Category: McDonald’s

Need to write a McDonald’s operation management assignment? This case study on McDonald’s operations explores the issues of the company’s supply chain & production system strategy.

Introduction

Operations management is defined as the planning, scheduling, and controlling of all the activities that can transform organizational inputs into finished goods and services. It focuses on effective organization and control of manufacturing through the application of such concepts as engineering, quality management, production management, accounting, and management systems. In addition, it entails making use of all the resources available to produce finished products or services and to meet the customers’ needs in a cost-effective manner. Research of McDonald’s operation management will provide an understanding of its success with customers and in the industry.

The processes involved in operations management are the creation of the products, development, production, and distribution. Other activities that are related to the phenomenon are the regulation of purchases, control of inventory, quality, storage, and overall logistics. They can be realized through efficient and effective processes (Heizer, 2022). Operations management places a significant focus on the management of the processes involved in the creation and distribution of the products.

McDonald’s Case Study: the Background

McDonald’s is the largest and most popular of the fast-food chain restaurants in the world. It was founded by Dick and Mac McDonald in California in the year 1940 and facilitated by the initiation of franchised restaurants by Ray Kroc. MacDonald’s serves approximately 47 million clients per day.

They have approximately 30,000 outlets located in various parts of the world and subsidiaries in over 120 countries and territories.

In all the McDonald’s restaurants in the world, there are several operations that have a relationship with the overall strategy of the organization. In this portfolio report, the details of McDonald’s competitive strategy, supply chain, quality management, raw materials, and forecasting are reviewed.

Among the foods that are sold at McDonald’s are hamburgers, cheeseburgers, French fries, milkshakes (chocolate, strawberry, and vanilla), coke, orange, root beef, and coffee. McDonald’s menu is synchronized into beef, chicken, bread, and potatoes.

MacDonald’s operations are concentrated in the service industry, and the greatest challenge in the industry is that there is much need for warmth and friendliness in order to meet the customers’ satisfaction. It is the largest food services company in the world, and it is considered the leader in global food service retailers (Sinha, 2023).

The main operation that can take place at McDonald’s is services, which are realized through taking orders by the staff and getting the same orders ready for the customers.

McDonald’s Operation Management

McDonald’s Supply Chain

Supply chain management enables organizations to get the right goods and services to the place they are needed at the exact time, at proper quality and quantity, and at an affordable cost.

Managing the supply chain process involves overseeing the relationship between suppliers and customers, controlling inventories and forecasting demand, as well as getting feedback concerning what is happening at whichever link of the chain.

In McDonald’s Corporation, the restaurants also have various and particular suppliers that provide them with raw materials like buns, patties, beef, sauce disposable cups, and other food packaging materials. This stresses the fact that the corporation has to manage its relationships with the suppliers in order to receive its raw materials at the right time, with proper quality, and at an affordable price.

McDonald’s supply chain is that of a three-legged stool where there are the corporation, suppliers, and operators. The supply chain involves purchasing and logistics. The supply chain of McDonald’s encompasses the following challenges: a strong focus on quality and freshness, product innovation, fluctuation of customer demand, and order inventory management.

McDonald’s Global Business Strategy

With the boom experienced in the fast-food market, McDonald’s has developed a strategic plan that will enable it to be at the top of their competitors by selling their goods at affordable and friendly prices, providing more healthy meal options for their consumers, and great and quality services for their customers.

McDonald’s competitiveness is based on different aspects, including pricing, quality, employee training, and management. Consumers have confidence in the products of McDonald’s due to their nature of using tested and trusted brands that families buy and use in local grocery shops (McDonald’s, 2022). Its only competitive advantage is that McDonald’s shopping cart is usually bigger.

McDonald’s restaurants operate in a competitive and challenging environment, and they achieve their competitive edge by providing customized products and services. Without strategies, ineffective competitors cannot withstand the market competition.

To maintain its competitiveness, McDonald’s employs a competitive strategy that enables it to compete in various aspects, for instance, the speediness of its services, meeting nutrition demands, and meeting customer satisfaction, as explained below.

Speed: This is the ground that prompts McDonald’s to provide speedy and affordable services. After performing comprehensive market research, McDonald’s realized that its customers stressed the desire for speedy services as their top priority.

This made it endeavor to provide fast, friendly, and accurate services in order to meet customer demands. McDonald’s deems it necessary to measure their speed performance and compare it with their desired targets. This is normally reported to the quality management department. This speed enables the company to sell their products at a lower cost.

Cost: Offering their services at a lower cost requires an effective and efficient process. This efficiency is stressed and well indicated in the company’s goals and vision statement. To offer value for money, McDonald’s has employed several strategies, which include a value meal where customers can buy goods at a discounted price, especially when they purchase sandwiches, French fries, and beverages together.

McDonald’s provides seven to twelve meals at one meal menu. Secondly, McDonald’s has applied the strategy of a dollar menu, which encompasses several individual products that are sold at the price of only $1 each. This proved to be successful when it was tested in southern California and was later incorporated into several of their shops.

McDonald’s operations management has also included several promotions to boost their sales. The popular promotions are the $0.39 hamburger on Wednesdays and other big occasions and the Big Mac Monday.

Nutrition: This is the third competitive strategy for McDonald’s. This has been prompted by the change in health and consumption trends and, hence, the need to promote better nutritious options. The offering of Go-Active meals, which include salad, bottled water, and a step-o-meter to track customer steps daily.

There are several health options in various countries depending on the diet of that region. McDonald’s is always considerate of the needs and desires of its customers and their health.

This has been achieved by assembling their Global Advisory Council on balanced lifestyles, which can advise and assist in exercise and obesity measures. This is to ensure that McDonald’s takes responsibility for helping its customers achieve optimal health.

McDonald’s also utilizes modern technology to enhance the efficiency of its services so that customers can select their menu combination over the Internet and conduct nutritional analysis on their menu selection (WBR Insights, 2023). This has given McDonald’s an edge over its competitors.

The driving objective of McDonald’s is to make their customers happy through the enhancement of their competitive dimensions of speed, price, nutrition, and customer satisfaction.

When we rate and compare McDonald’s with its competitors like the Charlie Trotters in Chicago, McDonald’s competes on the platform of cost or price, flexibility, and delivery of services, where they offer their goods at a cheaper cost, deliver their products within minutes of the order, and they embrace flexibility in their product choice. In contrast, Charlie trotters compete to provide top-performance quality with excellent meals, but they are expensive (Khan, n.d.).

McDonald’s Operation Management & Production Process

Since it is a fast-food company and serves dynamic customers with different tastes and preferences, McDonald’s Corporation has developed special dishes on the menu based on various factors, including the country, population, culture, and recipes.

To realize quality operations, McDonald’s employs advanced technology in calculating the time a particular process can take. They have also created a database for observing time and making improvements.

One of the particular specific measurement tools is the Total Time in Line, which computes the time a customer spends in the McDonald’s line from the time of ordering until the time he begins to be served, and the target time in this process is 90 seconds.

There is also a system that supports fulfilling speedy orders like the Made for You system, which utilizes the Kitchen-video-System, which eases the process of data entry for the staff.

McDonald’s also utilizes technology in the drive-through area. This is whereby, when a drive-through worker is making an order, the order is displayed straight on the screen available for the customer, which is called the Customer Order Display (COD).

Through this screen, the customer can make changes or correct mistakes incurred in the ordering process. This makes ordering processes precise and efficient, hence minimizing time spent.

Regarding the use of technology, McDonald’s operates an automated system where a computer keeps track of what is available in the restaurant (“McDonald’s value chain analysis,” n.d.). It also monitors what the distribution center needs to ship to the restaurant on a regular basis instead of having to wait for inventory requests from the restaurants.

The Internet is also used at the McDonald’s to advertise their products. McDonald’s offers sales promotions online through coupons, and they also have sweepstakes and online contests.

The Internet is utilized by McDonald’s as a platform for performing public relations and individual selling. Their official website is well known; it is a comprehensive one with all the requisite information needed by the customers, including the menu, location, and pricing.

McDonald’s Commitment to Quality

McDonald’s commitment to quality is measured through the time it takes to process orders and customer products, which can be realized through effective and efficient operations.

To enhance its quality, McDonald’s must ensure that inspection is carried out on all foods. Every McDonald’s restaurant should check on food temperatures, dates of expiry, and several other food hazards every day.

The restaurant has a comprehensive standardized food safety operation that is made available to all restaurants, and it contains the food items that should be measured.

Consequently, periodic controls and corporate inspections are regularly undertaken, whether with or without notice, and there are a minimum of two inspections every year in all restaurants. Furthermore, to ensure quality, store managers in every restaurant perform inspections frequently.

McDonald’s also applies the five Ps policies to enhance their quality. These are people, price, promotion, product, and place. People are the individuals who are employed in McDonald’s chains and are represented by services, hospitality, and pride.

McDonald’s staff are trained and retained in order to save the cost incurred in training short-term and inexperienced workers. Product includes taste, quality, and price of their products. This is usually dynamic since they are dictated by the customer’s tastes and preferences as defined by the market. Maintaining the quality of food is always a top priority at McDonald’s.

Place indicates a clean, relevant, and modern store in all the McDonald’s surrounding environment, be it the restaurant, the kitchen, or the restroom. This is aimed at ensuring safety and comfort for their consumers. Promotion concerns marketing, leadership, and trust; this has earned the company a reputation for quality food for its customers.

McDonald’s Inventory Methodologies

Inventory management is a critical operation in any organization. This is because it involves identifying and selecting the best method of inventory control. Before selecting the organization’s method of controlling inventory, it is imperative to factor the product demand into mind.

There are different modes that companies consider in selecting their inventory methods, but the common denominator is that companies should ensure that their mix of inventory types can satisfy the demands of the customers and that it can deliver the needed profit and cash flow.

In McDonald Corporation, the inventory is managed on a First-In-First-Out basis. This is necessary and applicable due to the fact that their inventory entails perishable items, and as such, the deliveries are made twice or three times a week based on the restaurant business.

Consequently, the inventory is stored in freezers that have proper packaging to maintain the freshness of the items. These activities and other issues regarding inventory are undertaken by the inventory management of the organization.

In particular chains, restaurant managers are charged with the task of tracking inventories of food, wrappers, and cleaning suppliers. Other orders required by the restaurant are sourced from the distribution center and then shipped to the restaurant.

McDonald’s Management System

Managing McDonald’s is a heavy task, and being in charge of its daily operations is an enormous duty and quite a challenging one.

To achieve and manage McDonald’s successfully, it is imperative that there should be adequate infrastructure and up-to-date information and communication technology. Animal welfare is at the center of McDonald’s company policies. They communicate their policies, including their animal welfare policy, to all those in the supply chain.

The following is the leadership structure of McDonald’s:

The CEO at the top has the responsibility of overseeing the major activities of the company; below him are the managers who are in charge of operations, development, finance, marketing, and sales. The supply chain unit falls in the department of finance.

McDonald’s & New Markets

McDonald’s corporation is organized in a lateral manner where the CEO is at the apex of the management, whereas the managers of other departments are outsourced. Other parts of the structures that reflect outsourcing are:

Consulting: McDonald’s always considers the company’s present and prospective financial position. The consultants deal with matters of development, strategies, and identifying the opportunities for growth for the organizations.

McDonald’s is a visible and popular brand in the world. It has developed to be one of the food chains with popular food brands around the globe.

With the current increase in exposure to new markets, especially in the emerging markets of Asia and Europe, McDonald’s continues to witness unprecedented growth in its operations in order to tap into these new markets. McDonald’s strategy encompasses four main dimensions: financial, learning, customer, and internal process.

Conclusion

Operations management is an important function in an organization since it concerns the relationship with the company strategy. Operations management plays a key role in the development of a company strategy, hence enhancing the competitive advantage of the company.

An example is the planning process that will assist an organization in minimizing costs while gaining an advantage in competitiveness and cost. It is, therefore, necessary for an organization to manage its operations as a measure of boosting its organizational strategy.

From the analysis of McDonald’s operation strategy, it is evident that consistency and quality of services are order winners, whereas speed, cost, efficiency, and innovation are the order qualifiers. This has resulted in an enhanced market share and massive consumer buying power.

McDonald’s is a market leader and a household name in the fast-food industry. Its marketing strategy is very strong, and it is placed under the supervision of the mother company, irrespective of its outlet in the world. Their prices, customer service, and quality are unparalleled.

References

Heizer, J. (2022). Sustainability and supply Chain (14th ed.). Pearson.

Khan, B. (n.d.). Operations management in McDonald’s. Scribd. Web.

McDonald’s Value Chain Analysis. (n.d.). Edrawnax. Web.

McDonald’s. (2022). Our purpose & impact. McDonald’s. Web.

Sinha, S. (2023). How McDonald’s became the world’s largest fast-food chain. Medium.

WBR Insights. (2023). McDonald’s successful rollout of mobile ordering and self-serve kiosks across the US. Future Stories.

Internal and External Factors of McDonald’s: Introduction

The McDonald’s Corporation was listed in1966 under the New York Stock Exchange as a business operating in the restaurant and bar industry. All publian cly traded companies arthe e required to make submissions of public filings to the Securities and Exchange Commission.

Although compliance to the legal environment is one of the external factors that affect the operation of McDonald’s, the organization ensures that it complies wi ofth all legal requirements in all areas of its operations including timely submission of all necessary forms to the Securities and Exchange Commission.

The goal of this paper is to analyze the McDonald’s segments of the generathe l environment, the forces of competition, mechanisms of improving the stability, external threats and opportunities, resources, capabilities, and core competencies, and value chain analysis.

McDonald’s General Environment

Organizational environment refers to all forces that shape or affect organizations. Internal and external environments make up the organizational environment. One of the components of the external environment is the general environment segments including the economic, legal, technical forces, and international forces coupled with social cultural and political segments (Hill & Westbrook, 1997). The second component of the external environment entails the specific environment.

McDonald’s operations have probabilities of being highly influenced by international forces and socio-cultural forces. Health professionals create intense awareness through public health programs on the need of eating low calories foods. High calories foods are associated with obesity, and thus they are considered as a risk factor for ailments such as hypertension and diabetes. Organizations dealing with fast foods face enormous challenges in looking for new products with low calories.

This aspect constitutes a major socio-cultural challenge that fast food organizations need to address sufficiently in a bid to remain profitable. McDonald’s has experienced a myriad of changes in its operational environments, especially in the wake of the increasing emphasis on the need to change eating behaviors to avoid the dangers of health risks associated with eating unhealthy foods.

Health specialists classify foods containing high calories such as fast foods, which form the menus at McDonald’s, as unhealthy. Campaigns incepted by health organizations against such products lead to the emergence of demand for foods rich in fiber. Competing organizations creating their menus meeting these socio-cultural needs are likely to pose a major threat to McDonald’s operations.

One of the McDonald’s strategies for enhancing its performance is venturing into new markets, especially in Asia. For instance, the company has opened various outlets in China and India. This strategic decision opens the company to effects of international forces on its operations. Such forces include differing tastes and preferences, legal, and political forces and McDonald’s is fully aware of these effects. The organization has designed new menus to meet international market needs.

The McDonald’s Corporation (2013) reckons, “McDonald’s restaurants offer a substantially uniform menu, although there are geographic variations to suit local consumer preferences and tastes” (p.1). Although McDonald’s has responded to the challenges of tastes and preferences in the Chinese market by developing chicken humbuggers, international forces related to culturally dictated eating habits remain an essential factor that may affect the performance of the firm in the international markets.

McDonald’s External Environment Analysis

Porter’s five forces method is one of the ways of analyzing forces that shape industry competitions. These forces are “degree of rivalry in the industry, threats of new entrants, threats of substitutes, the bargaining power of customers, and the bargaining power of suppliers” (Porter, 2008, p.57). McDonald’s is the leading organization globally in the fast foods industry. However, the degree of rivalry is one of the most important competition factors.

Numerous organizations are operating in the fast food industry, thus threatening to take up McDonald’s’ market share. Such organizations include Wendy’s, In and Out, Burger King, Jack in the Box, and Taco Bell, among others.

Increased rivalry in the industry makes the fast foods industry incredibly dynamic. Organizations keep on looking for mechanisms of enhancing their competitive advantage, including innovation of new products that meet the emerging needs of the consumers (Hoskisson, Ireland & Hitt, 2008). For McDonald’s innovation and products, differentiation is one of the central mechanisms of ensuring that it remains well ahead of the competitors.

The bargaining power of the buyers also tops the list of the most important competition forces for McDonald’s, as the success of the organization is dependent on the strength of its customers’ base. Therefore, apart from retaining the existing customers, it also seeks for mechanisms of attracting new customers who are loyal to the competing brands. McDonald’s encounters the main challenges while attempting to attract and keep customers whose influence on their bargaining power base rests on concerns of eating healthy diets.

These concerns force fast foods, consumers, to demand healthier products. In response to the buyer demands, McDonald’s has added salads into its menus coupled with the alteration of cooking oils to reflect healthier foods demands.

Although the organization leads other organization in adopting healthier diets in their menus, negative profiling created by books such as A Fast Food Nation and the film Super Size Me has probabilities of affecting McDonald’s more negatively than other competing originations since the organization has created a strong fast food brand image.

Improving the stability of McDonald’s

In an attempt to maintain its stability in the near future, in the context of the two competitive forces discussed above, McDonald’s has several options at its disposal. The organization can continue with its strategic efforts of innovating and creating new products that do not resemble its traditional products. Indeed, the creation of new products like chicken McNuggets, McFlurry, and Big Mac is not adequate.

The company should invest more on alteration of the buyers’ mental cognition about the nature of its products. Conventionally, McDonald’s has created a strong brand image by positioning its brands as an option for people who do not have time to prepare foods at home.

When such people are hungry, they often turn to McDonald’s for the utility. However, with profiling fast foods as unhealthy, as argued before, when fast food customers feel hungry, they think of what they have been accustomed to as the means of satisfying their need. What comes in their mind is fast foods, but the conceptions of its impacts on their health then follow.

McDonald’s has to complete the above chain of information processing as utilized by consumers before making a decision to buy fast foods products, especially among consumers who have embraced the concerns of healthy meals. This goal is achievable through the strong positioning of their new salads products and foods rich in fibers.

Hence, when people think of buying fast foods, the concept of unhealthy nature of the foods comes in, but then immediately they realize there are other options, which satisfy the definition of healthy fast foods that are offered at McDonald’s. This move changes the brand image of McDonald’s from a fast food center to a healthy meals center. This way, it is perhaps possible to improve the stability of McDonald’s in the near future.

External threats and opportunities

SWOT analysis is the standard approach for analyzing organizational external threats and opportunities. Threats are the external chances that impair the performance of an organization (Hill & Westbrook, 1997). The main threat to McDonald’s is competitive forces. Amid this threat, McDonald’s has opportunities, which it can capitalize on to yield continued success in its industry of operation.

Opportunities are the existing external chances, which when utilized make an organization improve its performance (Hill & Westbrook, 1997). Increasing concerns for healthy eating presents a major opportunity for the firm. Another opportunity is an expansion into global markets into regions where McDonald’s has no stores such as in Africa and other Asian nations apart from China and India.

The justification for the threat above is that other companies are taking leadership in some products. For instance, Wendy’s is dominating the industry in chicken products. With the preference of such products in comparison to beef products in the international markets such as China, the domination of Wendy’s presents major challenges in case it (Wendy’s) would decide to open outlets in the Asian markets.

Wendy’s will also likely develop a strong brand image as a chicken products outlet in the UK and the American markets. McDonald’s may fail to overcome such brand positioning. However, through studying the weakness of the chicken products of Wendy’s, especially on aspects of ‘healthy concerns’, McDonald’s can develop healthier chicken products. This aspect can help it gain immense success in the chicken products’ market.

McDonald’s Internal Environment Analysis

Organizations use their strengths to enhance their performance (Hill & Westbrook, 1997). McDonald’s has several strengths including domestic and international leadership in the fast food industry, utilization of economies of scale to pursue low-cost strategy, ability to make adjustments for its ingredients to develop new product lines, and strong brand portfolio among others. Economies of scale present a major strength of the company.

Compared to any other organization, McDonald’s faced challenges in its operations akin to its weaknesses. One of the weaknesses of the organization is the bureaucratic culture. Employees complain about the denial of the freedom to voice their concerns through unions. McDonald’s has a negative perception that its products are unhealthy and that it advertises them to even small children. People believe that the company is chiefly responsible for making people obese.

In my opinion, healthy eating concerns of customers present the biggest weakness for McDonald’s. The justification for this challenge is that people are increasingly concerned about how they can live free from ailments such as hypertension and diabetes among other diseases associated with obesity.

Hence, they are likely to stop consuming any product that may pose the risk of becoming obese. With increased media attention on effects of fast foods on the health of their consumers, the question of the relationship between fast foods sold by McDonald’s and obesity becomes even more imperative in affecting the future success of the organization.

Dealing with the weakness proactively requires McDonald’s to utilize its strengths such as its strong positioning ability and high financial base to introduce various products that meet customers’ perception and definition of healthy foods and investing heavily in their marketing via both traditional and new media while abandoning the products considered as unhealthy.

Since the company is large, it can also take advantage of economies of scale to pursue low costs strategies while attempting to reclaim its loyal customers and attracting new consumers to the new healthy products.

Resources, capabilities and core competencies

These elements form the “foundation of the competitive advantage of an organization and resources are either tangible or intangible” (Hoskisson, Ireland, & Hitt, 2008, p.83). McDonald’s tangible resource includes financial resources, organizational resources, physical resources, and technological resources. In terms of financial resources, it has strong borrowing capability since it possesses large asset bases globally and the ability to generate funds internally through sales.

McDonald’s is in a position to maintain strong planning, controlling, and coordinating procedures in its operations to deliver high-quality products. These aspects constitute the organizational resources of the organization. McDonald’s has patented its brand and products. It has also established other technological resources such as protection of its products through trademarks and possession of trade secrets. In terms of physical resources, McDonald’s has the ability to source raw material from across the globe.

Intangible resources for McDonald’s include resources such as brand name, reliability, and quality of its products coupled with good suppliers’ reputation on the corporation. Another essential intangible resource of the organization is innovation resources including the ability to generate ideas and make new products that meet the emerging needs of the consumers.

The firm’s capacities include the capacity to produce high-quality products, ability to conduct intensive market studies to determine appropriate strategies for success and consumer perceptions of their products, and the capability to position its products. Quality, which is the ability to produce and deliver with both speed and hygienic manner, forms the core competency of the firm.

Value chain analysis

Resources, which are core competences and capabilities, aid in McDonald’s’ realization of the value chain. The organization stands out as one of the biggest global fast food retailer outlet offering fast foods in more than119 countries all over the globe. McDonald’s restaurants and franchises, which stood at about 34, 480 by December 2012 (The McDonald’s Corporation, 2013), continue to grow as the organization penetrates new markets in Asia.

This immense success is attributed to several factors among them being an incredible emphasis on engagement of consumers, appropriate leaderships that fit the business of the organization and exceptional investments of the organizational resources in brand management.

Deployment of core competences, resources, and capabilities to create value forms of pillars for McDonald’s market capitalization. The corporation offers low price and diverse products to average consumers. The McDonald’s workers emphasize quality and speed of delivery in their work. McDonald’s has also been using the same suppliers throughout its history of operation, which led to the establishment of good relationships with the suppliers. The firm thus benefits through the suppliers’ reliability to supply quality and enough raw materials.

External Environment of McDonald’s: Conclusion

McDonald’s operates in an environment that exposes it to various internal threats such as competition with other organization, which have developed products meeting the emerging needs of consumers in the fast foods industry. However, amid various threats and weaknesses encountered, the McDonald Corporation has deployed its opportunities, core competences, values s, and strengths to gain market success.

This success has been possible due to the ability of the organization to respond proactively to consumers needs. Apart from the emerging consumers’ needs such as the concerns of healthy eating having the ability to expose McDonald to new weaknesses, they also give buyers an immense capacity to influence the nature of the products produced by the organization coupled with creating new opportunities for the future success.

Reference List

Hill, T., & Westbrook, R. (1997). SWOT Analysis: It’s Time for a Product Recall. Long Range Planning, 30(1), 46–52.

Hoskisson, R., Ireland, D., & Hitt, M. (2008). StrategicManagement: Competiveness, Globalizationand Concepts. New York, NY: Cengage Learning.

Porter, M. (2008).The five forces that shape strategy. Harvard business review, 3 (1), 56-63.

The McDonald’s Corporation. (2013). Corporate Info.

McDonald’s Statement of the Problem or Opportunity

There is lack of proper management of resources within McDonald restaurants and this has led to tremendous drop in sales over the years. Most of the stores in the Far East have closed due to economic downturn. At the same time consumers are shifting their tastes and preferences from hamburgers to other types of food. This has contributed to low sales since the number of people visiting the stores decreased over the years.

The number of prospective franchisees has also decreased attributing their exit to poor customer turnout owing to cheap brand that McDonald has exposed itself to by offering too much discounts on its products. The firm is also experiencing poor quality services and uncleanliness; this is due to laxity by the top management making them not to inspect the franchises. There is also lack of skilled manpower due to postponement of training sessions that were once used to equip employees.

McDonald’s Problem Statement: Alternatives

The company need to work out on their business models through appropriate segmentation to enable them work comfortably with the changing market economy. Professional training of the employees on the marketing and sales strategies needs to be resumed. The firm at the same time need to diversify its sales in order to catch up with the consumers changing trends on tastes.

These other food products must be accompanied by quality services including reasonable prices. McDonalds should also improve on the quality of their burgers by inventing new and unique recipe. This can only be achieved by utilizing the most creative franchisees having high skilled employees (McDonald et al 335-352).

There is need to recruit managers who are capable of implementing the firms marketing programs and at the same time have the ability of building internal cohesion (Johlke and Duhan 265-267). The manager must have the ability to motivate and unite employees from the franchises to the head office.

The managers must possess the ability to control and cope with major changes and challenges within the market. The managers need to acquire valuable information on the current market trends without relying so much on their past performances. They need to improve on their level of interaction and communication with their franchisee.

McDonald’s Problem: Analysis of the Alternatives

Making training mandatory for every employee on a regular basis might see an improvement in the level of skilled manpower. This can be used to enhance marketing effectiveness as well as the level of performance. Recruiting experienced managers will ensure that proper tactics are implemented to regain the control of the market.

This will also ensure that the human resource have the right people for right duties (Cravens and Piercy 2009). McDonalds have kept on changing its managers due to poor performances and inability to implement quality strategies for quality services. Like in this case, poor management led to McDonalds closing over seven hundred restaurants (Gogoi and Michael 281-284).

Looking for the alternative food stuff for consumers might not look effective at the start since there are many consumers who are now used to the supplies from other potential competitors. Improving the recipe will not also realize much change because according to research ratings, the consumers prefer being served with firms that offer better quality services.

According to the research carried out, companies like Wendy and Chick-fill-A Inc were ranked a head of McDonald. McDonald’s competitors offer far better quality food stuff than them and this might mean that McDonald will really have to improve on their sales and marketing tactics in order to convince consumers (Kohli 53-8).

Recommendation

There is need to analyze other competitors intentions and strategies in order to find the best counteractive approach. The need for good management team will enhance the provision of good brand and articulation of all the elements that comprise marketing mix. The products, pricing and the way of marketing must change for growth and improvement to be realised.

Works Cited

Cravens, David and Piercy, Nigel. “Strategic Marketing”. McGraw Hill. 9^th edition. 2009.

Gogoi, Pallovi and Michael, Arndt. “McDonald’s Corporation”. Business week, New York, (2003): 281-284.

Johlke, Mark and Dale Duhan. “Testing Competing Models of Sales Force Communication”. Journal of Personal Selling & Sales Management. USA Vol. 21 (4), (2000): 265-277.

Kohli, Jaworski. “Market orientation: Antecedents and consequences”. Journal of Marketing; New York 57, (3) (1993): 53-81.

McDonald, Malcolm et al. “Corporate Marketing and Service Brands—Moving Beyond the Fast-Moving Consumer Goods Model.” European Journal of Marketing; London. Vol. 35 (3/4), (2001):335-352.

Executive Summary of McDonald’s Marketing Strategy

McDonald’s Corporation is the world’s largest fast food company by sales volume and retail outlets. McDonald’s operates in over 116 countries with its outlets and franchises. The company is successful and still growing fast. The company uses its marketing plan carefully when implementing its marketing strategies across its global outlets and franchises.

McDonald’s uses the strategy of Plan to Win to drive its worldwide expansion. This strategy has 5Ps that consist of price, promotion, product, place, and people. The company relies on strong strategic thrust and competitive advantage that mainly focus on its resources for implementing its marketing objectives.

McDonald’s is also one of the largest spenders on advertising. Industry analysts estimated that McDonald’s spends over $ 1.2 billion in advertising beating all other fast food companies. The kids’ advertisement and promotional strategies take the largest portion of this budget.

Despite this success, McDonald’s faces a number of challenges from unlikely sources like its customers, who complain that the company uses its advertisement messages to target kids.

Still, McDonald’s has to contend with expensive lawsuits related to obesity claims as a result of consuming its unhealthy food. In addition, there are also challenges of staff turnover, risks of food infection, and threats from competition. The company now strives to focus on provisions of healthy organic food as a response to its customers’ demands for future growth.

Business Mission

McDonald’s Mission Statement

“McDonald’s vision is to be the world’s best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile”.

In McDonald’s annual report of the year 2010, the Vice Chairman and CEO, Jim Skinner, states that the company started to create its brand and strength throughout the globe. The CEO also accepts that the business situation during the year 2010 was tough.

The company managed to deliver its business through consumer-oriented management in order to focus its strategies and enhance its main business concentration, specifically the menu, restaurants, core values, and convenience to the customers. At the same time, McDonald’s management continued to focus on the quality of human resources and restaurants in order to enhance customer satisfaction (McDonald’s Corporation, 2010).

External Situational Analysis

McDonald’s has survived all the external global conditions that may affect its operation. Consequently, the company continuously monitors the external environment, such as political risks. In over 100 countries, political situations have not stopped McDonald’s from operating its outlets or franchises.

McDonald’s is also a stable company economically for the past decades. The company has survived the global recession of 2007 and continues to make profits and introduce new ranges of products. McDonald’s also provides services and uses technology that appeals to its consumers and always strives to create positive consumer experiences in its outlets and franchises.

Thus, observing ethics with regard to claims that McDonald’s advertisement target kids and sell unhealthy foods and junk have been a source of concern for the company. McDonald’s is an industry leader; thus, competitors mainly borrow or watch McDonald’s strategies in terms of new products, technology, promotion, and investments, among others.

Internal Marketing Audit

Marketing Mix Effectiveness

McDonald’s marketing mix is effective and strategic due to its approach. Studies have shown that McDonald’s concentrates carefully on the implementation processes of the 4Ps of the marketing mix. At the same time, the company focuses on fulfilling consumers’ needs through its innovative products and services in different outlets and franchises and enhances the relationship with stakeholders such as consumers, investors, franchisees, employees, suppliers, and the community in which it operates.

McDonald’s also strives to provide healthy food among its products, especially to children, due to claims of obesity. In this regard, the company provides the nutritional contents of its food to consumers on the packages. These concerns have enhanced the company’s competitive strategy and advantages in terms of serving low costs healthy foods (Koshuta, 2007).

However, lately, McDonald’s has suffered several lawsuits related to what consumers call unhealthy food it serves children. The claims relate to an increase in obesity among such consumers. This means that McDonald’s must improve its nutrient contents in such foods and reduce the level of calories. This is where the marketing mix of products should focus in order to create competitive advantages.

McDonald’s can use modern technology to reduce the fat contents and reduce risks of contamination by removing E. coli and salmonella. This way, McDonald’s food will result in a strong brand for the company. McDonald’s can promote reduced fat contents, risk and contamination free, and work with food safety authorities to promote its healthy food.

McDonald’s should capitalize on the strengths of products using the marketing mix strategies in order to promote healthy foods and healthy eating habits among kids.

Promotions and advertisement activities of healthy diets must reflect the above objectives of promoting a healthy diet and helping in the fight against obesity among its customers. These promotions are ethical and legal since they promote and advertise healthy diets. The company’s strategy to focus on healthy products will determine its future growth, marketing strategy, and target market, and in turn, provide the needs and wants of its customers (Story and French, 2004).

Marketing Structures and Systems

A company’s marketing structures and systems come after marketing strategies for implementation of the strategies (Gilligan and Wilson, 2007). In addition, marketing structures and systems provide the needed support during the implementation of organizational marketing activities.

Still, managers must use such systems in the processes of decision-making. These include application tools, data collection, and interpretation of data for providing factual information for both internal and external situations of the business so as to support marketing activities (Gilligan and Wilson, 2007).

McDonald’s global marketing structures and systems have enabled it to thrive and drive its global business agenda. McDonald’s calls it franchises as systems. Franchises are responsible for the international presence of McDonald’s in over 100 countries. The company is successful because of its marketing structures and systems that offer what consumers want.

SWOT Analysis

McDonald’s SWOT analysis shows that the company has a higher ranking in the global fast food industry. It gets its competitive advantage from locations such as airports, theme parks, busy roads, and in Wal-Mart stores. McDonald’s also has quality food products, such as quality chicken products, beef, and pork for its products.

McDonald’s only uses brand names and supplies nutritional information on the food packages (Adcock and Halborg 2004). McDonald’s also offers its products at low cost in order to appeal to a wide target market. The company has relied on its strategy of Plan to Win and franchise systems in order to maintain its first position and global presence in the fast food industry.

McDonald’s weaknesses include high staff turnover. This has increased its staff acquisition and training costs. McDonald’s also did not pass the pizza test. This failure resulted in limited competition among pizza providers. The issue of obesity is fast affecting the fast food industry, and McDonald is the first casualty.

However, McDonald’s does not focus much on organic food. Occasionally, customers have expressed their concerns regarding the quality of food in McDonald’s outlets and franchises around the globe. In addition, McDonald’s only provides certain fast foods and soft drinks. This act of specialization means that the company cannot serve outside its menu; thus, it cannot offer other varieties of foods.

McDonald’s has many opportunities for provisions of fast food. McDonald’s can still franchise with several retailers. It also has opportunities of providing healthy and organic food as consumers demand in fights against obesity concerns among its customers so as to reduce possible lawsuits.

McDonald’s can also support social responsibilities through support for its farmers and encourage the conservation of the environment. The company can enhance its use of promotional channels in its restaurants, provide playgrounds for kids, increase partnerships with beverage companies, and create locations with Wi-Fi for customers.

McDonald’s encounters many threats. The advertisement experts criticize the company for targeting small children and adults alike with its multi-billion advertisement campaigns. Likewise, the company is also under constant threats of lawsuits because of serving addictive and unhealthy foods, mainly to children. It is impossible for McDonald’s to serve healthy foods to fit various customers’ nutritional needs. In a number of cases, there are risks and issues of food contamination, specifically with e-coli.

This has ruined the company’s reputation in some franchises and outlets. McDonald’s also faces competition from other fast food restaurants, and consumption also depends on economic stability. The main competitors of McDonald’s include Burger King, Wendy’s/Arby’s, Subway, Pizza Hut, and Yum! Brands (Gupta, 2010).

Marketing Objectives

Strategic Thrust

The main strategies are also a company’s strategic thrusts. Strategic thrust offers organizations basic steps in order to undertake strategic actions and functional strategies. Strategic thrusts may work independently or may work together so as to reinforce others (Ferrel and Hartline, 2005).

McDonald’s applies a strategic thrust of concentrated growth. Concentrated growth focuses on enhancing sales of the existing products and services of McDonald’s using its outlets and franchises. At the same time, the strategy addresses issues of price, value, and quality as consumers express their concerns.

This strategy reduces risks and costs to McDonald’s and creates stable business operations. However, this strategic thrust of concentrated growth may not serve the company in unstable business conditions and where there are rapid changes (Baker, 2008).

McDonald’s also focuses on market development. The approach emphasizes the growth of the company through using its existing fast foods and soft drinks and marketing them in related areas, opening new outlets, franchises, and increasing advertisement and promotional strategies.

The company also focuses on product development for both existing and target markets. For instance, McDonald’s has been able to introduce a range of products and services so as to serve its wide target markets. In addition, the company relies on innovation and technology in order to reduce fat content and calories in some of its menus as customers demand.

Strategic Objectives

Andy McKenna, the company Chairman, puts it that McDonald’s has a Plan to Win strategy. The company has used this strategy to carry out its strategic objectives for the past eight years. McDonald’s strategically implements its marketing plan using the Plan to Win strategy, which has the core objectives and strategies of its marketing agenda.

These are the 5Ps of price, promotion, product, place, and people. McDonald’s executives have noticed the potential and importance of every P, and the company plans to apply all the Ps in its marketing plan. McDonald’s is using this strategy in order to focus on its right priorities, such as keeping its brand relevant and meeting the needs of ever-changing customers, more so with regard to healthy food.

The Plan to Win strategy enables McDonald’s to be decisive, flexible, and show strong business orientation so as to meet the needs of its customers, especially with regard to obesity and health issues. McDonald’s believes that the strategic objective of the Plan to Win strategy has worked well and will continue to do both in the domestic and global markets in the coming years (McDonald’s Corporation, 2010).

Core Strategy

Target Market(s)

McDonald’s target market is wide and broad, covering every segment of the consumer demography. Thus, McDonald’s target consumers of all ages, generations, nationalities, income, race, gender, and family with its global presence and franchises approach. The company offers low-cost and high-cost products that meet its wide markets.

Competitor Targets

McDonald’s competitors include Wendy’s/Arby’s, Burger King, Subway, and Yum! Brands, among others. Some of these competitors do not focus on the entire market segment as McDonald’s does. For instance, Burger King has been targeting adults of 18 years to 35 years old, as Wendy’s/Arby’s target consumers of 24 to 49 years, instead of its previous strategy of targeting 18 to 24 years consumers (WSJ, 2008). In addition, most of these competitors’ target markets have limits in terms of geographical coverage.

Wendy’s/Arby’s is in 33 countries. The company focuses on providing varieties of fast-food products and services. McDonald’s focuses on all segments of the market. Consequently, it has reduced its prices to cater to such consumers and gain a competitive advantage. However, Wendy’s/Arby’s focuses on the quality of its products instead of prices. The company has products like Garden Sensation that appeal to diet-conscious consumers (Gupta, 2010).

McDonald’s has been able to challenge its competitors using expansion strategies across the globe through franchises. However, a competitor like Wendy’s/Arby’s focuses its expansion strategy in Latin American countries. The company also seeks joint ventures and uses acquisition strategies.

KFC focuses on profits and sales growth. In addition, just like McDonald’s, the company also focuses on customer service. KFC also tries to change its menus to match those of the countries it serves and caters to different ethnic communities. This is to enhance its market share. KFC targets emerging markets and highly populated areas like shopping malls.

Subway also has a strategy of targeting international markets. Subway also focuses on healthy food in reaction to customers’ demands. The company has established healthy brands of sandwiches as a form of fight against obesity among children. The company believes that health-conscious consumers are here to stay (Gupta, 2010).

Competitive Advantage

Like any other company, McDonald’s also seeks competitive advantage. Competitive advantage has enabled McDonald’s to hold the leading position in the fast food industry since its inception. The focus of the company has been brand recognition and a global presence through franchises and outlets. The company is consistent with its advertisement and has an innovative capacity to create a low-cost menu of $ 1.

It is also focusing on introducing healthy options consisting of salads in its menus so as to reflect the changing taste of consumers. Recently, the company introduced a low-cost coffee product that aims at competing with Starbucks in the coffee market. These approaches keep McDonald’s competitive advantage stronger than competitors (Ferrel and Hartline, 2005).

McDonald’s attention is on managerial and organizational activities that aim at creating an integration of the company. The team focuses on a common goal that aims at creating value for the organization. Therefore, change and learning are necessary in order to cater to customers’ trends, developments in technology, and innovation in the company (Hooley et al, 2007). McDonald’s concentrates on hiring and creating management experts and enhances organizational behavior.

The company also looks into areas of technology, structure, and assets that enhance competitive advantage. McDonald’s uses its resources, technology, and financial resources to create a competitive advantage in the fast food industry.

McDonald’s focuses on a wide target market with global outreach and creates low-cost products, which has improved its competitive advantage in the market. The company’s vision of serving fast food to busy consumers has seen it spread throughout the world. The provision of quality products and services has remained defining factor in McDonald’s competitive advantage. These are advantages that are unique to McDonald’s only; thus, it is difficult for competitors to imitate them (Bateman and Snell, 2004).

McDonald’s Marketing Plan

Product

McDonald’s deals in fast food that consists of hamburgers, chicken, French fries, soft drinks, coffee, milkshakes, salads, desserts, and breakfast. These products provide varieties for McDonald’s wide target consumers. McDonald’s serves these products in various quantities and quality, and prices.

The company has unique designs for its packaging that reflects its brand and identity. Product packaging is a strategy that McDonald’s uses in its products to implement its marketing mix (Jobber, 2010). The company knows the effect of packaging messages to all its customers.

Consequently, the packaging of fast food products must thrust McDonald’s brand. The fast food industry is competitive; thus, McDonald’s has to convince customers with its products within a short period. Products packaging offers convenience to consumers who buy fast food for home consumption or traveling. Most products experience repeat purchases due to packaging. McDonald’s has strived to enhance its fast food products and coffee for the convenience of its consumers.

Consumers know McDonald’s for its French fries. However, the product had been on the decline stage and was no longer generating significant revenue (Perner, 2008). Consequently, McDonald’s reacted by revitalizing and repositioning it through a new product known as Shake Shake Fries. In addition, the company added new varieties to it, such as spices mix. This approach ensured that French fries remained relevant in its menu for revenue growth.

Although McDonald’s has several outlets and franchises, it strives to maintain the same quality and tastes of its products across the globe. McDonald’s can claim that all its products will be of the same quality and service always across the globe. The leading fast food company has demonstrated this over a number of years.

Consequently, customers can trust McDonald’s brands. This allows consumers to know what to expect from McDonald’s products and services whenever they make purchases. This flexibility allows consumers to trust McDonald’s to provide the same quality fast food in every outlet and franchise.

Price

McDonald’s pricing tends to consider all elements of the marketing mix. The company provides value pricing whereby its offers products as low as $ 1. This combination provides quality products at fair prices to all customers. Therefore, a non-pricing approach is impossible for McDonald’s, even if it is the company leading in the fast food industry (Perner, 2008). Pricing strategy and implementation are necessary due to the competitive nature of the fast food industry.

In addition, McDonald’s must set a pricing strategy to cater to reduced costs that affect the price, promotion, and distribution of its products. These will strongly affect its pricing strategy. In all these marketing mixes oriented toward pricing, McDonald should know that consumers’ decision to buy goes beyond pricing alone as there are other factors that influence consumers’ decisions. Consumers seek the best values and satisfaction from their purchases.

McDonald’s sells to high-end consumers as well as low segments of its target markets. Consequently, McDonald’s pricing mix and implementation are necessary for determining the company’s success. McDonald’s value pricing strategy sends a message to all consumers of different segments and income statuses.

The advantage is that McDonald’s serves all segments of the market. Consumers need value for their spending, and McDonald’s has created this. McDonald’s pricing strategy must also account for competition. McDonald’s also experiences competition from other fast food companies. Therefore, a pricing strategy to outdo the competition and maintain the leading position, as well as market share, is crucial in McDonald’s marketing mix (Adcock and Halborg, 2004).

McDonald’s has noted customers’ sensitivity to prices. Consequently, the company has reacted by introducing low-cost, fast food of a dollar. However, some customers do not have to pay much attention to product pricing if they can get quality products and value. McDonald’s must use its pricing strategy and implementation as a tool for controlling other elements of the marketing mix.

Place

McDonald’s has some of the most strategic places among fast food companies. The company seeks populated areas, places of high-end consumers, and easily accessible such as airports, busy streets, and retail stores. McDonald’s also likes locations near its main competitors, such as Subway and Burger King. This strategy is crucial to ensure that McDonald’s captures and supplies its products to all market segments.

McDonald’s is also available online as clients can place their orders. McDonald’s has a worldwide focus through its new outlets and franchise approach. Availability has enabled McDonald’s to remain competitive and conduct profitable business. Presence in such locations creates demands for such products. Place strategy has worked for McDonald’s as customers can easily access their favorite fast foods.

The choice of place also promotes McDonald’s brand image to its target markets. In addition, the choice of such places also influences the pricing of McDonald’s fast food products and the type of consumers who visit such places. Thus, McDonald’s serves both low-end consumers as well as high-end consumers who may not have time to prepare their meals (Gupta, 2010).

When implementing a place strategy, McDonald’s must consider the price, products, place, and people. McDonald’s must also watch its competitors, such as Subway and Burger King, as they choose their places. McDonald’s has been opening new outlets and franchises. McDonald’s place strategy must appeal to its employees, stakeholders, and customers.

Promotion

Implementation of a promotional strategy is crucial for the success of any business venture. Companies rely on communication to promote their brand images and create awareness about their products. The company must consider the message and tools of communication in order to reach its target market.

McDonald’s has used several strategies, such as providing toys for kids, Big Mac Hockey Contest, and card games. Such strategies aim at promoting both its existing and new products. There are also advertisement campaigns that promote McDonald’s experience and active lifestyle.

McDonald’s uses channels such as television, newspapers, and radio. It also uses billboards and signage. The company also sponsors sporting events like Olympic Games and Little League. The company provides its branded drinks at such events. Lately, McDonald’s has used its Web site to promote its products. However, it is the television that has created the most memorable advertisement for the company.

McDonald’s has many slogans for different countries. Some of these slogans and advertisement campaigns have resulted in lawsuits.

McDonald’s also has a fifth element in the marketing mix that focuses on people. This is mainly to enhance customers’ experiences of McDonald’s products and services.

However, some reports indicate that McDonald’s tends to concentrate on children more than any other segment of the target markets in terms of advertisement budget and products alike (Story and French, 2004). According to John Koshuta, “the world’s largest fast food chain uses cartoons, toys, schools, charities, and even parents to reach its youngest customers” (Koshuta, 2007).

Budget

According to Advertising Age, McDonald’s spent $ 1.2 billion in the US alone in the year 2008. It is among the top 30 largest advertisers in the US. In the US, McDonald’s has a national and local advertisement strategy. The company has a national budget for national advertisements, and local co-operatives organize local advertisements. The industry total is $ 5.6 billion. Koshuta notes “about 40% of McDonald’s total advertising budget focuses on children” (Koshuta, 2007).

McDonald’s Action Plan

A marketing plan will provide McDonald’s with the road it requires in order to pursue its marketing objectives. However, a marketing plan is just a plan; thus, it is not a guarantee that the company will achieve such desired goals.

Therefore, turning a marketing plan into a strategy needs practical implementation. This will turn the plan into action and, in turn, helps achieve strategic marketing objectives (McDonald, 2007). Implementing any strategy requires resources. McDonald’s needs a strategy management approach that will ensure that the marketing plan becomes the center of focus (Lehmann, 2007).

The best marketing plan with the best strategic plan will ensure that McDonald’s achieves its business goals and objectives of Plan to Win. Some authors have argued that the implementation of the plan is more crucial than the strategy. However, implementation and strategy depend on each other for success.

Kotler and associates note that implementation results in a competitive advantage for the company (Kotler, Wong, Saunders, and Armstrong, 2005). In this context, scholars have identified three stages that are crucial for the implementation of business strategy. These include owning the plan, supporting the plan, and adapting the plan.

Most business plans fail due to a lack of ownership. McDonald’s management teams must demonstrate a willingness to support the plan. They can claim a stake in it and take responsibility during its formulation. Management must promote ownership of the plan by establishing action points, plan, involvement of senior level management, compensation, champions, and ownership team.

Senior-level management of McDonald’s must also actively participate in the process. They must remain committed and take part in the review of the progress of the plan. Senior-level management that shows less interest in the plan may communicate a lack of interest in the plan. Consequently, champions and ownership groups may feel a lack of interest too. This may result in a complete failure of the plan due to its lack of implementation (Aaker, 2009).

McDonald’s must also support the plan. Supporting the plan depends on five company elements. These include human resources with the necessary competencies and skills and leadership needed to implement the plan successfully. Allocation of resources such as time, personnel, and money will also affect the implementation of the plan. The organization must also provide the required structures in terms of policies and practices that guide a marketing plan.

The support for the plan also requires the organization to provide systems of information flow, operation, communications, rewards, planning, and measurement of outcomes. Lastly, organizational culture also influences the outcome of plan implementation. McDonald’s must have a strong culture that supports marketing initiatives and promote coordination during implementation processes. These five elements must be in line with each other and aligned with the business strategy of the organization (Baker, 2008).

Control

Businesses have control systems that guide their strategic plans in order to adapt to dynamic market situations. A strategic marketing plan sets the direction and offers the company a direction for implementation and continuous improvement as it adapts to the market (Gilligan and Wilson, 2007).

Controls ensure that McDonald’s takes corrective measures after evaluating its marketing plan. This will ensure that the company achieves its strategic plan. McDonald’s must find ways to narrow boundaries due to its international presence by creating a cross-functional management system that communicates organizational plans across various units or countries (Aaker, 2009).

Reference List

Aaker, D 2009, Strategic Market Management, 9th edn, Wiley, New York.

Adcock, D and Halborg, A 2004, Marketing Principles and Practice, 4th edn, Prentice Hall, London.

Baker, M 2008, Marketing Strategy and Management, Palgrave, London.

Bateman, S and Snell, A 2004, Management: The new competitive landscape, 2nd edn, McGraw-Hill, New York, NY.

Ferrel, C and Hartline, M 2005, Marketing Strategy, Thompson South-Western, Mason, Ohio.

Gilligan, C and Wilson, R 2007, Strategic Marketing Management: planning, implementation and control, 3rd edn, Butterworth-Heinemann, London.

Gupta, A 2010, Marketing: Competitor Analysis of McDonald’s. Web.

Hooley, G, Saunders, J, Piercy, N and Nicoulaud, B. 2007. Marketing Strategy and Competitive Positioning, 4th edn, South-Western College Pub, London.

Jobber, D 2010, Principles and Practice of Marketing, 6th edn, McGraw-hill, London.

Koshuta, J 2007, ‘McDonald’s Marketing Focused On Children’, Organic Consumer Association, vol. 12 no. 7, pp. 1-2.

Kotler, P, Wong, V, Saunders, J and Armstrong, G. 2005. Principles of Marketing, 4th edn, Pearson Education Limited, Essex.

Lehmann, D 2007, Analysis for Marketing Planning, McGraw-Hill/Irwin, London.

McDonald, M 2007, Marketing plans: how to prepare them, how to use them, Butterworth Heinemann, Oxford.

McDonald’s Corporation 2010, McDonald’s Corporation: 2010 Annual Report. McDonald’s Corporation, Oak Brook, IL.

Perner, L 2008, The Marketing Mix: Product. Web.

Story, M and French, S 2004, ‘Food Advertising and Marketing Directed at Children and Adolescents in the US,’ International Journal of Behavioral Nutrition and Physical Activity, vol. 1, no. 3, pp. 1-3.

WSJ 2008, ‘New Wendy’s to target older customers,’ Wall Street Journal, vol. 30, pp. 1-1.

The strengths and weaknesses of McDonalds can be illustrated with the help of the Internal Factor Evaluation (IFE) Matrix. This tool helps to identify the core competencies or problems of the organization. This following table will illustrate the extent to which east strength and weakness is important for this company and its performance.

IFE Matrix of McDonalds

On the whole, this analysis shows that the brand is one of the main strengths of McDonalds since it is recognized in countries that may have different cultures or languages (Kurtz 2010, p. 484). This is probably the core asset of this corporation. Secondly, this organization has a well-developed supply chain that enables the company to keep its prices low (Kurtz 2010, p. 484).

Furthermore, this organization uses training methods that ensure that employees can easily substitute one another in the workplace (Leidner 2002, p. 17). Therefore, high turnover does not threaten their performance. In turn, the main weaknesses of this corporation are related to their inability to retain workers. The majority of these people work for them only on a part-time basis. Not all of them want to stay in McDonalds for a long time.

Additionally, one should note that McDonalds frequently faces lawsuit from their customers (Miller, & Cross 2012, p. 338). In particular, they people can blame the company for not warn them about the health risk of fast-food meals (Miller, & Cross 2012, p. 338). Secondly, some guests criticize the customer service of this organization (Miller, & Cross 2012, p. 338).

These are the main strengths and weaknesses of this corporation and the management should find ways of improving these aspects of performance if they do not want to lose their leading positions in the fast-food industry.

When discussing the strategies of McDonald’s one can take the so-called resource-based approach. According to it, the competitive advantage of an organization can be acquired and retained provided that a company has a set of valuable resources that cannot be easily replicated by other firms (Phadtare 2011, p. 180).

This model emphasizes organizational, human, or physical resources of a business (Phadtare 2011, p. 180). There are several things that are important for competitive position of this corporation. In particular, one can speak about its brand that is easily recognized at an international level. The brand of this corporation can be viewed as organizational resource of McDonald’s. For a long time, it has been the source of their competitive advantage.

Currently, this company extends its operations by letting franchisees to open fast-food restaurants that bear the name of McDonald’s. Their supply chain enables them to open new restaurants relatively quickly. This efficiency of operations is another thing that ensures competitive advantage of McDonald’s, especially when the corporation attempts to enter foreign markets.

On the whole, this organization creates values by providing customers with fast and cheap food (Verkatachalam & Sellappan 2011, p. 5). The core competency of this fast-food company lies in its ability to serve a great number of visitors within a shortest possible time. This ability can be viewed as organizational resource of the corporation.

As it has been mentioned before, the employees in McDonald’s restaurant are trained to substitute one another. Therefore, the performance of a fast-food restaurant will not decline provided that one of its employees chooses to live. Thus, their HR strategies also give them some advantage over other firms.

When positioning themselves the company emphasizes such aspects as price of their products and the efficiency of their services. Their fast-food restaurants are described as those places where a person can easily get tasty food within the shortest time. This element of positioning is present even when the company operates in foreign countries. Thus, one can say that the major competencies of McDonald’s enable this company to achieve financial and organizational success.

References

Kurtz, D 2010, Contemporary Marketing, Cengage Learning, New York.

Leidner R 2002, Fast-food work in the United States. In Royle, T & Towers, B (eds.), Labor relations in the global fast food industry, Routledge, New York, pp. 7-27.

Miller, R & Cross, F 2012, The Legal Environment Today: Business in Its Ethical, Regulatory, E-Commerce, and Global Setting, Cengage Learning, New York.

Phadtare, M 2011, Strategic Management Concepts and Cases, PHI Learning Pvt. Ltd, New York.

Verkatachalam, T & Sellappan, C 2011, Business Process, PHI Learning Pvt. Ltd, London.

Budget Control

Mc Donald’s has many financial sources because of the diverse businesses it operates. The sources range from franchising to renting and leasing of property. While making the budget, the company puts into consideration many factors. Some of them include marketing and customer service.

This forms the basis for competing well in the market. Quality service is the hallmark of success at Mc Donald’s. The company does not buy expensive raw materials. It has a competitive tendering policy that recognizes the important aspects of its raw materials. Overall, the company has a policy to guard its budget against unnecessary spending.

Market Control

Mc Donald’s is a globally recognized brand. Buzz marketing works to the company’s advantage. In its industry of operation, it is a market leader and a trailblazer. The company unveils new products frequently to appeal to its new and potential markets. This strategy is also meant to retain customers. The company believes that after using a certain product for some time, some customers get redundant. Therefore, it works hard to appeal to those customers by meeting their needs.

The company communication and advertising strategies are unbeatable. The combination of imagery and coloring in its ads makes it quite appealing to its potential customers. The company has divided its market according to needs. This includes children, youth, middle-aged and the old.

They have further subdivided the market according to disposable incomes. Therefore, it unveils products that aptly suit the market blocs. Before unveiling any products, the company conducts market research on the desired products. Then it employs market mixes that correctly suits the market. These strategies have enabled the company to maintain a lion’s market share and wade off competition.

Clan Control

The mc Donald’s is not so far owned by a single person. The biggest food chain in the world is owned by a group of inheritors. These family members have squabbles that do not show in public. The company owners have also been associated with Satanism. Once, the owner Ray Kroc was rumored to have tithed in a Satan church. Though the family name gives the hotel chain some identity, it is also a source of many problems.

Management has a hard time to meet the demands of the owners. The company family members are also associated with powerful people in governments. The united sates government is accused of funding mc Donald’s to open new food chains abroad under the guise of foreign policy. The mc Donald’s are also publishers of occult materials in the UK. The company does this unabated which raises eyebrows (Love, 2007).

Bureaucratic Control

Because of the family background of Mac Donald’s, the company has a bureaucratic side in its operations. It is brought about by the apparent single handed decision making of the owners. Managers may make decisions, but it is always widely influenced by the owner’s wishes.

This extends to its franchises. The rules and regulations that govern the franchising business are custom made and different from any other in that field. This company employs a different business model from all the other players in the industry. It owns around a quarter of all restaurant chains directly and franchises the rest. Its method of franchising is different form all the rest. It owns properties of the locations of franchises.

The owner of mc Donald once said he is not in restaurant industry, he is real estate. The nature of agreements that govern its franchising is unique to many franchises. But, most of them have the condition of owning or leasing the property on which the franchise is located. Therefore, mc Donald’s collects rent from the franchises. Also, the company does not make direct sales to the franchise choosing to use third parties for that (Webb, 2007).

References

Love, J. (2007). Big Macs, Fries, and Real Estate. Financial Executive, (4): 20–26.

Webb, H. (2007). The Association between Disclosure, Distress and Failure. Journal of Business Ethics, 75(4): 301-314.

Issues

The case deals with a series of challenges faced by McDonald’s in 2013 as a result of several external factors. The issues presented in the case can be divided into three categories. First, the aftermath of the 2011 economic recession impacted customer behavior and prompted them to seek better value at a lower price, as well as generally cut spending. Second, increased awareness of the adverse effects of unhealthy eating backed by the efforts of the Affordable Care Act and Patient Protection undermined the trust of the target audience and decreased the inflow of new customers. Third, the company faced criticism due to the inadequate level of service and staffing. The combination of the issues above led to the severe decline of shareholder return.

Situational Analysis

External Environment

The fast-food industry is exhibiting a steady growth, with a 15 percent growth from 2007 to 2012 and an expected continuation of the trend throughout the next five years (Arthaud-Day, Rothaermel, & Collins 2013). This suggests that the industry is in the late growth segment of its life cycle and is about to enter maturity. Its main audience, young single professionals, demonstrates strong paying capacity, and a recent shift towards healthy diets allows for a diversification of the marketing solutions.

The market segment displays high competitive rivalry from several brands that closely mimic McDonald’s strategies as well as from several marginal competitors such as fast-casual restaurants that offer attractive alternatives. The threat of substitution is also high, with the existence of nearly identical product lines as well as alternatives that are more attractive from the health standpoint, both of which have zero switching costs. The power of buyers is moderate since their increased attention to the quality of food and reluctance to spend more on eating out is mitigated with the low bargaining power. The power of suppliers is extremely low since, despite their size and importance, the current state of all suppliers is driven solely by their ability to sell their products to large corporations, and they have few options aside from those offered by McDonald’s (Schlosser 2012). Finally, the threat of new entry is low due to the factor of economies of scale and the saturation of the market with recognizable brands.

As can be seen from the information above, the general trends can be considered favorable, but the specific threats in the form of health policies and customer behavior align poorly with McDonald’s existing strategy.

Internal Environment

The company possesses numerous strengths. Its brand name is among the most recognizable ones in the world, and it has a strong presence in the United States, with 13,381 outlets in 2013 (Arthaud-Day, Rothaermel, & Collins 2013). It also has a strong resource base, and firmly controls all key points of the supply chain, such as farms, processing plants, and distribution channels (Corporate Accountability International n.d.). Finally, it has strong R&D resources that consistently produce superior solutions and products. On the other hand, the company currently has an extremely variable menu, which decreases growth opportunities due to logistical reasons and introduces employee confusion and stress (Arthaud-Day, Rothaermel, & Collins 2013). Finally, numerous reports and media highlights indicate persistent issues with customer service and customer dissatisfaction.

Key Industry Success Factors

Aside from the overall trend of fast food market growth, several important success factors should be acknowledged. First, all of the competitors in the field focus on store and process modernization, which determines their success. Second, the inclusion of healthier menu items and whole foods leads to favorable outcomes. Third, the decreased price of restaurant foods blurs the line between quick-service restaurants and related segments. It should be noted that McDonald’s excels only in the first key success factor.

Strategies

The current strategy used by McDonald’s is a “Plan to Win,” which aims at maximizing profits from existing restaurants, diversifying the menu options, and cutting corporate costs. The second option has been the least successful so far, and the strategy can be considered generally unsuccessful since it either does not solve or aggravates the identified issues.

Recommendations

Despite the failure to address several issues, the chosen strategy is generally acceptable. Thus, it would be sufficient to introduce several adjustments in order to ensure improvements. First, the company must improve the communication of the health benefits of its new menu options and seek ways of increasing customers’ trust in order to connect the new products with the target audience. Simultaneously, the menu diversity must be gradually reduced via elimination of less healthy options which are associated with adverse effects and are featured in the anti-fast food campaigns. Finally, resources must be allocated for staff training and service improvements, with the reasons for additional expenses and long-term benefits transparently communicated to the stakeholders.

Update

Recent developments are partially consistent with the suggested direction. McDonald’s introduced a premium segment of healthier foods in its menu but retained familiar cheaper breakfasts. This has led to a slow yet steady improvement (Trefis 2016). However, there are no signs of service enhancements on a major scale, which may be responsible for the insufficient rate of improvement. To sum up, the recommendations above were only partially implemented, with observable yet insufficient outcomes, which may be considered proof of their validity.

Reference List

Arthaud-Day, M, Rothaermel, F & Collins, J 2013, McDonald’s (in 2013): How to win again?. Web.

Corporate Accountability International n.d., McDonald’s influence on the food system. Web.

Schlosser, E 2012, Fast food nation: The dark side of the all-American meal, Houghton Mifflin Harcourt, New York.

Trefis 2016, ‘Here’s how McDonald’s is ensuring that “all day breakfast” remains a winner’, Forbes. Web.

Introduction

McDonald’s is a large hamburger fast food restaurant chain that operates in more than 120 countries (Fast Food Menu Prices, McDonald’s par.1). It offers various types of food such as hamburgers, chicken, cheeseburgers, soft drinks, and salads among others. Subway is a healthy fast food restaurant chain that operates on a national level. It sells sandwiches and salads to health-conscious consumers at affordable prices (Fast Food Menu Prices McDonald’s par.1). The purpose of this paper is to compare and contrast the two franchises in terms of their prices, service quality, and healthiness of food items.

McDonald’s

Prices

The following is a shortlist of some of the most popular meals at McDonald’s and their corresponding prices in California: Big Mac – $5.11, Quarter Pounder with Cheese – $3.69$, Filet-O-Fish – $4.85, McChicken – $1.65, and 20 Pc. Chicken Nuggets – $6.40 (Fast Food Menu Prices, McDonald’s par.1).

Service

According to a recent study that evaluated the comparative performance of the most popular fast-food restaurants in the United States, McDonald’s scored the highest on the overall service scale (Min and Min 286). The results of the study revealed that customers perceived McDonald’s as a leader in the following categories: location, amenity, operating hours, and service response time (Min and Min 286).

The healthiness of Food Items

A study of the purchasing behavior of adolescents 12 to 21 years of age showed that the sandwich purchased at McDonald’s contained 572 calories on average (Lesser et al. 443). Soft drinks in McDonald’s averaged 151 calories (Lesser et al. 443). The participants obtained 36 grams of sugar on average from the total meal in McDonald’s (Lesser et al. 443).

Subway

Prices

The following is a list of popular Subway menu items in California and their corresponding prices: Subway Club – $9.92, Tuna Sub – $8.64, Black Forest Ham – $7.04, Veggie Delite Sub – $7.04, and Pizza Sub with Cheese – $7.68 (Fast Food Menu Prices Subway par. 1). It is clear that McDonald’s offers lower prices than Subway for comparable food items.

Service

Even though the study conducted by Min and Min revealed that McDonald’s ranked highest on the overall service scale, Subway was the leader in the following categories: cleanliness, employee courtesy, healthy food, a variety of food, safety, and reputation (286). However, the findings of the research showed that Subway fell behind McDonald’s and was ranked third best fast food restaurant chain with respect to overall quality of its services (Min and Min 286).

Healthiness of Food Items

The results of the study conducted by Lesser et al. revealed that the sandwich at Subway contained 784 calories on average while a similar menu item at McDonald’s had only 572 calories (Lesser et al. 443). It means that the sandwich in Subway contributed more calories thereby making it less healthy. However, soft drinks in Subway averaged only 61 calories while McDonald’s offered drinks containing 151 calories on average (Lesser et al. 443). Moreover, the adolescents participating in the study obtained 36 grams of sugar from the total meal at Subway and almost 55 grams of sugar at McDonald’s (Lesser et al. 443). Therefore, it is safe to conclude that McDonald’s offers slightly less healthy food in terms of sugar and calories than Subway.

Conclusion

The comparative analysis of the two fast food restaurant chains showed that both of them have similar food items in terms of their healthiness. However, McDonald’s is the price and service leader.

Works Cited

Fast Food Menu Prices. McDonald’s Prices. 2016.

— (n.d.). Subway Prices. 2016.

Lesser, Leonard, Karen Kayekjian, Paz Velasquez, Chi-Hong Tseng and Deborah Cohen. “Adolescent Purchasing Behavior at McDonald’s and Subway.” Journal of Adolescent Health 53.4 (2013): 441-445. Print.

Min, Hokey and Hyesung Min. “Benchmarking the Service Quality of Fast‐Food Restaurant Franchises in the USA.” Benchmarking: An International Journal, 18.2 (2011): 282-300. Print.

McDonald’s Mission and Responsibilities

McDonald’s is one of the most popular fast-food restaurant chains worldwide. The brand has won the love and loyalty of its customers and has united many of its employees, which is impossible without a clearly formulated mission. According to the company’s website, its mission is “to make delicious feel-good moments easy for everyone” (“Our mission and values,” n.d., para. 1).

By this statement, the organization means providing its customers with delicious food quickly, in a convenient location, and at an affordable price. McDonald’s also strives to unite and develop society and improve the visitors’ mood through its service. The activity is based on the company’s values:

• Serve – focus on customers;
• Inclusion – everyone can be McDonald’s client;
• Integrity – company strives to do the right thing;
• Family – organization wants to unite families providing happy moments;
• Community – McDonald’s is a good neighbor that support society (“Our mission and values,” n.d.).

Companies’ missions evolve and change according to market trends and customer needs. McDonald’s started as a product-driven enterprise, which focused on the speed of service and taste of food, and the menu was limited by a small number of offers. Although the company was able to enter the market and attract attention, this format of work did not provide the growth necessary for prosperity. For this reason, McDonald’s began to collect and use data about customers and, thanks to it, became a global network.

This change affected the mission of the organization and its activity. The primary responsibility has evolved to respond to visitors’ demands and offer what they need – food, service, and convenience. Obligations before its customers create other responsibilities and duties for McDonald’s. For example, the company recognizes its responsibility to find quality and eco-friendly suppliers for both products and packages. A number of obligations also included taking care of animals, reducing waste, and taking care of nature as a whole. Thus, at the moment, McDonald’s is focused on its clients.

Limitation in Gaining Data for McDonald’s Decision-Making

Every company must develop strategies based on relevant data for their area. Analysis helps organizations get ahead of competitors, improve performance, and gain other benefits. For instance, companies may use such an approach as decision analysis (DA), which is an investigation of all available data that may influence the decision-making and taking actions to achieve the best outcome (“Decision analysis,” n.d.).

For the restaurant business, information is critical, and in the future, companies that cannot use it in their favor will be at a disadvantage. It is essential to consider that with the development of technologies, the amount of data, the availability of information, and customer requirements for services increase (Bolden et al., 2018). Paradoxically, the larger amount of data for analysis can also be a limitation, as it is challenging to analyze.

To develop the company, McDonald’s leadership makes essential decisions on the strategy. It is crucial for decision-making to understand customers’ needs, how profitable a specific department, its employees, whether its location and other parameters are successful. McDonald’s previously used average-based metrics to access its own activity, but the company faced certain limitations. Such a system created difficulties in comparing stores and regions since the metrics could be the same in developing and declining stores.

Moreover, this method had limited ability to combine data from different sources. Average-based metrics also could not present the data in a convenient form, that is, visualize them. As a result, the analysis did not provide information about the correlation between various factors and cause-and-effect relationships. An alternative approach was trend analytics, which helped to get away from the existing restrictions.

McDonald’s Trend Analytics

The choice of tools for analyzing data about the company’s activities and the customers’ needs is critical because it can affect the success of the analysis. As previously noted, McDonald’s has moved to trend analytics, which contributes to understanding the situation in various restaurants of the chain and to optimizing processes. For this approach, specialists use information over a certain period in the past to predict trends in the future.

This tool helps to collect various data from multiple databases, and in this way, all the important and influential information is included in the analysis. Another advantage of the method is the visualization of the obtained data, which contributes to identifying causal relationships for different phenomena. Such trend tracking improves the efficiency of the company and helps prepare for periods of demand, such as hot drinks in winter, cold and light snacks in summer. The trend analytics helped McDonald’s solve the problems of sale, supply, speed of work, production, and other matters.

As a result of decisions applied to company restaurants worldwide to improve the quality of work and standardize experience. However, it is worth noting that although establishments look very similar, they can differ, as an organization also takes into account local trends, features, and preferences. An example of a practical solution to the problem after analysis is an improvement of the drive-thru system. The problem for customers on cars was that the waiting time is too long for fast food – three minutes. The changes included improving the quality of speakers for communication with the operator, the menu board reduction and optimizing its design, and creating additional service lines. Thus, the company coped with the adverse experience of its clients and proved its loyalty to customers.

Importance of Information Technologies in Strategic Planning

Strategic planning is an integral part of any business necessary to determine the direction for development and the goals that the company seeks to achieve. The plan includes the mission, values, the vision of the organization. The strategic plan provides guidance to staff on how to act and respond to specific situations. The planning process involves a comprehensive analysis of the data and making decisions based on it about what tasks the company sets itself and when it wants to solve them (Vo, 2020). This process contributes to improving productivity, identifying weaknesses, increasing motivation, and other benefits.

As data becomes more critical, information technology (IT) is crucial in business development and strategic planning. According to Linton (n.d.), companies need to align an IT strategy and a business strategy to maximize the benefits of technology. IT significantly speeds up the procedure of analyzing the data required to draw up a strategic plan or adjust it.

Thanks to rapid analysis, companies quickly respond to market trends and change their strategy to address customer needs. Moreover, IT provides the opportunity to adapt the current business model to a more profitable one based on the data obtained. The benefits that IT provides for strategic planning make them indispensable for modern companies.

The McDonald’s restaurant chain also actively uses technology for its own development. Starting as a product-driven business, the company has changed its business model to a customer-oriented one, and therefore, it needs to collect and analyze a large amount of data about the needs of its visitors. Previously, an example of improving their drive-thru system was mentioned – a decision made based on data analysis. Recently, the company decided to introduce technologies more actively and to use artificial intelligence (AI).

In particular, AI will be able to change the menu of the restaurants depending on the time of day, weather, or even offer a personalized order (“You want AIs,” 2019). Such a measure is another step to a more individualized approach to customer service.

References

Animal health & welfare.(n.d.). McDonald’s. Web.

Bolden, D., Martin, M., Luther, A., & Hadlock, P. (2018). Feeding the algorithm: How restaurants use data to capture competitive advantage. Boston Consulting Group. Web.

Climate action. (n.d.). McDonald’s. Web.

Craig, W. (2018). The importance of having a mission-driven company.Forbes. Web.

Decision analysis (DA). (n.d.). Corporate Finance Institute. Web.

Jeble, S., Kumari, S., & Patil, Y. (2017). Role of big data in decision making.Operations and Supply Chain Management: An International Journal, 11(1), 36-44. Web.

Linton, I. (n.d.). Strategic uses of IT in business. Chron. Web.

Our history. (n.d.). McDonald’s. Web.

Our mission and values. (n.d.). McDonald’s. Web.

Packaging & waste. (n.d.). McDonald’s. Web.

Responsible sourcing.(n.d.). McDonald’s. Web.

Trefis Team (2017). Why McDonald’s is looking to track customer data.Forbes. Web.

Vo, E. (2020). What is strategic planning? The Hartford. Web.

You want AIs with that? McDonald’s buys into machine learning. (2019). BBC News. Web.

This paper will recommend best training practices that can help McDonalds to stay competitive in the Canadian market. The company usually has eleven crew positions within any McDonalds Canada restaurant. The McDonalds Crew Development program has four steps: Prepare, Present, Try and Follow up. This model therefore guides the process through which the company trains its staff.

The current training practices in McDonalds have various strengths. On the job training helps employees to acquire vital skills that enable them perform their responsibilities more effectively. The training program is linked with organisational objectives and trainees get to understand the company’s culture and practices.

Cross -training gives employees an opportunity to be skilled in different areas of the firm’s operations. This makes it easy for employees to multi task. They are able to perform different functions effectively and this boosts productivity levels. The 4 step training model used by McDonalds helps it to save valuable time and costs (McDonalds Case Study, 2012).

The company’s employees are likely to become demoralised after training because they are highly supervised. These employees may lack confidence in their own abilities because of the extreme supervision they undergo during training. The training approaches that are used by McDonalds do not suit individual traits and talents of each employee.

This approach does not offer ways through which individual talents of employees can be harnessed for the greater benefit of the firm. Electronic learning approaches are time consuming and ineffective in helping trainees acquire the necessary knowledge. This proves problematic when a trainer wants to monitor the progress of each trainee (McDonalds Case Study, 2012).

The company updates its training materials electronically because of the fast-paced nature of its operations. Trainers and learners have access to updated information which they easily obtain from a central source. Employees are trained with the most current information which improves their knowledge and understanding.

The company has implemented various strategies to reduce training costs (McDonalds Case Study, 2012). The use of focus groups has opened up channels of communication and employees are able to share their thoughts freely regarding training procedures. This approach helps the firm to structure its training programs in a way that suits employees’ operations so as to achieve better results.

The company needs to improve its training approaches. The four step model is not suitable for all employees and therefore, more individualised training programs should be implemented. Individual talents of employees need to be harnessed and utilised for the benefit of the firm.

Employees should be given more time to discover their talents and skills during training for them to become more creative and innovative (Kleynhans, 2006, p.129). Less supervision will increase employees’ morale. The company experiences a high turnover of employees. McDonalds needs to implement policies which offer employees job security and satisfaction to reduce high rates of staff turnover.

The training program needs to be specialised to focus on making each worker more knowledgeable in specific areas. The emphasis on cross training can make workers to become less skilled in crucial areas of the firm’s operations. Trainers need to be encouraged to interact more with trainees.

This approach will encourage openness and cooperation in the firm (Kleynhans, 2006, p.130). Electronic learning needs to be improved to suit employees’ interests, skills and abilities. This approach will improve the level of knowledge employees acquire after training.

References

Kleynhans, R. (2006). Human resource management. London: Pearson.

McDonalds Case Study (2012). Training Practices in McDonalds.