Category: McDonald’s

Introduction

McDonald’s in Germany is a part of the successful chain of fast-food restaurants that closely follow the other American and the European model. There are more than 1211 McDonalds restaurants in Germany and the restaurants cater to millions of customers. The business model followed in Germany is a mix of company-owned restaurants and franchised restaurants. This paper provides an analysis of the McDonalds restaurants in Germany with special emphasis on the advertisement features and campaign that the company uses.

ich liebe es (I love it)

The ‘I love it’ campaign was launched on September 22, 2003, and this was a global campaign targeted at Mcdonald’s customers across all countries. The German advertising company, Heyes designed the campaign. The budget for the campaign was 100 million Euros. The campaign was aimed at the 15 to 24 age group and included a number of print, TV, and banner Ads. A public casting call was announced for people to participate in the Ads and over 15,000 applications were received out of which 24 were chosen to appear in the Ads. Sample images of the Ads are given in the following table (ich Liebe es, 22 September 2003).

Table 1. Sample Ads from the ich Liebe es Campaign (ich Liebe es, 2003)

Schro¨der (Schro¨der 2005) has argued that McDonald’s is the single largest fast food retail chain in the world. The core brand philosophy is defined into three easy concepts: Food, people, and fun. The brand essentially stands for a combination of unique food products, customers, employees, and the atmosphere in which this happens. The brand stands for one of the easiest everyday pleasures in life. It conveys the philosophy that Ray Croc wanted to convey when he set up McDonald’s as a lifestyle brand. The author suggests that Consumer value plays a crucial role at the heart of all marketing activity of Mcdonald’s as it refers to things of value that have been created for a specific market.

Product Levels

Consumer value is a very complicated concept as it integrates a number of possible product quality attributes, process-related attributes and less tangible sources of value, and the brand image. The product level is defined at different levels such as nutritional, sensory, and hygienic. In addition, there are other attributes such as credence attribution, ethical attribution, and environmental protection (Dibb 2001). The standard McDonald’s menu of burgers and fries has been supplemented with chicken breasts, salads, fruit, organic milk, and free-range eggs for breakfast. The company distributes leaflets that promote the daily consumption of five portions of fruit and vegetables. The following table gives a broad breakdown of various product and menu items that the company provides. The offerings shown may differ be different in some restaurants and some of them may not have all the items that are mentioned.

PEST Analysis

The PEST analysis of the political, environmental, social, and technological factors that drive the business is given in the following section.

Political

McDonald’s has been faced with increased allegations about the vast natural resources that are being depleted to provide the restaurant with products such as meat, potatoes, and other forms of food. The mad cow disease scare hit the business hard, as customers were not avoiding beef products. The company has been accused of endangering large areas of South American forests that are cleared up to breed animals and to plant crops that are used by McDonald’s (Horovitz 2002).

Economic

According to Datamonitor (Datamonitor July 2006), the German fast food industry of which McDonald is a part has grown by 1.9% in 2005 and is worth 3.462 billion USD. By the year 2010, the market is forecast to have a value of $3,810.7 million, and this is an increase of 10.1% from 2005. The volume of transactions in 2010 is forecasted to be 2031.5 million and this is an increase of 4.1% from 2005. The fast-food market is defined as the sale of food and drinks for immediate consumption either on the premises or in designated eating areas shared with other foodservice operators or for consumption elsewhere. This means that the market share of Mcdonald’s is expected to grow in the coming years.

Social

There have been increasing outcry against the dangers of obesity, diabetes, high cholesterol levels that fast food in general and McDonald’s, in particular, have brought. There has been major criticism about health problems associated with continuous eating of high-fat restaurant food and victims of obesity have filed many billion-dollar suits. But the phenomenon of fast-food restaurants is here to stay and many companies such as McDonald’s, Burger King, Taco Bell, Subway, etc. have set up multi-billion dollar enterprises across different countries (Schlosser Eric, 2001).

Technology

McDonald’s has taken extra efforts to keep up with the best in technology and has used innovative IT solutions to increase its competitive advantage. A few years back, the company initiated the Project Seer that was intended to upgrade and overhaul the IT systems. The company used a Business Intelligence tool called Business Objects that helped the internal operations to be made more transparent. The implementation has allowed the company to improve the manner in which data from everyday sales is handled. This allows the strategic management team to understand which products are moving fast, which have lower sales, how much time is taken to complete an order, and so on. The implementation also allows promotion offers to be more focussed. When a special promotion item is introduced, it is possible to know how the promotion has impacted the sales of other items, what items can be bundled to make the offer profitable, and so on. The implementation has also simplified the accounting procedures and the made customer complaint resolution much easier. The innovation allows the company to compare the sales figures of branches that have fewer complaints with sales figures of branches that have higher complaints. The company has also used technology innovations by using the web-based Restaurant Locator, using RFID tags, and the manner in which it makes the famous French fries that have the same taste no matter where they are eaten (Tiley 2004).

Five force analysis

Porter’s Five Forces analysis helps to identify the forces that influence the activities of Mcdonald’s in the market (Datamonitor 2006).

Promotional mix

Suppliers: McDonald’s supplier base is from third world countries and various ranches and farms in different countries. It is heavily dependant on the supplier who has to power to disrupt the operations and bring it to a standstill.

Industry Competitors: The leading players in the German market are McDonald’s Deutschland, Burger King Holding, Yum! Brands, and Nordsee Group. The German fast food market is fragmented and hence competition remains intense. Consumers are deluged with choice, and the availability of substitutes is high. The threat of new entrants is also high, although stringent hygiene standards raise the entry costs somewhat. Consumer demand is critical and influenced by factors such as spending power – which is dropping in Europe – public perception, health trends, and so on. Food is perhaps of less cultural significance in Germany than in countries such as France, and fast foods are inexpensive compared to other forms of eating out. Slow growth in the German economy generally has led to greater price consciousness in many markets, and the fast-food companies have responded in some cases by introducing ‘budget’ menus (Datamonitor 2006).

Buyers: Buyers have a wide choice in the form of suppliers and menu items. The market is also price-conscious and they have become increasingly health-conscious of the food they eat. Increasing health awareness, in part due to the rise of obesity and obesity-related conditions across Western Europe, has impacted negatively on the fast-food market. Consumers are also increasingly demanding organic, ethical, and GM-free food, although the demand for low-carbohydrate food has declined. Companies such as Mcdonald’s are attempting to mitigate the effects of changing consumer preference by broadening their product and brand portfolios to include healthier options and therefore retain revenues. McDonald’s is also engaging in a campaign to educate European consumers about the health content of its food (Datamonitor 2006).

Substitutes: Other than the major retail chain restaurants, there are a number of local shops and chains that operate in a locality or a town. These units have lesser operational costs and are able to offer customized service to their customers in the form of different flavors, different beverages, different choices of toppings and fillings, and so on (Datamonitor 2006).

German market segmentation

The market is broken down into four segments: Quick Service Restaurants (QSR), Takeaways, Mobile & Street Vendors, and Leisure Locations. QSR’s areas are defined as locations where the primary function is to provide full meals but where table service is not offered. Takeaways are defined as: establishments that provide freshly prepared food for immediate consumption and where typically 80% or more of revenues come from consumers who take the food off the premises to consume. Mobile & street vendors are defined as: Either individual mobile stalls or vans that offer a limited range of freshly prepared food as well as beverages. Leisure locations are defined as locations serving food and drinks for immediate consumption on-premises within leisure outlets (such as Cinemas, Theatres, Racecourses, etc.) that the Leisure operator owns and operates itself. Quick service restaurant fast food sales form the German market’s most lucrative segment, generating total revenues of $1.8 billion in 2005. The market is forecast to accelerate its performance, with an anticipated CAGR of 1.9% for the five-year period 2005-2010. Franchising remains an important way for large players to expand the number of their outlets.

Factors affecting the German market

The German fast food market has seen some fluctuation in its growth within the last five years. People find quick-service restaurants the most convenient place to buy their fast food, and these outlets account for the highest volume of transactions and the most lucrative share of the market revenues.

SWOT Analysis

A SWOT analysis of the company is provided in the following table (McDonald Corporation, 23 June 2007).

Reason for adopting the same type of advertisement

McDonald’s is a global brand with commonly shared values across all its franchises when it comes to serving customers. To customers, the “real” McDonald’s is playful, optimistic, distinctive, delightful, and authentic, and caring. The rules of advertisement have changed and customers are smart about marketing. They don’t McDonald’s to advertise at them but they want to be part of the conversation. They want to connect to brands the way they connect to each other. By using a common theme of advertisement, it creates a uniform message of excellence in quality and service, wherever Mcdonald’s is sold (Dillion, May 2006).

Benefits of Branding

According to Dibb (Dibb 2001), Branding helps to create a sharp focus on the business and this increases the overall effectiveness. Marketing activities will attract the right prospects for the service. The business development strategy and plan will be aligned for increased success. Core communication would be created that reflects the benefits, features, and unique selling points of the product. The product will have a clear and consistent value and presence and this provokes customer confidence.

Conclusion

The paper has examined various features of the I Like it advertising campaign run by McDonald’s. The paper has also provided a PEST and SWOT analysis and examined the market segmentation and analyzed Porter’s Five Force analysis. The reasons for adopting a common advertising strategy have been examined and the benefits of branding have been studied.

References

1. Buchholz Todd, 2004. Burgers, Fries and Lawyers. Journal Policy Review. 123. p. 45
2. Datamonitor (2006), ‘Fast Food in Germany’, Datamonitor Industry Report, Reference Code: 0165-2230
3. Dibb, S. (2001), ‘Marketing, Concepts and Strategies’, Boston, New York, ISBN 0395962447
4. ‘ich liebe es’ (2003), ‘How one a 100-millions-euro-budget locally, nationwide and internationally looks’.
5. Dillion, 2006, ‘Dillion WFA Speech-Draft 8’
6. Horovitz Bruce (2002), ‘McDonald’s looks beyond burgers‘ Web.
7. Lancaster, G., Reynolds, P. (1999), ‘Marketing‘, Butterworth-Heinemann, Oxford, ISBN 0750620552
8. McDonald’s Corporation (2007), ‘SWOT Analysis of McDonalds’, Datamonitor, pp: 18-21
9. Online Translation (2007), ‘Prompt Online: German to English Translation’. Web.
10. Schro¨der Monika J.A. (2005), ‘Fast foods and ethical consumer value: a focus on McDonald’s and KFC’ British Food Journal, Volume 107, Issue No 4, pp: 212-214
11. Tiley Steve, 2004, The Information Age Interview. Web.

Is there any challenge faced by the American company McDonald’s on the European market? Explain

McDonald’s is facing a crisis in the European nations. The crisis involves a reduction in sales as more people in the society have altered their preferences in food. While the culture of the European people is inclined toward consuming a lot of fast foods, the products offered by McDonald’s are being viewed as outdated menus. People in the nations have particularly been looking to purchase products from the new fast food companies that seem too have better menus, which include spicy chicken and other foods that have been modernized. McDonald’s is left at a situation where it either has to change the products or compete on the basis of prices.

Identify the environmental aspects that McDonald’s needs to consider and reevaluate in the European Market

The European market is associated with the presence of a society that has a growing concern about the environmental impacts of different companies, and their respective efforts toward offsetting the negative implications on the environment. McDonald’s has done little to prove to the people that it is willing to reduce its carbon footprint and pollution levels. One of the factors that must be considered by the company is the development of a corporate responsibility program that enhances its commitment in reducing the carbon footprint associated with the supply chain, distribution, and other processes.

Additionally, the company must start focusing on enhancing the production of packaging material that is recyclable. These efforts might have a positive impact on the perception of the consumers in the European countries. By simply showing more concern about the environment, McDonald’s can effectively harness a larger market share. This implies that the consumer behavior of the Europeans is dependent on the conduct of the companies in the market.

Discuss the product and consumer related factors that McDonald’s should take into account in order to compete successfully in the European fast food sector

The market in the European nations has indicated that the consumers are more interested in products associated with the post-modern culture. Food is a cultural artifact, and the Europeans have demonstrated that their tastes and preferences in food have been changing. The majority of the people are more inclined toward consuming healthier products, whereas the rest of the society has a keen eye on the consumption of modernized foods.

Differentiation of products in fast food joints is one of the factors that attract more consumers, and since McDonald’s has always operated on a fixed menu that is dominated by burgers and fries, it has not been able to increase its market share of the recent past. Price is also a major factor in consumer behavior in Europe. It is apparent that Europeans have a high appreciation for affordable quality products because of the value adding factors.

Based on your answers to the previous questions, give specific recommendations on how McDonald’s should address its growth issues on the European market

Firstly, the company has to respond to the requirements highlighted by the consumers. Disarming the European consumers will depend on McDonald’s ability to provide an environment where the consumers have nothing to complain about the company. This implies that it should start being conscious about the environment, and it should also introduce new products in its menu. Competing with the companies in the market will only be successful if McDonald’s menu also has the popular modernized foods. Secondly, the marketing campaign will be instrumental in providing information to the consumers about the health attributes of the products at McDonald’s.

Since most Europeans are looking for fast foods with healthier qualities, the low-fat products at McDonald’s are likely to harness a larger market share. This means that even the new products in the menu must also be associated with low-fats, which calls for innovation on the part of the company.

Break

Even Analysis

When examining the case of McDonald’s “senior” Restaurant there are several aspects to take into consideration, the first is the fact that the sheer amount of regular customers that come to this location can be considered advantageous for the company from a revenue standpoint. First off, it is important to note that while it is true that the amount seniors that occupy the restaurant is considerable, the fact remains that as a fast-food restaurant, most people are not there to stay for prolonged periods with the seniors being an exception to this “rule”. As such, the steady stream of customers that come into the fast-food chain can utilize the limited seating available, finish their meal quickly and leave.

Also, while it is true that most of the seniors do is merely buy a cup of coffee and stay there for a long period, the fact remains that this not apply to all instances wherein there is the very real possibility that some of the seniors would continue to buy food items as they get hungry since they are staying there for 2 to 4 hours. Thus, from a break-even analysis perspective of the number of seniors versus the limitation in seating for new customers, there is no problem whatsoever with the seniors being a very potent means of earning that branch more money.

As for the bingo idea, an underutilized party room for the seniors to play bingo would be a great idea since it is more or less not even used a majority of time yet the company still pays for it due to the rental payments it is subject to for the location it is using. By charging seniors $5 to join the bingo tournament and utilizing prizes in the form of McDonald’s coupons, this encourages people to continue to patronize the products of the restaurant. Not only that, the prizes awarded can be set at a lower level than the amount taken in for the bingo tournament which would result in more money generated than lost.

Financial Ratio Analysis

Sales

Overall, when looking at the sales of the branch, it can be stated that it is doing quite well for itself due to the sheer amount of regular seniors that patronize it. The coffee sales alone would be considerable which, when combined with other items that the seniors buy from time to time, make the current clients a very effective source of daily revenue.

Growth

When it comes to the growth of the location, it is important to note that there is nothing necessarily wrong with being known as the “senior” McDonald’s. The reason behind this is connected to the fact that this branch of the fast-food chain would be able to target a consumer demographic that in the past it had a hard time being able to successfully capture (Berfield 49). By encouraging more old people to visit the branch, this would result in higher sales revenue in the long run due to the steady stream of regular customers as compared to the irregular nature of the clientele that would visit an average McDonald’s branch wherein it is unknown how many people within a given day would come.

Forecasting

In terms of forecasting, the current setup is good for the restaurant since it enables an accurate estimation of the number of customers on any given day. Looking at the number of senior customers that come to the same branch which ranges from 100 to 150, it can be stated that a conservative estimate of the potential increase would be around 5% annually. The reason behind such an estimation is connected to the work of Boje, Driver, and Yue which explained that the inherent issue with senior clientele is that they do not have the same rapid exponential growth as compared to younger customers under their advanced ages (Boje, Driver, and Yue 197).

Works Cited

Berfield, Susan. “Mcfresh. (Cover Story).” Bloomberg Businessweek 4337 (2013): 46-48.

Boje, David, Michaela Driver, and Cai Yue. “Fiction And Humor In Transforming Mcdonald’S Narrative Strategies.” Culture & Organization 11.3 (2005): 195-208.

Introduction

Workforce management may be defined as an organizational process that enhances staff competency and performance levels. It provides a substantial range of practices and software to support executive management, store managers, front-line supervisors, and common employees across the company’s manufacturing, distribution, and retail operations. Workforce management includes such activities as human resource management, field service management, training management, recruitment, budgeting, scheduling, forecasting, and analytics. Human resource management is frequently regarded as a key element to the organization’s success as a substantial number of companies pay close attention to their employees. Moreover, the importance of training practices and the development of recruited employees for business growth cannot be denied. Effective training that develops professional skills, knowledge, and behavior requires well-defined schemes and a set of goals. This work examines and evaluates the efficacy of workforce management, especially the practices of recruitment, training, and development of McDonald’s corporation. Data was collected through the reliable works of scholars and the company’s official reports. The suggestions of the weak points’ improvement are provided as well.

Brief History

McDonald’s is a leading and valuable fast food corporation of international renown. This global foodservice retailer has approximately 34,000 restaurants in 119 countries and serves more than 69 million people every day (Mahajan 404). McDonald’s is one of the most distinguished international brands that “has spread its presence over the last 52 years” (Mahajan 404). Almost 80% of all McDonald’s restaurants in the world are open under the terms and conditions of franchising; they are owned and controlled by local individuals (Mahajan 404).

The company was founded in 1955 from the opening of its first restaurant by Roy Croc in Des Plaines (Mahajan 404). At the present day, its headquarters and training facility named Hamburger University is located in Illinois (Mahajan 404). McDonald’s currently holds a leading share in the global segment of fast-food restaurants and the local market of almost every country where it conducts business. McDonald’s is traditionally recognized for its experienced management, advanced operational systems, unique global infrastructure, staff hospitality, and high-quality food. The company’s well-defined management systems, structure, corporate culture, vision, goals, values, and missions provide its absolute leadership in the industry of fast food and foodservice.

Company’s Workforce Values

Concerning workforce management, the company is committed to inclusive workplace culture, equal opportunities for all employees, and their diversity. These fundamental standards are embedded in McDonald’s policies and practices. However, the maintenance of the fast-food branch’s commitment inevitably requires further development of these policies and practices as well. That is why the company provides significant transparency regarding its approach to specific contractual arrangements with its employees worldwide. As a condition of employment, the corporation does not require “mandatory arbitration of harassment and discrimination claims,” however, all claims related to discrimination or harassment either from an employee or former employee get appropriate feedback from the company’s Board of Directors (Global Diversity, Inclusion & Community Engagement). Moreover, employees are not forced to sign non-competition covenants that prohibit them from working in any rival company, except for a limited number of workers who have unique knowledge or skills and access to confidential trade secrets, intellectual property, and customer information.

The company is proud to offer its employees comprehensive, high-quality education and learning opportunities. McDonald’s has a wide range of training programs for the company’s competitiveness in the future – from the “long legacy of preparing restaurant managers at Hamburger University” to the international projects of leadership development (Global Diversity, Inclusion & Community Engagement). The McDonald’s Global Diversity, Inclusion & Community Engagement department elaborated and presented an education portfolio titled “Food for Thought,” Beyond Bias” (Global Diversity, Inclusion & Community Engagement). Its main objective is to provide an educational experience to all employees to realize their potential required for the business growth and awareness of their special ability to establish good relationships with customers and colleagues. This concept is firmly connected with the company’s belief that unconscious bias “can negatively impact the potential feel-good moments between employees and customers” (Global Diversity, Inclusion & Community Engagement). As these negative and positive subconscious stereotypes substantially affect the behavior, they should be rejected.

Strategy of Recruitment

Alongside traditional recruiting, McDonald’s substantively relies on its inner resources, especially in the case of employee responsible events. For instance, during the London Olympics, the company was chosen by the International Olympic Committee as an official restaurant service provider (Rees and Smith 140). The company’s UK department was required to establish several restaurants at various Games’ venues both for athletes and ordinary customers, with a total of 1,900 employees (Rees and Smith 140). Managers chose the strategy of internal recruitment rather than an external one and organized a competition for staff in all restaurants of the brand across the UK.

An opportunity to be employed during the Olympics was presented as a reward as the company, being the official sponsor, provided the selected staff with tickets, mobile phones, and accommodation in a luxurious London hotel for the Games’ duration (Rees and Smith 140). Employees were required to have excellent customer service and team cooperation skills and the ability to do a job in short order. From 6,800 employees across the country, 1,900 workers were subsequently chosen (Rees and Smith 140). This strategy of McDonald’s management was immeasurably successful as highly qualified and experienced staff provided outstanding work according to the company’s standards of quality.

Steps of Training in McDonald’s

The success of the McDonald’s company is provided by the highest standards of service and quality delivered to customers in every restaurant of this branch on a global basis. Well-trained and experienced employees and managers of the fast-food corporation are regarded as highly substantial elements for the achievement of these standards. According to its policy, McDonald’s provides its employees with career opportunities that empower them to realize their full potential (Mahajan 407). These options include broad-based and accurate training programs for staff and operation management and the internal recruitment policy that allows a newcomer to “progress through to a senior management position through merit-based promotions” (Mahajan 408). There are several stages of the company’s training, and the initial training stage at McDonald’s is oriented on all members of the fast-food empire that are divided into crew members and employees (Mahajan 408). The difference between these two positions is in their performance schedule – the work of crew members is organized on an hourly basis or shifts while the organization’s employees work regularly.

The initial stage of training may be defined as the welcome meetings that present the company’s expectations, standards, and guidelines. These meetings are followed by a comprehensive program of workforce development that provides training for all the McDonald’s employees in all areas of performance. Crew members work in close cooperation with trainers to obtain necessary skills and learn the operation circle, “from the front counter to the grill area,” required for all workstations in every restaurant (Mahajan 408). The prevalent number of training in McDonald’s is combined with practice as people store new information more successfully if they have a chance to apply their knowledge while learning.

During the period of initial training, both crew members and employees obtain the necessary knowledge concerning the basis of work and develop their professional skills to be competent in all areas within a restaurant. The time scale of the training period directly depends on the work schedule. All members of staff attend classroom-based training sessions as well to complete workbooks for service, quality, and cleanliness (Mahajan 408). The next step after initial training practice is ongoing training.

This procedure is conducted using observation checklists for all working stations and an appraisal grading system that forms the rating of every employee. In all restaurants, there is a common practice to promote crew members to the positions of hourly-paid managers who are responsible for the area’s accountability and schedule accuracy. In addition to the courses of development and training conducted within restaurants, workers attend regular development days (Mahajan 408). Crew members who want to be promoted should primarily pass the management entrance exam. After its successful completion, recruits attend training courses organized at the regional office by the training department (Mahajan 408). According to the development curriculum of the company, the managers’ training is combined with practice in a working place and implicates the learning of development modules through seminars and courses at McDonald’s National and Regional Training Centre (Mahajan 409). Only after this procedure do they receive a management position and return to restaurants.

The company’s management development curriculum offers prospects for future development in the sphere of restaurant management through intensive, elaborated, and structured training programs. The corporation offers this education for individuals aged 21 and older, either graduate or with previous management experience (Mahajan 409). The curriculum includes four main programs – shift management, systems management, restaurant leadership, and business leadership (Mahajan 409). Shift management provides employees with the development of essential skills and techniques that are required for effective operational control over working shifts. System management focuses on second assistant managers and first assistant managers who have been recently promoted. This program encourages the development of personal management techniques and increases the business knowledge of managers by covering all areas of the company’s systems.

Restaurant leadership introduces managers to team-building, communication with staff, decision-making, and other fundamental skills that are required for efficient restaurant management. Business leadership is defined as a program that targets restaurant and general managers and focuses them “on the need to develop a business strategy that encompasses both internal and external factors” (Mahajan 409). Experienced restaurant managers subsequently have an opportunity to get probation in the departments of regional offices. During this training, they learn new skills, see the business from different perspectives, and experience how the strategies of every department affect the achievement of the company’s goals.

Analysis of the Company’s Management

McDonald’s organizational culture addresses the development and efficiency of its human resources. The company’s workforce management supports its business growth in the fast-food market worldwide. According to the corporation’s prioritization, its organizational culture obtains specific characteristics – organizational learning, diversity and inclusion, the rewarding of excellent performance, people-centricity, and individual learning. The corporation defines people’s support and the employees’ development and needs as its priority. Management encourages staff to participate in the company’s improvement procedures and processes to enhance the quality of service.

The company’s organizational culture emphasizes the significance of in-depth and continuous learning as well. McDonald’s believes that individual learning encourages business effectiveness, quality of work, and productivity. It offers development opportunities and various training programs through the internship, Hamburger University, leadership courses, and global mobility to motivate the employees’ learning. Moreover, the corporation supports organizational training to achieve corporate goals. McDonald’s performs this organizational culture’s feature through policies, meetings, and collective training programs that encourage the employees’ knowledge-sharing. In addition, the official management policy of McDonald’s company defines inclusion and diversity as the fundamental factors of its corporate culture that optimize the capabilities of the HR department to deal with a highly diverse market.

However, despite immeasurably elaborated training programs and close attention to the qualification of the company’s employees and management, some of the McDonald’s workforce management practices need improvement. While the corporation emphasizes the importance of teamwork and collective training according to strict standards, the employees’ creativity is not encouraged. From a personal perspective, the company may organize regular meetings for employees and managers in every restaurant to discuss the potential solutions of specific problems. The aim of these meetings should be not only in decision-making but identification of creative workers to reward them as well. Moreover, corporate management should pay appropriate attention to the crew members’ conditions of work and salaries as long hours of work with constant deadlines and demanding customers should be properly appreciated in financial terms.

Conclusion

McDonald’s is a leading global foodservice retailer that has thousands of restaurants in the majority of countries worldwide. It currently holds a leading share in the global segment of fast-food restaurants and the local market of almost every country where it conducts business. The company is traditionally recognized by its experienced management, advanced operational systems, unique global infrastructure, and staff hospitality. McDonald’s organizational culture addresses the development and efficiency of its human resources. According to the corporation’s prioritization, its organizational culture obtains specific characteristics – organizational learning, diversity and inclusion, the rewarding of excellent performance, people-centricity, and individual learning.

According to its policy, McDonald’s provides its employees with career opportunities that empower them to realize their full potential through comprehensive and accurate training programs. There are several stages of the company’s training, and the initial training stage at McDonald’s that includes welcome meetings and practical exercises is oriented on all members of the fast-food empire. The next step after initial training practice is ongoing training conducted with the use of observation checklists for all working stations and an appraisal grading system that forms the rating of every employee. In general, the corporation offers four training programs – shift management, systems management, restaurant leadership, and business leadership.

Nevertheless, despite highly elaborated training programs and close attention to the qualification of the company’s employees and management, some of McDonald’s workforce management practices need improvement. The employees’ creativity is frequently not encouraged and rewarded in comparison with team work. That is why the company may organize regular meetings for employees and managers in every restaurant to discuss the potential solutions of specific problems to identify creative workers. Moreover, corporate management should pay appropriate attention to the crew members’ conditions of work and salaries as long hours of work with constant deadlines and demanding customers should be properly appreciated in financial terms. Unfortunately, the same issues are not unique for the McDonald’s corporation and may be observed in other fast food branches where the executive management should consider them as well to improve workforce practices.

Works Cited

“Global Diversity, Inclusion & Community Engagement.” McDonald’s, n.d., corporate.mcdonalds.com/corpmcd/about-us/diversity-and-inclusion.html. Accessed 10 Dec. 2019.

Mahajan, Supriya. “Competitive Advantage Through Training and Development in McDonald’s: A Case Study.” International Journal of Management, IT and Engineering, vol. 4, no. 10, 2014, pp. 403-417.

Rees, Gary, and Paul E. Smith. Strategic Human Resources Management: An International Perspective. SAGE Publications, 2014.

Executive Summary

The Green and Clean Kuwait Company (GCKC) is a Kuwaiti company with environmental and ecological technology and know-how and the company is interested to bid in the CSR project of McDonald’s Corporation as its project partner to introduce and implement an innovative approach that would reduce the environmental hazards by producing organic fertilizers generated from the food wastes of McDonald’s. GCKC would like to set up composting bins outside of every outlet of McDonald’s in Kuwait where the waste would be gathered and then transported to a factory outside the city where the foods and vegetable wastes would be turned into organic fertilizer.

The GCKC also develop a network of organic vegetable producers that would supply green products for McDonald’s at a cheap price in exchange for organic fertilizer. The project aimed to reduce greenhouse gas emissions through advanced technology integrating organic materials management strategies for Kuwait with waste composting bins, trucks, haulers, waste processors, gas generating set, boilers, and 1 master fertilizer with conveyor and packing line that would produce 5000 MT of organic fertilizer per year. It is predicted that the project would be feasible from the commercial and ecological viewpoint, as GCKC is striving for ecological sustainability in Kuwait and McDonald’s is eager to demonstrate its CSR concerns in the country, the joint effort would delegate environmental awareness in this region.

Introduction and background to the proposal

In the global arena, the environment has turned into the major focus of the global communities because the environmental degradation would generate ecological imbalance and hamper socio-economic development all over the world, the United Nations have taken intuitive for global negotiation in this regards. Kuwait is an integral part of global awareness for environmental and ecological sustainability, global warming also drawn significant attention of the government and local administration have taken three-layered waste management projects at the central and local level that incorporated municipal solid waste management, material recovery facility, and anaerobic digestion process (Al-Salem and Lettieri, 2009). Under such a scenario, the corporate houses in Kuwait have kept their highest priority on environmental issues as part of their corporate social responsibility where the multinational corporation McDonald’s would like to invest in this regard.

Kuwait is the pioneer of parliamentary form of government with women’s participation in the GCC region with its rising economic growth and social progress and placed at 4t^th at the Human development index of UNDP that pointed to the reasonable stage of development in the scale of life expectancy, education and living standard of the people. The economy of Kuwaiti is mostly dependent on the oil and petrochemical sector, although the government is emphasizing to improve its non-oil sectors including agricultural development, the climate of the country is not favorable to turn it self-dependant for its food supply, 75% of its water supply comes from distillation or import. According to the statistics of 2010, the country has a population of 2.9 million, and the total working force of the country consists of 35% local people, and the rest of them are foreign employees (BTI, 2012).

The Company

The Green and Clean Kuwait Company (GCKC), is a privately owned company incorporated under the local company act of Kuwait, the company has US$ 10 million of paid-up capital with headquarters in Kuwait city with skilled technical and professional working force and a dynamic board of management. GCKC is its corporate, residential, industrial, and pubic customers like municipals with an annual turnover of US$10 billion in 2011.

Business Proposal for Green and Clean Kuwait Company

Introduction to the Project

• Company Name: – Green and Clean Kuwait Company (GCKC)¹
• Address: –
• 07, XYZ street, City, Kuwait
• Name of the entrepreneurs: –
  1. Mr. X
  2. Mr. Y
  3. Mr. Z

• Telephone number: – (353) 000-123450
• Fax number: –
• (353) 000- 45670
• Email address: – GCKC @google.com, [email protected].

Budget status: – Initial investment of $1 supplied by McDonald’s Corporation.

Mission

Although GCKC is a privately owned company, profit is not its main motto, rather its mission is to maximize the resource values through waste management while reducing the environmental hazards and impact of global warming are a way that would improve the national economy and environment and the company could prosper.

Vision

GCKC strives to reach Kuwait in a stage of western nations for its environmental awareness by reducing its emulation of greenhouse gases and waste management and place it in a suitable position for the upcoming global convention for global warming.

Scope and Opportunity

• GCKC has previous working experience with the municipal waste management project in Kuwait;
• The company has a strong network with the non-profit nongovernmental organizations working in Kuwait;
• The company has a strong outsourcing set-up with the Asian emerging nations like Bangladesh, India, and Sri Lanka for low-cost workforce supply;
• GCKC has well enough global connection for technology supply;
• GCKC has enough financial and physical resources to implementing any big project.

Limitation

GCKC has not yet conducted any physical study with the stakeholders’ option, but having a Letter of Intent (LOI) from McDonald’s Corporation would go to conducting the study.

Business Concept

Zafar (2012) pointed out that Kuwait including other GCC and MEENA countries generate around 150 million tons of solid waste per year and one-third of the quantity comes from foods and vegetable which are used to landfill and discharging greenhouse gases into the open air. Scott (2011) pointed out that increasing health awareness, rising waste disposal costs and food safety legislation is the reason behind growing foods and vegetable waste, in Kuwait such wastes kept on the landfill and pollute the environment with tremendous health risk. To conduct a successful business with food waste management, it is essential to generate an inventory of food waste and then decide on a cost-effective solution for recycling with a benchmark indicator of the outcomes and their market price.

There are several processes for food and vegetable waste recycling options, for the first instance ‘cone composting system’ is a popular, cost-effective, and time-worthy solution for food waste including meat and other protein, bones, and vegetable and convert them into their original compounds like water and carbon dioxide. These green cones are manufacture made of recycled plastic with a solar power system along with a basket and a movable inner cone that function to eliminate greenhouse gases and separates the compounds in a form with is easily consumable for the plants and trees.

Thus, the compost could be transported to the selected farms to manure in the plants, at the same time it could be packaged into bags for marketing. This process is very cost-effective but may require permission from the local environmental authority for compliance with local.

Where the Project fits In the Organisation’s Existing Business

The project of composting for McDonald’s Corporation by collecting the leftover vegetables from the composting bins outside the 336 branches in Kuwait and selling those to the farmers by trucks will be the very first project for the Green and Clean Kuwait Company. This new company fits this project into the central point of its operations and it will continue to serve the McDonalds Corporation by running as an associate of its corporate social responsibly projects.

The Business Environment In Which GCKC Operates

According to The World Bank (2012), the environment of Kuwait is to a great extent business-friendly because within a very short time it has done remarkable progress in ensuring a corporate responsive atmosphere; the following graph shows how Kuwait and comparative nation rank on the ease of doing business –

How GCKC Will Enhance the Organisation’s CSR

Being socially responsibly is the heart of the Green and Clean Kuwait Company’s business because it aims to generate profit only by recycling waste matters into fertilizers. However, it would enhance its corporate social responsibly by creating awareness among communities through special programs and letting them know about the benefits of using recycled items for nature. After a couple of years of formation, it would also carry out plantation programs throughout the country to achieve its aim to create a greener Kuwait. Conversely, GCKC has plans to collaborate with a few primary schools in the country to educate the kids about the benefits of cultivating with organic fertilizers and motivating them towards recycling.

Explain how and where your proposed business initiative will operate in the context of the organization’s organization structure

The proposed business initiative will operate in the Kuwaiti market, chiefly targeting all the branches of McDonald’s Corporation. It has plans to place several composting beans outside the stores where the corporation will through away its leftover vegetables. When the vegetables will turn into fertilizers, Green and Clean Kuwait Company will routinely send trucks to collect those fertilizers to the farmers, so that they could buy them at cheaper prices. The owners of Green and Clean Kuwait Company decided that the organizational structure would be simple because the function and management system is to easy to understand, but they have to make sure that all departments can coordinate the works by following the instruction of the top leaders including managers to satisfy McDonald’s Corporation and the customers. However, the subsequent figure demonstrates the company structure of Green and Clean Kuwait Company more elaborately –

Aim of the project

The project aims to support the corporate social responsibility program of the McDonalds Corporation with a sustainable process of producing organic fertilizer from the waste food and vegetable of McDonald’s and distributing them to the farmers who are interested to supply organic vegetables to the company. The project would generate a huge scope of employment opportunities and involve developing people’s awareness of global warming and ecological hazards. By doing so GCKC would like to create value for its stakeholders and contribute to reducing the environmental degradation of the state of Kuwait which is an integral part of the company’s mission statement.

Key Objective of the Project

Marketing Objective

The marketing objective of Green and Clean Kuwait Company (GCKC) is to expand its business by targeting new farmers (apart from those who supplies to McDonald’s only), with the explicit aim to attain a 25% augmentation in total-sales that would represent an additional $50448 in profits by 2014; to attain this marketing objective of increasing the customer-base, GCKC will undertake many strategies. These strategies could include advertising through different feasible media; the table below assesses the suitability of different advertising methods that are necessary to achieve the marketing objective –

Table 1: Choosing advertising methods to help achieve the marketing objective. Source: Self generated.

Financial objective

The financial objective of Green and Clean Kuwait Company is to become a market leader and expand its business in GCC countries after three years of its operation; however, it expects to increase its yearly profit from 18.0% to 25.830% within the fiscal year 2015.

CSR Objective

The CSR objective of the Green and Clean Kuwait Company (GCKC) is to recycle 78480 units of waste by 2015.

Operational objective

Brealey & Myers (2002) stated that operational or tactical objectives are short-term or limited aims that are prepared to achieve the ultimate goal; besides, and Hitt, Ireland & Hoskisson (2001) argued that it concentrates on some characteristic of the business operation to change the position of the business. By introducing its fertilizer in the existing market in Kuwait, it will increase its business operating profit from $326,273.0 in 2013 to $1,807,500 by December 2015; at the same time, it has a plan to spend 1.5% of its operating income on market research and to increase investment for the promotional activities to aware 50% of its target customer by 2014.

Feasibility analysis

Market Analysis

The Nature of the Industry and Competition

In today’s world, global warming is the major concern that has led people around the world to find out ways in which emissions of sulfur, CFC gases, and other toxic substances can be reduced. This has created a drive towards recycling waste materials into useful substances so that the effect on the environment from making those substances new and discarding waste into the river can be lowered. As a result, there is an increasing demand for recycling service providers not only in the European or American market but also in the Middle East countries like Kuwait.

All over the 1990s, recycling was chiefly regarded as a disorganized procedure, which would support a technique that frequently produced a finished product of poor quality at a higher cost; but these days, the impulsion for recycling is determined almost as much by its economic benefits as it is for the safeguard of the flora and fauna. The total quantity of solid waste created in the GCC area is approximately 120 million tons annually; so, in Kuwait, the recycling industry is an emerging business sector with excellent prospects in terms of growth and profitability (ProMedia International, 2012). Providing recycling service is not a new concept anymore, as there are numerous competitors throughout the Kuwaiti recycling industry. Consequently, it can be argued that the nature of the Kuwaiti recycling industry is moderately competitive, although it is not a mature industry in terms of experience and performance.

Relevant Information about the Nature of the Market

The Green and Clean Kuwait Company (GCKC) will be operating in the Kuwaiti market, and the targeted customers would be the farmers. When it comes to the nature and characteristics of the market, it is important to state that as the soil quality of the country is not so good for agriculture, there will be a high demand for organic fertilizers among the customers. However, to assess the nature and characteristics of the market, it is also essential to assess the purchasing power parity of the customers to roughly identify the extent to which the customers would be able to afford the products of GCKC. According to Index Mundi (2012), the purchasing power has varied in different years as suggested in the table below: –

Table 1: Purchasing power parity in Kuwait (twenty years comparison). Source: Index Mundi (2012).

The purchasing power parity of the customers in Kuwait is graphically represented below –

Demographic Influences

The Green and Clean Kuwait Company (GCKC) will start its business by focusing on all the stores of McDonald’s in Kuwait. Initially, it will sell the fertilizers only to the farmers from whom McDonald buys its raw materials; however, after a few years, it would also target external farmers from the whole country. Nevertheless, it is highly essential to assess the demographic configuration of the country before entering the market; the following table shows the demographic features of Kuwait –

Table 2: Demographic features of Kuwait. Source: Self- generated from Index Mundi (2012).

While starting the business, it is important for the Green and Clean Kuwait Company to make sure that it has the appropriate preparations and competencies to serve people from every ethnic background; however, the table below illustrates the ethnic and the religious groups present in the country:

Table 2: Religious and Ethnic Groups in Kuwait. Source: Self- generated from Index Mundi (2012).

Past and Future Trends of the Industry and the Business Proposal

In the past, the recycling industry was not very lucrative and people from relevant business sectors had no interest in entering such a market; the reasoning behind this was that recycling was something which required too much investment to be made to make the waste reusable, but the outcome was poor quality items. The recycling companies were then forced to sell those items at lower prices because of their poor demand and this in turn resulted in losses for those businesses. However, with changing viewpoints of the global communities in terms of environmental awareness, people now find it necessary to contribute to nature by purchasing recycled items. As a result, although the past trend of the business has proved to be quite disappointing, the future trend of the industry will be quite encouraging. This is because further public awareness would mean that the government would come ahead to make large investments in this sector, making it helpful for new entrants to come up with interesting ideas.

Potential Customers

In the beginning, GCKC will sell the fertilizers only to the farmers from whom McDonald’s obtains its raw materials (like vegetables, fruits, etc); however, GCKC will sell those fertilizers for a cheaper price to the targeted customers.

Potential Suppliers

The main supplier for the Green and Clean Kuwait Company (GCKC) would be McDonald’s Corporation; to be specific; GCKC will collect leftover vegetables from the 336 branches of McDonald’s in Kuwait. Moreover, other suppliers include providers of composting bins, trucks, and all other essential equipment.

Potential Competitors

There are numerous competitors throughout the Kuwaiti recycling industry and the industry is fairly competitive because of the presence of well- established companies such as Metal & Recycling Company, the Green Target Company, Bin- Saleem Environmental Recycling, Kuwait Waste Collection, and Recycling Company, and Trust Cleaning Company.

Future Trends to Justify the Proposal

According to BIR (2010), the future will bring outstanding opportunities for the recycling industry based on the fact that this segment possesses the globe’s most prominent raw material suppliers and proffers the ideal reaction to the rising international responsiveness regarding the necessity for ecological safeguard throughout the planet. Also, BIR (2010) suggested that the industry will turn out to be obligatory for life on earth providing the most profitable trends for the future; this is because the corporate world is increasingly distinguishing the importance of creating an eco-friendly reputation, this will mean to be a great advantage for the industry. Standing on such a phase, it is arguable that the proposal will bring a huge success not only in terms of profit-making but also in terms of ecological assistance.

SWOT Analysis

Strength

Green and Clean Kuwait Company intended to establish this business because it will help farmers, and general people to develop a green environment. However, this project has several strong points to develop a green image and to dominate the market with its products and services, such as –

• Recycled products of Green and Clean Kuwait Company will assist farmers to reduce production costs because this company will sell fertilizer at a comparatively lower price;
• Mahdi & Majda (2002, p.2) stated that Soils of Kuwait are mostly sandy with limited organic matter; therefore, farmers will be benefited by using alternate fertilizer, which will increase soil productivity along with soil quality;
• At the same time, the products of this company will change the financial position of the farmers because they will get better quantity and quality of crops;
• The employees of this company have a long experience to deal with such a big project;
• Besides, the industries will get cost-effective pollution abatement technology (Nagavallemma, Wani, Lacroix & Padmaja 2006, p.15);
• It has the financial capability to ensure the success of the project, and provide top quality, recycled material to the customer;
• Supply chain management systems and innovative ideas of the human resources are also potential strengths of the company.

Weaknesses

Some possible weaknesses of this company will be –

• Due to high start-up costs, the management of this company has to face some limitations to manage its assets and human resources effectively to increase the production level at minimal operating costs;
• At the initial stage, it will not be possible for Green and Clean Kuwait Company to introduce online purchasing or e-commerce facilities;

Opportunity

Green and Clean Kuwait Company will start this business because it is a subject of enormous opportunities –

• The management team of this company has already conducted a market survey and expected that fertilizer from vegetable waste will be popular to the farmers and it will help the nation boosting the rural economy;
• It has the opportunity to expand its business inside and outside of Kuwait;
• It will develop an online order system and door-to-door delivery facilities within a very short period to increase loyal customer base;
• The purchasing power of buyers decreased all over the world; so, the competitive pricing structure will enhance business;
• It has the opportunity to contribute to reducing environmental hazards and global warming;
• Green and Clean Kuwait Company has bright prospect to diversify its product line;
• This company will get more offers from other companies to recycle their waste;
• Successful completion of this project will influence McDonald’s to invest more to start the same project in other Arabian nation;

Threats

There are many external threats, such as –

• Kuwait is one of the highest producers of waste in the world; therefore, their many renowned competitors, such as Metal and Recycling Company, Kuwait Waste Collection And Recycling Company (KWCR), Trust Cleaning Co. are the main threat to the Green and Clean Kuwait Company. However, it will build a good relationship with customers to save the company from future competition;
• Lack of consciousness of the target customer many create a serious crisis for this company;
• Other threats for this company are volatility in the price of raw materials, increase in the price of equipment and remuneration of employees, inflation rates, lack of market research, and global financial crisis, strategic plans of the competitors, threats of new entrants, and so on. Financial Projections:

The Green and Clean Kuwait Company design the following financial plan to assess the prospect of the business and estimate the return on investment; however, maximizing profits is not the prime intention of this company as the main purpose of this business to consider corporate social responsibility to develop green Kuwait. Also, this project needs additional fund since it focuses on the integrated marketing campaign and green program to aware the target customer regarding the importance of recycling waste and use of fertilizer; however, the financial projections include a Pro-forma profit and loss statement, cash flow statement, the balance sheet for the year 2013 to 2015, and break-even analysis.

Key financial indicators

McDonald’s Corporation and Green and Clean Kuwait Company will jointly coordinate this project where McDonald’s will invest $1 million or $1,000,000.0 for this project as it has a CSR program. However, the following table provides more information about the total budget, assets, long-term liabilities, etc.

Table 4: Startup costs for Green and Clean Kuwait Company. Source: Self-generated.

Projected Profit And Loss of Green and Clean Kuwait Company

In the projected profit and loss account, Green and Clean Kuwait Company can make $1,121,168 sales revenue from sales in the first year, and the expenses incurred in the year is $672,345, which indicates the net profit for the project. On the other hand, the company will reach the break-even point within the first year and the profit will increase year by year; however, the following table gives more information in this regard-

Table 1: Projected Profit And Loss of Green and Clean Kuwait Company for the year 2013 to 2015. Source: Self-generated/

Projected Cash Flow Statement of The Green and Clean Kuwait Company

From the following cash flow statement, it was observed that Green and Clean Kuwait Company would be able to generate positive cash flow in the beginning year though initial set-up costs can surpass the expectation level of the management team. In the first year of operation, this recycling company can generate a positive flow of cash since the revenue overlaps the cost and the flow will increase at a good pace, for instance –

Table 2: Projected Cash Flow Statement of Green and Clean Kuwait Company for the year 2013 to 2015. Source: Self-generated.

Projected balance Sheet of Green and Clean Kuwait Company

In the projected balance sheet, the Green and Clean Kuwait Company will have $1,064,710 total liabilities and capital a profit of in the first year while the second year after the initial setup of this company, it will be $1,608,796.0; however, the following table shows that assets and liabilities are increasing –

Table 1: Projected Balance Sheet of Green and Clean Kuwait Company for the year 2013 to 2015. Source: Self-generated.

Break-even Analysis for Green and Clean Kuwait Company

According to the projected profit and loss account, Green and Clean Kuwait Company anticipated that this company would be able to reach a breakeven point within six months of its operation because it will generate $201,792 in profits. From the financial projections for the next three years (2013 to 2015), it can be argued that the Green and Clean Kuwait Company would reach at break-even point if it can sell 2180 units/ per month or 26160 units/ per year fertilizer, otherwise, it has to face unexpected losses; however, the subsequent figure demonstrates the break-even point of the Green and Clean Kuwait Company –

The Feasibility of Business Initiative from a practical point of view:

Operational Issues

Green and Clean Kuwait Company will focus on environmental factors to sustain in the market and increase brand awareness; however, many specific issues may impact the success of your projects, such as specific operational procedures, business location and facilities, business management, and monitoring process.

• The management of this recycling company will purchase the necessary equipment;
• However, they will visit the outlets of McDonald’s at least two days a week and make phone all regularly;
• They also develop an effective communication system, supply chain management and
• At the same time, managers are each department will direct the employees, accountants, and other sub-ordinates;
• Also, the service will open for seven days a week to satisfy investor, farmers, and other customers

Legal Issues That May Impact on the Success of the Project

To ensure the success of the project, GCKC will need to fully conform to the laws and regulations of Kuwait; besides, the management of this company concentrates on the Companies Act to make license, Labor law ensure rights of the employees, employment laws for wage issue, Consumer Protection Act and environmental law to ensure environment safety issue.

The viability of the project

Brealey & Myers (2002) and Hitt, Ireland & Hoskisson (2001) argued that costs and benefits analysis takes into account the amount of monetary gain; however, the project considers prospective if it achieves higher CBR –

The success of the projects = Financial benefits – financial costs

However, the projected profit and loss account along with the balance sheet makes it clear that this project is highly profitable and it also ensures corporate social responsibility.

Return on investment (ROI) of GCK

Table 2: Return on Investment of Green and Clean Kuwait Company. Source: Self-generated.

Return on investment of Green and Clean Kuwait Company will satisfactorily increase year by year, which indicates the fact that McDonald’s Green project is a prospective project for this recycling company.

Reference List

Al-Salem, S.M. & Lettieri, P. (2009) Life Cycle Assessment (LCA) of Municipal Solid Waste Management in the State of Kuwait. European Journal of Scientific Research, Vol.34 No.3 , Web.

BIR (2010) General Assembly: Future brings excellent opportunities for the recycling industry, Web.

BTI (2012) Kuwait Country Report, Web.

Brealey, A. R. & Myers, S. (2002) Principles of Corporate Finance. 7^th ed. New York: McGraw Hill.

Deighton, J., Henderson, C. M., & Neslin, S. A. (1994) The effects of advertising on brand switching and repeat purchasing. Journal of Marketing Research, 16(1): 28-43.

Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2001) Strategic Management. 4^th ed. South-Western Thomson Learning.

Index Mundi (2012) GDP (purchasing power parity) (Billion $), Web.

Index Mundi (2012) Kuwait GDP (purchasing power parity) , Web.

Mahdi, A. & Majda, S. (2002) Soil properties and Characteristic in Kuwait for Agricultural Development, Web.

Nagavallemma, K.P., Wani S.P, Lacroix, S. & Padmaja V. V. (2006). Vermicomposting: Recycling Wastes into Valuable Organic Fertilizer, Web.

ProMedia International (2012) Kuwait Waste Management Conference & Exhibition. , Web.

Scott, S. (2011) Focus on Food Waste, Web.

The World Bank (2012) Doing Business, Web.

Zafar, S. (2012) Food Waste Management and Anaerobic Digestion, Web.

Footnotes

1. Assumed.

The McDonald’s strategy is to offer consumers cleanliness, quick and high-quality services. This focus of the organisation is important for the firm because it helps to attract a significant number of customers, who increase the sales turnover. This business strategy could be a roadmap that guide the firm.

The firm has established important platforms on which it focuses its competitive advantage. First, the organisation ensures that it gains competitive advantage through committed customers who are attracted through exemplary customer service and high-quality products. In fact, the firm believes in customer satisfaction because a satisfied customer is a great asset of any business organisation. Second, McDonald’s has a long history of appreciating its employees. In order to have a dedicated workforce, the company offers competitive wages and it adopts internal promotions that are meant to encourage workers to work towards achieving unique performance outcomes.

Business, human resource and staff are the three most important aspects that the organisation has adopted in order to achieve its goals. The management has aligned the three components so that they could lead to improved sales. The business aspect is oriented towards understanding customer needs. The firm is able to implement strategies that are geared towards satisfying customer needs. For instance, if customers want cheap products, then the firm aims at providing products at affordable prices. On the other hand, consumers may want expensive products that are characterized by high quality. Thus, the firm ensures that it provides customers with the products that they want. Human resource component is an important aspect in the company. The management ensures that workers are motivated to carry out their duties. In fact, the organisation encourages its workers to achieve growth in both professional and personal lives. The staffing strategies within the firm are aimed at realising growth of McDonald’s. Most of its employees are teenagers who are motivated to achieve excellent performance outcomes. Staffing strategies ensure that the best workers are hired and retained within the company. Thus, the firm is characterized by low rates of turnover with regard to personnel.

McDonald’s could have issues in the context of hiring personnel with the right talents. It focuses on hiring teenagers who could not have the right talents that could be utilized to improve performance outcomes. In addition, the firm concentrates on internal advertisements and local hiring practices to recruit its workers. This approach has the potential to hinder the achievement of the firm because it could hire personnel who are not talented to work for the organisation.

A high turnover or a tight labour market in which it is difficult to find talented people would be a problem. A high turnover market would imply that workers with the appropriate skills leave the organisation shortly after they are hired. A tight labour market would make it difficult for the firm to have a wide selection of workers because many companies compete to hire the few available personnel.

In order for the firm to maintain its competitive advantage for the next five years, it would be important to focus on hiring workers from diverse locations and backgrounds. This strategy would greatly improve cultural diversity within the business establishment and enable it to record excellent performance outcomes.

Quality and Capacity: Videos Analysis

The two videos illustrate the features mentioned in the textbook, namely quality (McDonald’s) and capacity (Bloomberg Airlines). While quality is the most significant characteristic of a profitable business, capacity is probably the second most important.

The video about McDonald’s featuring how chicken nuggets are made shows the company’s dedication to its product’s quality. I think that McDonald’s is doing a great job letting people come to their factories and see the working process. By doing this, they prove that their company takes care of people’s health by using only fresh meat and no additions to it. By this video, the company dissolves the skeptics’ myths about its food being of poor quality. Anyone can see that McDonald’s does everything possible to supply the best products to its restaurants. While some may say that even high-quality meat does not make McDonald’s a competitive restaurant, I would say they should take into consideration the fact that it is a fast-food restaurant and not some posh place. Moreover, a posh place means high prices, and McDonald’s can boast its moderate price level. Thus, I am convinced that the company’s high quality is the most encouraging factor for the customers to choose their restaurants.

The second video featuring Bloomberg Airlines illustrates another issue mentioned in the textbook – capacity. In my opinion, this characteristic is no less desired in business than quality. A thorough plan is necessary to promote strong capacity possibilities. The video emphasizes the importance of predicting the customers’ needs, tracking the strategic movements of the rival companies, and following the global prices of fuel for providing a high capacity of one’s company. Capacity undoubtedly is a vital attribute for any company that strives to be successful. I think that an airline company’s supply chain functions based on the use of capacity are bound to bring it a success.

Introduction

McDonald’s corporation is the world’s leading retail chain of fast food restaurants serving many customers in about 118 countries (Duchac, Reeve & Warren, 2010). The company reports high profits from the business, thus yielding substantial revenue for stock investment. Just like other successful companies, McDonald’s attracts investors by allowing stock investments as a way of diversifying and increasing its turnover. The business ensures the reporting of stock investment in the financial statements through various transparent ways at the end of every trading period. The proper recording of McDonald’s stock investments aims at maintaining the business’s good. This paper focuses on the reasons why McDonald’s would invest in stocks as well as debt securities.

Discussion

Considering the notable dividend yield, impressive profits, and strong cash flows, McDonald’s consistently reports its stock investment in the financial statement. The provision of financial statements is a requirement by law and the businesses’ many investors. Investors rely on the information to make informed decisions regarding their investments. The skilled professionals in McDonald’s utilizing cash flow statements, income statements, and balance sheets show the performance of the corporation in stock investment (Duchac et al., 2010). The reports on the financial statements indicate changes in performance of the stock investment as well as the financial position of the company. Cash flow statements show the inflows and outflows of transactions, as well as amounts to indicate the net cash flow that shows the financial performance of the company. In addition, balance sheets indicate the financial situation of the company in terms of its assets and liabilities. This strategy is useful in drawing income statements that show the profitability of the company’s investment. The reporting of the performance of stock investment in the financial statement is vital for prospective investors, because they require the information to decide on the viable areas for investment.

The McDonald’s corporation includes stocks and debt security investments in its portfolio due to the crucial benefits that accrue from them. Investing in debt securities such as bonds is more reliable compared to equity securities (Duchac et al., 2010). They are safer since the lender gets the principal amount upon maturity of the term. Through this strategy, debt securities also help preserve capital while still making investments. Stock and debt security investments provide steady returns to investors. Their returns are predictable as they mainly pay interest semi-annually. The interest rates from investing in stocks and debt securities are favorable in the end as compared to other sectors. Furthermore, the trading of stocks and debt securities is electronic, thus easing the process of investment while attracting potential investors. These benefits provide the rationale why McDonald’s corporation can heavily invest in stocks and debt securities.

Conclusion

Owing to the corporation’s remarkable performance, McDonald’s way of reporting its stock investment on the financial statements is of interest to many businesses that emulate it, therefore it is necessary for ensuring its continued operational success. The drawing of various charts to represent the stock, market, and dividend performance of the corporation enhances the reporting of stock investments in the financial statements. Given McDonald’s impressive profits, as well as the many benefits of stock and debt securities investments, it will be convenient for the business to venture into the investment. This move will be significant in ensuring that McDonald’s remains the leading chain of fast food hamburger restaurant.

Reference

Duchac, J., Reeve, J., & Warren, C. (2010). Financial Accounting: An Integrated Statements Approach. Connecticut: Cengage Learning Publishers.

McDonald restaurant experienced several setbacks in its operations. A combination of internal and external problems severely affected its performance and resulted in customer dissatisfaction. As a result, many of the customers found alternative restaurants with similar services (Jellison, 2006). Considering these two fundamental problems the top management of the company decided to move toward the implementation of a new strategy. The core of this new move was the introduction of travel path technology and provision of lower calories services. These were seen as key to reviving the restaurants reputation in the public.

Having a safe and well-prepared environment makes it easier to implement change (Jellison, 2006). The first step is to gain the trust and collaboration of your staff. Having to face barriers from within an organization makes it very difficult to implement change. The first phase of a plan which aims at ensuring a safe environment to implement change is gaining employee confidence and trust. The second step is to make all necessary technical preparation in order to avoid time waste and / or other barriers once change implementation begins. This includes all the necessary research and development activities related and financial backup if needed. The implementation of these steps will ensure a safe environment to implement change.

Recognition of employee’s hard work and their ability to contribute to the management of the business will build trust and lower down internal barriers. As described above, the first step is to communicate the new strategies to the staff and gather their feedback about possible ways of implementing them. This feedback collection process will make them feel involved in running the business. This information could result beneficial since it is employees who are in direct contact with customers all day long. They may give valuable details about how to increase customer satisfaction. For example, they can give information about the low calorie services to offer and what customers like the most.

A milestone plan is necessary to have a gradual change implementation. This plan will set milestones for all employees. This should not be a one-sided plan but employees should be involved in building it. At least their voice should be listened when drafting the plan. The plan should start with minimal increases in performance to continue with major ones. Employees should consider the target milestones they should fulfill prior to the external audit control (walk-in). Other steps include the assurance of franchise holders and other interested parties that the head office had adequate funds to cover this transition phase. This way they will become partners and not barriers to change implementation (England, 2011).

A new reward scheme is the final step of preparations. We have described above what is required from employees. Nevertheless, a new reward scheme will serve as a motivation force toward achieving the desired results. For every increase in performance and / or target achievement employees will get bonuses. If they have achieved all milestones prior to the walk in of the external audit, they will receive a bonus. This financial incentive will ensure that employees will have an internal drive in achieving all performance targets. In addition, they will receive penalties if the external walk in audit finds problems with their work. This combination of awards / penalties along with their involvement in the decision-making will ensure smooth implementation of change in the organization (England, 2011).

References

England, K. (2011). Navigating change. Smart business Akron/Canton New York: McGraw Hill.

Jellison, J. (2006). Managing the dynamics of change. New York: McGraw Hill.

McDonald’s is a food joint that was started in 1937 in the US. When it started, it dealt with hot dogs. It has transformed itself into a chain of food joints sprawling over several continents within the years. Clients from all over the world are impressed by the quality of service that McDonalds has to offer and hence the food joints receive many clients in a day whenever a McDonald’s joint is nearby.

When it introduced its entry into the market in the 1940s, consumers were used to the wayside drive through joints. This made McDonald’s to command a monopoly over the market. However, over the years other entrepreneurs have come forth with similar ventures and cut in the profitability levels of McDonald’s. This comes across as disastrous for McDonald’s signaling a strong need for change within the organization.

Any organization that intends to remain relevant in a market needs to consider a change strategy that improves its competitive edge. The lack of change in an organization is likely to cause the competitors of the business to improve their competitive edge and affect the profitability levels ( Wallace, 2009).This has been the case with McDonald’s over a number of years as other ventures come in with better strategies that cause employee and client turnover rates to rise.

Departments

McDonald’s has various departments that serve towards its common objectives. However, three departments that I feel require immediate changes are the production department, HR department, and operations department (Burter, 2001). The joint activities of these departments are vital as they contribute towards the overall performance of the organization. Over the years, these departments have operated disjointedly without clear direction and participation seeing the organization loosing ground to competitors.

The above mentioned departments need to anticipate the need for change. For instance, the managers of each department should begin to appreciate and understand that they need to change how they conduct their operations. For instance, since most of the clients happen to be travelers along specific routes, the increase for the driveway joints should be increased as well as improved services.

Immediately an organizational development (OD) practitioner gets introduced into the organization’s system, an unprecedented relationship crops up in the company. Such a practitioner should ensure that he formulates a chain of open communication, honesty, and an environment where there is shared responsibility between the people and the departments in the organization. A stable relationship within an organization is vital towards the achievement of organizational goals.

The diagnostic process is a stage where a practitioner contracted by McDonald’s will cooperate in finding the relevant information that will be vital for the change process. The information will be necessary towards identifying the potential problems that McDonald’s face. For instance, it would be important for McDonald’s to want to find out why it has been loosing its customers and employees to other competitors.

The final strategies for McDonald’s would be to develop action plans, strategies to carry out the change strategies developed, change intervention events within the company, and plans that focus on dealing with the difficulties that have been identified.

Finally, the need for self renewal, monitoring of change strategies, and sense of stability for the change programs introduced should be fostered. McDonald’s should be proactive in this phase to monitor the outcomes of the change process and stabilize the expected changes.

References

Burter, S. (2001).The McDonald’s. London: Prentice Hall.

Wallace, S. (2009). Organizational Change Management. New York: McGraw-Hill.