Category: McDonald’s

The research proposal aims at describing the current situation and the problem of McDonalds in Dubai. The company is among the largest players in the segment and was characterized with high performance until recent years when its level of sales experienced fall, both due to not sufficiently competent cross-cultural policy and sustainability policy, drawbacks in strategic management. Meanwhile, competition in the industry is increasing due to the emergence of new players applying customer-oriented approaches, corresponding to the recent trends in consumers preferences. The research attempts to reveal ways to raise customers satisfaction and thus strengthen the market position of McDonalds.

Background

McDonalds is an American foodservice corporation, the worlds largest fast-food franchise chain. It has 129 restaurants in the UAE, half of which are located in Dubai, generating 60 percent of the profits (PricewaterhouseCoopers, 2017). In the past couple of years, in the Middle East, where Dubai takes the largest share of the market in the McDonalds portfolio, sales fell 2.4%  more than in all other markets (McDonalds, 2020). The chains shareholders are concerned about the falling performance of McDonalds, as it means a decrease in customer loyalty and is fraught with a significant decrease in goodwill with a corresponding drop in the companys value. Analysts attribute McDonalds failures to successful marketing activities of competitors, including in the mainstream of healthy eating and sustainability (Ahmed, Salih and Elbushra, 2019). McDonalds food concept has been criticized in the UAE  this is mainly due to the growing trend towards organic food in the country.

The commitment of Middle Eastern consumers to organic food is driving the development of a market in which the UAE is the second largest organic food regional producer. This fact contributed to the formation of this sector as an integral part of the UAE free economic zones, facilitating the development of this sector in the near future (Zghoul, 2019). The trend is especially clear if considering that the total area occupied by farms of organic products is 3,920 hectares, compared with 218 hectares in 2007 (Zghoul, 2019). Based on retailers reviews and market observations, experts predict a steady increase in regional demand for organic and healthy products (Ahmed, Salih and Elbushra, 2019). Growth in disposable income, initiatives of consumers, and the UAE government striving to reduce obesity will accelerate demand for these foods.

Over the past few years, UAE retailers have sought to capitalize on this growing consumer trend by making more room for organic products on the shelves. The UAE retail industry is targeting customers from four main demographic groups: local emirates, Arabs, Westerners, and South Asians (Luciani and Moerenhout 2021). Retailers not only monitor consumer attitudes and trends in these groups but supply affordable and beneficial food from ex-pat countries of origin (PMA, 2020). This form of marketing aims at building customer loyalty, while McDonald still does not apply such a forward-looking policy. Thus, there is an urgent need to find ways to improve customer satisfaction, considering the existing trends.

Problem Definition and Research Objectives

• MDP: Market Decision Problem for McDonalds is as follows: What are the potential and possibilities for the company to raise the level of customers satisfaction and loyalty? Is it the fact that McDonalds loses its competitive position due to a noticeable reduction in consumers satisfaction?
• MRP: The Market Research Problem is as follows: To identify and systematize consumers needs and preferences and outline ways to improve customers experience and raise their loyalty.

Research Objectives

1. To reveal consumer expectations regarding the companys services and sustainability.
2. To understand problems facing consumers in the process of using the companys services and reveal an appropriate correlation with the companys market position and goodwill.
3. To outline ways of improving consumers satisfaction and sustainability practices.

Research Design

The research design implies a structured survey questionnaire, the advantages of which include standardization, due to the fact that all respondents are asked the same questions with the same answer options. It provides the base for in-depth analysis and statistical analysis, as well as classification and categorization (Creswell and Creswell 2018; Nardi 2018; Tracy 2019). However, the survey method has some limitations: it does not allow revealing latent motives, beliefs, and attitudes of respondents; it excludes the possibility of obtaining additional valuable information from respondents.

Data Analysis and Reporting

The data will be collected with the use of the SurveyMonkey tool and analyzed through statistical analysis using SPSS software.

Costs and Timetable

• Step 1  Submit Proposal  February, 04
• Step 2  Finishing of literature review and secondary research  February, 10
• Step 3  Create Questionnaire  February, 13
• Step 4  Revise questionnaire and collect data  February, 15
• Step 5  Data analysis  February, 22
• Step 6  Preparation of report  February, 24
• Step 7  Submit report  February, 27

Research Organization and Key Researchers

The team of researchers consists of John, Jill, and Jane. All participants will make collaborative efforts to contribute in all research stages.

References

Ahmed, A., Salih, O. and Elbushra, A. (2019) Food consumption patterns and trends in the gulf cooperation council, Pakistan Journal of Nutrition, 18(7), pp. 623-636.

Creswell, J. and Creswell, D. (2018) Research design: qualitative, quantitative, and mixed methods approaches. New York: SAGE Publications.

Luciani, G. and Moerenhout, T. (2021) When can oil economies be deemed sustainable? London: Palgrave Macmillan.

McDonalds (2020) Reports fourth quarter and full year 2019 results and quarterly cash dividend. Web.

Nardi, P. (2018) Doing survey research: a guide to quantitative methods. Abingdon: Routledge.

PMA (2020) Fresh produce industry: United Arab Emirates (UAE). Web.

PricewaterhouseCoopers (2017) Opportunities in the GCC food landscape: strategies for success. Web.

Tracy, S. (2019) Qualitative research methods: collecting evidence, crafting analysis, communicating impact. Hoboken: Wiley-Blackwell.

Zghoul, F. (2019) Natural and organic food market in the United Arab Emirates. New York: Global Agricultural Information Network.

McDonald’s, the most eminent cheap food chain of the world, began in 1955 by a visionary named Raymond Kroc Kroc assumed a huge job in altering the inexpensive food industry in America and as of now McDonalds is serving more than 60 million clients in more than 117 nations consistently The organization has a worldwide brand esteem and overall acknowledgment. It is a standout amongst the most generally perceived symbols of the world in the drive-through joint industry. By achieving immersion levels in the United States, McDonalds hoped to grow universally in the midst of expanding guidelines. In any case, they drew closer with a system by controlling institutionalized items, perfect and green situations and American beginning. With experience, confinement began expanding and the whole model was revamped to offer the localites of the remote nation. This system has been a turnaround point for McDonalds yet it has thed capability of losing brand value later on. Inspite of an American base, McDonalds regards the business sectors, societies, convictions and likings of different countries. Clients relate to the brand name and Golden Arches are perceived in America as well as in remote nations.

Organization structure demonstrates the authoritative plan and framework through which hierarchical parts arrange to accomplish business destinations. With respect to McDonalds, their corporate structure encourages the administration of sustenance administration markets dependent on execution levels. As the biggest drive-thru eatery chain on the planet, McDonalds continues developing to address present and developing business sector issues. Through this structure, the organization takes off new items to keep up its exhibition in fulfilling clients, particularly within the sight of other sustenance administration firms, for example, KFC and Burger King. Different key undertakings are bolstered through McDonalds hierarchical structure, which is intended to adjust to the changing industry condition. The organization’s auxiliary segments are kept up, in spite of the fact that changes are actualized to react to showcase elements and weights. Operational viability and financial strength are come to through help from McDonalds corporate structure and its highlights. Through its corporate structure, McDonalds prevails with regards to overseeing productivity and execution in its tasks in the worldwide drive-thru eatery industry.

McDonalds has a divisional organization structure. Theoretically, in this structure type, the business association is partitioned into segments that are given obligations dependent on operational necessities. Every division handles a particular operational zone or set of vital goals. One of the points of this corporate structure is to help self-governance and authoritative adaptability in fulfilling business needs in various hierarchical viewpoints and markets. McDonalds authoritative structure has the accompanying attributes, organized by criticalness in influencing sustenance administration business activities which incorporates worldwide structure, execution based division and capacity based gatherings.

Leeway of the chain of importance in McDonalds corporate structure is its help for checking and control of worldwide operation. Likewise, the presentation based divisions have the benefit of empowering the organization in executing methodologies dependent on market execution likenesses and related pointers. For instance, the firm applies comparable procedures for all lead markets. In any case, a detriment of McDonalds organization structure is that it will in general sum up methodologies for the exhibition based divisions. This issue limits business adaptability. Hence, McDonald’s could improve its corporate structure by changing or altering how these exhibition based divisions are utilized in key execution.

Next, Porter’s Five Forces is a basic however useful asset for understanding the intensity of your business condition and for distinguishing your methodologies potential productivity. The device was made by Harvard Business School educator Michael Porter, to investigate an industry’s engaging quality and likely productivity. Since its distribution in 1979, it has turned out to be a standout amongst the most well-known and exceptionally respected business system devices. Doorman perceived that associations likely keep a nearby watch on their opponents, however he urged them to look past the activities of their rivals and analyze what different variables could affect the business condition. He recognized five powers that make up the aggressive condition, and which can dissolve your benefit. These are includes competitive rivalry, supplier power, buyer power, threats of substitution and threats of new entry.

As for McDonalds, one of them that we can see is from the competitive rivalry aspect. This takes a gander at the number and quality of your rivals. What number of opponents do you have? Who are they, and how does the nature of their items and administrations contrast and yours? Where contention is serious, organizations can draw in clients with forceful value cuts and high-sway promoting efforts. Likewise, in business sectors with heaps of opponents, your providers and purchasers can go somewhere else in the event that they feel that they’re not getting a decent arrangement from you. Then again, where focused competition is insignificant, and nobody else is doing what you do, at that point you will likely have gigantic quality and healthy benefits.

The fast food restaurant is a standout amongst the most focused organizations today. With such a significant number of multinationals just as nearby cafés that have nearly similar menus, the challenge is getting to be extraordinary with every player in the business taking a stab at piece of the pie. There is a sure dimension of immersion that has created. The contenders of McDonalds can be seen, for example, KFC and Burger King. Every one of them is forcefully spending on promoting, developing in their arrangements and menus just as constantly opening new establishments to expand their entrance to new potential clients. The expansion in the quantity of competitors has made aggressive competition for McDonalds a solid power.

Other than that, for bargaining power of supplier aspect, the crude material, for example, chicken and potatoes that McDonalds use for their item are accessible through huge number of providers. The requests of McDonalds are gigantic on a standard premise. There are various providers that would turn into the providers of McDonalds. Consequently, the providers are in no situation to deal with McDonalds or endeavor to constrain it to expand its costs. McDonalds can without much of a stretch switch providers with small exchanging expense. Subsequently, the intensity of providers is a powerless power for Mcdonalds.

Next, McDonalds techniques address issues in its outside condition, for example, the ones recognized in this PESTEL/PESTLE examination of the worldwide fast food restaurant chain business. The PESTEL/PESTLE examination model backings key administration by recognizing the outside elements that present opportunities or threats, in light of the remote or full scale condition of the business, pertaining to the political, economic, sociocultural, technological, legal, and ecological factors. Through a PESTEL/PESTLE examination of McDonalds, the board choices can concentrate on the most huge patterns that impact the sustenance administration business and its industry. In such manner, in understanding the aggressive scene and the outer factors and patterns distinguished in this PESTEL/PESTLE examination, the organization the executives can create procedures suitable to the states of the business condition.

One of the factor that we can take is from sociocultural factors manipulating McDonalds business surroundings. This part of the PESTEL/PESTLE investigation alludes to the social conditions that help or point of confinement McDonalds the same old thing. Social patterns impact customer practices and, thusly, influence the remote or large scale condition of the business as far as incomes. For this situation of McDonalds, the most noteworthy sociocultural outer variables are increasing disposable earnings, hectic routine in built-up environment which are opportunity for them. Meanwhile, growing social diversity and vigorous life style will be the threats for McDonalds.

In light of the outer factor of rising expendable salaries, McDonalds has the chance to become dependent on the expanding propensity of purchasers to purchase cheap food as opposed to cooking at home. This inclination is additionally connected to occupied ways of life in urban situations. These ways of life improve buyers probability of eating in cafés like McDonalds as opposed to preparing nourishment at home. Then again, the expanding social decent variety is seen a risk and an open door with regards to this PESTEL/PESTLE investigation. For instance, this sociocultural outside factor makes a differing set of buyer inclinations dependent on different nearby and provincial markets that McDonalds must record for in item advancement. Powerlessness to do as such can diminish the organization benefits. The inexpensive food business has the chance to expand its adaptability in item configuration to fulfill customer inclinations in various markets far and wide. Besides, the sound ways of life pattern is a danger against McDonalds, founded on reactions about the antagonistic wellbeing impacts of huge numbers of the organization’s items. The organization has the chance to expand the fortification of its menu things. Therefore, the social outside elements in this part of the PESTEL/PESTLE examination of McDonalds make significant open doors for business improvement. These impacts of outside elements impact purchaser recognition about the organization.

Lastly, in my opinion, McDonalds has enormous potential in worldwide markets to wander out in various zones uncommonly the BRIC nations. As these urban areas are the focal point of research and development openings, McDonalds should center their internationalization in these zones substantially more than they are right now doing. McDonalds should concentrate on high and low territories of populace, connecting with an ever increasing number of areas of the general public. Joint endeavors can be taken up with built up organizations in remote nations with incorporations of coffeehouses, bread shop, web get to additional items in all prominent metropolitan urban areas McDonalds presently have cafés. For instance in Germany, McDonalds has a tie up with T versatile for problem areas. McDonalds should deal with expanding these offices in a ton of prominent, metropolitan urban areas over the world. McDonalds can take a gander at enhancing into different zones of sustenance industry such as McDonalds Hotel in Zurich is an unmistakable endeavor. The street ahead for McDonalds ought to be to build the nutritive estimation of the burgers and take a gander at certain wellbeing viewpoints to control the expanding waistlines among kids due to high utilization of quick nourishments particularly burgers. They should take a gander at improving their client administrations at the counters by maintaining a strategic distance from long lines and giving large amounts of consumer loyalty.

In conclusion, McDonalds organizational structure is in a state of harmony with the procedure utilized by McDonalds to be in front of its rivals. It is trying for supervisors to reliably keep in pace with the correct equalization of bringing together and decentralizing the tasks. Despite the fact that shortcomings and dangers exist, the qualities and openings make it a solid player in the market in the inexpensive food industry.

In an age where massive global franchises and consumerism rule the world, McDonalds is the one true king. This is verified both statistically – by being the world’s most valuable franchise network worth $85.7 billion dollars – and culturally, an example of which is the golden arches being more widely recognised than the cross. Contrary to it’s amassed size, the corporate giant had a relatively humble beginning.

Founded in 1940 by Richard and Maurice McDonald, the two brothers opened the first McDonalds in San Bernardino, California; a drive-in BBQ joint. Inspired by their predecessor White Castle, McDonalds changed their menu and remodelled as a burger stand in the late 40’s. Here they implemented factory-line kitchen practices, for which they are often (wrongfully) credited for. It was after this change that Ray Kroc joined the company in 1954 as a franchise advisor. Inspired by the modern, mechanised operation the McDonalds brothers had built, Kroc seen the market potential and proceeded to purchase the company from the brothers, beginning the franchising of McDonalds. As the franchise locations began springing up across America, the brand identity began to solidify. Prior to the iconic double arches logo now seen across the world, single golden arches were used in the architecture of the locations.

In 1961 Kroc filed for US trademarks for the name ‘McDonalds’ as well as it’s logo, which continued to evolve until 1968, when the double arched, overlapped ‘Golden Ray Kroc’s first location opened in 1955, Des Plaines, Illinois, USA. Arches’ logo we now know received it’s trademark. McDonalds has become the archetype of globalisation, occupying 120 countries and territories worldwide. It’s market impact has been so monumental that economic terms have been coined in reference to the company. The Economist newspaper uses the ‘Big Mac Index’, comparing the price of a Big Mac in different currencies to gauge the purchasing power of currencies. Sociologist George Ritzer developed the term “Mcdonaldization” in reference to when a society takes on the characteristics of a fast-food restaurant. Brand identity has been vital to the success of McDonalds in its international franchising. As a company that has been present in the market for 60 years during large socioeconomic changes, the chain continually evolves to both design trends and update the brand identity. Graphic and interior design have been fundamental in the remodelling of the companies image and can be heavily credited to market success. By analysing McDonalds interiors in 3 different timeframes, I aim to comment on the design characteristics and reasons for their aesthetic (and functional) decisions whilst discussing the effectiveness.

THE 70s

Entering the 1970s, McDonalds was almost 20 years into its Kroc-driven franchising. Gearing their locations towards a sit-in family restaurant rather than a drive-in, the interiors of McDonalds locations started to become more customer orientated. Prior to the 70s, franchised locations shared the quintessentially American diner aesthetic with most other joints serving comfort foods. The end of the 60s brought the end of the Vietnam war, improved civil social rights and an increased ‘misery index’ (the sum of the unemployment rate and the inflation rate) under Nixon. This seen women entering the workplace more than ever before but also a dip in the economy. McDonalds’ low prices and convenience made it a popular dining McDonalds location in USA, 1978. destination. Attempting to solidify their image as a family restaurant, McDonalds’ interiors began to reflect the domestic design trends of the time. Every vertical surface was plastered with either an eccentrically patterned wallpaper or wood cladding from floor to ceiling.

The only exception to the dark finishes are the functional stainless steel and red and yellow branding. The finishes create a collage of reds and browns that evoke a dark, warm environment. Patterned tiles leave no surface uninteresting (which in hindsight may have been a bit too much). The yellowish glow of the incandescent lights further the cosiness of the space. The preceding ‘diner-esque’ architecture was subject to criticism for being too bright and flashy. Subsequently, McDonalds’ design team started to utilise a double-sloped Mansard roof style, which soon became synonymous with the company. The use of design characteristics seen in the average American household provided a homely atmosphere to the restaurants, as if they were an extension of the family home. An early advertising campaign saw McDonalds urge customers to “Give Mom a night off.” , encouraging families to make an occasion of dining at the chain. The interior design of McDonalds in the 70s seemed to nurture customers, wanting them to stay rather than be in and out without ever sitting down. Even the manually organised letter Old pegboard menu, 1973. peg boards complimented the atmosphere, giving a sense of customisation and human touch, personifying the restaurants. This idea of ‘nurturing’ has always been part of the company’s values; when the ‘Golden Arches’ logo was threatened with being replaced, design consultant and psychologist Louis Cheskin insisted on maintaining the rounded ‘M’ as it represents “Mummy’s mammaries”. Although being (in some way) sweet sounding and strangely endearing of a global franchise, it can easily be contested that this design decision was more to tap into the primal ‘sex-obsessed’ side of consumers that advertisers so frequently target. I feel this was a successful design period for McDonalds as there was a sense of individuality between franchises. It feels as though you had entered an independently decorated and maintained location, although this may be the nostalgic charm of the finishes. By the 70s, McDonalds had locations across Western countries, carrying a consistent aesthetic to the US locations; spreading the ‘American Dream’ across the globe.

TURN OF THE CENTURY

By the end of the 90s, McDonalds was still in a state of rapid growth, with new franchises in Eastern countries such as Saudi Arabia and Pakistan, expanding the empire to previously untouched markets. With the rise of media such as Nickelodeon and video games, the 90s saw target markets commercialise towards children. McDonalds followed this trend, McDonalds Interior in Los Angeles, California. Picture taken in 2009. increasing the presence of mascots in their graphic design and making restaurants more child oriented. By introducing arcade machines, playgrounds and sculptural installations like full-size Ronald McDonald statues, franchise locations began to appear more like theme parks than the family restaurant of before. With money being directed towards operations behind the counter, the design of the restaurants fell lower in the priorities of the company. This can be seen in the lack-lustre aesthetics of early 00’s McDonalds; gimmicky graphics plastered on walls, uninspired colour palettes of nauseating colours that make you feel as ill as consuming a Big Mac. Despite the wide use of colour, the atmosphere is bland. Purely functional lighting, ceiling tiles and tiled floors project a clinical feel. With the addition of large cartoon graphics, the interiors – rather unappetisingly – share characteristics with a paediatric ward. Bolted-down furnishings sternly distinguish seating areas. There is grey area in this era of McDonalds’ aesthetic, where brand new franchises are appearing and long-standing ones lack refurbishment and feel dated. The design of the interiors became focused towards functionality rather than customer experience. Hard, tactile surfaces provide ease of cleaning and little need for maintenance. Fixed tables with chairs sprouting from its central leg makes it easy for staff to mop without moving furniture, but takes the option away from customers, making for restrictive and uncomfortable seating better suited to a public park. This apparent lack of care could be due to McDonalds’ status at the time; continually expanding across the world and having an established reputation. Thanks to Burger stool. USA, 2007. the franchising and simple menu, consumers were familiar with the company and there were little expectations to exceed. I feel this period in McDonalds’ timeline is reflective of the commercial climate at the time; utilising novelty features to appeal to the vulnerable market of children, sacrificing tasteful design. However, this may not have been of concern to the company as its reputation had become a quick, cheap dining option for the masses. The fact that the interiors may not be inviting or comfortable inevitably worked for the companies need for a high turnaround in customers. I fail to see though, how even a success-blinded business man cannot see that a hamburger stool is a bastardisation of design.

THE ‘NEW’ MCDONALDS

McDonalds began to suffer criticism towards the end of the 90s that escalated into the 00s. The sourcing methods for food products, unethical business practices and a crackdown on unhealthy food saw McDonalds frequently mentioned in the media. As early as the late 80s, businessman Phil Sokolof – who had suffered a heart attack age 43 – took out large newspaper ads in the US declaring McDonalds as a threat to McDonalds Interior in Hong Kong, 2016. national health. Morgan Spurlock’s 2004 documentary ‘Super Size Me’ also addressed the increasing issue of obesity and how McDonalds was contributing to the issue. Denunciation of McDonalds’ business practices were as big as the health concerns, with the Oxford Dictionary adding the term ‘McJob’ , defining an ‘unstimulating, low-paid jobs with few prospects, especially ones created by the expansion of the service sector”. The aftermath of Spurlock’s documentary (along with other controversies in the fast food world) had a massive impact on the reputation of McDonalds and other chain restaurants.

McDonalds had become a tarnished name, shamed for its unhealthy food and deprived locations. In an attempt to salvage their image, McDonalds began trying to refresh the brand identity and franchise locations. This has been an ongoing project worldwide at McDonalds locations until 2018, when they declared they would be spending $6 billion “on the construction and modernization of most of its restaurants by 2020”. McDonalds Interior in , 2016. Since the mid 00s, franchise locations across the world have been refurbished to show the ‘new face’ of McDonalds. Rather than have a design team creating standards for layout and furnishings, McDonalds have employed separate architecture firms to design individual locations. This has seen different approaches towards finishes and graphics, breaking from the homogenised look of before. Hard plastic booth seating has changed to faux leather and formed plywood banquette seating, with free standing tables. Chesterfield sofas and replica Eames ‘Eiffel’ chairs can now be sat in while having a Big Mac. Light wooden veneer line the till fronts and partition walls that break up the spaces into zones. These aren’t one off high-street locations either, even Perth Broxden’s ‘drive-thru’ has seen a revamp, boasting a Scandinavian feel with bright, youthful graphics. Every aspect of McDonalds has been updated; healthier menu options are available, graphics and packaging have New packaging designed by Boxer. (2018) been redesigned to boast the companies new fresh, young aesthetic and there has been a reform for staff treatment and pay. Even a pledge that the food products are ethically sourced.

McDonalds has definitely caught up with the design world, every new refurbishment being Wallpaper magazine worthy – and it’s working. With the remodelling of their interiors, McDonalds have stepped up the psychological impact that the designs have on us as consumers. Large graphics of fresh vegetables on walls make us perceive the rest of the menu as healthier, helping customers remove the association of McDonalds being bad for your health. An array of seat types – some now cushioned and wrapped in leather – provides comfortable seating for customers who wish to stay with their meal. Variances in lighting, from general LED space lighting to individual pendant lit tables creates a purposeful atmosphere helping distinguish zones in the interior. Not only employing fresh aesthetics, but new technology – you can now order on a self-service touch screen machine that resemble a scaled-up iPhone and collect your order without every having to say anything to an unenthused teenager behind the till. Use of interactive technology interests customers and makes them look over the whole menu before the buy, increasing the chance of extra sales. The reshaping of the McDonalds brand has been a large, positive change to their public image. I was surprised when first entering Sauchiehall Street’s franchise and seeing a clean, well-designed space that felt new and alive. It felt unnatural to the environment, this is the same place that you can buy 20 chicken nuggets at 3am. There is almost a classiness to the chain now; Scandinavian-style material palettes and monochromatic patterns create an aesthetically pleasing space, making you almost forget you’re there to buy a burger.

CONCLUSION

McDonalds’ rebranding is a much needed update to stay relevant in the current market – and it may not be for any other reason than that. Scrutiny towards the company over decades has pushed for this refreshment but whether enough has changed is another question. The new interior and graphic design has made for pleasant, fun branding and painted the company as a design conscious, hip brand. Although tasteful, the company has simply followed design trends, employing ‘safe’ characteristics that aren’t necessarily tied to the company. Some locations have features inspired by the region (i.e. bamboo cladding in South East Asia), but apart from these, it’s hard to identify “Angel of Cholesterol” Alexander Kosolapov (2010) where the franchise occupies. This isn’t necessarily a problem, as a large franchise this is useful for brand identity, but it is a missed opportunity. Large variances in regional aesthetics would help separate McDonalds from the ‘tyrannical’ reputation they have gained over time. In the modernisation of their locations, McDonalds have rather modestly scaled back their branding, with less offensive logo repetition. Along with the stylish, minimal design, this puts the space in a weird limbo, where it’s not entirely obvious that it is a McDonalds interior. As there is still the rapid service time and high customer footfall they are known for, McDonalds runs close to becoming a ‘non-place’.

INTRODUCTION TO “MCDONALDS”

McDonalds is a worldwide globally recognized franchise. McDonalds was founded in 1940 by two brothers Richard and Mavrice McDonald in California. They started their business as a hamburger stand and they also offered milkshakes but as time passed they turned their small stand into a worldwide franchise. Ray Kroc a businessman from whom the two brothers bought appliances joined the company and initially ended up buying the chaizz from the McDonalds brothers. The business that once started with the hamburger and shakes expanded and currently McDonalds is located in 100 countries and there are 37,855 restaurants globally and about 200,000 employees working for them. In 2011 McDonalds generated the revenue of 24 billion dollar. McDonalds is located almost in every city these days mostly in commercial areas where there are many restaurants. They provide high volume sales at low pricing instead of high pricing strategies. To achieve such goals the brand has to pinpoint exact priorities be visionary and have to be consistent.

THE BRAND CHARACTERISTICS OF MCDONALDS

We all know that McDonalds is a no 1 fast food brand in the whole world. So let’s hold on for a minute and lets think about how they got there. Basically McDonald as a brand is an example of new paradigm. They are undoubtedly more focused on what the customer’s feedback. As time passed they gave the customer’s quick quality food, a clean environment and great service. Basically marketing is a term in which we have to identify the needs and wants of the customer offering the customer something better than its competitors That’s the way to get loyal customer you also have to target your market. Not everyone is going to choose McDonalds over other brands. In my opinion the main characteristic trials on which McDonalds work on is providing a friendly, family oriented environment, a happy, cheerful hangout place for youth. There should also be good service and cleanliness. It’s a place where anyone can come. There is no specific target market in this scenario.

PRODUCT

McDonald is one of the world’s leading fast food restaurants. They are mainly known for their burgers and beverages. McDonald’s have the following main products;

• Burgers and sandwiches
• Chicken and fish
• Beverages
• Desserts and shakes
• Breakfast
• Salads
• Coffee

Products play an important role in making the brands image good or bad. McDonalds is known for its burger. For a business to compete with its competitors they have to be innovative and come up with the new product line to attract more customers. The company has to take risks as they cant be depended on a single product, so they have to introduce new products of different varieties. As fast food isn’t healthy so McDonalds have also started making salads and fresh juices. Basically the company has to satisfy the market demand and they have to study the market in terms of beating their competitors.

PRICE

McDonald’s pricing strategies pinpoint the prices of different products of the company. The main aim of McDonalds is to increase the sales and make profit on each sale. Prices of McDonalds are affordable by people of any class. I think McDonald’s use the following pricing strategies;

• Bundles pricing strategy
• Psychological pricing strategy

Bundle pricing strategies are mainly affordable rather than buying all the products separately. In bundle pricing strategies McDonalds offer burgers and other products for lower rates so, the customer would choose the bundle offer instead of buying everything separately.

In psychological pricing the company plays games with the mind of the customer. Let’s suppose there are two meals one is priced 99 and other priced 110. It’s obvious that the customer would choose the first meal in terms of its affordability. These two strategies can encourage a customer to buy more products from a company. So it plays a vital role to lure in the customer. It’s more attractive to the customers.

PLACE

The term place means “distribution”. Distributions mean that the product is delivered to the consumer. McDonalds have different distribution techniques. In this case restaurants are the most common place where the goods are distributed to the customers. Restaurants are mostly located in a commercial or a park. The location also matters in this case. Basically location also refers to where the company will generate most of its profit. McDonalds also have a phone app through which the customers can access all the information they need to know about the company and the products. Mcdelivery is also a work in progress. Its available in most cities in the UK. Some of the McDonalds are open 24/7 and most are not. It actually has to do with the business. For example the restaurant is full of activity at lunch time and empty at night. It would be costly if it stayed open for 24 hours. Mobile apps are given priority by the customer as they can order food without waiting. It’s a lot time saving and comfortable for the customers so it’s a top priority these days for the customers.

PROMOTION

“Promotion” means the techniques the company uses to attract its customer. For example, McDonalds provides information of new products on the McDonald’s mobile app to persuade customers to buy those products. McDonalds is mainly known for its advertisement among the promotional strategies, McDonalds uses TV, newspaper, social media apps for its advertisement (e.g. new bundles, cheap offers, night deals). McDonalds also offer coupons and free ice cream or coffee to attract more customers. McDonalds also do work for communities to make their brand image great for the customers to have fair in them. The company uses sale promotion technique e.g.; if you buy 3 mccafe and get 3 token then you will get a cup for free. McDonalds promotions display the role of bundles and psychological pricing strategy that urges the customer to buy new products.

Introduction

The food industry in Australia is rapidly growing. In 2016, the survey created in Australia of food industry in which total revenue of $6.6 billion is earned only from the food industry. McDonalds is one of food industry which public likes the most in Australia. McDonalds tries to improve at each stage to provide better customer experience. They are upgrading there stores to create “Experience Of The Future” restaurants in which they will provide self service kiosks and tables. The are going to complete this until the end of year 2020. They are also trying to expand the mobile app ordering for that they also have partnered with uber eats for delivery services. McDonalds have different burger creations in different countries like they have Gourmet creations in Australia and Mighty Angus in Canada. Large sales of these products give large revenue to them.

In 2013, the income of McDonalds decreased to 4758 US million dollars in 2014 and again increased to 5192 US million dollars which shows that there is no consistency in McDonald Australia as it is not consistent for profit but continuously fluctuates.

McDonalds Australia SWOT Analysis

Strengths

• QSCV Principle
• Customer satisfaction and quality assurance
• Training and skill imparted
• Standardization
• Competitive strategy

Weakness

• Current surveys reveals more focus on expansion than quality
• Limited vegetarian Menus
• Price

Opportunities

• Worldwide increase in demand of fast food
• Innovation
• Growing dinning-out market (especially young and middle age groups)

Threats

• Competitors rising rapidly
• Customer satisfaction level below competitors
• Different variants of fast food coming
• Fast food is considered as bad for health

Proposed Future State

McDonald’s Australia is getting ready to spend more than $500m on development attempt over the nation, including plans to support its portrayal in regional territories. The arrangement is relied upon to take three years, with the ‘brilliant curves’ focusing on a $350m investment that will see the dispatch of 45 new cafés in the prime retail centre points of Melbourne and Sydney.

The investment will bring McDonald’s all out number of Australian outlets over 1000 just because with the chain anxious to build up its developing number of unsupported areas.

Risk Analysis

Risks can be associated with anything it can be identified at work site like health risk, company at risk etc.

• Risk for employers: It can be either falling, cutting, burning during working at work site. Such injuries mainly happens when a person don’t follows the right steps while working and when they don’t have a proper PPE.
• Risk for company: Company can be in risk when any threat happens at the restaurant either robbery, fire or any kind of hazard. Moreover, company is also at risk when they have financial breakdown.
• Unhygienic food: There are also risk for health when there is not proper equipment used while working or when out dated food used. It causes health problems.

Key Stakeholders

Stakeholders are those people, associations and gatherings whom we influence and who influence us. Our stakeholders are different furthermore, include:

• Customers – more than 1.7 million Australians who visit us consistently. These are a wide scope of individuals from families to senior natives who go to our cafés in urban areas, rural areas, local focuses and communities all over Australia.
• Business Partners – our 258 franchisees and the majority of our 9,000 providers.
• Employees – in excess of 90,000 individuals utilized in our cafés and workplaces everywhere throughout the nation.
• Opinion pioneers and specialists – government, wellbeing experts, ecological gatherings, media and that’s just the beginning. These are the individuals we gain from and counsel with on a scope of issues influencing our business.

References

1. Analysis, M. (2019). McDonald’s Australia Market Analysis – Bohat ALA. Retrieved 11 August 2019, from https://bohatala.com/mcdonalds-australia-market-analysis/
2. Redirect Notice. (2019). Retrieved 11 August 2019, from https://www.google.com/url?sa=i&source=images&cd=&ved=2ahUKEwi1xLPY8frjAhXNdH0KHY_-DhwQjRx6BAgBEAQ&url=http%3A%2F%2Fdxessaypjfw.almasoderberg.com%2Fmcdonalds-swot-analysis-zadupezat6073.html&psig=AOvVaw3U6vsvDwGLmL77b0Ny3wgU&ust=1565613953374265
3. McDonald’s business model canvas. (2019). Retrieved 11 August 2019, from https://vizologi.com/business-strategy-canvas/mcdonalds-business-model-canvas/
4. Redirect Notice. (2019). Retrieved 11 August 2019, from https://www.google.com/url?sa=i&source=images&cd=&cad=rja&uact=8&ved=2ahUKEwjt6-6ykfvjAhXDZSsKHWVNCUcQjRx6BAgBEAQ&url=%2Furl%3Fsa%3Di%26source%3Dimages%26cd%3D%26ved%3D%26url%3Dhttps%253A%252F%252Fwww.bsigroup.com%252Fen-AU%252FAbout-BSI%252FMedia-Centre%252FPress-Releases%252F2015-News%252Fapril%252FRisk-Protection-and-the-Supply-Chain%252F%26psig%3DAOvVaw3nulav4ai5xUtm1Ow77RKq%26ust%3D1565623768833322&psig=AOvVaw3nulav4ai5xUtm1Ow77RKq&ust=1565623768833322

The two establishments I choose to study for the mission vision statement analysis are McDonald’s and Chick-fil-A. These two establishments both operate within the Food and Beverage industries and have a proven track record of dominating their retail industries and generating profit. I don’t believe there’s a correct or incorrect way to lead an organization; as long as they’re profitable and get the work done. These two organizations are great examples of extremely profitable organizations with vastly contrasting business values. Each of these two have very differing business models each well aligned and well-defined by their mission statements.

Chick-fil-A is an organization that has been at the forefront of servant leadership. The founder Samuel Truett Cathy in 1946 formed the country’s second-largest chicken quick-service restaurant chain, based on annual sales of 10% since 1946. Mr. Cathy created one thing unbelievably special at Chick-fil-A, Truett had the knowledge and humility to make one thing larger than himself: a permanent culture that values folks higher than everything else (Kruse, 2019).Chick-fil-A value statement is deeply rooted in religious influence that is unmistakable in the business’s values statement, “To glorify God by being a devoted steward of all that’s entrusted to United States and to possess a positive influence on all who inherit contact with Chick-fil-A”(Farfan, 2019). Mr. Cathy built his business on the foundation of Biblical values while creating a culture of servant leadership that is ever more evident in every level of the organization and all that cross the threshold of the business.

Like Chick-fil-A, McDonalds is a leader and ever-present icon in the quick services restaurant industry. But unlike the afore mention it’s not rooted in servant leadership. As the business was opened in 1937 by Richard and Maurice McDonald’s selling hotdogs and hamburgers. The brothers quickly realized that their profits were in selling hamburger and in 1948 stopped selling hotdogs. Ray Kroc who was a milk machine salesman joined the McDonald’s team in 1955, ultimately buying out the brothers for 2.7M, and is the one credited for its swift growth and achievements (Frost, 2019). Mr. Kroc valued advertising and marketing. Kroc thought that advertising was an investment that may, in the end, returning back again and again over, and advertising has invariably contend a key role within the development of the McDonald’s corporation.” In 2003 McDonald’s changed its mission statement from “The world’s best quick service restaurant” to a mission statement focusing on customer service “Being our customer’s favorite place and way to eat” (Gaurav,2019). Since its inception McDonalds has seen many changes in its organizational structure but has always and still operates today with the goals of achieving that stability within the organization and understanding the profit returns of its investors.

At Chick-fil-A not only do its employees practice servant leadership their customers do as well; and it’s echoed in their organization from a customer’s viewpoint. Chick-fil-A pursued to make going the second mile second nature, denotation the organization express to its employees that they must employ these “extra special” services automatically, instead of something they do every now and then. I was pleasantly surprised the first time I went to a Chick-fil-A and an employee was walking around refilling drinks and bringing customers extra napkins and condiments. Mr. Cathy entrenched this practice into the organizational culture, a real example of how to live a life of stewardship.

At McDonalds, ‘The essence of Kroc’s distinctive however astonishingly straightforward franchising philosophy was that a franchising company mustn’t live off the sweat of its franchisees but ought to succeed by serving to its franchisees succeed “(Frost, 2019). McDonald’s loyalty and focus are to its investors and franchises, rather than to its customer base. Both organizations are fast food restaurants that operate drive thru windows. At peak times both organizations had customers that would typically experience long wait times in these lines. Both organizations approached the issue from drastically different aspects. Chick-fil-A built a built a life-sized drive thru and considered every inch of the customers experience. Chick-fil-A solution to the issue is to provide proficient staff members taking orders outside the restaurant to speed up the drive thru wait times. At the drive thru window the employees use an assembly line construct with additional employees walking up and down the line to provide the orders. In contrast to Chick-fil-A McDonalds, solution was to provide designated parking spots for customers to sit and wait for a McDonalds employee to bring your order to the car. This solution did not decrease the wait time for the cars parked nor does it provide for and overall pleasant experience in my opinion. As an organization it’s easy to take the quick way out of a problem rather than providing a long-term solution. Providing a band aid solution to a gaping wound is a short-term fix, like placing a customer waiting sign in a parking spot. Rather than addressing the crux of the issue. However, once you take the easy way out, you miss the satisfaction of providing a long-term fix to a real problem. You miss the experience of providing exemplary customer service and satisfied returning customers that know you care. In McDonalds case taking a short-term quick fix to a long-term problem, you end up with the quick fix and a sign however the same quantity of annoyed customers.

In conclusion, we have studied these two organizations in the food and beverage industry, Chick-fil-A and McDonald’s. We have compared their mission and vision statements and their organizational values. While their general success is comparable, their guiding philosophies and ideologies are vastly different. Chick-fil-A, specifically, contains a distinctive outlook on a way to run a business; to form business decisions based on biblical principles. Chick-Fil-a appears to possess a client base that identifies with Chick-fil-A’s values and has well-tried to be loyal supporters even throughout recent difference. Both corporations are active philanthropically, giving giant sums of grants and scholarship funds to varied internal and external charities annually.

References

1. Farfan, B. (2019). Read These Mission Statements From Top F&B Brands. Retrieved from https://www.thebalancesmb.com/food-beverage-mission-statements-4068551
2. Kruse, K. (2019). How Chick-fil-A Created A Culture That Lasts. Retrieved from https://www.forbes.com/sites/kevinkruse/2015/12/08/how-chick-fil-a-created-a-culture-that-lasts/#297fca193602
3. Gaurav, K. (2019). McDonald’s “Plan to Win” – A Revitalization Strategy. Retrieved from https://smarketingmania.wordpress.com/2017/03/12/mcdonalds-plan-to-win-a-revitalization-strategy/
4. Frost, B. (2019). McDonald’s – HistoryAccess.com. Retrieved from http://www.historyaccess.com/mcdonald’s-histo.html
5. Keller, C. (2019). How McDonald’s Became The Leader In The Fast Food Industry – Marketing Strategy. Retrieved from https://profitworks.ca/blog/541-how-mcdonalds-became-the-leader-fast-food-industry-marketing-strategy

INTRODUCTION

This report is based on McDonalds ability to undergo the digital transformation and the impact the restaurant industry will have when the company transforms. McDonalds is originally an American fast food and hamburger restaurant which is now one of the largest restaurant chains in the world.

INDUSTRY ANALYSIS

Porter’s 5 competitive forces

The fast food restaurant business became very competitive as many multinational and local restaurants that sells almost the same food are being opened every day. Competition is very intense because every company is striving to have a market share and there is a new saturation level that has developed. Each company is spending more on innovation, advertising and opening new franchises to increase the access to reaching new customers. The high number of competitors made competitive rivalry a strong force in McDonalds.

Bargaining power of the supplies is a weak force in McDonald because the company uses raw materials that can be bought from a large variety of suppliers. There are many suppliers that are willing to supply the needed raw materials to McDonald. McDonalds can switch suppliers easily and with low costs. Therefore, the existing suppliers cannot attempt to bargain with McDonalds or even try to force them to increase their prices.

Bargaining power of the buyers is a strong force in McDonalds. There are a lot of fast food restaurants that buyers can switch to without any switching costs if they are not satisfied with McDonalds food or prices. The buyers can complain about any McDonalds meal price and change to buy from other restaurants. Buyers are in a position of great influence on bargaining McDonalds to cut their food prices for them to come back and buy from McDonalds.

Threat of substitute products is a strong force in McDonalds. The substitutes of McDonalds meals are meals from other fast food restaurants such as pizza, bakery products and pies. These substitutes are very competitive in terms of customers satisfaction and quality. There are no switching cost if a customer wishes to switch to these substitutes.

There are many entry barriers on the international level such as high investments on advertising therefore the threat of new entry on the international level is a weak force for McDonalds. However locally there are very few entry barriers thus the threat of new entry is a strong force, one billboard of a competitor can cause a lot of problems for McDonalds. The overall threat of new entry is moderate for McDonalds.

Macroeconomic factors in the business environment

Political factors that affects McDonalds are the increasing international trade agreements which are an opportunity for this company, the governmental guidelines for diet and health as well as the evolving public health policies which can either be a threat or an opportunity for McDonalds. Economic factors that affects McDonalds are rapid growth of developing countries, stable growth of developed countries and the slowdown of the economy since the pandemic that hit many countries early this year which came as a threat to the company.

Social factors that affects McDonalds are the healthy lifestyle trend, increasing cultural diversity and high level of employment as may people will have more money to dispose. Technological factors that affects McDonalds are the increasing uses of 4IR technologies and the moderate R&D activity in the restaurants industry which are both an opportunity to the company.

Environmental factors that can affect McDonalds are the increasing interests for corporate environmental programs, emphasis on the sustainable strategy and the climate conditions changing in some parts of the countries. Legal factors that affects McDonalds are the increasing animal welfare regulations and the rising legal minimum wages for restaurants workers which is a threat to the company.

VISION AND OBJECTIVES

McDonalds vision is “to move with velocity to drive profitable growth and become an even better McDonalds serving more customers delicious food each day around the world”. This vision statement makes the company want to achieve growth and improvements when conducting their businesses.

Their objective for food is to serve more of the 100% healthy food in nine of their top markets such as fruits, vegetables, low-fat dairy or whole grains. For the sourcing objective McDonalds is planning to have 100% of its coffee, palm oil and fish verified as supporting sustainable and 100% of its fibre-based packaging from certified or recycled sources. Their objective for the planet is to save 20% increase in energy efficiency of restaurants, they also planned to increase the amount of in-restaurant recycling to 50% and minimize waste products.

Stakeholders of McDonalds are its employees, customers and suppliers. These three stakeholders have a great direct impact on the daily operations of this company. McDonalds also engages with the experts from the local communities and the non-government business. The competitors are additional stakeholders of this company as they challenge each other on daily basis on becoming the best in the industry. The government is also an additional stakeholder because it makes laws that govern some activities that take place in McDonalds daily.

BUSINESS MODEL

• Key partners at McDonalds are its franchise holders, each franchise must make sure that they make profit.
• Key resources of McDonalds are their employees, machines, equipment and their restaurants on different countries.
• Key activities and processes that McDonalds engages in are to make fast food, marketing and selling the food and beverages.
• Company’s outputs are hamburgers, chips, nuggets and other meals that they sell with beverages and ice-creams as siders.

DELIVERING VALUE

McDonalds segment includes the children, youth and the busy working people who don’t have enough time to cook. The company uses geographical, demographical, behavioural and psychographic variables to segment the market. The geographic segment used at McDonalds take into account the region criteria which includes domestic and international customers. They also take the density criteria into account where they cater for both urban and rural customers.

McDonalds demographic segment focus on the age and gender criteria where both males and females between the age of 8-45 are segmented. They also take occupation criteria into account which includes students, employees and professionals. The behavioural segment used at McDonalds include the degree of loyal criteria where hard core loyal are segmented. They have a benefit sought criteria where only the cost benefits and time efficiency customers were segmented.

McDonalds segmented the personality criteria of easy going and careless customers, they also segmented the user status of easy going and regular fast food eaters. The psychological segment used in this company includes the social class criteria of lower, working and middle classes. They have the lifestyle criteria where they segmented the resigned, struggler and mainstreamer customers.

Assumptions of choosing the segment was that they wanted to know the exact segments so that they can position their product to that segment. McDonalds uses the life-cycle stage to segment its customers and there after positions itself as a low-cost fast food restaurant which is family friendly. The sales channels that the McDonalds use to reach their different segments are selective since their products can be found at their restaurants, their McDonalds app as well as the Uber app.

The main sales channel they are using is the direct-to-customer channel where they make their products and sell them to customers at their restaurants or their McDonalds app. They also use the business to business sales channel where they sell their products to customers through uber eats. Lastly, they use the retail sales channel where they sell brand soft drinks from the manufacturers to customers.

DISRUPTIONS

The fastest and easy to use technologies are being adopted by different industries for a better service delivery, the restaurant industry is about to do the same. There are seven digital trends that are going to bring a change in the restaurant industry that will affect the daily operations of McDonalds.

Online and Mobile Commerce

Many customers are placing their orders online instead of coming to eat and order at the restaurants. McDonalds has an app where customers can order online but they made breakfast to be a sit in where customers go to their restaurants to order.

Personalized Marketing

There is a wide range of customer segments that restaurants have to deliver to and they have different needs. Each customer wants a personalized experience and orders.

Geo-location

The Geographic Information System and Location analytics tools are now helping the restaurants to know when their customers are near so that they can advertise their products to attract them to come and purchase. The food delivery drivers also use the Geo-tracking to find the fastest route to their customers.

Real-time Business Intelligence

The restaurants which have real-time business intelligence make decisions that are informed. The use of BI and analytics software has became essential for a restaurant to gain the real-time business intelligence. The artificial intelligence algorithms are also an important tool to forecast the sales considering different conditions

Digital kiosks for self-service

Digitalized kiosks offer contact-less experiences and it eliminates the possibility of making wrong orders.

Digitally-enabled contactless delivery

Customers can now place orders and make the payments on an app or a digital kiosk without cashiers helping them. The drones are about to take the job of delivering food to customers.

Labour and inventory management

There will be a great unemployment and massive business loss due to the resources being not enough as the technology is developing very fast.

SWOT analysis is defined as special and beneficial technique (tool) which is used by individuals as well as organisations in order to analyse the strengths, weaknesses, opportunities and threats.it is also known as SWOT matrix (Team, n.d.). The elements (strength, weakness, opportunity, threat) are usually same to all SWOT analysis. Nevertheless, organisations again classify these elements into two heads, which is internal and external (Shewan, 2020). Internal specifies the strengths and weaknesses, while the external determines the opportunities and threats of a company.

There are different purposes for performing SWOT analysis. Primarily, it is mostly used as an easy-to-plan and easy-to-use ream building tool (Bertelsen, 2012). Teams can provide valuable ideas for the development of the organization and work together to initiate changes inside the organization. Moreover, another purpose doing a SWOT analysis is considered for its major strategic planning process of a business (Bertelsen, 2012). Numerous firms use this system to understand its current business condition and forecast the future environmental and industrial conditions (Bertelsen, 2012).

SWOT analysis of McDonald’s

McDonalds is considered as the most leading fast-food chain worldwide. Richard and Maurice two brothers found McDonalds 75 years ago in California (Gupta, 2019). Its SWOT analysis is been highlighted below.

STRENGTHS WEAKNESSES

• One of the top 10 international brands.
• Food quality and taste.
• Brand value.
• Advanced technology. • Limited employee satisfaction.
• Poor Franchise Management.
• Low product diversification.

OPPOURTUNITIES THREATS

• Reasonable price meals.
• Innovative products.
• Delivery and online orders. • High competition.
• Covid-19
• Health conscious customers.

Strengths

McDonalds comes under top 10 largest fast food companies in the globe by its revenue of $24.1 billion (TTM) and it is operating more than 39000 locations in about nearly 100 countries (REIFF, 2020). McDonalds offer safe and quality products to their customers to satisfy them. They provide wide variety of choices for customers as well as use real and original ingredients in their products. For instance, use 100% pure beef from farmers in burgers (McDonald’s corporation, 2017-2019). As of 2020, it is came under 9th rank as per the ranking of brands by value with 129 billion U.S dollars (Guttmann, 2020).

Weaknesses

Due to the stressful working environment and poor management McDonald’s facing high rate of employee turnover in the recent years (MATYSZCZYK, n.d.). McDonald’s is a company works as a franchise model, the success and development of the firm is depend on the day to day actions performed my the franchise and it is not possible to control each and every actions of franchise so it directly affects the performance of the business (Gupta, 2019). McDonald’s is mainly focused on food and beverages which is a weakness and reduces the growth rate and slow down in food and beverage industry because there is no product diversification (GREENSPAN, 2017).

Opportunities

While discussing about the opportunities the reasonable price meals which offered by McDonald’s is came to the first place. McDonald’s introduce several cheap meals in their menu which include $1, $2, $3 dollar menu in 2018 (Elliott, 2018). When comparing other competitors McDonald’s offer comparatively reasonable price for their meals. The McDonald’s is using product innovation strategies to keep their lead in the fast-food market. The example for product innovation by McDonald’s include order-taking Kiosks and drive-thru orders to call centers (FONTINELLE, 2020). McDonald’s introduced a special feature called McDelivery which is a service that customer get food in their doorstep. Using Doorstep app or UberEATS app anyone can order online from McDonald’s (McDonald’s corporation, 2017-2020).

Threats

McDonald’s competition is limitless. The company facing competition from different international firms and local outlets which performing same kind of business. For instance, Domino’s pizza, Burger king, Starbucks (Khandelwal, 2019). Corona virus shuts the restaurants around the world which caused more than expected fall in profit of McDonald’s. To function the franchise operation McDonald’s needs to spent millions of dollars (Haddon, 2020). Customers are getting health conscious day by day. Due to that the worlds largest fast-food restaurant business experiencing loss, low market share value, fail to retain customers. Clearly their global sales dropped by 1% (Kazan, 2015).

Conclusion

McDonald’s is one of the worlds largest fast-food restaurant chain which posses strong market growth and profit margin and brand value. However, they are facing different kind of threats and problems. Hence, it is important to check and identify the factors which can cause threats to the company. In this SWOT analysis, it clearly mentions its strengths, weaknesses, opportunities, and threats of McDonald’s.

References

1. Bertelsen, B. (2012). Everything You Need to Know About SWOT Analysis. In B. Bertelsen, Everything You Need to Know About SWOT Analysis (p. 10). Newmarket: [Newmarket, Ont.] : BrainMass Inc. 2012.
2. Elliott, M. (2018, august 06). These Are the Cheapest Meals You Can Order at McDonald’s. Retrieved from https://www.cheatsheet.com/: https://www.cheatsheet.com/money-career/these-are-the-cheapest-meals-you-can-order-at-mcdonalds.html/
3. FONTINELLE, E. (2020, june 03). McDonald’s: A History Of Innovation. Retrieved from https://www.investopedia.com/: https://www.investopedia.com/financial-edge/0410/mcdonalds-a-look-back.aspx
4. Food Safety and Quality. (2017-2019). Retrieved from https://corporate.mcdonalds.com/: https://corporate.mcdonalds.com/corpmcd/scale-for-good/our-food/foodsafety.html
5. GREENSPAN, R. (2017, February 05). McDonald’s SWOT Analysis & Recommendations. Retrieved from http://panmore.com/: http://panmore.com/mcdonalds-swot-analysis-recommendations#:~:text=Low%20product%20diversification%20corresponds%20to,U.S.%20and%20other%20Western%20economies.
6. Gupta, S. (2019). McDonald’s SWOT Analysis(2019). Retrieved from https://bstrategyhub.com: https://bstrategyhub.com/mcdonalds-swot-analysis/
7. Guttmann, A. (2020, August 14). McDonald’s: brand value 2006-2020. Retrieved from https://www.statista.com/: https://www.statista.com/statistics/326059/mcdonalds-brand-value/
8. Haddon, H. (2020, july 28). Coronavirus Pandemic Squeezes McDonald’s Profit. Retrieved from https://www.wsj.com/: https://www.wsj.com/articles/coronavirus-pandemic-squeezes-mcdonalds-profit-11595934000
9. Kazan, R. (2015, January 29). McDonald’s losing battle for more health conscious consumers. Retrieved from https://america.cgtn.com/: https://america.cgtn.com/2015/01/29/mcdonalds-losing-battle-for-more-health-conscious-consumers
10. Khandelwal, R. (2019). Must-Know: McDonald’s Has Got Tough Competition. Retrieved from https://marketrealist.com/: https://marketrealist.com/2019/11/must-know-mcdonalds-has-got-tough-competition/
11. MATYSZCZYK, C. (n.d.). McDonald’s Has A Massive New Problem That Could Ruin Everything the Company Is Trying To Do. Retrieved from https://www.inc.com/: CHRIS MATYSZCZYK
12. McDonald’s coorporation. (2017-2019). Food Safety and Quality. Retrieved from https://corporate.mcdonalds.com/: https://corporate.mcdonalds.com/corpmcd/scale-for-good/our-food/foodsafety.html
13. McDonald’s corporation. (2017-2019). Food Safety and Quality. Retrieved from https://corporate.mcdonalds.com/: https://corporate.mcdonalds.com/corpmcd/scale-for-good/our-food/foodsafety.html
14. McDonald’s corporation. (2017-2020). Get McDonald’s Delivered on Uber Eats and DoorDash. Retrieved from https://www.mcdonalds.com/: https://www.mcdonalds.com/us/en-us/mcdelivery.html
15. REIFF, N. (2020, August 06). 10 Biggest Restaurant Companies. Retrieved from https://www.investopedia.com/: https://www.investopedia.com/articles/markets/012516/worlds-top-10-restaurant-companies-mcdsbux.asp
16. Shewan, D. (2020, april 20). How to Do a SWOT Analysis for Your Small Business (with Examples). Retrieved from https://www.wordstream.com/: https://www.wordstream.com/blog/ws/2017/12/20/swot-analysis
17. Team, B. t. (n.d.). SWOT Analysis How to Develop a Strategy For Success. Retrieved from mindtools.com: https://www.mindtools.com/pages/article/newTMC_05.htm#:~:text=SWOT%20Analysis%20is%20a%20simple,advantage%20of%20chances%20for%20success

I will be researching the different methods of digital marketing and how it affects Mcdonald’s status in society, as many of their customers react differently to each product and service. Within the research, I will be focusing on the concept of marketing, methods including social media, famous adverts and the use of cross-collaboration with other entities in the international markets. In addition to this, I will be analyzing the chosen product, which will be the McChicken Sandwich and will be commenting on how the worldwide franchise is marketing this to it’s target audience. The social media channels will include Facebook, Google+ and Linkedin, I will explain how each is implied as a part of the marketing campaign and to what to extent it plays an impact on Mcdonald’s.

Marketing

Marketing is the concept of when a business tries to identify it’s target market to promote and advertise the product or idea. It’s a means of gaining customers and establishing some type of brand loyalty amongst national and international competitors. A large amount of research is carried out in the process of marketing so that the business understands the customer’s overall perception. This is crucial for any business when it markets it’s an idea so that it raises awareness beforehand. Marketing affects a business in many positive manners as it provides a platform to find new customers and increase their overall revenue. Most of the marketing is nowadays completed via the use of social media as it has become widely popular and is cost-effective for most businesses. The 4 P’s are always considered to be very important in the subject of marketing, as they are designed to ensure that much growing businesses understand their overall target market. Price, Product, Place and Promotion cover the concept of marketing in a nutshell and are used throughout the marketing campaign of a business, however, at certain times these can change for a business depending on it’s circumstances. For example, the price may increase of the product or of the marketing campaign, or the place where the product may be sold could be located elsewhere because of less competition in the current area.

Another part of marketing is the idea of collaboration between established companies that help and support a business when it’s promoting it’s ideas to the target market. Many businesses attempt this method and the majority of the time it does bring a positive impact to their marketing strategy, this is due to a team effort by both organizations as they both benefit equally. The target market does not only observe the two marketing campaigns but in fact, it becomes aware of one marketing campaign that includes two businesses. Collaboration amongst businesses automatically increases the awareness and international status, it also provides huge amount of competition in the markets that changes the perception of the current target market and attracts new customer’s.

Mcdonald’s

A well-established business such as Mcdonald’s is known for it’s successful marketing campaign for over half a century now and is still maintaining this to keep itself going as it has gained an increase of customers in the last 20 to 25 years. It has utilized many methods, such as providing the best price to it’s customers over range of branches around the world. Some branches in many Asian countries have cheap prices compared to the branches of Europe, this is an example of marketing as Mcdonald’s is spreading it’s business idea to one target market to another that may have various cultural, religious and racial backgrounds. Much of it’s advertising campaigns are never-ending as you see them week in and week out, some can even be remembered after very long period of time. Within it’s advertisements, it always plays same theme music, the “whistle” tune. This is an example of a positive marketing strategy as people automatically begin to realize that this advertisement belongs to Mcdonald’s, even though they are located elsewhere in the world. At the same time it provides it’s target market with a short and catchy slogan to remember, “I’m loving it”, which would increase it’s status as more and more people would be saying it whilst enjoying their tasty meals.

In addition to this it also is known for collaborating with other organizations to maintain it’s rank in the international markets. For an instance, Mcdonald’s combined with FIFA to sponsor the Russia World Cup 2018, in return they had an increase of customers buying it’s meals whilst enjoying the world cup fixtures. In fact this also boosted the reputation of Mcdonald’s as it showed it can participate on the world stage unlike it’s competitors, which sent a new positive and strong message to it’s customers. Mcdonald’s has also introduced a new sports program called Grassroots. Within the program, it sponsors many international tournaments such as the World Cup and has collaborated with the 4 main national football institutions to teach young children football. It also has many big prizes for the 500,000 children aged 5-11 that are participating in the different sessions and events. We can begin to realise that this type of marketing has shown that Mcdonald’s is promoting it’s franchise in healthy direction rather than being known as a “fatty foods franchise.” This way the target market has understood that the world-leading franchise is beginning to change it’s image in society, which is one of the reasons why it’s far ahead of it’s key franchising rivals. The bonus of doing such a program and sponsor is that Mcdonald’s has found a niche market within it’s target market, for example, the kids aged 5-11. The majority of the kids in the UK love football therefore this is a great marketing strategy by Mcdonald’s as it can change the perception of not only the customers but the rest of the world that Mcdonald’s is not a franchise that comprises of fatty, oily and rich foods, but also has a better understanding of sports and exercise.

Another marketing aspect of Mcdonald’s is that it implies the latest software to modify it’s images as this will attract the majority of it’s target market. People’s perception will quickly change as they will assume that Mcdonald’s has the best food as it’s presented in the leaflet. Even within the leaflets Mcdonald’s has deployed many persuasive methods to raise awareness about it’s brand and ideas. Many of it’s customers are captivated of what they analyze from the leaflets, this is due to the large and fancy text that Mcdonald’s implies to maintain it’s customer loyalty. In regards to the leaflet, Mcdonald’s is also known like any other business to modify it’s photos before posting them by using software like Photoshop, which is also the other reason why much of it’s target audience is keen on it’s food as they have a positive feeling from what they observe from the leaflet. For example the recent leaflet of the franchise of it’s Classic Burgers has brought a lot of attention by the target market as many of the customers are excited to see what is in store for them. Another concept to consider is that Mcdonald’s offers monthly and seasonal offers to it’s customers to increase customer loyalty, if the customers are not satisfied by what Mcdonald’s offers, then it would have a catoptric effect on the world-leading franchise, as it can lose the majority of it’s target market. In the recent trend Mcdonald’s has begun to offer extra fries or free delivery service by using codes for a limited amount of time, which has attracted many customers and at the same time has increased the overall sales of Mcdonald’s franchise.

Maintaining a positive image and gaining brand loyalty is an important phase of marketing for any business in the international community. Designing a logo gives the business a higher chance of increasing it’s awareness of it’s target market. Mcdonald’s also has been producing and maintaining it’s logo over a long period of time since it’s establishment. Its first-ever logo consisted the “Speedee” mascot, where McDonald promoted the concept of quickly served meals to it’s target market. This instantly gained some attention by those individuals, who wanted to have hot quicked served meals, the franchise was successful in achieving this and this was considered to be one of the very first steps to becoming the world-leading franchise that it is today.

In the present time Mcdonald’s uses similar features from it’s old logo, the golden arches, but now it is identified in the form of a large “M”, allowing customer’s become more aware of who they are buying from. This logo was eventually completed and was launched in 2003. One key part of Mcdonald’s marketing scheme is the colour combination that it has included in the design of it’s logo. It’s two main colours are red and gold as they can attract a large audience. The red color represents the franchise whereas the color gold refers to the golden arches from the previous logos. All around the world, Mcdonald’s logo is displayed on all it’s products that it sells to the genrel public. Mcdonald’s has came a long way in designing it’s the famous logo and has gained full recognition of it around the world, giving the target market a more detailed understanding. In addition to this, the current logo has changed the perception of the customers as they see Mcdonald’s as a family-friendly and convenient franchise to visit in their spare time. This has rapidly increased the positive outcome of Mcdonald’s customer service, which Mcdonald’s takes seriously at all costs.

Many decades ago businesses would market their products face to face or deploy traditional methods like using telephone marketing to raise awareness of it’s idea. In addition to this employees were hired to send emails to the main target market about seasonal offers rather than now it’s completed in the form of a newsletter. Billboards were also regarded as being a primary method of marketing about 20 years ago but they have also decreased as the ordinary customer does not have the time to observe a giant billboard every second of their day. Posting leaflets through letterboxes was another vital method for any established business as it allowed the target market to gain key information about the business whilst being at home. This method is still used today but isn’t adopted as much due to new advances in technology. Businesses also used the technique of print marketing, where it published themselves in newspapers on a certain headline. Unfortunately, this method was not effective because many businesses did not acknowledge whether their target audience read newspapers or not. Such traditional methods have all been replaced by the invention of digital marketing that has spread from one country to another.

The fast food industry has been dominated by five main fast-food franchises, Mcdonald’s, Wendy’s, Burger King, Kentucky Fried Chicken (KFC), and Taco Bell. All these restaurants are known for their low prices, services, variety in the menu, and extremely low prices. Burger King is well known for its burgers. Wendy’s is known for their mostly Asian Influenced menu. Taco Bell is best known for its menu including Mexican Food KFC is known for its mascot Colonel Sanders and Kentucky Fried Chicken, and McDonald’s is known for their familiar mascot Ronald McDonald, Kids Meal, simple menu, different locations around the world, and accessibility. Mcdonald’s has been dominating the fast food industry for decades and is known as the most successful fast food franchise in the world (Forbes, 2016). McDonald’s Corporation, the American fast-food chain is one of the largest in the world, best known for its hamburgers. Mcdonald’s is the leading fast food restaurant in the world leaving their customers with a little less in their wallets and a smile across their faces. The restaurant serves a wide variety of customers estimated at around 70 million every year The success of McDonald’s brought a lot of criticism to the table, much of which was concerned for its indicated association with the global increase in obesity due to the nature of their food. McDonald’s responded by adding a healthy selection of items to its menu. Some items include the P.L.T. and the veggie burger but that discussion is reserved for another paragraph down below. As one of the largest food chains in the world, without a doubt that is why Mcdonald’s food is so popular. The fast food industry has been booming for years and continues to supply different foods and services every year. Mcdonald’s provides low prices and quality food which already sets the business up for success. Mcdonald’s start in the fast food community was a success from the beginning.

The first McDonald’s restaurant was started in 1948 by brothers Maurice, also known as Mac, and Richard McDonald in San Bernardino, California. They bought the appliances for their hamburger restaurant from a salesman named Ray Kroc, who was fascinated by their need for eight malts and shake blenders, known as mixers at the time. When Kroc would visit the brothers in 1954, he saw how a small shop could sell so many milk shakes, he discovered an easy, sturdy presentation that allowed the McDonald’s brothers to produce huge quantities of food at low prices and shorter times than the average burger joint. A standard hamburger costs roughly 15 cents at this time, about half the price charged by other competing restaurants. The “DIY” counter eliminated the need for waiters and waitresses to service customers and instead created an easy “come and go” method. Customers received their food quickly because the hamburgers were cooked ahead of time, pre-wrapped, and warmed under heat lamps to ensure their quality. What started as a one-hit wonder, shifted into McDonald’s the leading fast food restaurant on the planet with its cheap prices, great customer service, and timing for order processing.

Due to the increasing amount of controversy surrounding McDonald’s with rumors implicating that the fast-food chain promoted obesity, the restaurant came up with a solution. McDonald’s responded by adding a healthy selection of items to its menu. In 2017, McDonald’s released McVegan, a plant-based hamburger, which was limited to certain restaurants across the globe. Moreover, two years later, the fast-food restaurant began testing another vegan hamburger, the P.L.T. During this time McDonald’s also eliminated supersized portions, and its U.S. and Canadian restaurants stopped using trans-fat oil in a number of items. The concept of fast food started during the terrible time of the great depression when the majority of people wanted to have something cheap and fast, and Howard Johnson, a very well-known figure in American culture, introduced the concept of ‘food that is meant to be on the go’ in the 1930s, within a year the idea was so successful that he also started the concept of the famed ‘Drive Through’ which brought significant growth to a booming business and has since stayed a major concept in fast-food restaurants for decades. The concept of fast food was so victorious that around 1951 the word ‘fast food’ was even added to the Merriam-Webster Dictionary. But, as time flew by, McDonald’s changed the meaning of fast food by continuously influencing the public and putting forth research in order to transform consumer behavior and overall ideas about food in general. Mcdonald’s is by far the only franchise in the fast food industry that targeted consumers by using different marketing factors and techniques such as cultural, social, subcultural, economic, international, and overall essential marketing techniques to draw more customers to their restaurants compared to the methods other fast-food chains were using at the time. Due to the booming of McDonald’s restaurants, they were able to purchase several other companies. In the late 20th century, McDonald’s moved beyond the hamburger business by purchasing Donatos Pizza (1999), Boston Market (2000), and Chipotle Mexican Grill (1998) in the United States. In the United Kingdom, McDonald’s purchased Pret A Manger (2001), a sandwich shop, and Aroma Cafe (1999). Sadly, by 2008 McDonald’s no longer owned or had any sort of stake in any of those companies, instead they concentrated on their own brand. McDonald’s turned to charitable work. In 1974 Mcdonald’s joined the Philadelphia Eagles football player Fred Hill, whose daughter was suffering from leukemia at the time, in releasing the Ronald McDonald House charity in Philadelphia. The residence of this charity allowed families to live near the hospital where their children were receiving treatment for their illnesses. By the early 21st century more than 360 Ronald McDonald Houses existed around the world. The Ronald McDonald House Charities, which was established in 1987, supported other various efforts as well.

Health was a major problem and still is to this day. The average amount of Americans who are obese today is 42.4%. The American family has transformed over the past decade. Whether someone may live with two parents or one parent they are more than likely to be working full-time jobs to provide for their family. Moreover, outside their jobs they have the responsibility of raising the children, helping with doing their homework, doing chores around the house, and providing 3 meals a day to properly nourish their children. Due to the events of what the parents may perceive as their everyday life, the temptation is the winner, and the family gorges on a Mcdonald’s meal almost 3-4 days a week due to the parent’s overbearing schedule. Awesome, the family is “properly” fed, but how will the long-term effects set in after each meal of fast food when ingested several times a month? To many, Planning nutritious meals in advance is a hassle and would promote a healthier lifestyle for the American family but there is not enough time to do that. Many Americans are defined as obese by these unmet prerequisites and thus setting a downfall for their health. McDonald’s has been around for a long time and had smaller portions many years ago. Now a meal can be considered much longer for an extra dollar or even less. Sizes are increasing with a small charge, making it seem affordable for the working class. McDonald’s restaurants are located all over the world and are easily found throughout the city, pretty much on every corner. Hunger can be easily relinquished by stopping by the nearest McDonald’s restaurant. A surprisingly fast food restaurant operating whether as an organization or an individual business is aimed at creating a new wave in performance; all aimed towards implementing and sustaining the brand quality and the innovation of the business plan. Many fast food restaurants in the UK continue to analyze external as well as internal business opportunities and therefore develop marketing plans that see them with major market shares. These make the food chain industry a very competitive industry in the UK. According to Hetrick et al (2006), Mcdonald’s appreciates that competition in the marketplace is stiff and has tasked its management to constantly communicate, compare their services with those of other fast food restaurants and finally improve on their service delivery and incorporate the developments of technology such as the internet to basically motivate their clients and improve on the overall center performance.

From the above discussion, it is evident that the strategic management plan of Mcdonald’s has positioned it as the largest fast food corporation in the UK. This means that its business model is evidently different from other fast food chains. . Part of the strategic drive of Mcdonald’s to increase its competitive edge has been to overhaul the system of food preparation and as evidenced in its recent food preparation system dubbed “Made For You” McDonald’s developed a mutual relationship with its customers since fresher as well as hotter food was delivered to customers; an aspect that led to more consumption of McDonald’s food. The overall point in the strategic thinking and management of Mcdonald’s rests on the enhanced flexibility of its customer service, and business model and analyzing the strategic edge in light of competitive advantage, and business level strategies among others.