, be aware of the different environments in which their restaurants operate before they can plan effectively. This will help them forecast into the future, so that they could plan any eventualities in the market. This is what the managers at McDonald’s did even, as they came up with strategic plans for their chain of restaurants (McDonald’s Corporation, 2001).

McDonald’s has a strategic plan that has been known as a ‘plan to win’. The company's project is not to be known as the largest world’s fast food restaurant chain. The company instead aims at being the very best fast food restaurant chain. In order to achieve this vision, McDonald’s has continued to use what is known as the five P’s: promotion, place, products, price, and of course, the people.  Together with the five P’s, McDonald’s continues to apply its geographic strategic plans. In their US markets, they have adopted a strategic plan that places its focus on convenience, chicken, breakfast, and beverages. For the McDonald’s in the US, these are the key areas of focus. 

McDonald’s success has mostly been as a result of the ability of the company to strategize or to plan properly. They have also introduced new items on their menu, such as the Southern Style Chicken Biscuit, which can be taken for breakfast, as well as the Southern Style Chicken Sandwich, which is mostly promoted as being ideal for lunch. When it comes to beverages, McDonald’s has also planned to introduce the new specialty of coffee as a hot drink. This introduction will, however, vary from market to market and will not be introduced at once in all markets.

Everything that the company does has been in an effort to keep with its global strategy. The global strategy is a Plan to win, which insists on offering only the best services to its customers. They have often come up with slogans that they hope will differentiate them from the other companies, and to set them apart from the competition. Planning is important to every organization. McDonald’s is the company that has managed to remain profitable because it has been able to plan ahead. They have strategically owned new restaurants only because they did proper market research and used their findings as a basis for doing business (Holmstrom & Milgrom, 1994).

Organization

The reality is that a company like McDonald’s would not be as successful as it is today if the company did not organize itself properly. The function of organization is one that is very important. A company that is not organized often becomes chaotic, as no one is held accountable for anything that takes place in the line of business. Proper organization from the top to the bottom is what has enabled McDonald’s to achieve the amount of success that the company has today. It remains a force to reckon within the fast food industry because of its organizational structure, which one will further discuss in this article. Analyzing and understanding organizational structures often involves working with data and charts, which is where Excel homework can come in handy, providing students with the necessary skills to organize and interpret data effectively in real-world scenarios.

McDonald’s has also aimed at promoting diversity among all the employees that work for the organization. Managers want all their employees to feel like they belong. As a result, they often aimed at being their customers’ favorite way and place of eating. One of the strengths of the organization is that it is able to emphasize on proper leadership skills. They also offer leadership programs to their executives who are extensive and comprehensive. They have established very high standards for all their employees. They always insist on hiring only the best, and each time, a new employee or manager has to do a better job than the former one (Holmstrom & Milgrom, 1994).

The organization also focuses on its human resources. The way McDonald’s hires employees is in such a way that they ensure that they only select candidates who indicate willingness to put the needs of the organization ahead of their own personal ambitions. McDonald’s also has a culture of appreciating its employees, so that they do not feel the need to pride themselves as the authors of a project. Whenever a project is successful, the glory is shared among the employees, so that no one feels left out. In addition, the company does not have a culture where fingers are pointed or people are vilified whenever something goes wrong. Also, the organization has well laid out succession plans, so that when an employee leaves, a vacuum is not created.

The company's succession culture, as well as its enduring culture, has seen its rise above the troubled times which have seen other companies going under. Even when the company needs to make changes in management, they do so under well-organized procedures, so that operations are not interrupted in the process. The firm never waits until a Chief Executive Officer has died or retired to replace him, as this has a way of creating a crisis. There are well laid out plans for succession, in case someone decides to retire or to leave the company for another one. It is these strong organizational capabilities that have contributed to its great customer service.

The company has over the years ensured that they have leadership skills which are sustaining. This is the reason why they have maintained the skills that are necessary to ensure that their customers are happy, so that they could keep coming back. They have been able to train their current leaders and even those they hope to have in the future. McDonald’s have over the years proven that they are capable of implementing leadership programs that are very strong and capable of producing the highest standards possible.

McDonald’s has remained strong because the company is able to adapt to changes that occur in demographics and technology. Changes in globalization have affected many organizations, and some have not been able to come through. The secret behind the success at McDonald’s has been as a result of their employee culture. The company has a culture where they build very capable team and emphasize on the value of teamwork. McDonald’s is a company where teamwork is valued. Each time they have a task to be accomplished or a business issue, the first thing that managers do is put a team together and empower them to accomplish the task. This is a culture that the company has natured for many years now, and can be seen by anyone who walks into any of the McDonald’s outlets anywhere in the world.

The corporation’s current Chief Executive Officer is Don Thompson. Mr. Thompson’s leadership style has been characterized the aggressive expansion and acquisition of the new market niches.  As a part of its business strategy, McDonald’s regards business competition as a war (Clausewitz, 2010). McDonald’s allocates most of its resources on provision of core services in order to ensure that the corporation stays ahead of the rest in the fast food industry. In this respect, McDonald’s operates its outlets either as joint venture or through franchising. In 1997, the corporation redesigned its strategy to focus only on its core brand. This move saw the company divest itself off some chains in Mexico. McDonald’s primarily focuses on selling products that it can provide conveniently to its clientele. This includes various types of chicken sandwiches, hamburgers, French fries, and an assortment of in-house soft drink brands. 

Concerning supportive policies, the corporation has ratified measures to ensure that it grows its business in the most profitable manner. Furthermore, McDonald’s believes in its systems, which ensure that the quality of its products remains high throughout the supply chain. Ethics is paramount to the corporation’s business. As a part of its policy, McDonald’s believes that good ethics means quality business. The corporation conducts its business in a fair and honest manner (Parasuraman et, el, 1988).

McDonald’s has a culture that ensures that the corporation grows continuously in order to respond to stakeholders’ needs effectively. The corporation has incorporated principles of organizational learning in its operations. These principles help the corporation to respond positively to ever-changing needs of consumers, system, and employees. Customer’s satisfaction is paramount to McDonald’s, since it is viewed as a business entity. The corporation offers excellent services to customers to afford them the unique experience that cannot be offered anywhere else. Currently, the corporation has the largest number of loyal customers than any other of its competitors. Additionally, the corporation has invested in the latest technology. McDonald’s was the first fast food restaurant to launch online shopping and selling of customized products. The company designs the business environment in which it operates, leaving others behind competition (Clausewitz, 2010). 

Strategic leadership is critical for any business success. McDonald’s has an efficient labor force and a management team that is innovative and visionary. The aim of management and workforce at large is to shape the corporation’s culture and ensure that it is in tandem with the organizational strategy. Moreover, McDonald’s has excellent reward programs that are geared towards stimulating employee performance. A motivated workforce is critical to an organization that aims at making profits. McDonald’s uses numerous tactics to reward its employees. This helps meet the company’s objects and reduce overheads at the same time. 

Controlling

According to McDonald’s Corporation Annual Report (2012), the company concentrates on the strategies that would strengthen its long-term survival with objectives of distributing evenly the shareholder returns in the top one-third of their colleagues. The company’s long-term financial targets are to:

Grow organic sales from 1% to 2% faster than the market grows in product classes and regions in which they operate

Attain the Core EPS growth of high single digits to low double digits

Generate free cash flow productivity of about 90% or even more

The fast food industry is extremely dynamic. Customer tests and preferences change rapidly. The organization must adopt a sound business strategy to stay ahead of competition. McDonald’s has a competitive strategy that has always manipulated the market in its favor. The corporation recognizes talents and trains them in order to build a formidable team that will always carry on the corporation’s mission, vision, and strategic plan. This has seen the company establishing a good organizational culture that is a critical organizational growth. The corporation appreciates diversity and unique customer requirements in the retail industry. This explains why the company has collaborated with other businesses in some of its chains to ensure that it serves the wider society. 

McDonald’s had to apply various marketing concepts to percolate the global market. This market segmentation analysis did not include a survey; instead, it relied wholly on customer’s behavior data that was captured at various branches. The food is mostly served in bags, cartons, or plastic wrapping to minimize cost of operation and for quick identification. Menus are made from processed ingredients prepared from a central place, and then transported to individual outlets. Once in the destination restaurant, the food is finally cooked through grill, microwave, or deep frying for a short time to meet the ever-surging customer’s demand. Precooked food is constantly evaluated to root out stale or overstayed food products. Thus, food at fast food restaurants is mostly characterized by high amounts of fat, high sugar content and less fiber i.e. highly processed. For example, King Burger’s food had a characteristic flavor, aroma, mouth feel, and texture (McDonald’s Corporation, 2001).

Their products include chicken nuggets, pizza, sandwiches, and hamburgers. Customers check in any time of the day either for a bit or for a take-away. The customers are mostly youngsters, and a few old busy people who want to grab some food while on their chores. Young people, in particular, prefer fast foods because they are cheap. Food is packaged in a group and sold at a considerably cheap prize. The restaurant also has a value meal; this is a case when a collection of menu items is sold as a whole at a low price that would be also sold individually. These arrangement-attracted youths, especially school going children usually keep looking for either a hamburger or chicken nuggets to eat.

What is more, the restaurant has a hospital point of sale system to cope with high customer’s demand. This enabled kitchen crew to view orders placed at the counter and prepare them in real time. The system also ensures speed and accuracy in service delivery. Consumer spending was very high, for the time one had been there, the restaurant made sales amounting to $100000. It was evident that most Americans still prefer fast foods compared to cooking a meal at home.

McDonald’s customers in Asia, especially in China, are naturally conservative and prefer eating home-cooked meals, unlike fast food products. Fast foods are prepared with many additives, salts, sugars, flavorings, and preservatives that limit the nutritional value of the final product. McDonald’s restaurants in China include ingredients of organic foods to enrich quality of their food, in accordance with the recommended standards, and minimize the negative impacts of fast food. Despite all negative facts, fast food has become more appealing because it is cheaply priced with irresistible tastes. Consequently, this makes fast food almost everybody’s choice, despite its health implications. McDonald’s provides broad range of chic products, such as modern and classic foodstuffs, including chicken nuggets, pizza, sandwiches, and hamburgers. Its products’ design was initiated by designers, style makers, and buyers. For that reason, it becomes a new trend, which attracts a number of customers. The new items are channeled to the right stores at the right time. McDonald’s provides fashion and quality products at the best price to customers. The best price can be assured through buying in large quantities, purchasing the right products at the right place, focusing on cost-awareness, and making effective distribution. McDonald’s sells its products through stores, catalogues, and online stores. However, there is a limitation for shopping via catalogue and Internet, as this system exists only in some countries. Customers in up market estates are able to order products through catalogue and online, i.e. they can purchase merchandise via Internet. These two channels give advantages and convenience to the customers since they can purchase items at home. Nonetheless, the major distribution channel of McDonald’s consists in stores, which expands more rapidly than other two channels. 

Catalogue and Internet shopping are the channels that offer customers more accessible and also increasing service, which reinforces its profile. The corporation does not own any stores, it rents all of them. Therefore, it can move its stores to the new location as the prime location changes. McDonald’s will not establish a new store until it finds the suitable place. Location of a store is essential for success. The company’s stores are always located in the best commercial regions, such as, busy streets and up market estates. A large number of customers are induced to shopping at McDonald’s because of the effective marketing tool of store displays. 

McDonald’s usually launches several campaigns annually in order to promote fashionable products that satisfy the ever-changing consumer tests and preferences. Its customers can get up-to-date information about trendy fast food products from such social networks, such as Facebook, Twitter, and the magazine, which is also available on its website.  

Video advertising, print advertising, and e-marketing are used to promote its products. Approximately 5% of its income is expended on advertising. There are websites, which customers can access 24 hours a day and 7 days a week. Customers can be acknowledged about a new trend and a new arrival of products via its website. The Internet utilization is a powerful tool in marketing. Online market can help to attract customers and encourage the business growth. 

McDonald’s believes in people. Its employees are the most important asset. It encourages employees to share their ideas and attitudes. Moreover, it avoids line of authority. Teamwork and cost awareness are promoted. Responsibility is delegated to employees. Consequently, staffs will feel that they are one part of the company. Freedom and responsibility exist in all business functions and workplaces. People can make their own decisions. Some unexpected situations might happen, but the critical thing is that one can learn from mistakes and avoid them next time. There are policies of diversity, gender equality, and non-discrimination policy. The company usually concentrates on customer’s demand and always provides base of products, according to customer’s requirement. Employees in the stores are well-trained about customer’s services. When customers walk to the company’s outlets, they can feel revitalized, since McDonald’s always provides new fashionable products to clients. Its store layout is obviously separated among merchandise for children, teenagers, women, and men. 

An analysis of McDonald’s indicates that successful firms do not target every customer; instead, they satisfy and meet demands only of certain groups of customers. This circumstance is called market segmentation. Consumers have different needs and interests. Firms have to differentiate products according to customers’ need in order to satisfy all clients. One cannot imagine that one product can meet all customers’ demands. However, avoiding mass marketing and focusing only on specific group of customers is significant. This process consists of three elements, which are segmentation, targeting, and positioning (Hale, 1996). Transforming demand and need of customers into marketing mix, which comprises of product, price, place, and promotion at the maximum satisfaction is the challenging job. It is vital to provide well-defined and large enough segmentation. The successful position of products depends on how well companies are able to offer more preferable products than their competitors.

Evidence indicates that there are four standards for effective segmentation:

Identifiable: Ability to determine

Viable: Enough quantity of customers which share the same interest in order for firms to get profit

Merchantable and governable: Easy to create sales and promotion

Static: Remain stable to carry out an activity

There are various types of segmentation, such as geographic segmentation, distribution segmentation, media segmentation, price segmentation, demographic segmentation, time segmentation, and psychographic segmentation (Treacy & Wiersema, 1993).

McDonald’s segments its customers based on both demographic and psychographic factors. Demographic segmentation can be defined as gender, age, income, and education level, while psychographic segmentation is based on customers’ lifestyle, attitudes, values, behaviors, perceptions, beliefs, personality, and interests. The company concentrates on satisfying demand and requirement of target customers rather than making and selling its products. Moreover, it offers products for children, teenagers, women, and men. Children segmentation includes a target audience starting from a newborn infant to an adolescent aged 14. In this segment, products will be produced based on the nature of tastes and preferences. McDonald’s segments’ customers are classified by demographic principle. It involves children, youngsters, women, men, relying on preference and style of everyone in that segmentation (Narver & Stanley, 1990).

After the market segmentation was discovered, firms got alternatives regarding decision about a group of customers that they will target. Firms can target only one segment with one brand of product, or provide different segments with one brand of product, or offer each customer groups with different brands of products. The choice of entirely targeting specific market is not always suitable. The successful company such as Body Shop targets only one segment, which is well-determined. Therefore, it can strongly enhance the appeal of products. McDonald’s major customers are young people aged between 18 to 45 years. The range of target customers was expanded into all ages of both female and male customers. 

Positioning is the processes of making customers perceive its products in their minds. Customers’ demand of selected group has to transform into marketing mix, product, price, place and promotion. It is essential, regarding to the fact how customers perceive and position the products in their opinion relatively to the rivals. Sometimes, customers do not sense the correct image of the brand. The uniqueness of the brand is the main factor that leads to success. Positioning can be defined through various factors. It is essential for customers to make judgment and selection from them. The key factor in selecting a grocery store can be defined by price, the possible parameter in choosing a hotel can be made by level of service, the major element in buying electrical device, such as computer, can be chosen from quality and reliability. Some customers perceive that H&M provides cheap products relatively to its quality. It means that McDonald’s positioning is still unclear to some customers, since they understand the company in the wrong direction. Moreover, some customers do not know what the full name of the company is.

It is vital to create a strong brand, which provides competitive advantage to the corporation. Customers should perceive that McDonald’s offers fashion and quality products at the best price. Its merchandises are always updated. In addition, new items are always available. Website is one of the communicative tools that strengthen its brand. Moreover, online shopping is used to convey the business concept and induce customers to come to stores, and purchase products online or by catalogue.

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McDonald’s: Company Analysis, Essay Example

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Introduction

McDonald’s has revolutionized the way in which people from all over the world eat fast food. When thinking about the success of the McDonald’s it is equivalent to thinking about the American Dream. The McDonald’s franchise was not the first, but it has been the premier example of a successful business model that started from just a single-drive in food place by a pair of brothers. McDonald’s has grown to have over 30,000 locations within over 100 countries. The McDonald’s franchise has followed the standards of innovation, consistency, and resiliency.

There have been roadblocks and challenges along the way, but for the most part McDonald’s has seemed to weather the storms. Their business strategy entails acknowledging the challenges from external and internal sources and commandeering a way to stay on top of the issues when they service. This following business analysis is to provide a critique overview of McDonald’s history, their business strategy, their internal and external environment, and examine the driving forces behind McDonald’s success. This information along with their successful financial statistics will allow the paper to see into the future 40 years ahead in determining if the company will sustain their success, and their impact on the environment. A strategic plan will be develop to keep McDonald’s as the market leader and ahead of their competition in the future.

McDonald’s is considered one of the first pioneers of the fast food industry. It began when Patrick McDonald opened “The Airdrome” in California at 1937. After three, years his two sons, relocated the entire building and opened the restaurant with a different name “McDonald’s Bar-B-Que Restaurant. It was a regular drive-in featuring an extensive menu and car hop service. The company was founded by brothers Maurice and Richard McDonald. The McDonald’s brothers opened their first McDonald’s restaurant located in San Bernardino, California in 1948. At the time, the menu included hamburgers, fries and milkshakes. In 1954, the two brothers met with Ray Kroc, a 52 year old Multimixer salesman, who was impressed with their company and decided to pursue them nationwide (McDonalds, 2013). The biggest event at that time in 1960 was the announcement that McDonald’s has sold more than 100 Million more hamburgers in more than 100 restaurants in America, and opened up the Hamburger University in 1961. When students “graduated” they received a Bachelor degree of “Hamburgerology”.

The Business started to develop, and in 1967, McDonald’s starts the business internationally. Therefore, nowadays we can see McDonald’s restaurants in 119 countries around the world. McDonald’s changed history with creating the first Drive-thru. The first drive-thru restaurant was opened in Sierra Vista, Arizona. The local army fort where there was no shortage of solider were usually not allowed to leave their vehicle wearing their army fatigues. In order for McDonald’s to continue to serve them, they solved this problem by introducing a new service “drive-thru”. The Drive-thru became one of most successful implementation in services field.

From this innovation in their fast food service, McDonald’s started to expand the business at a rapid pace. In 1963, the Ronald McDonald clown debuted as the spokesperson (clown), while McDonald’s sold their 1 billion number of burgers. The Big Mac introduced in 1968 was an instant hit, soon after; the famous frozen French fry was also introduced. To meet the needs of workingwomen the Happy Meal was introduced in 1979; the meal included a burger, fries, a soda and a toy. By June 1993, McDonald’s had 2,576 companies operating, and had over 9,000 franchises. In over 60 countries, they had over 1000. In the United States daily there were over 18 million people visiting a McDonald’s location.

Developing Business Strategy

At the time, McDonald’s had the second biggest brand recognition of any global brand. They had a high brand awareness with a $1 million advertising budget dedicated to the company. They introduced the new ad campaign in 1991, “Great Food at a Great Value,” that was successful in promoting productive value-meal combinations. In 1992, they followed up with their largest outdoor advertising campaign by a single brand. Their advertising messages focuses on customer satisfaction and value. Due to their increase brand awareness it was particularly pertinent to McDonald’s as many customers that were buying impulsively, and would select the McDonald’s locations out of a manner of convenience. An estimated 28% of the company revenues were obtained from their franchise fees. This amount was based on the percentage of sales gathered to cover the corporate services costs that included R&D and centralized marketing research. Now over 70% of McDonald’s restaurants are franchises. McDonald’s usually placed businesses in new countries aligned with company-owned restaurants that are located capital cities. There are franchised after they have well been established.

To attract more mature customers the company launched its Arch Deluxe in 1996, but the low-fat burger fell down. In 2001 subway surpassed McDonalds as a fast-food chain with 148 more stores than McDonalds, causing McDonalds to announce its first ever quarterly loss. The coffee based specialty drinks were successfully launched in 2006. In 2012, McDonalds sustained to emphasize beverages, value, breakfast, and traditional core favorites. They expanded the McCafé beverage offerings with the Chocolate Chip Frappé and Cherry Berry Chill. McDonald’s has expanded the coffee business offering over 1,600 McCafé locations, which in different countries such as Europe have different areas that are normally being located inside the restaurants that provide specialty coffees, desserts and snacks. In addition, McDonald’s has increased their convenience and accessibility, and with extended operating hours, self-order kiosks, optimized drive-through, and opened over 250 new restaurants.

In 2010, Don Thompson was elected and continues to be the president and CEO of McDonald’s, currently one of the world’s largest food service companies. McDonald’s Corporation franchises and operates McDonald’s restaurants that provide menu at different price points providing value in 119 countries. McDonald’s customer-focused Plan to Win (“Plan”) offers a common framework for a global business while also allowed for local adaptation. From the implementation of various initiatives surrounding the five pillars of McDonald’s: Plan, People, Products, Place, Price and Promotion.

McDonald’s has improved the restaurant experience for customers globally and grown worldwide comparable sales and visitor counts in each of the last nine years. As of December 31, 2012, there were 34,480 restaurants in 119 countries, 27,882 were franchised or licensed that included 19,869 franchised to established franchisees. There are over 4,000 licensed to developmental licensees and over 3,000 licensed to foreign affiliates that are located in Japan. While McDonald’s operates over 6,500. (McDonald) All restaurants are operated either by the Company or conventional franchisees fall under the franchise arrangements, and the developmental licensees and foreign affiliated markets are under the license agreements. The franchises that fall under the conventional franchise arrangements contribute a measure of the capital required by investing initially in the seating, equipment, signs, and decoration of their restaurant businesses. They have helped by reinvesting into the company over time. Modernizing the customer experience continued through McDonald’s grand remodeling approach, which provides latest restaurant designs and retailing efforts. The enhanced appearance and functionality of McDonald’s restaurants, which provide a more relevant experience for customers. In 2012, there were over 900 existing restaurants remodeled, the adding drive-thru capacity to attract additional guest counts.

Their Financials are continually improving:

Internal Analysis

McDonald’s brand mission statement is “To be our customers’ favorite place and a way to eat.” McDonald’s global processes have been aligned around a global strategy called the Plan to Win centering on the five factors of an exceptional customer experience: Products, People, Price, Place, and Promotion. McDonald’s has stayed dedicated to improving their operations and enhancing their customers’ experience. (McDonald’s) This mission includes becoming the first company for people in each local area independently in location. In McDonald’s, there is a strategy named “Plan to Win” since 2003. It exists in the field till now, and it forced McDonald’s to have 32 months of international, comparative, and productive sales which is the longest streak in the last 25 years. McDonald’s has had a success which lies generally above the industry average growth. To maintain the excellent service to all customers and continue to attain success with a profit through strengths such as McDonald’s process innovation and technology. Their vision refers to exceptional quality, cleanliness, high quality service and excellent value in customer service.

McDonald’s company states that their values in business are the corporate responsibility of the company. Both factors work together with independent franchisees and suppliers in order to achieve a maintainable future not only for the company but for all the surrounding communities. McDonald’s strong values having helped them to become the success they are, and how it is incorporated into their daily routine. The one the primary cores of the McDonald’s values are customer satisfaction. One of the reason for McDonald’s business are the customers. They are trying to explain the admiration by serving a high quality food and excellent service. McDonald’s strive to achieve a welcoming environment, and are committed to the people who are working for them. McDonald’s maintained a well-trained team with intercultural experiences and diverse backgrounds that are a part of their success.

The business model which contains the “three-legged stool” (suppliers, operator and employees) as the primary foundation for developing the business globally. The most prominent is to keep the balance between those “stool’s legs”. Ethics is also one of the values. McDonald’s tries to conduct their business with fairness, honesty and integrity. McDonald’s states that: “We are individually accountable and collectively responsible”. (McDonald’s). This necessitates not only focus on attainment more money but also on customers and the health of the whole system. The changing environment, customer, employee and systems need lead to the McDonald’s progress and innovation as well.

Their business strategy is rooted in their care paid to their customers and customer satisfaction. The customer service philosophy is talking about to retaining customer loyalty and dedication is the central core. If the company do not incorporate the principles of customer service to serve their customers, a company cannot survive. Customers will continue support the company products or services if the company cares about customers, their comfort and concerns. Adam Smith’s legendary Wealth of Nations (1776) said that customer service is the essence of the basic principles of competition. If one company wants to succeed, the company needs to comprehend what kind of products or services customers need at different times. If not the customer will lead to other companies understand what they want to satisfy their needs.

The products produced can be separated into several groups: Hamburgers, Chicken, pork and fish products. They have French fries, Soft drinks, and healthy alternatives such as salads and desserts. Their biggest seller are their hamburgers. They have Big Mac, Double Cheeseburger, McDouble, Big N’Tasty, etc. The most edible items on the menu with its signature taste are the French fries. The main reason for this is that no matter what other product the customer is willing to take, but in every set the first salads were added to the menus in 1985. Currently there are more, and more people are concerned about their health so, McDonald’s puts its all efforts to gain more and not lose any of customers throughout the world. Coca Cola is the biggest soft drink supplier to McDonald’s, followed by specialty coffees, and Hot and iced tea that is delivered by S& D Coffee in the US. McDonald’s also offers hot chocolate, assorted juice and other local beverages such as milkshakes are available in different markets all around the globe. The desserts that McDonald’s offers includes such items as ice-cream (McFlurry), McDonald-land cookies, Freshly Baked cookies, Pies, Cinnamon melts, the fruit and yogurt parfait, smoothies and other items which depending on the country and region.

External Analysis

The fast food restaurants industry is just one of the numerous components of the extensive food services listing. The total estimated revenue from this sector is about $1.86 trillion (US dollars) during the year 2012. Around $706.7 billion is the estimated earnings in 2012. This contributes to around 38% of the food service sub-sector of the world. The revenue from the industry is expected to grow at an estimate of 3.2% in 2012. On a global level, the fast food industry plunged down because the global recession arose and the unemployment rate hit high in the United States and many other countries. To keep the market position and to keep up the idea, some of the fast food operators set up promotional activities to attract customers and also shut down some of the underperforming stores (Smith, 2012). The recovery of McDonald’s after the global financial crisis is at a surprising pace, and the rate in sales growth continues to grow. One of the biggest fast food restaurant in the world announced that it is still gaining market shares from its competitions. The high rate of unemployment does not alter telling people to spend money and eat at McDonald’s. It has suggested and improved breakfast menu with the new frappe drinks. It was the critical success factor in recovering after the huge losses. The surprise of industry execs, McDonald’s reported a growth of 6.0% worldwide while the comparable store sales growth was almost 3.8%. The company is forecasting the further expansion of 5-6% worldwide. The chart below shows the slowdown experience in 2008.

Though the convenience that is provided by fast-food retailers which was valued by the growing numbers of travelers and families in the first part of the 90’s, the recession and fierce competition had produced a decline in growth and decreasing profits for the fast food sector. Predominantly the most hard-hit were independent restaurants that found it problematic to compete with the value-pricing strategies of the burger chains’ and their powerful advertising budgets. As a result, independents encompassed only 56% of all the restaurants in the U, S Sales declined in 1993, down from 63% in 1986, the restaurant industry in fact indicates that saturation in the “limited menu” portion of the restaurant industry was forcing growth-oriented chains to expand overseas and consider alternate outlets domestically. The growth in the restaurant industry includes the: total sales growth for this section during 1990–1991 that was only 0.3% in the U.S. Customer satisfaction, nutrition, and the price which seemed to form the basis for competition nationally. Even though all of the rapidly growing restaurant chains have pursued various strategies. “For example, Rally’s advertised “We get it right or you get it free,” Boston Chicken emphasized nutrition by roasting, steaming and baking its dishes, and Checkers, a double-drive-through burger chain, offered made-to-order burgers at lower prices. Drive-through window sales industry-wide reached $25 billion in 1992.” (GlobalENS 3)

(WikiInvest)

One of the problems that the fast food industry is facing is the criticism about the product, for being high in fat content, increase in body mass index (BMI) and putting on weight. A number of books and documentaries have increased awareness among the public about the harmful consequences on one’s health. The various articles get the health conscious consumers skeptical towards fast food and look for other resources to meet their likes. The rise in commodity prices has significantly affected the fast food industry. The cost of food and beverage inputs comes up to approximately 33% of costs, and higher cost of other raw materials has drastically reduced the profit margin. Due to fierce competition from other players in the market, trying to build a price increase is not possible either. Instead, many of the fast food franchises promoted meals at a remarkably affordable price, affecting their limits making plenty.

Situational Analysis (PEST Analysis)

Demographics will appear where most of your potential customers live their age, gender, needs, likes and dislikes. It appears that McDonalds has been successful in creating and fulfilling a need for just about everyone and appears to have hit on every demographic.

• Daily traffic at McDonald’s is 62 million people, more than the population of Great Britain
• McDonalds feeds 68 million people per day. That is similar to 1% of the world’s population.
• McDonalds hires over a million workers in the U.S. every year with over millions of employees worldwide. (Business Insider)

The socio-cultural aspect of McDonald’s is rooted in their 27 billion in revenue each year that has made it the 90th largest economy in the world. $8.7 billion of this revenue comes from the franchise stores only, making McDonald’s richer than Mongolia. One in every worker in the United States has been employed by McDonalds. As for entertainment, McDonalds offers a recreation area for kids with slides and games, and free WIFI for adults. Parents get a break as their children eat a happy meal and play in the play area. McDonalds is an equal opportunity employer. Male, female, young and old, different nationalities and even handicapped people can be found working at McDonalds.

The political and legal aspect of McDonald’s takes into account the global offerings that they must adhere to. Although global consumer confidence continues to negatively affect the overall sales in retail for the food industry, yet McDonalds is still outperforming the market as it has grown its market share. The other significant contributors to comparable market sales were the U.K. and Russia. Despite ongoing economic challenges, McDonald’s priority remains: growing the overall business by balancing a strong focus on their unique value offerings, endless premium product innovation, and new products. In APMEA, comparable sales rose 1.4%, and approximate visitor counts rose 2.2%, despite a challenging year of economic pressures, partly due to Japan’s uneven recovery and the slower economic growth of China. Several problems have been due to economic uncertainty and government-initiated austerity measures implemented in many countries.

McDonalds has worked hard to streamline the customer experience through their major remodeling initiatives, which offer modern restaurant designs and retailing efforts. The enhanced appearance and functionality of the restaurants delivers a more enjoyable experience for the customer. Over 900 existing restaurants were remodeled during 2012 with the most adding drive-thru capacity to attract additional guest counts. McDonalds has also extended the accessibility of more convenient locations with extended hours and efficient drive-thru service. More than half of the restaurants use some form of various order points to maximize drive-thru capacity, including 1,500 with hand-held order takers to help improve customer service times. As mentioned earlier McDonalds also offers free WIFI and television to its customers. McDonalds tries to invest in the latest technology.

McDonalds incorporates a long-term, average annual constant currency, financial goal to measure business as they continue to build the business. McDonald area has also delivered strong results for their shareholders ever since its inception. McDonald’s long term, average annuals constant currency financial targets are: 1. Statewide sales growth of 3% to 5%, 2. Operating and revenue growth of 6%, and 3. POIC in the high teens. McDonalds strives to keep its prices affordable and uses a cost low advantage strategy to be competitive in the food industry. McDonalds also recognizes their responsibility to give back to the community locally and globally. In 2012 McDonalds sponsored the 2012 London Olympics. The McDonald house was built to help families and children that are dealing with cancer. Globally, McDonald’s uses a customer focused plan that provides a common framework for a global business and continues to prepare for local adaptation. Multiple initiatives encompass the five pillars of the McDonald plan. The five pillars include—People, Products, Place, Price and Promotion, each incorporated to enhance the restaurant experience for customers worldwide. This idea has grown worldwide comparable sales and visitor counts in each of the last nine years. McDonald’s restaurants are located throughout the entire world.

Environmental Impact

Environmentally, McDonald’s has strived to continue their success in trying to in waste reduction, and being a leader in protecting the environment. Since 1993, Michael Quinlan, McDonald’s CEO, felt pretty confident about his company’s environmental performance. McDonald’’ formed a partnership with the Environmental Defense Fund (EDF), which has helped to win over the approval of the customers and its efforts to reduce waste, combined with its highly-publicized move from polystyrene “clamshells” to paper-based sandwich wraps. It has helped to repositioned McDonald’s as the market leader, and purport the image in protecting the environment. In 1994, however, there was another problem with a nonprofit environmental group, this groups called the Beyond Beef Coalition, aimed at McDonald’s in a bigger plan to reduce beef consumption. The environmental complaints this time held to launch an attack at McDonald’s that did not criticize supplementary factors of their business but, rather, aimed at their central products and growing markets. “Quinlan did not want this campaign to devalue the reputation the company had solidified through the EDF partnership.” (UMich 5) It has been proved that as income rises, so does meat consumption. Take in for example the Koreans in 1975 and Japan that red meat consumption doubled as the population has grew in Asia so has the meat consumption. As more people around the world are adopting an American Style diet, they are consuming meat at a faster pace than the world’s farmers are able to produce.

The Beyond Beef Coalition saw the expansion of the “cattle culture” to the developing world as one of the greatest threats to the global environment. “The Coalition was comprised of individuals and organizations involved in environmental protection, animal rights, public health, and world hunger. “ (UMich 4) Similar to the Environmental Defense Fund, this groups of activist aimed at McDonald’s for its business strategy due it to being the industry leader, and one of the largest buyers of beef throughout the world. The goals of the Coalition were: to reduce individual beef consumption in the “U.S. by at least 50%; to replace beef in the diet with organically raised grains, legumes, vegetables and fruits; to change current cattle-industry practices, and to promote humanely and organically raised beef as an alternative for those who continue to include some beef in their diet.” (UMich 6) The main aim for the McDonald’s campaign was to notify at least 1 million McDonald’s customers about beef’s negative effect of on the environment through a large campaign around their thousands of McDonald’s locations around the United States. The volunteer activist group, Beyond Beef protested outside of a McDonald’s establishment on April 17, 1993 to leave leaflets and children’s literature that informed passersby’s of McDonald’s environmental costs with beef. The activist groups collect names for petitions in an effort to assist individuals to reduce their beef consumption by 50%, and to encourage McDonald’s to make a vegetarian component to their U.S. menu. By doing so they are also able to deliver 25% of advertising to the new item. According to research conducted by the University of Michigan, there has been no other commercial entity such as McDonald’s that has been responsible for the encouragement of prime beef consumption. In the United States alone in their over 9,000 restaurants in addition to tens of thousands around the world, McDonald’s proudly displays they have served over 85 billion hamburgers and counting. (UMich 5) According to them the real cost of beef is:

* Tens of millions of cows slaughtered;

* Trillions of gallons of water used to develop their feed;

* Millions of tons of methane, a greenhouse gas, released;

* Millions of acres of public land eroded and destroyed;

* Enough grain fed to cows to produce millions of hungry families with a daily meal. Most McDonald’s patrons are unaware of how their individual decisions as consumers make up to create such a devastating global consequences.

The Future (SWOT Analysis)

From their most recent financial statistics, McDonald’s has made in 2012 $27.56 billion in revenue, and $5.46 billion in profit. They have over 1.8 million employees in 2013, and they have over 34, 000 local restaurants that serve 69 million people in over 119 countries on a daily basis. (McDonald’s) Their main competition now is Subway, Wendy’s, Yum! Brand (Jack in the Box, etc.) Inc., and Burger King. Using the SWOT analysis, we can see that that are several strengths that include that they are the market leader, and they have the largest fast food market share in the world. They have better brand recognition than most other global companies that are valued at over $40 billion. McDonald’s is the one of the most recognized brands throughout the world. They have an annual $2 billion budget allocated for advertising, and is able to adapt their food menus to match the local community. In an effort to strengthen their brand they have partnered with notable brands that include Heinz ketchup, Dannon Yogurt, Pepsi and Coca Cola, and others that add value to the corporation.

However, there are several weaknesses that McDonald’s must overcome in the future to sustain their success. These factors include the negative publicity they contrived from critics that heavily criticized their unhealthy food choices that are targeted towards children let alone the rest of their demographics. McDonald’s helps to contribute to the problems of obesity that has expanded to be a factor around the world. The increase in introducing healthier food choices could potentially lower McDonald’s popularity as competition will soon spring up to offer better healthier food alternatives. While customers are their focal point, they also have an increasing number to employee turnover, as employees are low paid and low skilled. Yet the major problem with McDonald’s is their low differentiation from other fast food competitors, and opts to compete based on price than product differentiation.

In developing a strategic plan for the future, one must incorporate all of these factors as they will continue to be a problem and strength in the far future. Their current market share is broken down:

The long term strategy must recognized that the external factors will continue to change. McDonald’s must thus constantly monitor and erect the most efficient and effective actions to taken into response to the situations. McDonald’s needs to continually be involved in government related programs, the image created can be further supplemented by the active link to the political system. By engaging in programs that promote international growth, contribute to employing more national citizens, and maintaining a positive relationship with the government, McDonald’s will continue to maintain its’ market share. McDonald’s needs to comply and cooperate with various resources that can be used to implement new government programs that benefit society. Changes in economic factors such as the price of raw materials have effects on the profit margin. McDonald’s needs to take control of their suppliers, in becoming self-sufficient, they are able to forecast the changes in the deficit, and minimize the proverbial dip in profit margin. The growing concern in health will continue to be a critical component as society progresses. The changes in health and factors will continue to change. If America continues to eat the way they have been doing, the factors of chronic diseases will be a primary concern for the customer base. McDonald’s will continually invest in Research and Development in order to develop more products that create a neutral balance that benefits those that are looking for healthier alternatives for consumers. This change will help to improve McDonald’s image overall, and win the confidence of the general consumers, which will continue to lead to a better profit margin.

The values estimated for the next five years includes an increasing amount of income, focus on the changing trends and the amount of attention being paid to placing healthier choices on the menu. These include the strategy of heaving a salad and fruit bar for those that are looking for healthier choices. Also placing vegan choices on items, which can be served in a like manner for burgers and fries, but with vegan ingredients. The threats to new entrants have been high as there are certainly no legal barriers that have kept competition from entering the industry. Since McDonalds is already an established company and in 40 years will continue to grow they will enjoy the luxury of maintaining a large amount of market share with new restaurants in developing countries. By offering menu items at a value price, more consumers will continue to demand McDonald’s products. While many of the competition have tried to imitate, by continuing to use quality products people will continue to be the preferred Choice. As evident in this financial chart in the next five years, the income, sales, profits, and margin will continue to improve. By the year 2043, McDonald’s will be the largest franchise in the world. They will employee the most people around the world that contributes to countries GDP, and push for more products on their menus that cater to all types of food choices.

McDonald’s could be on pace to be the first trillion dollar company, and will be able to use improved technology to support its millions of customers that will no doubt still take to consume their trillions of burgers that will be served, on a daily basis. McDonald’s will still need to provide a strategy of sustainability that will help to reduce their environmental impact on beef and waste reduction with smaller packaging, better recycling alternatives, and using more organic food choices to cut down on water consumption. The feasibility of this long term strategy working for McDonald’s is extremely high. Experts have agreed that the type of strategy that McDonald’s currently implements has allowed them to be a public mainstay that more and more companies wanting to invest and buy franchises to place on every corner. Potentially with McDonald’s adhering to these type of strategies used they will be one of the first companies to make a trillion dollars, and can possibly help developing companies by employing more and more people. It can also cross over to providing better training and educational classes that will help with low skilled workers, and helping them to compete with more people around the world. McDonald’s will need to invest in other companies such as competitors like Yum! Brands, that has a diverse portfolio. By investing they will be able to add and grow to their customer base and their profit margins. This will set up for McDonald’s to remain a success beyond forty years from now.

Works Cited

“C- Case Sustaining McDonald’s Environmental Success.” Pollution Prevention in Corporate Strategy . 1995. Web. 10 Dec 2013. http://www.umich.edu/~nppcpub/resources/compendia/CORPpdfs/CORPcaseC.pdf

Gus Lubin, M. B. “19 Facts About McDonald’s That Will Blow Your Mind.” Business Insider . 2012. Web. 10 Dec 2013. www.businessinsider.com/19-facts-about-mcdonalds-that-will-blow-your-mind-2012-4?op=1

Kowitt, Beth. “Why McDonald’s wins in any economy.” CNN Money . 23 Aug 2011. Web. 10 Dec 2013. http://management.fortune.cnn.com/2011/08/23/why-mcdonalds-wins-in-any-economy/

“McDonald’s Investors. Company profile” McDonald’s . 2013. Web. 8 Dec 2013. http://www.aboutmcdonalds.com/mcd/investors/company_profile.html

“McDonald’s Corporation .” 4-Traders . 2013. Web. 10 Dec. 2013. http://www.4-traders.com/MCDONALDS-CORPORATION-4833/financials/

“Making a difference one family at a time .” McDonald’s . 2013. Web. 10 Dec 2013 http://www.mcdonalds.com/us/en/our_story/our_communities/rmhc.html

“Our History.” McDonald’s. 2013. Web. 10 Dec 2013. http://www.aboutmcdonalds.com/mcd/our_company/mcdonalds_history_timeline.html

Rosenbaum, Eric. “McDonald’s: More than a trillion served, by robots,” CNBC . 8 Dec 2013. Web. 10 Dec 2013. http://www.cnbc.com/id/101253344

“SWOT Analysis.” Strategic Management Insight. 10 Mar 2013. Web. 10 Dec. 2013. http://www.strategicmanagementinsight.com/swot-analyses/mcdonalds-swot-analysis.html

“10-K Form McDonald’s Corporation.” United States Securities and Exchange Commission . 2013. Web. 10 Dec 2013. http://sec.gov/Archives/edgar/data/63908/000119312511046701/d10k.htm

“Stock:McDonald’s Corporation (NYSE:MCD). “Wikinvest.” 2013. Web. 11 Dec. 2013. http://www.wikinvest.com/stock/McDonald%27s_Corporation_(NYSE:MCD)

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120 McDonald���s Essay Topic Ideas & Examples

Inside This Article

McDonald's is one of the most well-known and beloved fast food chains in the world. With its iconic golden arches and delicious menu items, McDonald's has become a staple in many people's diets. If you're a student looking for essay topics, why not consider writing about McDonald's? To help you get started, here are 120 McDonald's essay topic ideas and examples:

• The history and evolution of McDonald's
• The impact of McDonald's on the fast food industry
• McDonald's marketing strategies and tactics
• The role of McDonald's in popular culture
• The controversies surrounding McDonald's food and business practices
• McDonald's global expansion and international success
• The McDonald's menu and its evolution over time
• The nutritional value of McDonald's food
• McDonald's sustainability and environmental initiatives
• The influence of McDonald's on children's food preferences
• McDonald's competitive advantage in the fast food industry
• The social responsibility of McDonald's as a corporation
• The effects of McDonald's advertising on consumer behavior
• McDonald's partnerships and collaborations with other brands
• The cultural significance of McDonald's in different countries
• The role of McDonald's in shaping American eating habits
• McDonald's response to changing consumer preferences
• The impact of McDonald's Happy Meal on children's health
• McDonald's efforts to offer healthier menu options
• The role of McDonald's in promoting diversity and inclusion
• McDonald's contribution to local communities through charity work
• The effects of McDonald's pricing strategies on consumer spending
• McDonald's use of technology in its operations and customer service
• The growth of McDonald's delivery services and online ordering
• The impact of McDonald's on small businesses and local food markets
• McDonald's response to the COVID-19 pandemic and its effects on the restaurant industry
• The future of McDonald's and its potential for growth and innovation
• McDonald's customer loyalty programs and rewards
• The influence of McDonald's on food trends and culinary innovation
• McDonald's corporate culture and employee satisfaction
• The effects of McDonald's presence in low-income communities
• McDonald's efforts to reduce its carbon footprint and promote sustainability
• The role of McDonald's in the fight against childhood obesity
• McDonald's partnerships with celebrities and influencers for marketing campaigns
• The impact of McDonald's on public health and nutrition policies
• McDonald's collaborations with local suppliers and farmers
• The effects of McDonald's advertising on children's food choices
• McDonald's use of social media for marketing and customer engagement
• The influence of McDonald's on food packaging and waste management
• McDonald's response to criticism and backlash from consumers and activists
• The role of McDonald's in the global economy and job market
• McDonald's efforts to improve its animal welfare practices
• The effects of McDonald's franchising model on small business owners
• McDonald's partnerships with sports teams and events for sponsorship
• The impact of McDonald's on urban development and city planning
• McDonald's collaborations with local artists and designers for branding
• The influence of McDonald's on the fast casual dining trend
• McDonald's use of data analytics and customer insights for business growth
• The effects of McDonald's menu changes on customer loyalty
• McDonald's efforts to reduce sodium and sugar content in its food
• The role of McDonald's in promoting food safety and hygiene standards
• McDonald's partnerships with nonprofits and social enterprises for community impact
• The impact of McDonald's McCafe on the coffee industry
• McDonald's collaborations with tech companies for digital innovation
• The effects of McDonald's menu pricing on consumer spending habits
• McDonald's role in supporting farmers and sustainable agriculture
• The influence of McDonald's on urban planning and design
• McDonald's partnerships with food delivery apps for convenience
• The impact of McDonald's limited-time menu items on customer traffic
• McDonald's use of artificial intelligence and automation in its operations
• The effects of McDonald's branding and packaging on consumer perception
• McDonald's role in promoting diversity and inclusion in the workplace
• The influence of McDonald's on food culture and eating habits
• McDonald's efforts to reduce food waste and promote recycling
• The effects of McDonald's employee training programs on job satisfaction
• McDonald's collaborations with local schools and community centers for education
• The impact of McDonald's mobile app on customer engagement
• McDonald's partnerships with government agencies for public health initiatives
• The role of McDonald's in disaster relief and emergency response efforts
• McDonald's efforts to promote gender equality and female empowerment
• The effects of McDonald's customer loyalty programs on repeat business
• McDonald's collaborations with celebrity chefs for menu innovation
• The influence of McDonald's on the fast food industry's labor practices
• McDonald's role in promoting healthy eating habits and lifestyle choices
• The impact of McDonald's breakfast menu on morning traffic
• McDonald's partnerships with universities and research institutions for innovation
• The effects of McDonald's drive-thru service on customer convenience
• McDonald's use of virtual reality and augmented reality for marketing
• The role of McDonald's in supporting LGBTQ rights and advocacy
• McDonald's efforts to reduce plastic waste and promote sustainability
• The influence of McDonald's on consumer trust and brand loyalty
• McDonald's collaborations with food bloggers and influencers for promotion
• The impact of McDonald's marketing campaigns on brand awareness
• McDonald's partnerships with entertainment companies for cross-promotion
• The effects of McDonald's menu changes on customer satisfaction
• McDonald's use of mobile ordering and payment for convenience
• The role of McDonald's in promoting fair trade and ethical sourcing
• McDonald's efforts to support local farmers and small businesses
• The influence of McDonald's on food industry regulations and policies
• McDonald's collaborations with food banks and hunger relief organizations
• The impact of McDonald's packaging redesign on environmental sustainability
• McDonald's role in promoting diversity and inclusion in its workforce
• The effects of McDonald's social media presence on customer engagement
• McDonald's partnerships with food delivery services for expansion
• The influence of McDonald's on consumer perceptions of fast food
• McDonald's use of customer feedback and surveys for improvement
• The role of McDonald's in promoting community engagement and volunteerism
• McDonald's efforts to reduce food allergies and promote allergen awareness
• The impact of McDonald's breakfast menu on morning routines
• McDonald's collaborations with local artists for restaurant design
• The effects of McDonald's mobile ordering app on customer convenience
• McDonald's role in promoting food education and culinary skills
• The influence of McDonald's on consumer behavior and preferences
• McDonald's partnerships with environmental organizations for sustainability
• The impact of McDonald's menu pricing on customer loyalty
• McDonald's efforts to reduce its carbon footprint and promote clean energy
• The effects of McDonald's marketing campaigns on brand perception
• McDonald's collaborations with sports teams for sponsorship
• The role of McDonald's in promoting healthy eating habits and lifestyle choices
• McDonald's partnerships with nonprofit organizations for social impact
• The influence of McDonald's on food industry trends and innovation
• McDonald's use of data analytics for customer segmentation and targeting
• McDonald's collaborations with local farmers for sustainable sourcing
• The influence of McDonald's on consumer trust and loyalty
• McDonald's partnerships with food bloggers for promotion
• McDonald's efforts to reduce plastic waste and promote environmental sustainability.

With these 120 McDonald's essay topic ideas and examples, you'll have plenty of inspiration to write a compelling and informative essay on this iconic fast food chain. Whether you're interested in the history of McDonald's, its impact on the fast food industry, its marketing strategies, or its social responsibility initiatives, there's a topic here for you to explore. Happy writing!

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Food Industry: McDonald’s Company

Introduction.

McDonald’s has impacted the food industry within the global capacity. The company can be credited with the development of the revolutionary idea of fast-food. Today, the firm is one of the largest fast-food chains across the world. Currently, it has over 30,000 restaurants serving around 46 million customers in over 110 countries daily. In 2019, the firm reported revenue of $21.1 billion, illustrating how well it is doing in the market.

McDonald’s continues to implement changes to increase its market share in a highly competitive market. For example, in 2018, it cut out non-natural ingredients from its seven classic burgers. The case of McDonald’s can be analyzed in different approaches, such as the kind of market the company belongs to, price elasticity of demand for its goods and services, closest competitors, macroeconomic environment, and close substitutes.

McDonald” Income Statement (2019)

Market McDonald’s Market Segments

McDonald’s franchise operates in an oligopoly market due to many features. Oligopolistic markets are characterized by price rigidity and were that impacts McDonald’s pricing strategies. One reason why the firm operates in oligopolistic markets is that the fast-food sector consists of a small number of larger sellers. Therefore, every seller in impacts other sellers influencing the market. The company is considered an oligopoly since it is one of the few large firms offering similar products and dominating the fast-food industry. McDonald’s, along with its major competitors, are under the economies of scale and operating in a market characterized by many barriers of entry. The business has a long-run average total cost that declines if its operations or its size increases. Therefore, the above factors indicate that McDonald’s operates in an oligopoly market.

Price Elasticity of Demands for Goods that McDonald’s Sells

McDonald offers both fast foods and nonalcoholic beverages; the price elasticity is under one. The analysis of its price elasticity also factors food away from home, further bringing the elasticity closer to one. Overall, the price elasticity for its fast food is between 0.7 and 0.8, indicating that the demand for the firm’s food and beverages is highly sensitive to price changes. The fast-food industry is characterized by constant price fluctuations, mainly due to high competition. If the price of a specific product increases by one percent, the projected decrease in demand will be between 0.7 percent and 0.7 percent. Hence, the price elasticity for food and beverages is highly influenced by constant changes in prices.

The need for the firm’s products is elastic, meaning that price changes affect demand in the short-term. In most cases, the changes in price are the result of the corporation’s decision or uncontrolled regulations, such as tax. Loyal customers cannot reduce their demand rate or shift to alternative products even when the firm changes its price. However, as noted above, its demand is elastic, which poses risks to its market position. The company remains vulnerable to many factors that may influence price changes. For example, there increased concerns about the health of the food products it offers; increased focus on healthy eating habits by many people raises concerns about the firm. Therefore, McDonald’s must consider these factors and develop new solutions to deal with changing the economic and social elements of its customers.

Income Elasticity the Products of the Company Face

McDonald’s offers healthy foods and beverages with demand and supply curves that follow market conventions. For example, a price increase results in high supply, and during this time, demand either increases or decreases. On the other hand, a price increase in products results in demand decline when other factors remain constant. The firm’s customers buy more products when their income increases; for example, the company records more sales during the end months. Demand by customers also decreases during harsh economic conditions and when they lose jobs resulting in having less disposable income.

During such times, the income elasticity is elastic. The income elasticity only becomes inelastic for specific foods, such as burgers. An increase in consumer income will only raise demand to a certain level before the customer opts for other pricier foods that consider to healthier. Hence, income elasticity of demand for McDonald’s products varies depending on price, consumers’ disposable income, and specific food that are unhealthy.

Competitors

McDonald’s is always fighting to maintain changes in demand due to the increased number of rivals. The firm’s most significant competitors include:

Burger King

The Burger King is the most direct rival for McDonald’s with a considerable market share. By the end of 2018, it had over 17,000 locations in over 100 countries. The company recorded an estimated 11 million daily customers from all its restaurants.

Wendy’s

Wendy’s has more than 6,700 locations globally and focuses on similar fast food products as McDonald’s and Burger King: burgers and fries. As of March, this year, the firm had made around $3.7 billion, and its stock was trading at approximately $17 per share. Wendy’s also offers direct competition to McDonald’s, considering the two sell similar products.

Yum Brands has multiple large quick-service restaurant chains, such as Taco Bell, Pizza Hut, and Kentucky Fried Chicken. The firm has over 49,000 restaurants in over 140 countries.

Starbucks ranks as the largest coffeehouse chain globally. It has an estimated 30,000 stores in 76 different countries. In the United States alone, it has over 14,000 stores. The firm offers foods, such as sandwiches as well as coffee and other beverages.

Close Substitutes/Complements

There multiple products that can act as close substitutes or complements for McDonald’s products based on their elasticity of demand. Consumers often go for substitutes when they do not want to buy any of McDonald’s for different reasons, such as price and preference. McDonald’s and Burger King are close substitutes. For example, if McDonald’s offers meals at a higher rate than Burger King, many consumers will opt for Burger King due to the low price. Most of McDonald’s products have complements; for example, Burger King offers Pepsi at a price that is almost the same as the coke provided by McDonald’s.

These two can introduce the case of substitute based on customers’ preferred taste. Since the price of the two soft drinks is almost the same at the two restaurants, some customers will prefer to buy their products at McDonald’s because they prefer the taste of coke over that of Pepsi.

Most of McDonald’s foods and beverages are common among fast-food restaurants; therefore, customers can find substitutes easily at the company’s rivals. For meals, such as burgers, the firm can difference by producing in different tastes and sizes to ensure customers do not find a replacement. Some customers form foods and beverages preferences based on the location of the restaurant due to convenience and brand association. Those who prefer to buy products based on tastes and preferences can easily find replacements at McDonald’s rivals irrespective of location. Therefore, McDonald’s has both substitutes and complements; however, a large portion of its consumers rely on alternatives rather than complements.

Growing Demand for Products

Over the last few years, McDonald has faced many rivals due to the entry of new companies into the fast-food sector. As a result, the overall demand for both foods and beverages has declined. Negative performances due to economic crises have also facilitated the drop in demand. Many customers only have limited disposable income to spend on fast foods. Nonetheless, McDonald’s is still recording marginal growth in demand due to expansion into new markets in different parts of the word (Puleka et al., 2018).

Furthermore, population growth, coupled with investments in emerging economies, such as Brazil and India, has prompted some increase in demand. On the other hand, demand in developed countries continues to decline due to consumer preferences as many people are becoming aware of the health concerns posed by junk food. Health concerns have created negative publicity for the company forcing some consumers to move to its rivals. McDonald’s is considering a change of menu and investing awareness campaigns that inform people about healthy eating habits (Puleka et al., 2018). The firm is now focusing on offering foods that constitute natural ingredients and investing in promotional strategies to new markets as well as retain existing ones.

McDonald’s should focus on more training and development to meet its goals. For example, it should introduce career development and training initiatives even to senior employees to develop their skills that will allow them to cope with labor shortages. These programs will also establish the most efficient working techniques to maximize productivity and facilitate sustainable competitive advantage. The workforce will also be able to work with new equipment and apply innovations. Organizational training represents the foundation of business success. Continuous training of the McDonald’s workforce can improve productivity and reduce operational costs (Puleka et al., 2018). Currently, the firm offers different training programs, including video-training; nonetheless, additional training increases workers’ competencies and productivity.

McDonald’s Labor Force

The human resource of any organization is critical to meeting goals; therefore, it should offer frequent training to improve its competence. The human resource department of McDonald’s functions as the backbone of the firm by hiring the right candidates, adequate numbers, and the right cost to ensure high productivity. The workforce is skilled with the necessary experience and expertise. HRM of the firm offers the staff frequent training to maintain competence. Employees at the company usually receive the initial training that entails skill training in which they are equipped with basic job knowledge for specific positions that can develop further.

The workforce will always require future training to cope with changing business environments characterized by new technologies and changing customer needs. At McDonald’s, ongoing training programs offer a more advanced level of job expertise and knowledge, making the workforce more economical based on productivity. The company should also implement continuous training evaluation programs to ensure the workforce is up-to-date with the latest business demands. McDonald’s requires training and development programs to meet customer needs and organizational goals.

Macroeconomic Environment

McDonald’s operates in an external environment with many risk factors. The firm’s macroeconomic environment demands effective management and decision making to prepare for potential uncertainties. Its PESTEL analysis and management decisions should concentrate on trends that impact the fast-food sector. McDonald’s PESTEL analysis and its potential risks are as follows:

Political Factors

McDonald’s faces many reservations regarding the impacts of government policies and actions in different countries that limit its business operations to reduce profit margins. The most significant external political factors that affect McDonald’s include increasing international trade agreements, changing public health policies, and governmental regulations. Countries such as China and India have rigid laws that make it difficult for McDonald’s to operate profitably. New trade agreements between different countries can influence the brand’s performance either negatively or positively (Pratap, 2018). Political changes, currently taking place among Asian countries, pose many threats to McDonald’s.

Economic Factors

The economic factors are the most essential for corporations operating in the global settings. McDonald’s experiences many economic uncertainties that threaten its brand’s performance. A few years back, the world’s economy experienced a deep recession that affected McDonald’s (Schramade, 2019). Currently, the economy has improved, promoting the firm’s performance (Pratap, 2018). The strength of the dollar also raises uncertainties; for example, a stronger dollar negatively affects McDonald’s profit margins. Therefore, economic forces create many uncertainties that can adversely influence financial performance resulting in a decline in revenue.

McDonald’s Financial Performance 2019

(Ganti, 2019)

Social Factors

McDonald’s should also consider social factors while analyzing its performance. Influential social factors include social trends and lifestyle changes among customers. Consumers often change tastes and eating habits, and it is difficult for the company to predict when such changes may occur. Over the last few years, customers have grown conscious of healthy eating habits forcing McDonald’s to create new menus that suit their preferences. Millennials are more health and price-conscious, two factors that influence the firm’s operations as it has to meet this group’s product needs. McDonald’s currently offers a complex menu that is made of “fat recipes” that many customers do not prefer. The firm needs to create a “slimmer” list characterized by low calories items to meet the demands of millennial customers (Pratap, 2018). It should also focus on identifying the right market segments in society, especially those made of young adults from middle-class families.

Technological Factors

In today’s business world, technology is an essential factor. It enables everything from customer services and sales of products. McDonald’s can invest more on innovation to amplify its brand’s power; for example, the firm can implement technological changes in marketing, sales, advertising, and customer services, which will accelerate performance (Pratap, 2018). Constant technological changes pose many uncertainties; therefore, McDonald’s should keep updated with any new trends to ensure customer satisfaction and remain competitive.

Environmental factors

There has been an increased focus on environmental protection and sustainability. McDonald’s has invested much in creating environmentally friendly and sustainable supply chains and use them to grow the customer base. Consumers tend to prefer brands that illustrate a high level of environmental sustainability and CSR programs (Pratap, 2018). McDonald’s is currently framing its policies to establish itself as more environmentally friendly.

Legal Factors

McDonald’s operates in many countries, with each having unique legal requirements for both local and international businesses. The company is required to operate within laws that may hinder its business performance. The poor state of regulations can result in difficulties in the firm, limiting its capacity to increase productivity. Some countries lack well-development employment laws that may increase turnover rates (Pratap, 2018). Therefore, McDonald’s should be conscious of such laws and be prepared for the development of new business laws that may hinder its performance.

McDonald’s Profitability

McDonald’s can grow its profit margins through different approaches. For example, it only serves one percent of the world’s population. Therefore, it can improve its profits by targeting more markets to increase the volume of sales. The corporation should also consider corporate social responsibility initiatives to build customer trust and loyalty. McDonald’s can also grow its profits by placing itself in an excellent market position that will allow it to cover different market segments defined by consumer preferences.

Maintaining a highly sustainable competitive edge should the firm’s priority. There are many ways through which McDonald’s can sustain its competitive advantage: extensive advertising, capital investment, maintaining a public relationship, and meeting customer needs by offering healthy foods. The company should conduct extensive researches to understand consumer needs and establish the best approaches to build customer relationships that will build trust and loyalty. McDonald’s can further grow profit margins by implementing strategies that allow management of multiple revenue streams, making it easier to sustain its business operations even during economic recessions. Hence, McDonald’s has many avenues it can invest in to grow its net revenue.

The corporation must invest in innovations and research to facilitate the delivery of differentiated services. Technology would allow the firm to extend the restaurant experience beyond McDonald’s facilitate by integrating them with customers’ social lifestyles. It should increase interaction with customers by keeping in touch through social media platforms. It should use its website to keep customers updated with changing menus and allow them to order for foods and beverages online.

Such initiatives will reduce traffic at the restaurant and decrease the workforce cutting operational costs. The corporation should also consider offering customized services, especially to loyal customers. McDonald’s has many areas that it can exploit to increase customer-base resulting in high-profit margins.

Other Relevant Factors

McDonald’s is a multinational corporation that is expanding its products and services in diverse markets. The firm developed a unique concept of “think global, act local” that can be credited for the success of its globalization marketing strategy (Kolmakova, 2017). McDonald’s uses local services, goods, and assets to create unique products for other countries. Each country has a unique culture; therefore, McDonald’s develops a specific menu that matches that country in regards to culture and eating habits.

These menus are based on the eating habits of a specific country but contain different aspects of the mother country. This form of differentiation demands massive investment in customer intelligence and research of preferences and market trends. According to Igami and Yang (2016), McDonald’s differs significantly from other fast-food franchises regarding profits and costs structures. It generates more revenue than most of them, highlighting the reason it affords vast investments.

McDonald’s SWOT Analysis

McDonald’s has a robust brand identity that differentiates it from other fast-food restaurants globally. This strength has been fundamental to the growth of its customer base in China. McDonald’s delivers new products, such as McCafe that provides drive-thru and sit-in cafeteria services. The firm mixes a uniform product menu at all its stores and offers localized food options to meet the preferences and tastes of local consumers. For example, in Beijing and Shanghai, McDonald’s delivers tasty food options to local customers.

The firm still retains its classic sense of place and purpose despite offering localized food choices. McDonald’s is well-recognized for its high-quality customer services. The firm has realized this by providing safe and reliable products as well as creating an attractive eating environment. Its services are fast, whereas workers are professional and friendly. McDonald’s has increased its investment capital on marketing. The corporations consistently provide robust promotion and communication tools to reach broader markets. It uses radio, television, billboards, magazines, and newspapers for advertising. Hence, McDonald’s SWOT analysis outlines vital strengths that help the firm remain competitive.

Most of McDonald’s products are expensive as compared to local fast-food restaurants. Many people consider these products as costly for them to afford. The company has been weak regarding product innovation as compared to competitors, such as Domino’s Pizza, who have been innovating coupled with expanding their menu repeatedly. Its burgers have remained unchanged for almost ten years. McDonald’s has been slow in the expansion of its business operations in developing cities. The corporation has always struggled in the management of increasing material and operating costs and offers low wages to its employees. McDonald’s can expand its customer base and profit margins by addressing these weaknesses.

Opportunities

McDonald’s can exploit different opportunities to increase the sustainability of its competitive advantage. First, the corporation can focus on offering healthy food based on the increased conscious of healthy eating among most people. It can partner with health companies to facilitate the delivery of healthy foods and beverages to customers. Currently, McDonald’s only serves one percent of the world’s population; therefore, it should consider internationalization.

The firm should invest in emerging economies, such as in South America and Africa, to grow its revenue. It should also consider the introduction of variations of most demanded products in developed countries to capture new market segments. The current world population is embracing an eating-out culture, among other consumer trends. McDonald’s can exploit these opportunities by partnering with local counties; as a result, expand to new markets.

McDonald’s operates in a highly competitive business environment that presents many threats. For example, in most of the countries where it has business operations, the company has to deal with many local rivals. In these countries, its success is often scrutinized based on its business strategies, acting as deterrents to differentiation strategy. Local competitors often copy McDonald’s plans decreasing competitive advantage. The firm is always under the threat of cultural backlash, mainly in foreign markets.

McDonald’s operates in many international countries and only employs limited efforts to assimilate into local cultures. As a result, it risks facing resistance by a lack of meeting local cultural expectations of specific people. Lastly, the corporation is often associated with unhealthy habits; it faces the challenge of brand image damage as consumers are becoming more health-conscious. McDonald’s needs to address these concerns to avoid the risk of losing customers to rivals and ensure the sustainability of its competitive edge.

McDonald’s is one of the world’s leading fast-food corporations. Its fast growth and expansion in the global scene have influenced the food industry by revolutionizing the fast-food sector. The company can be categorized as an oligopoly due to price rigidity. Furthermore, it operates in an industry that is made up of a small number of larger sellers, such as Burger King and Wendy’s. McDonald’s sells both fast foods and nonalcoholic beverages with a price elasticity of below one (ranging between 0.7 and 0.8).

The price for its products is influenced by demand in the short-term. The demand and supply curves of its foods and beverages follow market conventions meaning that an increase in price results in high supply and low demand for products. McDonald’s operates in a highly competitive market with changing demands due to new market entry. Its most significant rivals include Burger King, Wendy’s, Yum Brands, and Starbucks. The firm can expand its services to emerging economies in South America and Africa to grow demand for its products and services. Overall, McDonald’s is a highly profitable multinational corporation existing in an oligopolistic market.

Igami, M., & Yang, N. (2016). Unobserved heterogeneity in dynamic games: Cannibalization and preemptive entry of hamburger chains in Canada. Quantitative Economics , 7 (2), 483-521. Web.

Ganti, A. (2019). How McDonald’s makes money: Monetizing the demand for fast food. Investopedia. Web.

Kolmakova, L. (2017). Glocalization marketing strategy of Mc Donald’s case study: Turkey . [Unpublished doctoral dissertation] . KTH Royal Institute of Technology.

Pratap, A. (2018). A PESTEL analysis of McDonald’s . Web.

Puleka, D., Kakade, K. S., Pulekar, N. (2018). Comparative analysis of training and development practices in the fast-food segment – McDonald’s and KFC. International Journal of Advance and Innovative Research , 5 (3), 174-191. Web.

Schramade, W. (2019). McDonald’s: A sustainable finance case study . Erasmus University. Web.

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McDonald’s ”I’m Lovin’ It”: The Illustration Essay

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Introduction

Bright colors, works cited.

Have you ever eaten at McDonald’s? When I was younger, I used to beg my parents and grandparents to take me to McDonald’s before we would go home. Sometimes McDonald’s was even used as an award for good behavior or accomplishing a particular milestone. I especially remember them being known for their delicious burgers, fries, and nuggets. They knew exactly how to catch younger children’s attention through the famous Ronald McDonald and promoting happy meals with happy toys. This strategy has been very effective since 1955, and it is just as popular or even more by now. McDonald’s also presents bright colors such as red and yellow that help promote their products. These colors give off a warm and happy sensation towards which people gravitate. The specific ad that I recently came across has the slogan “Fuel up…feel good”, which demonstrates a gas pump pouring fuel into a Coke. In other words, this advertisement communicates that drinking Coke gives one the energy and enthusiasm they need. This ad specifically targets adults because children may fail to understand why the gas pump is pouring fuel into the Coke. In addition, the ad features a big mac and large fry, which are adult meals. In essence, the McDonald’s ad effectively applies bright colors, slogans, and imagery to sell.

Colors communicate a variety of concepts and evoke different feelings in individuals. McDonald’s main advertisement goal is to retain its customers while attracting new consumers, implying that their choice of color has to be significantly impactful. The company has effectively utilized the connection between appearance and appetite by ensuring that its advertisements contain bright colors to attract viewers and provoke them to try the products. Although one may argue that the ad does not alter their consumption habits, McDonald’s color choices significantly promote the consumption of its products. Kilbourne argues that “Advertising is subliminal: not in the sense of hidden messages embedded in ice cubes, but in the sense that we aren’t consciously aware of what advertising is doing” (59). This effect is evident in the ad since the red hue triggers hunger and appetite and draws consumers’ attention, while yellow communicates friendliness and happiness. With these attributes, customers are made to consume more of McDonald’s to satiate their hunger, hoping to achieve the happy mood evoked by the colors.

Advertising slogans target specific groups of consumers by appealing to their feelings and culture. The ad uses the words “Fuel up…feel good” to demonstrate how good feelings result from consuming the company’s foods (McDonald’s 1). It communicates that one has to fuel at McDonald’s to be energized. This is an essential correlation because everyone wishes to gain the energy to push through the day. By appealing to the energizing aspect of McDonald’s food, more customers are attracted to it. In addition, the slogan is short and catchy, satisfying the youth and adults’ preference for precise information. The sound “f” repeated in the slogan makes it memorable, keeping McDonald’s in people’s minds. According to Xia, metadiscourse in advertising slogans, including repetitions and attitude markers, significantly influence customers’ perceptions, consequently increasing a company’s consumer base (1). In this ad, hearing the sound “f” repeatedly evokes a desire for food, leading more people to buy from McDonald’s.

People tend to see, imagine, and reflect on symbolism conveyed through ads. In this case, the company uses a picture of a full course with a delicious-looking meal with a hose pouring fuel into the Coke (McDonald’s 1). This image creates a picture of a person getting instant energy, as would be obtained by a fueled car, to carry them throughout the day. In addition, the food shown in the ad is more appealing and better than in real life. Although the food may not be as delicious as imagined in real life, the image created in the ad keeps people attracted to it. The company also uses the Coke imagery to signify the energy boost one would get from using it. A combination of these images alters a person’s behavior. Kilbourne alludes that advertising is “both a creator and perpetuator of the dominant attitudes, values, and ideology of the culture, the social norms, and myths by which most people govern their behavior” (67). In essence, people follow the ad’s imagery seeking to recreate such experiences in their lives, adding to McDonald’s sales volume.

In conclusion, McDonald’s successfully uses the “Fuel up…feel good” to persuade people to think that if they eat the food, they will be happy and energized. The company uses a combination of colors, a slogan, and imagery to reflect the consumers’ desire for delicious food that energizes them and leaves them yearning for more. The ad targets the youth and adults who can easily relate to the images used and develop the desire to have feelings of satisfaction, happiness, and friendliness in their lives. The slogan’s memorable attribute makes it easy for customers to keep McDonald’s food in their memory. The ad appeals to consumers’ appetites, hunger, and desire for energy, expanding the company’s consumer base.

Kilbourne, Jean. “In Your Face All Over the Place.” Can’t Buy My Love: How Advertising Changes the Way We Think and Feel , Simon and Schuster, 2000, pp. 57-74.

McDonald’s. “Fuel Up…Feel Good.” Pinterest , 2022, www.mcdonalds.com.pk

Xia, Jie. “Linguistic Realizations of Metadiscourse in Advertising Slogans: A Case Study of McDonald’s.” 2020 5th International Conference on Modern Management and Education Technology (MMET 2020) . Atlantis Press, 2020, Web.

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IvyPanda. (2023, August 13). McDonald’s ”I'm Lovin' It”: The Illustration. https://ivypanda.com/essays/mcdonalds-im-lovin-it-the-illustration-essay/

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Home — Essay Samples — Business — Mcdonald's — Analysis of McDonald’s Advertisement Success

Success of Mcdonald's Advertisement: Analysis

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Published: Mar 14, 2019

Words: 626 | Page: 1 | 4 min read

McDonalds Advertisement Analysis Essay

Works cited:.

• African Women's Development Fund. (n.d.). Our grants. http://awdf.org/grantees/
• Arese, U. (2016). The smart money woman. Troubador Publishing Ltd.
• County Government of Kericho. (2018). Kericho County integrated development plan 2018-2022.
• Health Renaissance Network. (n.d.). About us.
• Kipkemoi, J. K. (2019). Youth leadership and representation in Kenya's devolved governance: Experiences from Kericho County. Commonwealth Journal of Local Governance, (22), 26-42.
• Kweyu, R., Opiyo, R., & Siboe, G. (2016). Determinants of early sexual debut among high school students in Kisumu County, Kenya. Journal of Education and Practice, 7(6), 147-156.
• National Youth Council of Kenya. (2019). National youth policy 2007 review report. https://nyc.go.ke/wp-content/uploads/2020/06/Report-of-the-Review-of-the-National-Youth-Policy.pdf
• Population Reference Bureau. (n.d.). PACE project.
• World Vision Kenya. (n.d.). Programs. https://www.wvi.org/kenya/our-work/health
• Young African Leadership Initiative. (n.d.). About YALI.

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Providing meaningful value to our fans, with a side of facts

May 29, 2024

The following is an open letter from Joe Erlinger, President of McDonald’s USA

To our U.S. fans:

I still remember the excitement I felt as a kid when my parents turned into a McDonald’s. I think back to that almost every day in my job running McDonald’s USA (and to my mom’s love of McNuggets).

While I didn’t realize it then, it wasn't just the great burgers and fries that made McDonald’s a destination for the Erlingers – it was knowing my parents could count on their local McDonald’s for a convenient, affordable meal for the whole family.

That’s just as important today. Americans across the country are making tough calls about where to spend their hard-earned money.

And while we’ve been working hard to make sure our fans have great reasons to visit us, it’s clear that we – together with our franchisees – must remain laser-focused on value and affordability.

It’s what our brand was built on, and we are committed to living up to that legacy - especially at a time when our customers need it most.

That’s not why I’m writing today, though.

Recently, we have seen viral social posts and poorly sourced reports that McDonald’s has raised prices significantly beyond inflationary rates. This is inaccurate. And for a brand that proudly serves nearly 90% of the U.S. population every year, we feel a responsibility to make sure the real facts are available.

I can tell you that it frustrates and worries me, and many of our franchisees, when I hear about an $18 Big Mac meal being sold - even if it was at one location in the U.S. out of more than 13,700. More worrying, though, is when people believe that this is the rule and not the exception, or when folks start to suggest that the prices of a Big Mac have risen 100% since 2019.

The average price of a Big Mac in the U.S. was $4.39 in 2019. Despite a global pandemic and historic rises in supply chain costs, wages and other inflationary pressures in the years that followed, the average cost is now $5.29. That’s an increase of 21% (not 100%).

Inflationary pressures have affected all sectors of the economy, including ours. Our franchisees (who own and operate more than 95% of all restaurants in the U.S.) set menu prices for their restaurants, which account for the increased costs of running their businesses. In doing so, they work hard to minimize the impact of price increases on our fans. This includes the everyday prices on our restaurant menu boards to special limited-time offers.

That’s why prices for many of our menu items have risen less than the rate of inflation – and remain well within the range of other quick service restaurants. It’s also why more than 90% of U.S. franchisees are offering meal bundles for $4 or less.

I fully expect the prices at your local McDonald’s to be an area of conversation and focus in the coming months. As it does, I hope you’ll see the programs we’re launching nationally and locally as meaningful to you. At the same time, I hope it’s helpful to see some of the common myths that I’ve encountered, and the facts that go along with them.

And because I can’t help myself, for the greatest way to unlock all the value we offer, be sure to download and use the McDonald's app.

Joe Erlinger,  President of McDonald’s USA

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