evaluation essay on mcdonalds

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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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McDonald’s Company Evaluation and Financial Analysis

Mcdonald’s cash flows, mcdonald’s positive growth expectations, mcdonald’s cost of capital, enhancing mcdonald’s value, investment decisions.

The factors that could contribute to McDonald’s cash flows include inventory, accounts payable, sunk costs, low profits, and over-investment. The McDonald’s menu consists of more than 200 food items, and introducing the “Create Your Taste” burgers implies that all the ingredients necessary to produce the burgers must be available. McDonald’s risks accumulating excessive inventory since some of the elements may remain unused or expire, thus resulting in losses.

McDonald’s also must increase the amount it spends on paying its suppliers for various raw materials, and this increases the company’s accounts payable. Installing the new ordering system could result in sunk costs if the customers consider them ineffective or irrelevant. The sunk costs would arise because McDonald’s would find it difficult to install the redundant systems in its future programs or projects. McDonald’s is facing stiff competition from other businesses, and introducing the new system could further reduce the company’s profit if the system does not appeal to customers. McDonald’s also risks over-investing by introducing its new system into 2,000 restaurants simultaneously.

The impact of introducing the “Create Your Taste” burgers to 2,000 restaurants will increase the competitiveness of the company as it competes with companies such as Starbucks and Burger King. The company’s management acknowledges the need to attract younger consumers, and its new IT system will improve McDonald’s image among its consumers of different age groups. However, the new system also increases the risk of the company to make more losses if the targeted consumers have negative feelings about the system. McDonald’s can increase its cash flows by advertising the new system to create awareness among the consumers since this will reduce consumers’ rejection or apathy to “Create Your Taste” burgers. The McDonald’s should also reduce the number of outlets where it will introduce the “Create Your Taste” burgers because this will reduce losses due to overstocking various ingredients.

McDonald’s continues to lead in the fast-food industry due to the company’s response to the demands of its consumers and franchisees. Previously, consumers required a high diversity of meals offered by fast-food restaurants, and McDonald’s responded by increasing the available foods in its menu to 200. McDonald’s also realized that most of its consumers needed affordable, fast foods, and the company responded by introducing a wide variety of cheap meals. However, the company’s management realized that many complications arose from so many foods on the menu, and McDonald’s sought to respond by reducing its menu without compromising on quality. McDonald’s has also succeeded in developing positive growth expectations by incorporating various innovations within its operations. For instance, the new ordering system promises to revolutionize the fast-food industry and increase McDonald’s competitiveness.

The positive growth rate expectations on McDonald’s have helped improve the company’s value for many decades. The company enjoys strong investor confidence, although it has endured some turbulent periods in the past. The strong investor confidence arises due to McDonald’s impressive cash flow, and this has assisted the company in withstanding turbulent times due to economic challenges and competition from other businesses. The company also engages in aggressive refranchising of restaurants, and this has allowed McDonald’s to grow rapidly. However, McDonald’s can reverse the factors that have improved the value of its business if it does not institute a proper marketing plan that would ensure its new ordering system becomes effective. Poor implementation of the new system could result in losses to the company and damage its reputation further due to declining sales. Inaccurate records on the impact of the new system may result in bad judgments by McDonald’s management.

The cost of capital for McDonald’s could increase due to various factors such as the prevailing economic conditions, the company’s dividend policy, an increase in tax rates, and the amount of financing needed for the new ordering system. Worsening economic conditions due to recessions or increased competition will reduce the returns on McDonald’s investment and increase the cost of capital incurred. McDonald’s has consistently increased the dividend it offers its shareholders, and if the new system does not increase the company’s profit margins, the cost of capital for McDonald’s will increase. The increase in tax rates would reduce the company’s profits.

Since McDonald’s will invest in installing the new ordering system, the company’s cost of profit will be high. The cost of capital will also increase if the amount of financing needed to install the new ordering system is high.

The possible factors that would decrease the cost of capital for McDonald’s include advertisement, a reduction in tax rates, and improvement of economic conditions. An advertisement will increase consumer awareness of the company’s system and encourage them to visit McDonald’s outlets to try the system. A reduction in tax rates will enable the company to realize higher profit margins, thus reducing the cost of capital. An improvement in the economic conditions would allow McDonald’s customers have more disposable income, and this will result in an increase in the consumption rates of McDonald’s products. The factors affecting the company’s cost of capital have a direct impact on the value of McDonald’s since the company is valuable if it realizes greater profit margins. An increase in the cost of capital reduces the value of the company, while a reduction in the cost of capital increases McDonald’s value.

McDonald’s has several options to improve its value. For instance, ensuring that the new ordering system operates flawlessly will encourage more consumers to use it, and this will improve the company’s competitiveness. McDonald’s can adopt vigorous advertising to ensure that its consumers are aware of its new products and services. Lack of awareness may make the consumers less appreciative of McDonald’s efforts to improve its operations. A Proper advertisement will help increase McDonald’s sales volumes, reduce the company’s cost of capital, and make McDonald’s valuable. The company should also invest in improving its brand name by responding to the criticisms leveled against it. McDonald’s currently faces an arduous test in redeeming its image after damning shows such as “Super Size Me” and “Food, Inc.” that criticized the company.

Such shows have made McDonald’s products less attractive to young and health-conscious consumers. McDonald’s also faces criticisms from other sources such as health activists who argue that the company uses dangerous preservatives in its products. Labour unions also point out that McDonald’s exploits its employees in different ways, such as offering low minimum salaries and threatening the employees. Addressing such concerns will enable the company to restore its image among its consumers. One of the methods McDonald’s can use to minimize the risk of shareholders as investors are ensuring that the company’s strategic decisions maximize its value. McDonald’s should ensure that the new ordering system improves the company’s service provision.

As an analyst, I would encourage investors to hold their shares in McDonald’s because the company has consistently offered high dividends to its shareholders for many years. McDonald’s is a resilient company that has managed to withstand several challenges to remain the leading fast-food restaurant in the United States. McDonald’s is a global brand, and this guarantees its investors of improved performance in the future. McDonald’s rebounded from poor performance during the 2002-2003 financial year, and the company has an opportunity to experience similar improvements despite the current poor performance.

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Local McDonalds: An Evaluation Essay Example

Type of paper: Essay

Topic: Customers , People , Food , Services papers , Register , Front , Evaluation , Women

Words: 1300

Published: 12/27/2020

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For decades policy makers and individuals have complained about the quality of fast food, in particular, McDonald’s. Any discussion of obesity rates and mediocre fast food service is never complete without the mentioning of the fast food giant- McDonalds. Even though I have read an unlimited number of articles and watched documentaries about the nature of the food that McDonalds serve and its nutrient value; I still frequent McDonalds for breakfast and sometimes lunch. From since I started going to McDonalds nature of its drive through service has barely changed. McDonalds has tried to make its food healthier by introducing salads which has led to a better appreciation of its products and food. Since I always do drive through, I recently decided to visit a local McDonalds for lunch and actively observed what people ordered and how the workers in the shop dealt with customer orders, requests and complaints. In this essay, I evaluate the local McDonalds. The evaluation focuses on both customers and workers. Their interaction and how customers react to the service they get. The evaluation is a result of notes taken while watching customers and workers interact. It focuses on the willingness of the workers to address the customers’ concerns, act quick on orders and the kind of responses from the customer. It further looks at the nature and character of the customers. It explores the question of whether customers should continue to frequent the local McDonalds considered the kind of service they get and the nutritional value of the food they order. There are a few limitations to this evaluation criterion. Basing a service evaluation on one single episode has its disadvantages since you can catch the staff at their best or worst on a particular event and sometimes the targeted place might have less people coming in which in the end makes it difficult to come out with a substantial evaluation. These limitations can be offset by the general knowledge that entities like McDonalds have a long history of service and track record and this prior knowledge is also important in an honest and apt evaluation. My criteria of observing the number of customers and the response of customer complaints remain relevant for this analysis. The local McDonalds is always more active during lunch times than any other part of the day. I go to it mostly when I am in need of a quick meal and do not have the money for lunch at a fancier restaurant. When I walked in, it had one person serving and a couple of individuals at the back. There were about five people in front and eight others who had already placed their orders and were waiting for it to be delivered. I couldn’t tell the number of the people working in the kitchen. The meal took more time than it usually does when I do McDonalds drive though. There was another register but no one was operating it. I sensed that if it was opened the number of people just standing waiting for their food to be ready or worse still to order their food would have been reduced. On the service counter was one middle aged woman. In addition to working on the front cash register, the woman working on the register would walk away from the front register so that she could serve individuals coming from the drive through. She disappeared for a few minutes and was probably serving an irate drive through customer who had gotten the wrong order. I sat facing the register and observed how the women patiently served customers and did try to address the customer concerns. One male customer with a little girl of about eight by his side ordered a kids meal which he did not get when his order arrived. He showed his frustration and disapproval of how they had mixed up his order. The women apologized and offered to get his the meal for free. Despite the slow way in with the service were conducted people kept on coming in and one could see from the outside that the line of cars of drive through customers had grown. Instead of increasing the number of servers or seeing to it that the other cash register is open, the restaurant continued operating with the one individual working in front. All kinds of people streamed in. They seemed not to be bothered by the long waiting time which I attributed to the favorable and cheap prices of McDonalds products. From the demeanor of the customers, it showed that they were somehow used to this and were mostly probably regular customers who had the patience and were used to waiting. In my evaluation of the service, I also looked at how the place was cleaned since it was flooding with people. A number of customers including a family of five had left their trash on their tables. No one came to remove the trash. A guy actually came and sat on the table, they just pushed the trash to the other side. I also used the restaurant twice; it was pretty clean both times. It seemed like someone was frequently going in to make sure that it was clean. My conclusion in terms of the slow service and lack of people to come and remove trash on tables was that the place was probably having staff shortages for the day. The only dirty that was in the restaurant was the unpicked trash on tables. The air-conditioning system was working well. I ordered a Double Cheeseburger and an ice-coffee. The cheeseburger was warm rather than hot. It tasted like it had been on the grill machine for longer than it should. It had a bland taste. The Ice-coffee tasted good. I tried to signal to the woman working on the register that the burger was not hot and she told me to wait. After about five minutes of signaling, I went and sat down and ate the burger which was cold by now. Since the place was big, I knew that even asking for a refund of my money was going to take more time and in the end I would have missed some of my day’s assignments. Most of the customers conducted themselves well especially when they did not get what they had ordered. I sensed this was because the people working in front were ready to help and did all they could despite their small numbers. Most of the complains had to do with the server forgetting ketch-up or other add-ons. It seemed like the people working inside and at the front were good at taking orders. Except for the man who got his daughter’s meal mixed up there were little complaints from people who were walking in and taking their orders. In conclusion, through an observation of the local McDonalds, I was able to come to conclusions that despite the kind of service rendered people are always going to frequent McDonald’s evidence by how much people were prepared to wait in cars and stand inside the restaurant waiting for one single individual to serve a multitude of people. The place was hygienic except for the unavailability of individuals to take away trash immediately from people who would have finished their meals. Their bathrooms were clean. Despite the fact that she was working alone and serving a lot of people the woman in front patiently attended to customers’ orders, complaints and requests. In is also important to note that McDonalds like other major corporations like Comcast have a reputation of bad customer service evidenced by how much time they respond to customer complaints. It was difficult for customers to vent on this particular McDonalds since there was only one person working diligently in from of the register.

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Evaluating McDonald’s Restaurant

Table of Contents

Origin of McDonalds

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Transformation of McDonald Restaurant

The founding principles, success factors, menu change, related free analysis essays.

In the U.S., the restaurant business includes places that serve food and drinks, both self service and full service. In addition, the restaurant sub-sector also includes outlets of fast foods, food courts, canteens, and special sumptuous dining restaurants. Restaurant business is profoundly affected by trends in consumer tastes; economic conditions; changes in the currency, human demographic patterns; traffic trends that encompass number and location of other restaurants, and consumers purchasing power. All these concepts are necessary as they enable a restaurant business to be competitive with other local and regional restaurant chains. This essay will make an in depth evaluation of McDonald restaurant; a fast food restaurant with chains all over the globe.

Like most mega corporations all over the world, McDonald’s draws its origin from a humble beginning that helps to underscore its growth from a small restaurant to a giant multibillion dollar corporation existing in several countries across the world. The origin of the company traces back to 1937, when Patrick McDonald opened a small restaurant next to Monrovia Airport in California (Gilbert 259). Initially, the restaurant sold the conventional foods that were sold by most restaurants. These included hamburgers and orange juice. The building moved 40 miles to the East, and was established in San Bernardino in California. This was undertaken by the two sons of MacDonald, Richard and Maurice in 1940. The restaurant was subsequently renamed “MacDonald’s Farmhouse Barbeque” at that time the restaurant mostly sold barbequed products.

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In 1948, when the two brothers realized that most of the profits for the restaurant came from hamburgers, they focused their attention on the sale of hamburgers, French fries, shakes and  other food that were selling fast in the restaurant. Carhops were eliminated from the menu of MacDonald’s. The two brothers recognized the need to organize the restaurant in a manner that operated like an assembly line in order to ensure full efficiency. In 1948, the name of the restaurant was once again changed to McDonald’s and it reopened its doors on 12 th   December, 1948 (Gilbert 266).

The growth and success of McDonald’s as a fast food restaurant is partly attributed to the proper founding principles that have always defined the corporation to this day. Indeed, with millions of customers across the globe, it is inevitable for the corporation to have a sense of definition that clearly distinguishes it from other players market. The basic concern for Ray Kroc was the necessity to provide exceptionally quick service. In 1954, the McDonald’s hamburger stand in California could run a total of eight multi-mixers at a time. This quick service enabled the company to establish a brand from an early age. McDonald’s also boasts a supremely philanthropic principle which has always defined the corporation for years.

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Indeed, the organization is always responsible for the community within which it dwells and will always chip in to assist in developing projects that benefit the community. The management is always personally responsible for the issues and needs of their customers. This concern is clearly evident in the manner the corporation involves itself in projects like health, education and medical research. All the franchises of McDonald’s are exceptionally positive in their social responsiveness, thus, assisting communities in a progressive manner.

One of the core principles that Ray Kroc instilled in the employees of McDonald’s at his time was cleanliness in operations. Indeed, the corporation is known across the world as a restaurant that serves sumptuous food in remarkably healthy and clean environments. The concept of cleanliness has helped the organization to extend its boundaries as it serves its clients and addresses their needs. As Ray Kroc defined the founding principles as Quality, Service, Cleanliness & Value (Q.S.C&V), the management has always ensured that these fundamental concerns are addressed in the most appropriate way (Kroc & Anderson 113). Without doubt, in terms of quality of service and products, it can be well argued that McDonald’s is indeed a leader in its field in offering quality. In the increasingly competitive global business environment quality is always a core priority and the basic preoccupation for most organizations.

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In that regard, McDonald’s is always abreast through an extensive involvement in research and development which has always assisted the organization to improve its operational services in tandem with the needs of this competitive age. In the same way, proper service is the most valued approach at McDonald’s. Through the research activities over the years, the corporation has managed to improve its services beyond the conventional market standards. Throughout the entire life of McDonald’s, management of the corporation has always stressed the importance of values for the corporation. As such, McDonald’s is value-driven and is steered by the will of customers through their need to get a proper value-meal combination. In this regard, the corporation has been known across the world as value-driven and will always strive to enhance its operations in this respect.

McDonald’s has always been a leader in exceptional customer care since its establishment. The corporation realized the importance of a proper customer-centric nature, and how such an attitude can be a good marketing criterion in its own right. In this regard, Love observes “the management is always at the forefront in advocating for the imperatives that would enhance customer care, and thereby improve the image of the corporation across the globe” (98). A casual stroll to any McDonald’s franchise serves to confirm this hellish fundamental principle that has always put the corporation at the forefront and a leader in its industry.

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In the present age, like most global corporations, McDonald’s is concerned about environmental conservation and the need to make the environment a better place that is conducive for life and activities. The company has developed an incredibly elaborate environmental policy, which declares that it is always committed to environmental conservation, thus, making the world a better place to live for the future generations. Besides, the leaders of the corporations are required to be environmentally concerned so as to steer the realization of the corporation’s environmental policy concern.

Indeed, the success of McDonald’s at its establishment can be attributed to several factors that come to play. Ray Kroc recognized the need to establish a brand for the company, and was extremely instrumental in enhancing the principles of quality and speed in the operations of the company. These fundamental values have become a driving force that attracted many customers to the restaurants. In the food industry, customer care is an extraordinarily essential component that determines success (Kroc & Anderson 85).

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The management of McDonald’s was lucky to realize this concept from the establishment of the corporation, and customer service was taken as paramount. Most importantly, the decision to engage in the fast food restaurant business was a brilliant idea because the demand for food is always available. It only increases with each year, but rarely diminishes. Therefore, the decision to sell hamburger and other favorite foods was hugely instrumental in steering the McDonald’s from a street food to join the global corporation in the food industry.

Like any other global corporation, McDonald’s has always faced a number of managerial challenges in the course of its operations. Common challenges have always revolved around egos, emotions and the struggle for power at the organization. Most people who have worked close to the middle management claim that there are abound challenges indeed. Several mistakes are always overlooked instead of being addressed and used as learning tools for future development (Gilbert 310). A lot of carelessness has also been seen in some operational areas. The management of McDonald’s has always been blamed on the low levels of motivation realized from most of the employees of the corporation. A lot of discrimination is realized in the corporation considering that it operates in diverse backgrounds. Nevertheless, the top management at the corporation is always on the move to address most of these management challenges.

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In 1954, the menu of MacDonald’s was only limited to fries, burgers and some beverages which were popular in those days (Love 245). Over the years, the restaurant has come to incorporate an assortment of foods on its menu in a bid to address the varied needs of its many clients. With time meat, which was produced on farms and some dairy products were added to the menu as the corporation grew in size. Today, the restaurant chain offers a variety of burgers, chicken, fish, pork, fries, dairy products, juices and a host of other beverages. These products are always offered in the most appropriate flavors and have always given the restaurant a brand name. Lately, McDonald’s has realized the popularity of its beverages, thereby posing a lot of competition to the original players like Starbucks and Dunkin Donuts. This latest trend has seen the popularity of some brands like the McCafe shakes and Big Mac. The corporation is developing a new franchising method that encourages linkages between the individual franchises, and management of the corporation in a bid to improve service quality through research.

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Therefore, the success of McDonald’s as a global brand is a function of several factors, which have developed the corporation over the years. A strong sense of identity combined with the value-driven spirit is just the right tools that have propelled the corporation to fame and recognition.

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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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Mcdonalds Code of Ethics Case Study

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Published: Mar 20, 2024

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Introduction, ethical challenges faced by mcdonald's, mcdonald's code of ethics, evaluation of mcdonald's code of ethics.

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Evaluation Essay on McDonald's

Introduction.

McDonald's is a multinational fast food company whose origin and company headquarters are in California, USA. Richard and Maurice McDonald founded the company in 1940 as a hamburger stand from which it has grown over the years into the world's leading restaurant chain by revenue with more than 69 customers frequenting its establishments and having branches in more than 100 countries and 36,900 outlets by the year 2016.BBC report, the company, is the second largest private employer with approximately 1.9 million employees with 1.5 million of these working for the franchises. Having such a large workforce creates unique challenges for the management especially with regards to organizational behaviour. One of the most significant concerns for any organization, especially firms such as McDonald's that have such a large workforce involves improving the levels of productivity and efficiency. Furthermore, it is possible to attain enhanced levels of productivity and efficiency by both the application of strategies and the adoption of advanced technologies and also a highly motivated and enthusiastic workforce. The ability to develop positive motivation among the employees is a critical ingredient achieving more growth in terms of efficiency, production, and productivity. Additionally, motivation plays a critical role in an organization and it exists as a mixture of elements as opposed to employee remuneration only. Poor motivation in an organization out rightly results in decreased efforts, employee output, and low levels of commitment. In the service industry, and specifically the fast food sector where there is cut-throat competition and in which McDonalds operates, the quality of service delivery and customer satisfaction plays a pivotal role in the success of the business. In such a sector, company employees interact directly with the customers.

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The Issues Facing the Organization

Before discussing the issues facing the company, the following anecdote showcases the experiences of my best friend (James) who works in McDonald's on a part-time basis. He always complains about the pay in the company and cites that he is always "zombified" whenever he is at work because there is nothing that drives him. He talks of being paid in peanuts while the company expects him to do so much during the short hours in which he works for them. His shifts consist of endless pressure to serve the consumers at a very fast rate. He often has to work overtime to meet the targets that his manager has in place for all of them. The overtime is always unpaid for because the company regards it as part of the targets that the employees have to meet. James often talks about being unable to balance his education and work because he is overworked. His manager is also quite harsh and thinks the customer is always right. There are moments when the customers are unnecessarily rude; which always prompts James to assume an attitude. The manager punishes him without considering the role that the customer played in the incident. James wants to stop working for the company but does not have any other opportunities.

McDonald's faces the problem of an unmotivated workforce. The employees illustrate poor levels of creativity, innovativeness, and enthusiasm towards their jobs. Most of the employees in McDonald's are merely working in the company because they need to have an income. They face economic challenges that make the availability of employment opportunities difficult and thus resort to working in the fast food company that always has vacancies. However, many do not showcase enthusiasm towards working with McDonald's because of low levels of motivation. The situation is concerning when compared to other fast food establishments that have several initiatives to motivate their employees such as flexible working hours, overtime compensation, and a work-life balance.

The causative aspect of employees lacking motivation is the compensation system at McDonald's. Low wages and the subsequent lack of employee satisfaction and morale have a strong correlation that explains the situation in this organization. The low wages lead to poor organizational behaviour that is not in synch with the values, culture, and mission of the company. Talwar (2018) asserts that employee motivation is at the core of the success of the organization. Even though many other factors play a role in whether or not the employees motivated, financial compensation is a chief determinant of this aspect. When the employees are well compensated, they are more motivated to meet the goals and vision of the organization. Unfortunately, McDonald's has not tapped into the compensation as a critical contributor to employee satisfaction. The company pays inadequate wages that in turn contribute to very dismal performances from the employees. The company pays slightly above the minimum wage only because it is compelled by law to do so. However, the compensation is not aligned to the numerous changes in the economy that demand higher wages for individuals to meet their daily expenses. Research indicates that McDonald's is among the companies with the lowest compensation rates in the fast food industry. The salary these employees earn is not sustainable to their needs. The situation promotes many workers to engage in protests that seek better compensation systems from the company. The workers want a minimum wage of $15 an hour together with benefits. However, McDonald's has remained adamant and continues to provide low wages that in turn create an unsatisfied workforce. Jacobs & Padavic (2015) conducted a study that showcased the attitudes of female employees towards the compensation system in McDonald's. According to the results, more than 90% cited that they only worked in the company for the failure of other viable options. Many expressed displeasure with the compensation system. The result was a lack of morale when engaging in different processes that reflect the aspect of organizational behaviour. For instance, one woman in the study said that she could not smile to the customers when the company paid her a meagre salary. Therefore, the effect of the lack of better compensation system on the overall culture of the company is apparent.

Most employees in the company work directly with the consumers. Being a service industry, a majority of the employees communicate with the consumers on a frequent basis. Given the nature of the competition in the service industry, it is apparent customer-service determines how successful an organization will be. The interactions with the consumers influence loyalty and create a competitive edge that facilitates success. Therefore, the employees have to be motivated to interact with the consumers in a way that reflects the values of the organization. The employees at McDonald's may not be able to showcase enthusiasm and pass along the joyful spirit when they are not adequately compensated. The average employee in the company makes $9 an hour. The same employee is expected to work for long shifts, smile at the customers, talk to them, and provide a personalized approach to the company's services. The whole process is exhaustive to a staff that is not well-motivated. The employees will always harbour negative feelings that affect their customer service in the long-run.

The issues plaguing the firm are well documented by industry surveys. One survey, in particular, is that recently conducted by Jobs website Glassdoor (2018). According to the survey, McDonald's ranks poorly and is the last out of the top ten fast food establishments that employees would prefer to work in. The survey was conducted among the employees of the leading fast-food firms. According to the survey, the company ranks particularly low on salaries where it posted a 2.5 score for employee compensation and benefits. The benchmark standards indicate that scores that are below 3.2 are considered poor. Company employees also offered strong criticism the organization's top-level management by awarding a poor score of 2.7. Additionally, the company employees awarded the company a score of 2.9 for its culture, career opportunities, and work-life balance. The table below offers a summary of how the company performed in the survey.

A further review of some of the comments offered by the employees reveals the extent of the issues plaguing the company. One employee is reported saying that there are hardly any rotations with employees working long shifts and meagre pay. Furthermore, the company normally sends employees off when the labour is high. Another study participant highlights that the workplace environment has grease issues, poor hygiene with the management rarely offering quick and effective mediation to the issues brought to them. In its defence, the management appeared appalled and surprised by the findings claiming that the firm invests in the excess of PS43m annually for the purposes of developing its workforce.

Late 2018, employees at two restaurants based in England voted to strike and possibly paving way for the first industrial action against the firm in the United Kingdom. During the incident, workers at the firm's establishments in Crayford and Cambridge voted resoundingly for industrial action citing disparate working conditions together with the use of zero-hour contracts. The representatives of the employees at the Bakers, Food and Allied Workers Union further explained the workers were being paid poorly and with no guarantee for hours. Furthermore, the management had failed to acknowledge the right of the employees to form a union making the issues appear as some form of retribution for joining a union.

The employee challenges facing the firm are further compounded by the high turnovers rates. Although it is widely accepted that the fast food industry is generally characterized by high employee turnovers, McDonald's restaurants seem to experience significantly highly turnovers that could adversely impact on the overall productivity and profitability. The average turnover for the UK outlets stands at 44%. The turnover is, however, relatively higher among the subordinate employees since the managerial turnover is 20%. The high levels of employee turnovers are as a result of various aspects most of which are attributable to low employee morale, poor working conditions, low pay, and long working hours among others. As earlier mentioned, failure to address the employee working conditions and improving their morale will outrightly result in loss of customer satisfaction and market share.

Another issue with working at the organization is the strict deadlines and expected time-frames of completion for each order. The management strives to ensure that the establishment lives up to the name of "fast-food" and hence promises its customers the speedy delivery of each order. As a result, the employees are worked in a speedy manner in ensuring that all orders are delivered on time. As an illustration, an employee is allocated a forty five second time frame to ensure that an order is complete upon being made. Therefore, the employee has to drop the bun, process it and send it as a complete sandwich within the designated time frame. It is rather obvious employees fail to meet the target on various occasions. Such is especially the case when a family shows up and makes different orders simultaneously, with the orders comprising of 22 McChickens, 4 Big Macs, and five Mc Wraps. Additionally, there are employees who are more focused on quality than performing work in a speedy manner. Such employees would prefer to perform their duties in the best manner possible as opposed to working as fast as they possibly could.

A third challenge lies on the mantra held by most business firms an...

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• Strategic Evaluation of McDonalds

Strategic Evaluation of McDonalds - Essay Example

• Subject: Management
• Type: Essay
• Level: Masters
• Pages: 10 (2500 words)
• Downloads: 4
• Author: margaretteframi

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McDonald’s Company’s Global Strategy Evaluation

The work of large enterprises that are known all over the world, as a rule, involves the search for special ways of expanding the business, which does not suit the conditions of development in small areas. In order for an international organization to improve its performance, the search for an appropriate strategy is an essential and indispensable component of business conduct. To analyze the activities of such an enterprise and the approaches to work that are supported by its leadership, the world-famous McDonald’s fast-food network will be considered.

The policy of this company provides for the constant expansion of the network and the opening of new outlets in different countries. The evaluation of the company’s activities, as well as the assessment of risks and possible strategies for overcoming them, can be carried out on the basis of SWOTT analysis. The way of the continuous expansion of business supported by the leadership of McDonald’s allows the company to constantly increase its assets and be one of the most recognizable brands in the world.

SWOTT Analysis, Risks, and Strategies

Based on SWOTT analysis, it is possible to assess the features of McDonald’s’ work in a global market. Thus, the first component that needs to be analyzed is strengths. McDonald’s is known all over the world and is the most recognizable brand associated with fast food. Concerning the criterion of weaknesses, it is possible to note that conflicts arise periodically, which is caused by the insufficiently high quality of production and scandals related to the harmfulness of food sold.

Further, the opportunity factor should be discussed. This position is essential for the organization under consideration, and today, the company has made great strides, having many sales outlets around the world and opening new retail facilities regularly. Regarding threats, it is possible that competitors can entice a significant portion of clients. Regarding trends, McDonald’s regularly offers buyers new interesting promotions and constantly attracts customers with profitable offers.

Risk Assessment and Strategies for Overcoming

When assessing possible risks that the company may face, the threat of losing customer interest may manifest itself. According to Lasserre (2017), this risk is classified as technical and can be overcome through the development of the enterprise’s marketing sphere. Numerous competing companies that are similar to McDonald’s can attract customers by more profitable promotions and discounts. In order to avoid this outcome, it is necessary to pay attention to existing trends and to promote the goods in accordance with the needs of consumers.

Another potential risk is the loss of positions in the international market due to insufficiently competent management. In order to overcome such a threat, an appropriate method of leadership can be applied, namely, synergetic. As Kobersy, Barmuta, Muradova, Dubrova, and Shkurkin (2015) claim, “synergetic management is regarded as a technology development management at different levels” (p. 28). In other words, control over the development of economic indicators in a highly competitive environment can be useful for strengthening a stable position in the world market and preserving the reputation of a reliable enterprise.

Benchmarking Techniques to Measure Performance

It is possible to evaluate the performance of the enterprise using benchmarking techniques. To do it, it is necessary to compare McDonald’s’ economic and other indicators with trends in the global market and consider how the company can increase its potential and achieve greater success. According to Lasserre (2017), benchmarking and the search for the best practices can be implemented to fit the status of a globally recognized enterprise. One of the ways is to assess the company’s activities in terms of the efficiency of its expansion.

Today, it is quite difficult to find a developed country where there are no McDonald’s outlets. This corporation’s fast food stores are on all the world’s continents, and few companies in the world can boast such recognition. There are other competing enterprises that also provide similar services and develop, opening sales points in different countries. Nevertheless, McDonald’s can be considered a pioneer in this field, and a long period of work in the market is proof of its success and stability. Regardless of potential risks and emerging disagreements in the quality of products, the corporation is a recognized brand and can count on the recognition of customers anywhere in the world.

In order to measure performance, it is possible to compare the average annual revenue of the company with the data of competitors and assess which enterprises have achieved the greatest success. Also, customers’ feedback can be considered to analyze the effectiveness of the measures proposed by the management to improve the work of the corporation. If the prevailing number of opinions is positive, it will mean that the leadership successfully copes with the introduction of appropriate management strategies and is able to respond to changes in consumers ‘ interests timely.

Effectiveness of Synergetic Management and Current International Issues

The effectiveness of the chosen synergistic management strategy is obvious when current market needs and customers’ interests are taken into account. As Lasserre (2017) notes, “synergetic management focuses on accelerated development, breakthrough the formation in systems of synergy effects, the creation of new products, new markets, new economic environment” (p. 28). With respect to the McDonald’s corporation, the possibility of introducing such an approach helps to achieve consumer recognition and develop new spheres of influence. The company, as it is known, has not only a network of restaurants but also other outlets, for example, selling points for car owners. A versatile approach to the provision of services can meet the needs of many customers, which affects profit positively.

While mentioning some of the current international issues that McDonald’s occasionally faces, there are some problems, in particular, an obstacle to the expansion of the corporation’s business. According to Siqueira, Priem, and Parente (2015), using the example of McDonald’s, it is possible to see how the policy of cross-border expansion is implemented. Nevertheless, the reluctance of some countries to distribute the products of this brand can have different reasons, for example, political ones. Therefore, the unwillingness of some authorities of the company to work in a particular region can be a serious problem in the way of the globalization of McDonald’s’ business.

The global expansion supported by the leadership of McDonald’s allows the corporation to develop the business successfully, following modern trends and receiving a stable profit. SWOTT analysis can be useful in the process of assessing the features of the company. The consideration of potential risks and strategies for overcoming them can help to find the best approaches to business organization. The effectiveness of synergistic management is evident in the development environment for the provision of services to many consumers, even despite some international issues.

Kobersy, I. S., Barmuta, K. A., Muradova, S. S., Dubrova, L. I., & Shkurkin, D. (2015). The system of the methodological principles of management of enterprise development. Mediterranean Journal of Social Sciences , 6 (3 S4), 25-30.

Lasserre, P. (2017). Global strategic management (4th ed.). London, UK: Palgrave Macmillan.

Siqueira, A. C. O., Priem, R. L., & Parente, R. C. (2015). Demand-side perspectives in international business: Themes and future directions. Journal of International Management , 21 (4), 261-266.

McDonald’s Business Description Evaluation Essay

Mcdonald’s mission and values, the values of mcdonald’s, mcdonald’s operation process, works cited.

Every organization has values which it strives to uphold. This can be noticed in the manner the organizations conduct their business operations. Strategies will mostly be aligned to the values sustained through the years (Gambino 6).

The main mission of this company is to stand as the customer’s best place of choice and way to eat. The food chain store has worldwide operations. These operations are focused along a universal tactic known as the plan to win. It lays emphasis on the excellent clientele experience which recognizes 5ps in its services.

The 5ps are people, products, place, price, and promotion. The food store remains focused to endlessly better its operations and improve its clientele’s experience (Shapiro 3).

The company places its customers experience at the center of all activities it undertakes. Clients are the reason for the store’s existence. It shows its appreciation by offering the clients high quality products as well as grander service in a neat, friendly atmosphere, and at a very good price. Operations focus on service quality, neatness, and the value for every person involved at all times.

The company will always be focused on efficiently serving its people. It offers the chance, develops people’s talents, develops leadership, and rewards performance. It acknowledges the fact that a group of properly trained people having diverse backgrounds and knowledge, functioning coherently in an atmosphere which values respect and enhances superior levels of participation are very key to its continuous success.

The business has developed a superior system in place. Its model of doing business portrayed by its “three legged stool” as an example of owner, supply people, as well as company personnel is the base that it uses to balance all the concerns of all the three mentioned groups.

McDonald’s conducts its business operations through ethical practices. Here, everybody holds himself accountable and performs business to the greatest degrees of justice, morality, and integrity. Everyone is personally responsible and collectively culpable.

The company also gives back to its immediate societies. It seriously considers the mandates which come with it being an industry leader. It assists its clients develop better societies, augment Ronald McDonald House Charities , and control its size in development, scope and assets to assist in making the globe a better place.

The organization conducts its business in a manner in which everything is profitable. Since it is a public company it really struggles to ensure that everybody benefits from it. This needs an incessant emphasis on its clients and the wellbeing of its system.

It also struggles to incessantly improve. It exists as an institution which considers every situation as an opportunity to learn as well as aim to antedate and react to the non-static client, workers, and system requirements through continuous progression and innovation.

The company makes use of a superior operation strategy to get a larger share of the market and intensify the value of the shareholders. It specially focuses on its speed, regularization, quality of products, and the affordability offered to clients.

It has managed to beat competition by majoring on these elements. It contends on three primary pillars like speed, affordability as well as regularization basically to ensure that clients remain satisfied at all times.

By conducting serious market research and survey studies, McDonald’s identified that its clients wished to have speed among the store’s top concerns. Hence, it anchored its operations towards offering a fast, pleasant, and perfect service.

It also realized that definite targets were important to quantify speed. Hence, they incessantly use appropriate measurements to match the actual performance with the desired performance. From the moment a client makes an order, to the preparation of a burger, until the client exits the store, speed is an essential element in the store’s operation strategy.

In order to reduce the time taken to offer specific services, the business makes use of standardized training procedures for all its workers and has created new drive through layouts for many of its customers. In addition to speed, it also strives to outdo its competitors in the market by coming with prices that are so low and affordable to its clientele.

A decision to offer high quality goods in a low cost margin needs effective procedures through all the units that the organization manages. Again, this objective is fitted into the statement of the vision which says that the organization endeavors to become the most effective service provider so that it can be the unique value to many people. The organization makes use of several processes to offer great value to its clientele.

One of the greatest strategies which the organization has made use for a long time is referred to as the value meal. This value meal permits clients to purchase food items like sandwich, French fries as well as beverages at a discount rate when the food items are purchased together at once. This service is offered across all restaurants for both lunch and breakfast meals with time ranging from seven to twelve.

Gambino, Scott. Business in Process . London: Prentice Hall, 2010. Print.

Shapiro, Peter. The Case of McDonald’s . New York: McGraw Hill, 2009. Print.

• Chicago (A-D)
• Chicago (N-B)

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Bibliography

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