Category: McDonald’s

The fundamental problems with the manner in which the case was put forward by McDonalds

After McDonalds thought they had somehow succeeded in coercing the London Greenpeace five to withdraw and apologize for their insinuations about the company, Dave Morris and Helen Steel were left unperturbed. Dave Morris and Helen Steel saw no sense to be victimized and resolved to fight an overarching multinational with a record of winning all cases it institutes against all dissenting voices (McLibel Trial Organization, 2009).

The way McDonalds narrowed down to only five members of the Greenpeace group is highly controversial. One wonders how a bigger and reputable organization of such status could lower itself to use spies in order to target individuals who had a due course to pursue. First, this move contravened the privacy act of the United Kingdoms laws. The multinational went a step further to hire two investigative firms to introspect into a single issue concurrently. It can be argued that this would have made the participating investigators to take their eyes off the target and investigate one another. Some experts in law see this move as a counterproductive one.

There were instances which the investigators befriended some of the Greenpeace members to an extent of having relationship. This as well might have hampered their work as evidenced during the court proceedings. One of the investigators, Michelle Hooker, had an half a year relationship with one of the lobbyist. Some of the investigators went as far as breaking into the groups offices and other malicious acts.

After McDonalds failed to silence the two, it sued them for libel and wanted reparation as part of the settlement. However Morris and Steel, with no legal battle experience set out to fight to the end. The two received financial backing from within the group as well as other well wishers.

In my opinion the McLibel case is a spectacular example to the extents which the worlds multinationals act with impunity. These multinationals seem even larger than life. They do not recognize foreign governments laws and regulations leave alone the parent country. International corporate laws are also weak to such an extent that settlements arrived at may not be binding to all parties especially if they originate from different countries.

The McLibels case is just an example of how multinationals are perpetrators of expansionist ideals. They go about their businesses in total disregard of human rights. For instance, it is an undisputable fact that consumption of junk food eventually lead to health complications like obesity and hypertension among others. What McDonald did was to circumvent the laws by filing constitutional cases and raising as many objections as possible. It went to extreme ends by coercing members of the Greenpeace group to agree to an out of court arrangement.

It would also be argued that McDonalds use the financial muscle it has to meet its ends, means notwithstanding. By using false advertising particularly touching on children was an inconsiderate move. But instead of retracting such stances, it replies with empty rhetoric and real threats to whoever is raising an alarm. This is just the tip of the iceberg of the ills which multinationals operate.

A critically evaluation

However, in the United Kingdom, there is no provision for legal services on defamation suits. What the defendants only got was just two hours of complimentary legal guidance. This particular advice was surmised to a single premise that in legal trial touching on defamation was intricate and usually ends up in favor of the claimant. It was also determined that the two would incur colossal legal fees. It was also viewed that the McDonalds had the most formidable legal lineup consisting of top lawyers as well as getting advice from libel consulting experts. It was further argued that the case would not even go through the legal complications to qualify for a complete trial.

Consequently, Keir Starmer, an advocate by then offered his services for the two. Before a trial could be commissioned, there are multiple precluding examinations and processes which ought to be comprehensively covered. The two defendants had to be put in order their argument. This basically had a well thought out and evidential reply to McDonaldss proclamation paper it had filed. After that, they would be taken through a number of Further and Better Particulars of Justification and Fair Comment practices.

When the initial case was ruled in favor of McDonalds, Morris and Steel went a step further and sued the government of the United Kingdom at the European Court of Human Rights. The main aim by this time was to force the government to grant rights to free legal aid on libel cases or otherwise to amend the statutes governing the same.

On the other hand, McDonalds had done all it could to see that the two did not succeed in any way. First, its legal team declined to release all the pertinent papers it had. McDonalds lawyer further claimed that the defendants arguments were pathetic such that the two were in no position to bring into being any sort of proof as they had claimed. This led to the thinking that is if the situation was so, then the majority of the claims could be scrapped thereby not necessitating McDonalds submission of the said papers. The adjudicator, by breaking the precedents, then borrowed this argument and gave the defendants some time to hand over accounts by witnesses.

It became even more interesting when the defendants produced 75 proclamations from the witnesses to the case. To counter this move, the McDonalds introduced to its now fledging legal panel a revered trial attorney, Richard Rampton, albeit with a sizable fee paid to him per day among other payments.

Rampton then demonstrated the heavy perks he got paid by submitting an application suggesting that the trial be presided over only by one judge and postulated that empirical corroboration was indispensable in exploring the links connecting diet and ailments. This, he said, were beyond the comprehension of a lay man. On the contrary, both Morris and Steel were neither trained nutritionist nor doctors by any measure.

Similarly, a judgement was passed in support of McDonald. This was borrowed from the fact that average for members of the public would be in no position to adjudicate matters of such magnitude and therefore the case would be handled by one judge instead of a jury. It was further alleged that the jury would even wonder why there was any case in the first place.

McDonald further applied for an injunction barring some of the defending statement by witnesses claiming that they did not meet requirements while others were vague or unsuitable. The judge decided to leave out the whole of rainforest segment and other claims touching on overseas Trade Union rows.

It is therefore justified to say that in as much as Morris and Steel tried; it was a tall order for them to put up a good case against the McDonalds. Without any sound legal and financial backing they had absolutely no chance. McDonalds, on the other hand, had all the requirements for a successful court battles starting from the legal panel to the financial might.

An evaluation of the final verdict of the European Court of Law and recommendations

The final verdict of this long case was taken to the European court because there raised a controversy in the British court therefore the European court was to have the final say. The court ruled that the British laws have a suppressive nature of denying citizens right of expressing themselves. It showed that citizens dont have a right to criticize company malpractices that harm people. McDonald had several unethical issues that they were involved with but when they were challenged they ended up suing people and complaining that they were being defamed (Ritzer, 2004, pp. 75).

Citizens have a right to express themselves in whichever way they can as long as it is not incitement or against the law. The campaign done against unhealthy food and unfavourable working terms in McDonald was a legal thing to do since it was the truth. Selling unhealthy food especially to children is an act of exploitation since the main objective of the organization is to maximize profits. Any company or firm that produces food products should make sure that the food is fit for human consumption and not just being after money making (Armstrong, 2006, pp. 52).

.It would be recommended that an injunction would be ruled towards the McDonalds that they should stop misleading advertising and improve the quality of the foods that they sell, improve the wages and conditions of the workers and to stop ill treating the animals. The undermined when they air their grievances.

The favourite part of the film McLibel: Two people who refused to say they were sorry

In this movie, there were five activists who were identified by McDonalds spies. Each of them was given a desolate choice of either apologizing for the allegations made in the leaflet or be taken to court. Among the five activists, three of them apologised but two of them refused to do so. The three activists apologised because they didnt have money, had no information regarding the legal system, and there were minimal chances of defeating McDonald. The other two that is Morris and Steel refused to apologise in the claim that they were being bullied. According to the information given by steel, McDonald and his team were supposed to apologise to people instead of them doing so. He claims that they have caused a lot of harm to the society, and that is why they should apologise to the society (Hardling, 2007, pp. 57).

This part is the most favourite in the film. They spent over three years in court and experienced overwhelming chances which changed their lives. They were refuted from legal assistance and a right to fair trial. In the film, Morris managed to bring up his son outside the court room while on the other hand Steel was supporting herself with the cash that she was paid in a bar at night. As they were struggling in court McDonald was using every trick against them. He had put aside skilled and expensive experts, company executives and board committees who will testify against Morris and Steel (Ritzer, 2009, pp. 101).

Having no cash, witnesses and inadequate experience in the legal system, Morris and Steel found a team of supporters who surrounded them and became their witnesses. The most interesting part is the numbers of the witnesses, especially those who knew more about McDonald for example, McDonalds workers, McSpies and a former actor and all were willing to testify against the plaintiff (Gillespie, 2007, pp. 271). In this film, the case seems to be so critical in that it was the first time that a multinational company practises were put in the eyes of the public scrutiny (Top Documentary Film, 2008).

References

Armstrong, F., 2006. The true story of two people who refused to say Mcsorry. Michigan: Revelation publishers, pp. 45- 60.

Gillespie, A., 2007. The English legal system. London; Oxford University Press, pp. 87-93.

Hardling, C., 2008. Human Rights in the Market Place: The Exploitation of Rights Protection by Economic Actors. Markets and the law. Ashgate Publishing, pp. 54-61.

McLibel Trial Organization, (2009). The McLibel Trial. Web.

Ritzer, G., 2009. McDonaldization: The Reader. 3rd ed. London: Pine Forge Press, pp. 92-107.

Ritzer, G., 2004. The McDonaldization of society. 4^th Ed. London: Pine Forge Press, pp. 72-79.

Top Documentary Film, 2008. McLibel. Web.

Introduction

The McDonalds Company is the globes largest restaurant chain specializing in serving hamburgers among other fast foods. The chain of restaurants serves about 68 million consumers every day across the 119 countries with McDonalds outlets. The McDonalds Corporation has its headquarters in the USA (McDonalds, 2013a). The company was started in 1940, originally as a barbecue center operated by Maurice and Richard McDonald.

During 1948, the proprietors reorganized the business, changing the restaurant into a hamburger. In 1955, businessperson Ray Kroc joined the business as a Franchising agent. Later, Kroc took over the business from the McDonalds brothers and then expanded the business to a multinational enterprise (McDonalds, 2013a). A restaurant under the name of McDonalds is ran by the company. This can also be run as an associate outlet or a chartered outlet.

History of the Company

The McDonald Company started in 1940. Initially, it was operated by the McDonald brothers. The initial business was based in San Bernardino, California. The restaurant was the first to introduce the speedee service model during 1948, later leading to the contemporary fast-food place (McDonalds, 2013a). The McDonalds symbol was first used in 1961.

However, it was adjusted towards the end of 2009. During 1961, the company registered the logo of an overlapping M symbol (McDonalds, 2013b). In 1962, the double M symbol was changed for a single arched M. The single M symbol was not used until it was trademarked in 1968 (McDonalds, 2013b).

The present McDonalds was born from the opening of the McDonalds franchised restaurant in Des Plaines by Ray Kroc. Later, Kroc acquired the business from the McDonalds. The San Bernardino outlet was destroyed in the 1970s before being sold. Since the start of its international expansion, McDonalds has been viewed as a model of globalization and a mark of the American lifestyle (McDonalds, 2013b).

Goods, Services and Operations Management at McDonalds

Operations management at McDonalds is the key method employed during the conversion of inputs like information, materials and labor into outputs like goods, services and value-added products. The operations management of McDonalds includes the practices of capacity planning, forecasting, managing inventory, scheduling, motivating employees, assuring the quality, and control of activity.

Through the practices covered under operations management, the company improves the areas of product development, quality improvement and responding to change sin demand, among other functions that affect operations.

Through operations management, the company develops models of employing the most efficient use of the companys resources towards the delivery of the finished food services required by their customers. Operations management also ensures that the company provides services and the products developed by the company in a cost-effective manner and at the right time.

Product planning and management are some of the main practices in goods and services planning. Product management entails the development of new product lines, which helps shape the future of the McDonalds Company through increasing their reputation, market coverage, and the revenues obtained. In the case of the McDonalds, the addition of new product forms a major component of the future-looking strategies.

The efforts of offering new products help direct the business of the company towards areas that satisfy the needs and wants of the company to a higher level. An example of these moves includes the account of Gasparro and Jargon (2012), which discusses the McDonalds company planned to launch vegetarian-only outlets during 2013.

The shift in product and services management towards offering foods that are more health-friendly has resulted from the constant pressure to consume healthy food, among the modern-time consumer (Ashbridge, 2007).

McDonalds Value Chains Management

The value chain of McDonalds comprises of a number of aspects including the firms infrastructure, the human resource base, the technology employed by the company and the procurement process.

The inbound logistics of the company include the sourcing of raw materials and other fresh supplies like vegetables from pre-defined suppliers. As a result, the suppliers continue increasing their labor and capital needs as their production continues to increase from time to time (McDonalds, 2013c). The McDonalds does a vertical, backward integration as an effort to reduce its suppliers.

This is aimed at cost reduction and ensuring that they offer high quality products. Some of the products in question include milk and beef, which they source from the companys farm. The McDonalds checks the operational standards of their overseas suppliers in New Zealand and Australia by ensuring that they comply with the standards set for American supplier plants. The standards include food safety, animal welfare and testing.

The practices ensure that the consumer of the end product gets a high quality product. The McDonalds Company operates many of its restaurants centrally, where central management system checks whether the different restaurants are stocked with all that customers may need including wrappers, food supplies and cups (McDonalds, 2013c). The effort improves the efficiency of the supply chain of the company in different areas like buying policies, capacity and technology deployment.

The McDonalds ensures that value is delivered at its different operational outlets, whether suppliers, employees or franchises. They do that by setting standards of cleanliness, product quality, and the superiority of service, waste management, energy conservation and sustainable packaging. The company employs all efforts to invest in green operations, regardless of investing in contemporary technological models (McDonalds, 2013c).

Measuring Operational Performance at McDonalds

The operational performance of McDonalds is evaluated on a number of standards. These include the companys performance in the supply chain, the satisfaction of customers, and the companys progress towards strategic goals.

Other areas where the performance of the company is perceived include the gauging of operational and performance operational performance in the different areas of business. The other indicator used to show the performance of the company is the financial level of the company following their management structure (GAPbuster, 2009).

The supply chain standards used to gauge the performance of the company include the responsiveness of the company to the needs of its customers. The indicators of good performance for the company in this area include stock out probability, lead time, and the fill rate of the different outlets. For instance, in the case that an outlet is not able to supply the products and services required by the customers for a given day, it marks a negative indicator regarding the performance of the outlet and the central management model (GAPbuster, 2009).

An example is the gauging of product quality at McDonalds, where emphasis is placed on the performance directly related to the companys strategic goals. For instance, the reduction in the system resources of the company is likely to affect the supply chain management of the company negatively. Among the areas that mark the competitiveness of the company is the introduction of innovative products, including health foods, service reliability, continual product supplies and flexibility in service delivery (Ashbridge, 2007).

Another area that marks the competitiveness of the company is the measure of customer satisfaction. The customer relations managers of the company are tasked with the role of collecting customer satisfaction information so as to employ corrective strategies for service improvement.

The evaluation of customer satisfaction is done during the time of service, and talking to the customer during service delivery. The company also collects customer satisfaction information through letters or faxes from customers that had visited their outlets; talking to loyal customers for their feedback in order to identify complaints and possible problems (GAPbuster, 2009).

Operation Strategy of McDonalds

The business structure of McDonalds is founded upon geographic placement: the company has divided their market into five operational centers. The centers include US, Asia/Pacific and Middle East, Canada, Latin America, and Europe.

However, the major business area for the company is the US where they cultivate control while at the same time expanding to reach other markets (Mourdoukoutas, 2012). As a result, the companys strategy is characterized by retaining its prominent role in the US market, as well as other global markets. The company has also realized that different groups in the newer markets, as well as the US market, have varied requirements and tastes.

As a result, they have adopted the operational strategy of product differentiation by target consumer groups as well as including varieties of products and services to meet the needs of different groups. An example is the case of India, where the McDonalds is starting vegetarian-only outlets, compared to their traditional offering in the US and other areas (Gasparro and Jargon, 2012; Ashbridge, 2007).

Through the strategy, the company has realized the customer needs satisfaction as well as local development. The strategy of the company is also characterized by price differentiation, on the basis of the area of operation and products delivered by the company. The strategy of McDonalds is also characterized by quality service, fast service, delivery of similar value at the different markets and cleanliness (Mourdoukoutas, 2012).

McDonalds Forecasting and Demand Planning Style

BBC (2012) reported that McDonalds, the second biggest food seller has shifted to opening vegetarian outlets. The company is renowned for its control and major stake in the fast food industry, but it is adopting drastic changes so as to meet the changing demands of customers.

The changes are also adopted, as a way of ensuring that the needs of emerging markets are met (BBC, 2012). According to the reports, the major market where the company is investing in vegetarian outlets is India and Muslim countries, where meat-free dishes are preferred.

For instance, at the Indian market, it is believed that cows are sacred, which makes the target population a non-meat consuming group (BBC, 2012). On the other hand, in Muslim countries, pork is believed to be unclean, which results in the presence of meat-free diets. In forecasting the needs of the Hindu consumers at India, McDonalds plans to open vegetarian restaurants during the mid of 2013. The outlet will be located next to the Golden Temple.

This is found in Amritsar City, Northern India. From the demand style planning of the company, the company was optimistic about capturing the wide vegetarian market. The spokesperson reported that, during 2012, the company operated only 271 restaurants, which marks a very small coverage (BBC, 2012).

The company plans to take advantage of the visits taken to the Hindu pilgrimage center at Kashmir, where they plan to open a vegetarian outlet. From the evaluation of the forecasting and the demand planning of the company, it is clear that McDonalds plans their business in response to variations in customer needs. The strategy has been very successful for the company as it has allowed its entry into the Indian market successfully.

Inventory Management at McDonalds

Inventory management is a critical aspect of the companys operations. Inventory management is the chain of practices that control the flow of the stocks required to control the company.

The McDonalds Company employs the first-in-first-out rule in controlling its inventory (Rungfapaisarn, 2011). This method is effective for the company as it handles fragile items, which requires the company to handle or change the available inventory once or twice within any given week, depending on the area of collection and the business of the outlet.

Additionally, the company has invested in storage facilities, including refrigeration storage, where the inventory managers of the company, so as to ensure that the food items held as inventory are kept fresh. The company has adopted a just in time (JIT) system, which entails the supplying of products, immediately they are ordered. For instance, after visiting a McDonalds outlet, it is then that the staffs begin assembling and preheating their products (Rungfapaisarn, 2011).

The inventory model is critical in offering high quality products and delivering better customer service. Based on the JIT inventory model of the company, the company can hold the costs required to purchase products like beef, cheese, bread, and chicken, due to their highly perishable nature. Further, the money held by the company is available for current usage, which allows the company better liquidity at all times. Also, the model allows the company to source for better raw materials, at the time of need (Rungfapaisarn, 2011).

References

Ashbridge, I. (2007). McDonalds milk goes organic. Web.

BBC. (2012). McDonalds opens vegetarian-only restaurant. Web.

GAPbuster. (2009). Mcdonalds Training Manual 2010: McDonalds Company. Web.

Gasparro, A., and Jargon, J. (2012). McDonalds to Go Vegetarian in India. Web.

McDonalds. (2013a). Getting to Know Us. Web.

McDonalds. (2013b). McDonalds History: Travel Through Time With Us! Web.

McDonalds. (2013c). Sustainability Supply Chain: Focusing on the 3Es: Ethics, Environment and Economics. Web.

Mourdoukoutas, P. (2012). McDonalds Winning Strategy, At Home And Abroad. Web.

Rungfapaisarn, K. (2011). McDonalds introduces new inventory/menu management. Web.

Nike, McDonalds and Body Shop are the world known brands. Each of these brands has become popular because of many reasons, however, the main of them are human resource management, marketing and distribution, accounting and finance, operations, information management, and cross-functional issues.

The correct organization of these basic processes in economics leads to the successful business running. Speaking about efficiency and effectiveness for Nike, McDonalds and Body Shop, these specific aspects of business are going to be discussed with the stress on how the companies should behave in each of these processes.

Human resource management is one of the most important aspects of company running and a guarantee of successful company performance. Each of the companies mentioned above have specific approaches to the human resources. Nike is sure that having become a part of their company each person is going to change due to the challenges offered by the corporation. McDonalds has the strategy of so-called achievement.

People have an opportunity to achieve the highest positions only having come through the whole career ladder. Being a simple salesman, people can become managers and even top managers.

Training and other supportive practices are guaranteed. Body Shop offers people specific working places. The specifics with in working with human resources in Body Shop is that the first several days people do not work but get used to the new environment.

Marketing and distribution are important as well. Nike offers their products in pair with connecting software of the well-known producers. McDonalds is famous for its fast and tasty products with McDrive and other convenient options. Body Shop sells its products on the internet that increases the rate of customers who are ready to buy their products.

Accounting and finance in the companies is based on the latest innovative technologies and companies are sure to maintain order in these processes. The efficiency and effectiveness of the mentioned companies depends on their financial operations. The opportunity to pay online, create personal account in Nike and Body Shop are important as customers may return to these stores.

McDonalds also tries to improve its financial situation and accounting using electronic money, etc. Selling products online, companies deliver those throughout the country. The delivery is based on various express services which guarantee fast and quality delivery.

It is essential to understand that the effectiveness and the efficiency of Nike, McDonalds and Body Shop depend not only on the products but also on the quality of services offered.

Information management is an important stage in companies functioning as the knowledge about the rate of sale in the industry, about the lack or excess of the products and about other strategic issues is crucial for company efficiency.

The inability to get necessary information on time may create a number of difficulties and lead to substantial financial loses. Nike, Body Shop and McDonalds are successful because they do not consider each process of business separately but do all possible to dwell upon a combination of processes, etc.

These world known brands managed to be successful only because they collaborated all the processes implementing each new process in combination with many other processes. The efficiency and effectiveness of the companies is based on successful business running and other particular aspects which guaranteed effective work.

Introduction

Strategic management is about establishing visions and missions of a company. The missions and visions provide the direction to the company concerned and help it defines its position in the market amidst stiff competition from other industry players (Brubaker, 2005).

Corporate strategy management is viewed as the best way through which a company can easily establish a competitive edge over competitors.

The role of establishing the mission and the vision of the company is the sole responsibility of the top management, but for these missions and visions to be fully acceptable, all levels of managements and employees in general should be involved in a way in the process (Mourier and Smith, 2001). Once formulated the mission and the vision should be communicated clearly to the employees for implementation.

This report aims at presenting the findings of an investigation that was carried out to find out the process involved in the formulation of the corporate strategies at McDonalds corporation, the worlds leading Fast Food Franchise Corporation.

The report also establishes the areas of their applications, levels of strategies that a company can employ and the implication of these strategies on the companys well-being.

Overview of the company reviewed

McDonalds Corporation prides itself as the leading global fast food chain with a special appeal among many residents of America for its burgers and french fries.

The company started off in 1954 and has since grown many branches that are spread in all states of the United States of America as well as in other continents. Today, McDonalds serves millions of hungry customers across the globe through its franchised and fully owned branches.

The path to McDonalds success has been shaped by its creativity and innovativeness that has made it remain focused to a particular market segment. Although there is nothing much to be differentiated in a fast food restaurant, McDonalds has over the years defied this and has always come up with innovative products that has seen the chain gain continued revenues.

Among the most innovative products to have ever been produced by this chain were Big Mac and Egg Muffin whose market response was positively overwhelming. The chain is also famed for its innovative tag of Happy Meal which was essentially useful in pooling children into eating at McDonalds.

From the short overview of the company; it is evident that McDonalds has a way of doing things in a sharp contrast of what others in the fast foods industry do. It is this uniqueness portrayed by McDonalds that the report seeks to examine.

Scope

The investigation was done on McDonalds as it is a company with a national and international outlook. The reasons for the selection of this business included intense competition that exists in the fast food industry.

This competition has led to the need of extensive research and development of advanced corporate strategies to counter the competition and to establish a strong presence in the market. Therefore, McDonalds provides a good source of information on the study of corporate strategies, their applicability, their usefulness as well as their role in business success.

Report Structure

The report will be presented in the following manner: first we will discuss the scope of corporate strategy, then the level of corporate strategies, process of formulation of these strategies, areas of application of these strategies and the importance of these strategies to the business before giving a final summary in form of a conclusion. All these issues will be discussed in regard to McDonalds Inc.

Scope of corporate strategies

Corporate strategy planning involves the process of formulating corporate missions and visions. The missions define the main purpose of the corporate body. They give an overview of the companys intent and the reasons for its existence. Missions give a big picture of what the company aims to achieve in both the short-term and in the long run.

The visions on the other hand are aimed at explaining what the company aims to achieve in the long run. This can be either to be a market leader or to be a low cost leader in the market in the foreseeable future (Saunders, Lewis, and Thornhill, 2006).

The visions should be formulated in a way that leads to the achievement of the mission of the corporate body on the implementation. The process of corporate strategy formulation should also take into account the goals the corporate body aims to achieve.

The goals define what the company aims to achieve in the short term. Other issue to take into consideration is the objectives the company aims to achieve. Strategies should be formulated to help the company achieve its missions, visions, objectives and goals.

Factors shaping McDonalds competition

McDonalds operates within a highly competitive market. Due to this high competition, every player in this industry must formulate survival tactics that shall ensure that the firm remains sustainable within the competing market.

With little restriction on entry of new players and little sunk cost being required for an investor to invest in this industry, strategies are of critical importance for a firms business survival. To clearly understand the competitive forces that face this company, two major tools of analysis shall be utilized.

The two tools shall prove of vital importance especially in indicating the position of the company in regard to internal and external environments. It is from this internal and external environment positions that the strategies for success are to be formulated. These tools are;

• Porters five forces

• SWOT analysis

Porters five analysis

Bargaining Power of Buyers

In the fast food industry, the bargaining power of buyers is relatively small. This is because food is a necessity and thus one has to buy it.

However, due to increased competition, the bargaining power of buyers has constantly been increasing. One can opt to purchase from another fast food restaurant which makes the issue of bargaining power of buyers be of critical importance to McDonalds.

Potential Entrants

Threats from new entrants are rife in this market. There are little restrictions that may hinder an investor from entering into fast food industry. The industry lacks government restrictions which makes it easy for any entrant to start operating in the market.

Besides this, the initial startup cost especially sank cost is little and thus there are many new entrants into the fast food industry. To avoid this threat, McDonald must remain abreast in strategic management to ensure that it remains relevant to its customers.

Substitutes

Substitute products also cause a major threat to McDonalds. Customers have a wide variety of fast food restaurants to choose from and thus strategic management at McDonalds remain of critical importance to ensure that innovative strategies meant to retain customers are put in place.

Suppliers

There is little bargaining power of suppliers in the fast food industry. These therefore do not pose any threat to the sustainability of the firm.

From the porters five analysis, it is important to note that strategic management remains of critical importance in the management of MacDonalds. It is through formulation of various strategies that makes the chain remain relevant to the market.

SWOT Analysis

To further the understanding of the strategies that are used by McDonalds to ensure that it remains relevant in the market, an audit of both external and internal forces that are relevant in business process was conducted. The results of this audit have been tabulated as follows.

External Audit

Internal Audit

Analysis of the market share

Despite its operation in a highly competitive industry, the company enjoys an impressive market share compared to its competitors. At 19 percent, McDonalds remains the undistinguished giant of the fast food industry.

For the firm to gain this market leadership position there must be well defined strategies that have overseen its growth to this position. The chart below indicates the market share of McDonalds compared to its competitors. From the chart, it is evident that its closest competitors such as Burger King Corporation, Wendy International Inc., Jack in the Box among others are way too far down to be put to the scale of the giant McDonalds Corporation.

Chart available at http://4.bp.blogspot.com/-YPULGUoMIYc/TaVELab75-I/AAAAAAAAAF0/g5DYbZ1GprQ/s1600/Fast_Food_Industry_Markets.jpg

Strategies followed by McDonalds to establish a competitive edge

The investigation revealed that McDonalds establishes a competitive edge through following one or all of the following strategies:

Low cost leadership

McDonalds is known for its low cost on various meals. To achieve this, the company must ensure that its operating costs are equally low to guarantee profitability.

Fixed cost per unit in the company is reduced by the reduction in overall cost, which could be used to give them an advantage over other industry players. This advantage is attained in some cases through offering low prices than other industry players at the same quality level or by charging premium prices that help them generate high profits.

These profits in turn are used by the business to produce high quality products that meet the needs of customers better than the competitors (Porter, 1980; Wankel, and Malleck, 2008). In this way the company is able to position itself as the market leader and customers choice in provision of fast food services.

Price leadership strategy

McDonalds also uses price leadership as a strategy to woe its customers. Most of the products at McDonalds have premium prices which makes it appealing to the major target markets. The strategy also is boosted by low cost policy that the company has utilized over the years.

Differentiation strategy

This strategy was found to be highly employed by the company. The aim of this strategy was to give a notion to the buyer that the product offered by the company was different from that offered by the competitor and offered better features than any other similar product in the market. The strategy is mainly employed through packaging and the design of the product (Treacy, 2005; Swift and Piff, 2005). Trendy names are also used by the company to brand its food that makes it appealing to the populace. Through successful differentiation, the company in question is able to charge premium prices for its premium products, develop further market for its product and to maintain its current market for its products (Purcell, 2008; Stanton, 2007)

Market Niche Strategy

Customers are generally known to have diversified needs which are very dynamic in nature. To meet all these needs, a great challenge to any company for this requires application of large amount of resources both financial and human. Therefore, to satisfy all these needs a company should devise a way to understand the needs, know their likely direction of change and the best way to meet them.

At McDonalds, this strategy aims at understanding a particular need of the customer and trying to meet this need better than the competitors. Therefore, instead of dealing with a varied area of needs, the company in question concentrates on the few areas of need.

For instance, McDonalds does not serve breakfast, instead it focuses on the lunch market as well as dinner clients, with lunchtime clients topping its list. Due to this concentration of market niche, the chain is able to meet the needs of customers better and therefore able to establish a competitive advantage over competitors (Hatton, 2007; Swift and Piff, 2010)

Strategy formulation

For McDonalds to remain competitive in the market there is a need to have a strategic plan towards its future success. Since its inception in 1954, McDonalds has remained a household name among many Americans as well as among the populations where its international franchise outlets operate.

This therefore indicates that there is something that McDonalds do that is not done by some of its competitors. The company strategies are formulated by following the following steps

Identification of the current position of the business

The process of strategy formulation starts with identifying the current position of the business. This helps the business to identify the strength, weaknesses, opportunities and threats it faces as a result of both internal and external environment of its operation (Conger, 2008).

The result of this analysis is usually compared with other industrial players to help identify the position of the business in relation to the similar businesses in the industry. This analysis also helps the business to identify the gap that need to be addressed.

Define the missions of the company

Once the company has identified its position in relation to other industrial players, the next step is to state exactly what it intends to achieve in the long run (Waters, 1994). The mission was found to be formulated with the aim of positioning the company in the marketplace.

In the process of defining this mission, one question remains critical to McDonalds, does the chain live to its mission day in day out? This helps the firm to remain focused on the mission of the firm that has driven the firm to its current success status.

Defining the vision of the company

The vision is derived from the mission of the company. This vision also helps define the direction of the company by stating what the company aims to achieve in the long run. The vision also helped define the activities of all employees to be in line with the missions and visions of the company.

Establishment of goals to be achieved.

Once missions and visions are established, the next step involves the establishment of goals to be achieved. These goals broke down the missions and visions into components that can easily be achieved on a daily basis. Achievement of these goals contributes to the achievement of the overall missions and visions of the company.

Formulation of strategies

Finally strategies are formulated in different areas and levels to help in the achievement of companys missions and visions.

Conclusion

From this study, it was established that McDonalds have succeeded due to its unique strategic formulation of success policies that have constantly ensured that the company remained focused to its core objectives. The company also has survived in the fast food industry, which is highly fragile due to its unique differentiation strategy. It is through these unique approaches that McDonalds has remained a focused firm to succeed.

Reference List

Brubaker, D., (2005). The charismatic leader: the presentation of self and the creation of educational settings. New York: Corwin Press.

Conger, J., (2008). Charismatic leadership in organizations. New York: Sage.

Dunis, D., (2003). Applied quantitative methods for trading and investment. New York: John Wiley and Sons,

Hatton, A., (2007). The definitive business pitch: how to make the best pitches, proposals and presentations. New York: Prentice hall.

Mourier, P. & Smith, M. (2001). Conquering Organizational Change: How to Succeed Where Most Companies Fail. San Antonio: Project Management Institute.

Porter, M.. (1980). Competitive Strategy. New York: Free Press.

Purcell, J., (2008. People Management and Performance. New York: Taylor & Francis.

Saunders, M., Lewis, P., and Thornhill, A., 2006. Research Methods for Business Students. 4th ed. London: Prentice Hall.

Stanton, E. (2007). Marketing Management. New York: McGraw-Hill. 2007.

Swift, L. and Piff, S., (2005). Quantitative Methods for Business, Management & Finance. 2^nd ed. London: Palgrave MacMillan.

Porter, M., (1984). Competitive Advantage. New York: The Free Press.

Swift, L. and Piff, S., (2010). Quantitative Methods: For Business, Management and Finance. London: Palgrave Macmillan.

Treacy, W., (2005).The Discipline of Market Leaders. New Jersey: Addison Wesley.

Wankel, C. and Malleck, S., (2008). Global sustainability initiatives: new models and new approaches. New York: IAP. Print.

Waters, D., (1994). Quantitative methods for business. London: Addison-Wesley.

Kuwait is an Islamic region, which in the early years had few investors. This was because there was little knowledge of the marketing opportunities in the region. The religion and culture of the people living here influenced their perception of the services offered especially retail services. The discovery of oil attracted many foreign investors to Kuwait and this led to increased spread of wealth to those who were poor.

Many immigrants were from America, India, Bangladesh and other parts of Asia. The wealth from the extraction of oil accelerated growth in the middle and upper-middle classes. As a result of this, McDonalds corporation  an American fast food company  was one of the 63 companies attracted to develop a branch in Kuwait. It specializes in selling cheeseburgers, hamburgers, French fries wraps and breakfast items.

McDonalds corporation is considered to be a small store and it will be hard for it to succeed in the industry because it lacks incentives. On the other hand, McDonalds is believed to ignore some cultures and behaviors of customers. McDonalds corporation cannot expand their services into new markets because the Kuwait market is now saturated. For McDonalds retail store to grow, it needs to first understand the importance of culture and religion to the residents of Kuwait (Blank 4).

This will improve human relations that will have a positive effect on the incomes of the retail stores. According to Raven and Welsh, McDonalds fast food store should hire foreign workers from different countries who have experienced different needs and different ways of satisfying those needs.

This will be an opportunity for them to diversify in production of different types of foods. Foreign employees can easily be brought in from the head office in America. This will be an advantage to McDonalds corporation because it will have to train its workers on how to prepare its products as well as how to use the equipments (Blank 5).

McDonalds corporation should focus its attention on service encounters and satisfaction of their customers because customers are believed to receive less emphasis in the developing countries. Customer satisfaction is known to be specific to a transaction while service quality is affected by the attitude employees have towards service delivery.

The corporation should, therefore, invest its resources on improving the quality of services offered by its employees to their customers, for example, through training. This will help it to expand into other new markets leading to increased growth and profitability (Blank 5).

McDonalds corporation should understand the culture of residents to help it in segmenting the market and resource allocation. Before entering into a market, it should have full information of the different cultures that exist in that market so as to operate profitably. National culture is considered as the main factor that influences international management as it will determine the decisions made by management concerning its operations (Blank 5).

McDonalds corporation should prepare its food in large quantities in order to take advantage of economies of scale, which will lead to reduced costs and increased profits. The extra profits gained through savings from producing in large quantities will help expand to other areas. It should also invest in proper technologies and train employees on this modern technology (Blank 7). This will make the operations efficient and effective thereby reduced costs.

McDonalds corporation as one of the fast food companies is considered a low wage industry. It, therefore, cannot afford to pay the minimum wages. This leads to high turnover. It should, thus, take advantage of the sub minimum wage for the youths. Sub minimum wage reduces training costs because it does not require any additional training for the first consecutive ninety days. The working conditions of the employees should be improved and their health standards maintained in order to motivate them to work harder (Blank 7). The company should seek real expertise in brand development.

Finally, the top management at the organization should be well trained to make appropriate decisions that will make the operations of the store more effective. They should be able to research on information about the market and take advantage of the information to enter new markets. They should also possess interpersonal skills to help them relate with employees in a proper manner. This will motivate employees to put more effort in their work. Employees should also be allowed to make some decisions that affect them. The firm should adopt new business models, which will help in averting its smooth operation (Blank 9).

For McDonalds corporation in Kuwait to grow internally and externally, it should first understand the culture and religion of the residents who are the target customers. It should apply sub minimum wage to reduce employee turnover because it cannot manage to pay the minimum wage. It should also segment the market so as to serve the customers better. This can be done through obtaining relevant information about the market. Lastly, it should make sure it takes advantage of economies of scale and also provide good working conditions for employees.

Works Cited

Blank, Steve. Why the Lean Start-Up Changes Everything. Harvard Business Review, 2013. Web.

McDonalds is an American international enterprise that deals with fast foods. The franchise business that operates in more than 100 countries is based in the United States and is greatly influenced by federal regulations. Following the enactment of a law to promote healthier nutritional behavior, McDonalds Company has moved to comply with stipulated legal requirements and to modify the nutritional content of its products. This paper seeks to discuss the costs that are involved in the decision to enhance nutritional standards. The paper will identify relevant costs and costs that are not relevant to the decision.

Corporate social responsibility aimed at improving nutritional standards is one of the decisions that have recently been made by McDonalds corporation. One of the major initiatives in this decision involves the production of dairy products that are low in fat content. The company also ensures that the percentage of calories in its products is reduced to about 20 %. The companys move further extends to conducting awareness campaigns that target families as a whole with the main agenda of enhancing better nutrition among children. Other initiatives about the decision involve the production of specialized packaged meals, reducing sodium content in products, advertisements, and organized field trips by the organizations key personnel.

This decision was made in the year 2011 and its implementation is expected to be long term. Full compliance with the legislation to set nutritional standards is expected to be accomplished by the end of March 2012. Further considerations such as reduction of sodium content in foods are projected to be fully implemented by the end of the year 2015. Though advertising was to be reinforced, it has significantly been used by McDonalds to spearhead nutritional awareness campaigns. The period for implementation of the decision, therefore, includes the years 2011 and 2012 for active measures with slight extension to future periods.

To implement the decision to improve nutritional standards, the company faced a variety of inputs in terms of implementation costs. The first initiative, aimed at reducing fat, sodium and calorie content in the foods would, for instance, require inputs such as research and evaluation machinery and personnel. There was also the option of using alternative sources of raw materials that would yield low percentages of the minerals in products. Similarly, advertisements would call for the companys marketing inputs while field trips would require the application of the companys vehicles, work hours, and monetary expenses.

These inputs can be classified into either relevant costs or costs that are not relevant to decision making. The first classes of inputs that are considered irrelevant to making decisions are historical costs. Historical costs include costs of plants, machinery, and vehicles and are costs that have already been incurred before the decision. Relevant costs, on the other hand, include opportunity costs and sunk costs. These include benefits that would have been derived if another alternative were adopted instead of the decision and the costs that must be incurred in implementing the decision.

The table below summarizes some of the relevant costs and costs that are not relevant to the companys decision to improve its nutrition standards.

Table 1. Estimates of involved costs

Though the involved inputs are costly, a large percentage either are not relevant costs as they are historical costs or would have been incurred irrespective of the decision. The company, however, stands to benefit from the improved corporate image that may boost its sales.

Introduction

Product positioning is a crucial marketing mix function that ensures the strategic placement of goods and services in the market. McDonalds is known for its robust product positioning strategies that have continued to offer the brand, which has a unique competitive edge in more than 100 countries worldwide. This essay provides insight into McDonalds product positioning strategy.

McDonalds Product Positioning and Corporate Strategy

The fast-food company conducts its business in a way that targets families. In fact, it has made itself a friendly family low-cost restaurant in the fast-food industry (Hanratty et al. 548). The corporate strategy focuses on an economical business by providing healthy and blissful meals with considerably short delivery times.

The McDonalds utilizes tech-savvy point-of-sale systems to shorten the customers waiting time. The company made globalization one of its core strategies. Through internalization, the organization has introduced its products and customer service to various foreign countries. Close attention is paid to the cross-cultural diversity aspects associated with the cross-border business (Dabija and Postelnicu 210).

To position their products in line with the globalization strategy, the company has introduced numerous local business themes such as the Aunt and Uncle McDonalds in China. The themes correspond to the countrys emphasis on family values. The company has also established a unique fast food globalization strategy known as Mcdonaldization. The term implies the proliferation of the fast-food company worldwide by matching the principles of the organization with the family values of the host country.

The company has gone further to make its environment a hangout place by introducing services such as wireless internet connections, laptop points, play stations, and playgrounds for children (Bobba 76; Hanratty et al. 549). As the restaurants serve children, they have products too for the whole family.

Weaknesses in McDonalds Product Positioning

The McDonalds product positioning has faced stiff challenges in both the American markets and abroad (Nandini 21). Its products have been criticized for posing health threats such as obesity, heart disorders, asthma, and mad cow disease to children. The McDonalds products have also been questioned for having environmental issues such as the genetically modified potatoes that are used to prepare the meals. In addition, the beef used in the restaurants comes from as many as five different countries (Nandini 21).

This practice of mixing substances from different and extreme distant origins is problematic since the likely contamination is difficult to trace. The introduction of fast food products in different countries has affected local cultures adversely. Many people feel that it undermines the local cuisines that match with their traditions (Westjohn, Singh, and Magnusson 59).

The relevance of the EPS/EBIT Chart in Strategy Implementation

The determination of the financial risks of the enterprise is accomplished using different tools with a view of acquiring adequate capital to implement various strategies. Business risk refers to the unpredictability of the enterprises expected earnings before the interest and taxes (EBIT) (Rose 137). An EBIT analysis is utilized as a technique to determine the extent to which the debt and/or stock should be used to fund the projected strategies.

Successful strategy implementation requires additional capital that can be obtained from the debts and equity besides the companys operations and sale of assets (Rose 137). The EPS/EBIT Chart Terms include the Earnings Per Share (The Net Income divided by the number of Shares Outstanding), Earnings Before Interest and Taxes (EBIT, also referred to as operating income), Earnings Before Tax (EBT), and Earnings After Tax (EAT).

Works Cited

Bobba, Samantha. The role of the food industry in tackling Australias obesity epidemic. Discover the opportunities in general practice 1.1 (2013): 76. Print.

Dabija, Dan-Cristian, and Ctlin Postelnicu. Mcdonalds  Between Internationalization and Regionalization of Restaurants Value. Review of Management & Economic Engineering 14.1 (2015): 205-219. Print.

Hanratty, Barbara, Beth Milton, Matthew Ashton, and Margaret Whitehead. McDonalds and KFC, its never going to happen: the challenges of working with food outlets to tackle the obesogenic environment. Journal of Public Health 34.4 (2012): 548-554. Print.

Nandini, Satya. McDonalds Success Story in India. Journal of Contemporary Research in Management 9.3 (2014): 21. Print.

Rose, John. Extending the Presentation of the EBIT-EPS Relationship for Introducing Financial Leverage in the Classroom.Journal of Financial Education 1.1 (2010): 137. Print.

Westjohn, Stanford, Nitish Singh, and Peter Magnusson. Responsiveness to Global and Local Consumer Culture Positioning: A Personality and Collective Identity Perspective. Journal Of International Marketing 20.1 (2012): 58-73. Print.

Introduction

McDonalds is one of the largest fast-food restaurant networks in the world. It works as a global franchiser; more than 80% of their restaurants are possessed by independent businesspersons (Our Business Model).

According to the official website, the company serves approximately 69 million clients every day, in nearly 36,000 restaurants located in more than 100 countries of the world (Company Profile). In 2014, it had total revenue of $27,441 billion, and a net income of $4,758 billion (MCD Income Statement). So, is there any prospect for growth for such a large company, and if yes, what is it?

Current Situation at McDonalds and Threats

Despite the fact that McDonalds is among the largest fast-food worldwide networks, it is still planning to grow and develop. For example, in 2013, McDonalds plans for 2014 were to introduce a wider selection of foods and drinks, as well as to offer free WiFi. It also planned to open nearly 1,500 new restaurants and get an operating income growth of 6-7% (Campos par. 7).

However, according to MCD Income Statement, the organizations operating income in 2014 accounted for 90,7% of the operating income in 2013 (whereas the income in 2013 was 101,86% of 2012). So, the company has, in fact, suffered a great decline in sales in 2014. According to Udland, this is due to a rise in the levels of obesity and the increase in customers preference for healthy food (par. 3).

Thus, it can be inferred that competitors of McDonalds are not only other major fast-food restaurants such as KFC, Yum Brands, Burger King, or Wendys, but, more importantly, various restaurants (both local and worldwide) that serve healthier food. It is stated that consumers in New York are willing to pay more for meals that resemble home dinner in restaurants that look more like a kitchen than manufacturing (Hussain).

Opportunities for Recovery and Growth

Udland claims that in such a situation, when McDonalds sales are steadily falling, and the company is confronted by a long-term crisis, the only chance for its recovery and/or growth is to swallow other businesses of the same type, such as Wendys or Starbucks (par. 5).

On the other hand, Brumley asserts that there is much opportunity for McDonalds business in one particular region, which is China: the companys CEO and his team see China as the most productive place to foster change & even if only because China is the only place they truly understand how to improve (par. 7). So, a possible way of improving the companys situation is to focus on the development of the Chinese market.

Another prospect of improving the current situation might be related to the food McDonalds offers. As we mentioned before, clients often opt for other restaurants due to the fact that they offer healthier meals. Thus, McDonalds might consider changing the menu and adding more types of healthy food to it, such as salads or analogous vegetable dishes. This practice is not new; in fact, McDonalds already has the experience of introducing healthier types of food (such as carrot sticks). Perhaps it is time to conceive additional similar options.

Conclusion

As we see, McDonalds, despite its famed reputation and being a worldwide company, nowadays suffers a great decline in its sales. According to the authors cited, the decline is, to a great extent, the result of changing tendencies and preferences of the customers who opt for healthier food choices.

There may be not a great perspective for the companys development nowadays; most analysts are concerned with the problem of declining the drop in the sales. On the other hand, the company might still be able to develop further in some regions (particularly in China), and it might improve its own performance in markets by introducing new products that would correspond to consumers wishes.

Works Cited

Brumley, James. McDonalds Is About To Tap Into A Huge Growth Opportunity. 2014. Web.

Campos, Adrian. How McDonalds Plans to Keep Growing. 2013. Web.

Company Profile n.d. Web.

Hussain, Samira. McDonalds Losing Out to High End Competitors. 2015. Web.

MCD Income Statement. 2015. Web.

Our Business Model n.d. Web.

Udland, Myles. Maybe the Only Way for McDonalds to Grow is to Buy Wendys. 2015. Web.

In the contemporary world, firms are using a mix of strategies to achieve greater levels of differentiation. Service delivery is one of the avenues that firms are using to realize this operational goal. In this respect, this paper focuses on service visits and analyses by critically evaluating, comparing, and contrasting two service-based entities; a fast food restaurant (McDonalds) and an automobile service center (Bosch Car Service). By critically examining the types of services rendered by these two entities, it is evident that they mainly focus on consumer service as their main means of service delivery.

Consumer service at McDonalds is fast and efficient. Unlike in fine dining restaurants where customers have to wait for their orders to be taken and actually their food to be served, employees at the McDonalds outlet that I visited were quick to take orders from their customers and serve them quickly. This is an effective means of serving customers hence saving customers as well as the restaurants management a lot of time. On the other hand, Bosch Car Service has specialized in service delivery to enhance its overall performance. To achieve this, the service center that I visited, comprised of employees who had the skills and technical knowledge to perform specific duties that have been vested to them. This is critical as it ensures that all cars that are brought in for service are clearly diagnosed and repaired in accordance with the expectation of their clients. This is essential in ensuring that the entity maintains its existing clientele and attracts new customers.

At McDonalds, the main aspect of service delivery that had a positive influence was the offering, because the services that are offered in the outlet that I visited are designed to meet the needs and expectations of its clientele. The McDonalds menu, for instance, provides its customers with a wide array of food combinations to choose from, hence meeting the needs and expectations of their varied clientele. A fast-food restaurant needs to offer its services in a fast but efficient manner. McDonalds has specialized in this. It is perhaps as a result of this fact that this specific outlet did not have long queues, hence ensuring that customers spend a minimal amount of time purchasing food. These aspects of service delivery tend to enhance the overall consumer experience. However, while firms such as Bosch Car Service spend a lot of time and money on recruitment and training, McDonalds does not. This increases the chances of an employee behaving in an inappropriate manner, such as being rude or arrogant to customers or other employees, hence resulting in the development of a negative attitude and perception towards the restaurant.

As stated previously, the Bosch Car Service lays a lot of emphasis on employee recruitment and training. This ensures that the firm offers high-quality repair service to its customers, and also ensures that its customers develop a positive attitude and perception towards the entity. To further enhance its service delivery, this entity specifically offers service and genuine service parts for specific vehicle brands. This develops a feeling of professionalism and specialization in its clients. However, this aspect of consumer service has a negative influence on clients who own cars that cannot be serviced by this firm. Such clients will not have confidence in the firm if they take their cars to be serviced by Bosch.

At McDonalds, color, lighting, and smell influenced my overall consumer experience. The ambiance that was brought about as a result of the presence of these factors enhanced my eating mood while at the outlet. At Bosch, color and lighting were the main physical factors that enhanced my overall consumer experience while at the service center. The color and lighting of the service center clearly brought out its spatial layout. For instance, the customer waiting area was well spaced with comfortable couches that enhanced my comfort while waiting for my car to be fixed. Additionally, magazines were present, which had more information on the company as well as cars and car maintenance. This greatly enhanced my experience at the service center.

Other aspects of physical evidence at McDonalds and at Bosch aimed at achieving corporate branding. These entities used signs, symbols, and artifacts to brand themselves within their outlets. At McDonalds, for example, there was a huge logo of the company. Inside the restaurant, the logo and catchphrase of the company were present on its walls, employee uniforms, as well as the food packages. Bosch took a relatively similar approach to the brand itself. Outside, the service outlet was a huge Bosch sign. Moreover, there were numerous signs and symbols inside the building attributed to the firm. The use of the physical environment for corporate branding purposes is critical, especially in developing brand awareness and brand loyalty in consumers.

Like any other entity, McDonalds used its physical evidence as a service differentiator. To achieve this, the spatial layout of McDonalds restaurant aims at reducing congestion and increasing sitting space for its clients. Congestions and long queues are usually a problem in many fast-food restaurants. Thus, by overcoming this setback, McDonalds has managed to brand itself as a fast and effective fast food restaurant. To enhance the experience of its customers, McDonalds outlets are usually kept clean, well-spaced out, and have ambient lighting. This creates a desirable mood and eating atmosphere in consumers. To enhance service delivery, McDonalds outlets usually have a huge menu placed above the counter. This menu reduces the time, and difficulty customers might have in deciding what to purchase as well as their costs. Bosch, on the other hand, used its physical environment as a service differentiator. The technical team, for instance, had well-designed overalls with the logo of the company at the back. Such a dressing code tends to develop the notion that its employees are more intelligent, skilled, and interactive as compared to other car service firms. At the same time, the presence of symbols, signs, and magazines enhances the process of service delivery by providing more information about the entity, its operations, the ordering process as well as consumer management.

Despite the fact that McDonalds and Bosch operate in different industries, the service marketing concepts that these entities are using are fairly similar. Thus, to enhance their overall consumer service delivery, these firms need to conduct more consumer research to understand the needs and requirements of their customers clearly. This will ensure that the service delivery strategies that they will come up with will enhance their brand awareness, differentiate them from their rivals, and meet the needs and requirements of their target market.

Fictional hospitality operation and its products

Comfort Hotel Inn

Comfort Hotel Inn is a tourist hotel located on the coast of Zanzibar. The hotel has been in operation for the last two years; however, it has been facing difficulties to penetrate in the hotel industry. Nevertheless, as its marketing manager, I will change the direction and make the hotel more competitive.

Target Customers

The hotel is in a coastal region; this makes it effective for tourists. Zanzibar is a tourist destination, especially in festival seasons and summer. When tourists come to a country, they are interested in having a different experience/feeling. To ensure that this target customers needs are addressed, I will upgrade the hotels facilities.

Tourism is not an all year round activity; there are months that the flow of tourists is on a slow move. The company targets domestic tourists as its second target customers. Other than individual visitors, the hotel has halls for corporate customers and conferences.

Strategies to Target Customers

The general rule of customer care says, a dissatisfied customer tells two others, and a happy one tells another one, so the first thing is to ensure that quality and good services are provided in the inn (Cook 67). After all, measures have been put (for quality), the next step is marketing and advertisement. Marketing is a long trail of processes that ranges from drawing a raw strategy, setting the value of goods and services, creating consumer awareness to spreading out of different available concepts. The hallmark of this process is to enhance the supply of goods and services to meet the demand of consumers as well as achieving both the specific and general goals of a business enterprise (Paley, 1999).

Hospitality Brand Founded Before 1990

McDonalds

McDonalds is a fast-food company that was founded in 1955. Other than operating as a restaurant, it has been franchising its name to other companies all over the world. It is located in 117 countries and has over 32,000 local restaurants outlets. Its founder is Ray Croc. The major known brands of the company include Egg McMuffin, world Famous, Quarter Pounder, Chicken McNuggets, and Fries, among others (McDonalds Official website, 2010).

Product Changes Over the Years

The company initially manufactured hamburgers, but today numerous products are produced by the restaurant. It sold its 100millionth hamburger in 1958. Today the restaurant has a wide variety of foods. Hamburgers today are different from the old days hamburger. The recent development on the products is the introduction of McCafe real fruit smoothies and frappes that were launched on July 13, 2010, in the United States of America (McDonalds Official website, 2010).

The Current Phase of the Product Life Cycle

The products of the company are in the introduction, growth, and maturity ages, depending on the product (Paley, 1999). There are new products introduced to the market like the new McCafe real fruit smoothies and frappes. Egg McMuffin is in the development stage is not an old brand since it was introduced in the 1990s. It has grown in the way it is made, and more people are willing to give it a trial.

There are other products like chicken McNugget, which was introduced in 1980 and is in the maturity stage. It has been in existence for that long, and the customers today are elderly people, who form a small portion of the population.

Reference List

Cook, S. (2008). Customer Care Excellence: How to Create an Effective Customer Focus. New York: Kogan Page Publishers.

McDonalds. (2010). The Companys Official Website. Web.

Paley, N. (1999). The managers guide to competitive marketing strategies. New York: CRC Press.