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McDonald's Corporation: The World's Leading Fast Food Chain [Case Study]
McDonald's Corporation is an American fast-food organization established in 1940 as a café by Richard and Maurice McDonald, in San Bernardino, California, United States. They rechristened their business as a burger stand and later transformed the organization into an establishment; the Golden Arches logo being presented in 1953 at an area in Phoenix, Arizona.
Ray Kroc, a businessperson, joined the organization as an established operator in 1955 and continued to buy the chain from the McDonald's siblings. McDonald's had its base camp in Oak Brook, Illinois, and moved its worldwide base camp to Chicago in mid-2018.
McDonald's is worth $185+ bn today. It is the world's biggest eatery network by revenue. It was last registered to be serving 69+ million customers each day in more than 120 countries across over 39,000 outlets.
Although McDonald's is best known for its burgers, cheeseburgers, and french fries, its menu also includes chicken items, breakfast things, sodas, milkshakes, wraps, and sweets. In light of changing buyer tastes and a negative backfire on account of the wretchedness of its food, the organization has added mixed greens, fish, smoothies, and natural products to its offerings.
McDonald's Corporation's income originates from leases and charges paid by the franchisees. According to two reports distributed in 2018, McDonald's is the world's second-biggest private manager with 1.7 million representatives (behind Walmart with 2.3 million workers).
Here's bringing you the McDonald's company profile that will present to you McDonald's company overview, when was McDonald's founded, McDonald's growth over the years, about McDonald's, McDonald's owner name, founder of McDonald's corporation, McDonald's history and background, McDonald's case study marketing, and more.
McDonald's - Company Highlights
McDonald's - Startup Story and History McDonald's - Mascot/Logo McDonald's - Business Model And Market Strategy McDonald's - Target And Mission McDonald's - Growth McDonald's - Restaurants And Services McDonald's - Future
McDonald's - Startup Story and History
Richard and Maurice McDonald in 1940, opened the primary McDonald's at 1398 North E Street at West fourteenth Street in San Bernardino, California; however, it was not the McDonald's you know today. Ray Kroc made changes to the siblings' business and modernized it.
The siblings presented the "Speedee Service System" in 1948 by extending the standards of cutting-edge drive-thru eatery that their antecedent White Castle had tried over two decades earlier. McDonald's emerged with a delivery model where it made its food on a supply belt and delivered it within 2 minutes.
It looked like a fantastic and impossible eatery that had:
• Only burgers, fries, and shakes on the menu • No plates or waiters to serve the customers
However, when Ray Kroc came, he was astonished by the never-ending waiting lines that were there waiting for their orders from McDonald's.
Kroc was then 50 already and was selling milkshake mixers door to door. Ray Kroc had earlier tried his hand in many things but never had attained success in his whole life. He already worked as a musical director, pianist, and had also worked as a real estate guy, in the paper cup industry, and as a seller of kitchen appliances, but he couldn't hold on to one thing among them all. Thus, Kroc was a person who lived from paycheck to paycheck.
Kroc came to McDonald's to deliver an absurd order of 8 milkshake mixers for just one area. He wondered "why would someone want to make 40 milkshakes at a time?" This is why he drove to California, at McDonald's to see the place himself.
Seeing the huge demand for McDonald's burgers, fries, and shakes, Kroc sensed a huge opportunity. He soon pushed the founders of the store to embrace a franchise model. The McDonald's brothers who owned the business, were living a comfortable life then, getting rich by the day, and buying Cadillacs as they filled their pockets. They didn't have vision nor they were eager to expand. However, Ray convinced them and rushed to work, as soon as he did that.
He assumed the role by taking 2 major steps back to back:
- Mortgaging his house when he was already 52
- Opening 18 new outlets in the very first year
This has helped the company scale big time, and McDonald's now boasts of:
- Serving 2.3+ billion burgers a year
- Serving 39,000+ restaurants across more than 120 countries
- Being the 4th largest employer in the world
- Being the largest toy distributor in the world
Though it was Ray's idea and the expansion was promising, the McDonald's brothers made an unfair deal with him. Kroc was allowed only 2% of the profits. McDonald's being to scale aggressively but the founders of McDonald's wasn't really happy with Ray and his scaling. This is why Ray borrowed and bought them out for $2.7 mn, thereby becoming the 100% owner of McDonald's.
The organization attributes its success to Ray Kroc. Kroc later bought the McDonald siblings' value in the organization and was responsible for McDonald's overall reach. He was seen as a forceful colleague, driving the McDonald siblings out of the business. Kroc and the McDonald's siblings battled for control of the business, as recorded in Kroc's life account.
The San Bernardino eatery was torn down (1971, as indicated by Juan Pollo) and the site was offered to the Juan Pollo chain in 1976. This zone currently fills in as central command for the Juan Pollo chain, and a McDonald's and Route 66 museum.
With the development of McDonald's into numerous universal markets, the organization has turned into an image of globalization and the American lifestyle. Its unmistakable quality has additionally made it a regular point of open discussions about heftiness, corporate morals , and shopper obligation.
McDonald's - Mascot/Logo
The first mascot of McDonald's was a cooking cap over a burger who was alluded to as "Speedee" . In 1962, the Golden Arches supplanted Speedee as the all-inclusive mascot. The image of jokester Ronald McDonald was presented in 1965. Ronald McDonald showed up to promote amongst children.
On May 4, 1961, McDonald's initially petitioned for a U.S. trademark on the name "McDonald's" with the portrayal "Drive-In Restaurant Services". By September 13, McDonald's, under the direction of Ray Kroc, petitioned for a trademark on another logo—a covering, twofold curved "M" image.
Before the twofold curves, McDonald's used a solitary curve for the design of its structures. Even though the "Brilliant Arches" logo showed up in different structures , the present form was not utilized until November 18, 1968, when the organization was given a U.S. trademark.
McDonald's - Business Model And Market Strategy
The business and revenue model of McDonald's includes almost 37000 outlets which spread to more than 120 nations. Today, McDonald's is the biggest eatery network on the planet in terms of income.
Initially launched as a Drive-In Hamburger Bar, the idea was advanced in 1940 by The McDonald Brothers, Richard James (Dick), and Maurice James (Mac) McDonald. It was after the presentation of the Speedee Service System with shakes, fries, and burgers costing as low as 15 pennies that the McDonald Brothers started the establishment of McDonald's Hamburgers.
In 1954, Ray Kroc turned into the establishment operator of the McDonald Brothers. The main McDonald's eatery was opened by Kroc in 1955 in Des Plaines, Illinois, USA. It was in the year 1961 that the rights to the eating joint of the kin were obtained by McDonald's for a powerful total of $2.7 million.
You may likewise be astonished to realize that when the first McDonald's eatery opened, the extremely well-known McD french fries were eaten with no ketchup! The revenue model of McDonald's, the world's quickest developing food chain, is an interesting one.
McDonald's - Target And Mission
McDonald's endeavours hard to be its clients' "most loved spot and approach to eating". McDonald's plan of action is fixated on the ground-breaking strategy "Plan To Win", which is placed into requests around the world.
With the mission of "Quality, Service, Cleanliness, and Value", McDonald's has clung to each of these characteristics. Client experience is improved by the selection of five fundamentals: people, products, place, price, and promotion.
Additionally, McDonald's plans to give high-review nourishment, at effectively reasonable costs to individuals over the globe. The deals at McDonald's are furrowed through an efficient deals channel which guarantees remarkable consumer loyalty on all occasions.
Astounding Vision
When Ray Kroc opened the Original McDonald's in Illinois, he had a dream of expanding the franchise across the globe with more than 1000 outlets in the States itself. Remaining consistent with its guarantee, McDonald's widened its worldwide handle by opening joints outside the US as early as 1967.
The first international outlets were opened in Canada and Peurto Rico. By January 2018, McDonald's was situated in 120 nations and had about 37200 cafés with 1.9 million workers. It was serving more than 69 million individuals every day. At one point in time, McDonald's was opening a new outlet every 14.5 hours!
Significant Growth Strategy
McDonald's has clutched a promising development technique to serve customers and spread its wings. The presentation of the "Speed Growth Plan" in March 2017 enhanced the development of the business.
McDonald's development system depends on retaining, regaining, and converting. McDonald's strives to hold on to its old clients, recapture the lost trust, and convert easygoing clients into ordinary ones.
What's more, it has additionally embraced three quickening agents: digital, food delivery, and experience of things to control its monstrous development. It keeps on reshaping cooperation with clients and raising the level of consumer loyalty and experience through innovation and human endeavours.
Decent Variety
Monetarily, McDonald's has affected the world more significant manner than some other organizations. McDonald's adheres to the conviction "Decent variety is Inclusion" and doesn't leave a solitary opportunity to make each person from every network feel regarded. Its suggestion of "Decent variety is Inclusion" has affirmed its situation at the top position.
The McDonald's way of life revolves around the following: customer-obsessed, better together, and committed to lead. These coupled with its conviction has caused the fast-food chain to exceed expectations in the field of business enterprise and showcasing.
McDonaldization
McDonald's can appropriately be named as one of the best organizations to be involved in the worldwide system. The worldwide broadening of the McDonald's is regularly alluded to as "McDonaldization." Its accomplishment in more than 120 nations can be credited to its hierarchical structure.
The hierarchical structure of McDonald's mulls over expanding localization, and in this way, the entire plan of action of McDonald's is normally redone thinking about the mass intrigue in different nations.
Fruitful Acquisitions
The McDonald's Corporation Mergers and Acquisitions (M&A) have, since its inception, entertained itself with cautious acquisitions. Donato's Pizza which is a Midwestern chain of 143 eateries was obtained by McDonald's on 6 May 1999. Aside from securing Donato's, it acquired the Boston Market on 18 May 2000. Boston Market is a drive-through eatery chain that essentially focuses on home-style sustenance.
Supporting Employees
McDonald's doesn't, in any capacity, hamper the development of its workers. It bolsters its representatives in every possible way and empowers them to set up business systems.
At McDonald's, the work environment is brimming with positivity, connections are advanced, professional openings are supported, and business development is sustained.
Coaches, good examples, and backers are accessible at all times to direct the employees on successful initiatives, professional procedures, and prosperous business.
Engagement Of Community And Education
Aside from being one of the best good-quality fast food options, McDonald's investigates every possibility to endeavour for the network it serves. It effectively takes part in network administration and continues to have a critical effect on assorted networks.
The Global Diversity, Inclusion, and Community Engagement Team alongside its key accomplices have fabricated cherished relations with different network-based associations. McDonald's Hamburger University readies its workforce to maintain the multi-billion dollar business and worldwide initiative improvement programs.
McDonald's - Growth
McDonald's eateries are found in 120 nations and serve 69 million customers each day. McDonald's operates 39,000 restaurants/cafés around the world, utilizing more than 210,000 individuals as part of the arrangement. They help operate 2,770 organization possessed areas and 35,085 diversified areas, which incorporates 21,685 areas diversified to regular franchisees, 7,225 areas authorized to formative licensees, and 6,175 areas authorized to remote affiliates.
Concentrating on its centre image, McDonald's started stripping itself of different chains it had gained during the 1990s. The organization possessed a large stake in Chipotle Mexican Grill until October 2006 when McDonald's was completely stripped from Chipotle through a stock exchange .
Until December 2003, it likewise claimed Donatos Pizza, and it claimed a little portion of Aroma Café from 1999 to 2001. On August 27, 2007, McDonald's sold Boston Market to Sun Capital Partners.
Outstandingly, McDonald's has expanded investor profits for 25 back-to-back years, making it one of the S&P 500 Dividend Aristocrats. The organization is positioned 131st on the Fortune 500 of the biggest United States companies by revenue.
In October 2012, its month-to-month deals fell without precedent for nine years. In 2014, its quarterly deals fell without precedent for a long time, when its deals last dropped for the whole of 1997.
In the United States, McDonald's accounts for 70% of sales in drive-throughs. McDonald's shut down 184 eateries in the United States in 2015, which was 59 more than what they wanted to open.
Starting in 2017, the income was roughly $22.82 billion. The brand estimation of McDonald's is more than $88 billion; outperforming Starbucks with a brand estimation of $43 billion. The total compensation of the organization in 2017 was $5.2 billion; this worth saw an ascent of about 11% from the previous year.
McDonald's is, without a doubt, the quickest developing drive-thru eatery chain on the planet. In 2018, McDonald's developed as the most profitable inexpensive food chain with a brand worth nearing $126.04 billion. Also, the all-out resources of McDonald's were almost $33.8 billion.
The world's quickest developing cheap fast food chain partitions its market into four unique areas: U.S., International Lead Markets, High Growth Markets, and Foundational Markets and Corporate.
According to the report set forth by the organization in the year 2017, the market in the U.S. created the biggest measure of income at $8 billion. The International Leads Markets which includes Australia, Canada, France, Germany, and the U.K. created an income of $7.3 billion.
The High Growth Markets which incorporate China, Italy, Korea, Poland, Russia, Spain, Switzerland, the Netherlands, and comparative brought in about $5.5 billion in revenue.
The Foundational Markets and Corporate incorporate the rest of the business sectors. Furthermore, it additionally incorporates a wide range of corporate exercises. The income created by this section of the market represented roughly $1.9 billion.
McDonald's - Restaurants And Services
In certain nations, "McDrive" areas close to roadways offer no counter administration or seating. interestingly, areas in high-thickness city neighbourhoods frequently preclude pass-through service. There are likewise a couple of areas, found for the most part in the downtown locale, that offer a "Walk-Thru" administration instead of a Drive-Thru.
McCafé is a bistro-style backup to McDonald's cafés and is an idea conceived by McDonald's Australia (likewise known, and promoted, as "Macca's" in Australia), beginning with Melbourne in 1993. As of 2016, most McDonald's outlets in Australia have McCafés situated inside the current McDonald's eatery.
In Tasmania, there are McCafés in each eatery, with the rest of the states rapidly following suit. After moving up to the new McCafé look and feel, some Australian eateries have seen up to a 60% expansion in deals. There were more than 600 McCafés around the world some time back.
Create Your Taste
From 2015–2016, McDonald's attempted another gourmet burger administration and eatery idea dependent on other gourmet cafés, for example, Shake Shack and Grill'd. It was taken off without precedent for Australia in early 2015 and extended to China, Hong Kong, Singapore, Saudi Arabia, and New Zealand with progressing preliminaries in the US showcase.
In committed "Make Your Taste" (CYT) booths, clients could pick all fixings including a kind of bun and meat alongside discretionary additional items. In late 2015, the Australian CYT administration presented CYT servings of mixed greens.
After an individual had requested, McDonald's prompted that hold up times were between 10–15 minutes. At the point when the nourishment was prepared, the prepared group ('has') carried the sustenance to the client's table.
Rather than McDonald's typical cardboard and plastic bundling, CYT nourishment was exhibited on wooden sheets, fries in wire bushels, and servings of mixed greens in china bowls with metal cutlery. A more expensive rate connected. In November 2016, Create Your Taste was supplanted by a "Mark Crafted Recipes" program intended to be increasingly proficient and less expensive.
McDonald's Happy Day
McHappy Day is a yearly occasion at McDonald's during which a portion of the day's deals goes to philanthropy. The collections on this day go to Ronald McDonald House Charities.
In 2007, it was celebrated in 17 nations: Argentina, Australia, Austria, Brazil, Canada, England, Finland, France, Guatemala, Hungary, Ireland, New Zealand, Norway, Sweden, Switzerland, the United States, and Uruguay. As indicated by the Australian McHappy Day site, McHappy Day brought $20.4 million up in 2009. The objective for 2010 was $20.8 million.
McDonald's Monopoly Donation
In 1995, St. Jude Children's Research Hospital got a mysterious letter stamped in Dallas, Texas, containing a $1 million winnings McDonald's Monopoly game piece. McDonald's authorities went to the medical clinic, joined by a delegate from the bookkeeping firm Arthur Andersen, inspected the card under a diamond setter's eyepiece, took care of it with plastic gloves, and checked it as a winner.
Although game guidelines disallowed the exchange of prizes, McDonald's deferred the standard and made the yearly $50,000 annuity instalments for the full 20-year time frame through 2014, even in the wake of discovering that the piece was sent by an individual associated with a theft plan meant to cheat McDonald's.
McRefugees are destitute individuals in Hong Kong, Japan, and China who utilize McDonald's 24-hour cafés as transitory lodging. One out of five of Hong Kong's populace lives underneath the destitution line. The ascent of McRefugees was first archived by picture taker Suraj Katra in 2013.
McDonald's - Future
The reported objective is to source all visitor bundling from inexhaustible, reused, or ensured sources, reuse visitor bundling in 100% of eateries, and overcome framework challenges by 2025.
McDonald's turned into the principal eatery organization on the planet to set an endorsed Science-Based Target to lessen ozone-depleting substance emanations. It also joined the "We Are Still In Leader's Circle", driving activity to relieve environmental change.
McDonald's USA completed five years as the sole worldwide café organization to serve MSC-ensured fish in each U.S. area. It united with Closed Loop Partners to build up a worldwide recyclable and additionally compostable cup arrangement through the NextGen Cup Challenge and Consortium. Official pioneers called for atmosphere activity and offered arrangements at the primary Global Climate Action Summit (GCAS).
McDonald's co-facilitated the "Way to Greenbuild" occasion with Illinois Green Alliance at its new worldwide home office. The structure, a collaboration among Sterling Bay, McDonald's, and Gensler Chicago, got USGBC LEED Platinum accreditation.
McDonald's is establishing the tone for other inexpensive food organizations to pursue. Given the present want by numerous buyers to spend cash on organizations that are doing great on the planet, where McDonald's leads, others will pursue.
Who is the founder of McDonald's?
McDonald's was founded by Richard McDonald and Maurice McDonald on 15 April 1955 in California, United States.
Who is the CEO of Mcdonald's?
Chris Kempczinski is the CEO of Mcdonald's since Nov 2019.
Who is the owner of McDonald's in India?
In India, McDonald's is a joint-venture company managed by two Indians- Amit Jatia (M.D. Hardcastle Restaurants Private Ltd) and Vikram Bakshi ( Connaught Plaza Restaurants Private Ltd).
When was the fast-food chain McDonald's founded?
Mcdonald's was founded in 1940 in San Bernardino, California.
How much does a Mcdonald's franchise owner make?
An average Mcdonald's franchise generates $150,000 annually.
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McDonald’s Business Studies Case Study
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Resource Description
role of operations management ● strategic role of operations management – cost leadership, good/service differentiation
Operations → business processes that involve transformation/production – Production = conversion of inputs into outputs
Customer focus → minimising waste, fair value for labour, low cost, reflect changes in consumerism Profit centres → aspects of the business that derive revenue and profits Cost centres → areas which cost is attributed
Cost Leadership → aiming to have the lowest cost & be most price-competitive
CASE STUDY: McDonald’s → Mcdonald’s invested in a global training program (Hamburger University) to ensure efficiency and reduce overall costs
goods and/or services in different industries
Goods/Services Differentiation
Standardisation → making products that are all the same
Product Differentiation → distinguishing products
Differentiating Goods Differentiating Services
– Product features – Product quality – Augmented features (add-ons or benefits) – Time spent on a service – Level of expertise – Qualifications and expertise of the service provider – Quality of the materials/technology used in service delivery
Goods Differentiation Perishable goods → short lead times, distributed fast
Non-perishable goods → operations similar in all industries, more durable goods
Self-service → encouraging customers to take initiative
● interdependence with other key business functions
Interdependence → mutual dependency on one another
Interdependence with… Marketing → producing goods based on market needs, marketing based on cost, product design affects transformation
Finance → cost of production, labour costs
Human Resources → staff needed for production, technology changing operations, outsourcing specialists influences
● globalisation, technology, quality expectations, cost-based competition, government policies, legal regulation, environmental sustainability
Globalisation → removal of trade barriers between nations, operating on an international scale & develop international influence
CASE STUDY: McDonald’s → McDonalds has 37,000 restaurants in 120 countries → in 2018, McDonald’s ranked 11th on Forbes list of most valuable brands → 2017 report showed US$91billion in sales, showing success in maintaining competitive advantage by adapting to global conditions
Supply chain management → managing the flows of goods and services, including transformation. – Businesses need a reliable supply chain that is responsive to changes
Technology → the design, construction and application of innovation devices, methods and machinery in the operations process.
– Administrative level → organisation, planning, decision making – Processing level → manufacturing, logistics, quality management, inventory management
CASE STUDY: McDonald’s → digital menu boards, automatic drink dispensers, online ordering apps
Quality → how well designed, made and functionable goods are. – Expectations that people have of business determines the way products are designed, created and delivered.
CASE STUDY: McDonald’s → after complaints of coffee quality, McDonalds made a promise in 2011 that coffee would be barista made. → in 2018, Mcdonalds started using fresh (not frozen) beef patties, despite taking longer to cook, quality was improved
Cost-based Competition → derived from the breakeven point Fixed costs = costs that do not change regardless of business activity Variable costs = costs that vary in relation to business activity/level of production
CASE STUDY: McDonald’s → in 2015, Mcdonalds dominated western Europe, other businesses attempted to compete by lowering their prices → close focus on cost, helps them to maximise profits Government policies & Legal Regulation → Work Health and Safety Act 2011, Fair Work Act 2009, Superannuation Guarantee Act 1992, Racial Discrimination Act 1975, Taxation Act 1953 → influence business operations
CASE STUDY: McDonald’s → McDonalds is bound by obligations in relation to marketing, advertising, product safety and quality guarantees (Australian Consumer Law 2010) → they must ensure conscionable conduct at a local, state and federal level Environmental Sustainability → business operations shaped around sustainable practices
CASE STUDY: McDonald’s → in 2012, McDonalds opened the Australia’s first Green star accredited restaurant in VIC
● corporate social responsibility CSR → doing more than just complying with the law, but having higher respect for people, community and environment Triple Bottom Line → financial profitability, social impact and environmental impact of a business.
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McDonalds Case Study
In this paper we worked on the case study on Mcdonalds marketing case study which is in marketing management........
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This report has been written as part of the formative assessment for the Business consultancy project module. The aim of this report is to investigate Ciao Bella’s, to understand their position in the market, their shares and provide methods to enhance their brand. Ciao Bella has expressed concern towards international cuisine that, even though there are operating in a fast growing market of fast food, they still have face issues such as lack of awareness in their market. This is affecting their brand image and their ability to be competitive in the fast food market. Analytical tools used includes Porters 5 forces, SWOT &TWOS analysis, PESTEL, 7P’s framework and the 7S’s Framework. All analysis can be found in the appendices. The questionnaire was used as a method of primary research. Textbooks, journals, Website, newspaper articles and online database were also used to obtain a better understanding of the project. The main findings were as follows. Ciao Bella has been operating in the fast-food/takeaway market for the past six years. Through the process, there were areas of weaknesses identified. Key weaknesses found was their lack of awareness in the Ashfield area, lack of social media presences, poor advertising and the increased movement towards healthy food. In the macro environment, the technology factor is a key driver for change because in the fast food sector technology is increasingly used as a method of innovating their brand. However, this factor is an issue for Ciao Bella, which is inhibiting their ability to be competitive in the fast-food market. As a result of this issues discovered, a suitable recommendation has been suggested to solve this issues as well as to achieve the aim. The following recommendation is as following. • Using Effective social media channels to reach target consumers. • Develop marketing mix and create comparative analysis by applying 7P’S framework. • Employees training methods and design of restaurant • And Promotion Strategy In conclusion, the methodology outlines the way International Cuisine approaches the project and illustrates the way the group collects and processes data obtained from primary and secondary research. A mixture of qualitative and quantitative methods were used to gain insight on the how to improve the awareness of Ciao Bella, which International Cuisine found and used to recommend suitable ideas of enhancing it.
MUHAMMAD IMAD UD DIN
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Business Case: McDonald’s
Companies conduct Organizational Diagnosis by gathering and evaluating information the problems being faced by them to achieve effectiveness. There are many procedures that are used by a company to collect information in order to find out a solution to a problem. Diagnosis tools are also used for motivating the employees. These tools basically help the management of a company to identify a problem persisting in a company so that problems that were being overlooked can be easily identified. Let’s consider an example of a physician.
When a patient comes to a physician for any treatment, he first examines the patient properly, takes his tests required for the suspected illness. After the patient’s information is evaluated, he gives his prescription so that the disease can be cured. This same process takes place in the case of organizations as well (Tichy, Hornstein & Nisberg, 1977).
Order custom essay Business Case: McDonald’s with free plagiarism report
All these models can help an organization develop and improve the understanding of organizational behavior in different ways. It also helps to categorize and interpret data about an organization and provide a common language that is easy to understand.
There are many types of Organizational Diagnosis Models. The names of these models are Force Field Analysis, Leavitt’s Model, Likert System Analysis, Open System Theory, Weisbord’s Six-Box Model, Congruence Model for Organization Analysis, McKinsey 7S Framework, Tichy’s Technical Political Cultural Framework, High Performance Programming, Diagnosing Individual and Group Behavior, Burke-Litwin Causal Model ( Howard, 1994).
From all the models mentioned above, Nadler-Tushman Congruence Model is the strongest in terms of its inputs, throughputs and outputs. It is also more consistent with open systems theory . The congruence model states that the organizations are open social systems within a larger environment. They are dynamic bodies and change is not only possible but it also occurs. It also assumes that both organizational behavior and interactions occurs different levels such as the individual or group level and the systems level . Here, I will consider the example of McDonald’s.
An environment is created by all the factors such as the institutions, groups, individuals, events, and so on, that are outside the organization being analyzed, but that have a potential impact on an organization creates.
Resources are the different types of assets an organization owns or has access to. These can be both tangible and intangible assets. The tangible assets include the human resources, capital and information while the tangible resources are the recognition and the goodwill of an organization in the market.
The past behavior and activities influence an organization’s history greatly. The effectiveness also affects the functioning of the organization.
The type of strategy adopted by an organization is one of the most important inputs to the organization. The strategies are the decisions about how the organizational resources will be configured to meet the demands, constraints, and opportunities within the context of the organizations history
Most of the McDonald's restaurant franchises have included a play area for children and most of their advertising is targeted on the children. They have also re designed their franchises by giving a natural style but more importance has being given to comfort. This was done by introducing lounge areas and fireplaces, and by removing the hard plastic chairs and tables . They offer counter and drive-through service with indoor as well as outdoor seating.
McDonald's have even started off with McCafés that provides high quality coffee to the customers. There are also some locations of McDonald’s that are near to the gas stations.
The outputs of these inputs affect the individual, group and inter-group behavior of an employee and the system functioning of an organization.
Absenteeism, lateness, turnover, the levels of satisfaction, drug usage, and off-the-job activities which impact performance of the employees shows their individual behavior towards the organization.
Group and inter-group behavior is determined by inter-group conflicts, collaboration, and the quality of communication between the group members.
System functioning is the accomplishment of the desired goals of an organization. These can be achieving the target ratio of production. Other than production, there can be return on investment, utilization of available resources and adaptability to external environmental demands.
Every organization is influenced by the environment and the environment is created by the stakeholders of the organization. The history of an organization is another factor as to predict the future about an organization; the past must be carefully studies. The past trends show how an organization may perform in the future. Every organization adopts two types of strategies i.e. the corporate strategy and the business strategy. The former includes the portfolio decisions and the latter includes the decisions that help to configure the resources of the organization in respect to its demands, threats, constraints and opportunities.
These four inputs i.e. the environment, resources, organizational history and strategies do interact each other in different ways.
Every type of task assigned to an employee requires different levels of skills and knowledge and even the skills in the individuals who are given these tasks vary from person to person. The performance of an individual will be more effective depending on how much the skill and knowledge of the person to whom the task is assigned matches with the skill required to perform that particular task and this would in return reflect on the performance.
The only thing that seems to be negative in this model would be the fact the proponent was not able to consider the link or the connection between the “paired links” or those system parts that are paired together based from their congruence to one another
Resources are very essential for any organization that exists. Either it is the human resource or the capital; an organization cannot stay for long even if one of them goes missing. Organizational history of any organization is also important as goodwill is another factor because of which an organization gets recognition in the competing world.
The organizational strategies that an organization adopts reflect a lot on its performance and profits. Environment plays a major role in motivating the employees and motivated employees are always good for any organization.
The congruence model provides a graphic depiction of the organization as a social and technical system. It does not favor any particular structure neither it suggests to use the competitor’s strategy but to follow the most successful strategy that is the most effective for the organization. It helps to understand change as it allows one to predict the impact of change. It also shows comparisons of the output with the expectations. It also helps to organize what one thinks about the situation in the organization. (Wyman, 2003).
1. Burke, W.W & Litwin, G.H (1992). A causal model of organizational performance and change. Journal of Management. Retrieved from http://findarticles.com/p/articles/mi_m4256/is_n3_v18/ai_13526990/pg_2
- Falletta, S.V. (2005) Organizational Diagnostic Models: A Review & Synthesis. White Paper. Retrieved from http://66.102.9.104/search?q=cache:wlV4YaPvkrQJ:www.leadersphere.com/img/Orgmodels.pdf+what+is+Nadler-Tushman+Congruence+Model&hl=en&ct=clnk&cd=1&gl=pk
- Howard, A. (1994).Diagnosis for Organizational Change: Methods and Models. The Guilford Press
- Hornstein, H. A., & Nisberg, J. N. & Tichy, N. M. (1977). Organization diagnosis and
Intervention strategies: Developing emergent pragmatic theories of change . New York,
NY: Human Sciences Press.
- McDonalds’ Corporation. (n.d.) The McDonald's History - 1954 to 1955.Retrived August 22, 2008 from http://www.mcdonalds.com/corp/about/mcd_history_pg1.html
- Wyman, O. (2003). The Congruence Model: A roadmap for understanding organizational performance. Delta Organization and leadership. Retrieved fromhttp://www.oliverwyman.com/ow/pdf_files/Congruence_Model_INS.pdf
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McDonald’s Business Model Case Study
As the world’s largest fast-food chain, McDonald’s is synonymous with the global food industry. However, the company is facing some major challenges with its current business model. What does it mean for your business when the entire food sector is experiencing significant changes?
In the 1990s, McDonald’s was facing tough competition from its rivals. To survive, McDonald’s had to innovate, but with limited resources and a limited number of products to offer, McDonald’s wasn’t going to be able to compete using its current business model. How could McDonald’s get more customers? In 1997, a group of McDonald’s executives met to discuss how McDonald’s could achieve their goals. After the meeting, one executive summed up the team’s meeting. He said, “We need to innovate, but we also need to understand our market better.
Table of Contents
Company Overview
We have used McDonald’s Business Model case study to introduce our students to various topics in entrepreneurship, including marketing, finance, business strategy, operations, and international expansion. Students have enjoyed reading the McDonald’s case study. The case study is available as a standalone document, PowerPoint slide deck, and Google Docs.
“The McDonald’s story begins in 1940 when Floyd D. ‘Mac’ McDonald and three partners opened the first McDonald’s restaurant in San Bernardino, California. At the time, it was called McDonald’s Famous Barbeque Chicken Dinner and was a quick-service restaurant. The menu consisted of two entrées and a small assortment of side dishes. The restaurant served only hot foods and did not serve shakes. In 1948, the original location closed and the second location opened.
The restaurant was named McDonald’s and in 1950, the company’s first drive-through was added. By 1960, McDonald’s had expanded to 2,200 restaurants and became the largest fast-food chain in the world. In 1967, the first international franchise opened. Since then, McDonald’s has grown to over 35,000 restaurants in over 100 countries.” I encourage you to read more about this blog here: How To Start A Recycling Business With 7 Best Ideas And Tips
Global And Local Strategies
McDonald’s has mastered the art of local marketing strategy. Its global and local marketing strategies differ significantly, but both are important for its continued success. McDonald’s business model has allowed it to thrive in almost every market it’s entered, but only after it developed an effective marketing strategy for each region.
Learned from the McDonald’s business model case study that McDonald’s business model relies on two primary strategies: global and local. It is one of the most successful and innovative restaurant chains around the world. McDonald’s uses these strategies to achieve its global success. In a global market, McDonald’s takes advantage of the market by using its strong brand and efficient business model to capture a large market share.
In a local market, McDonald’s uses its brand and efficient business model to quickly capture market share. I learned that when McDonald’s operates in a local market, it often has to adapt its brand and business model to the culture of the local market. When McDonald’s operates in a global market, it often has to adapt its business model to the culture of the local market.
Conclusion And Possible Recommendations
McDonald’s business model isn’t one that most companies in the world would have thought of as a viable one. In fact, when McDonald’s first opened their doors, few people believed that a burger joint would be able to sustain itself financially for very long. However, the founders of McDonald’s knew that the fast food industry was going to be completely transformed by the rising demand for convenience. They built their own business based on the premise that it would take a long time to change consumer habits, and that they had the power to provide a superior experience that would lead to repeat purchases. This case study will examine the McDonald’s business model and show you how to create your own successful business plan based on the McDonald’s model.
When I first started learning about the power of blogging, one of the most important things that stood out to me was the business model for the McDonald’s Corporation. I was fascinated by the fact that a fast food chain based out of a tiny town in Illinois, USA, can achieve so much growth in so little time. What other business models might be possible for other industries?
What Problems Does McDonald’s Solve?
For this business model to succeed , the brothers identified that there were certain types of clients with needs that they had to cover:
- -Go eat at a good price
- -Eat at any time
How Do They Solve The Problem?
Once the problem was identified, the brothers decided that they would meet the needs of these customers in three ways:
- -By cheap American food
- -Restaurant with a permanently open kitchen
- -Service in minutes
What Business Strategy Does McDonald’s Use?
McDonald’s primary goal is to increase its brand awareness by targeting the general public. The key point of this generic strategy is to deliver affordable and convenient products. By offering value-oriented products, McDonald’s aims to create a favorable impression on customers and become the preferred choice.
Arby’s is famous for its value menu, which is a menu of cheap fast food products that are sold at a lower price than what McDonald’s is selling. However, the average cost of Arby’s menu items is higher than what McDonald’s sells.
When Was The Fast-Food Chain McDonald’s Founded?
In 1940, a man named Richard McDonald opened a small restaurant in downtown San Bernardino. At that time, there were about 4,000 fast-food restaurants in America. McDonald’s was different from all the rest, however. It sold hamburgers, fries, and milkshakes. Customers would wait in line for several hours to get inside McDonald’s—they weren’t happy with the food back then, but they wanted to be part of something special.
Why Was The McDonald’s Concept Successful?
In the beginning, they made their hamburgers taste better, reduced wait times, and gave their employees more job security. They also kept their prices low and offered their franchisees low prices. As a result, McDonald’s was able to grow quickly and enjoy rapid growth.
Conclusion:
At McDonald’s, Quality, Service, Cleanliness, and Value are the pillars of daily work, fundamentals that have allowed it to offer a unique experience.
The company brought to this new market an original fast service concept, where details are meticulously taken care of to provide the consumer with an excellent product. For this, high-quality ingredients are used, premises with strict hygiene standards, superior customer service, and a family atmosphere where children, young people, and adults have their own space.
McDonald’s creates a quiet revolution by entering a new market. It immediately sets a new standard in quick service food, provides opportunities for young people, and stands out as offering a new standard in the staff training system.
The impression I had when entering various McDonald’s stores was good service since the people who serve are trained to smile. A negative aspect to highlight is the influx of people during peak hours, an aspect that is really uncomfortable for people like me.
Finally, I believe that the marketing policies carried out by this company are in accordance with the needs of the market, for this reason, McDonald’s is a leading company in its field, achieving constant and persistent success.
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In-Depth McDonald’s Marketing Case Study – I’m Lovin’ It Already.
By Aditya Shastri
McDonald’s has been one of the leading food chains for many years in terms of the quick-service segment. They are a company with a broad understanding of the needs of their customers.
Today, McDonald’s is the industry’s leader not only in sales volumes but also in profit rates and market valuation. But how did they manage to gain such a strong position? The answer lies in its well thought out strategic marketing moves as well as other internal factors.
That’s why in this case study, we’ll dig deeper into McDonald’s Marketing Strategy from a marketing perspective by going through its marketing campaigns, marketing mix, marketing campaigns and its SWOT analysis.
So let us start by first learning more about the business model and brand history of McDonald’s.
About McDonald’s
McDonald’s Corporation, or simply McDonald’s, is the world’s largest chain of fast-food restaurants, serving around 69 million customers per day. Headquartered in the United States, the company began in 1940 as a restaurant operated by Richard and Maurice McDonald.
In 1948, they reorganized their business as a hamburger stand but later in 1955, businessman Ray Kroc joined the company as a franchise agent who subsequently purchased the chain from the McDonald brothers and oversaw its worldwide growth.
The mission of the company is, “To create delicious feel-good moments for everyone” .
McDonald’s offers its customers a wide variety of its menu items, along with drinks and other merchandise. It is known for its employee satisfaction, innovation, and commitment to quality.
The business model of McDonald’s is intensive, but in short, it is a franchise-based model. It shares the rights of the business with its franchise partners who later operate McDonald’s in select regions.
In India, McDonald’s is run by two companies, Hardcastle Restaurants Pvt. Ltd (controls the South & West India) and Connaught Plaza Restaurants Private Limited (controls the North & East India). It first entered India back in 1996.
Now that we know about McDonald’s Corporation and McDonald’s India. Let us now go through the company in greater detail by going through its marketing mix.
Marketing Mix of Mcdonald’s
A marketing mix is a model that an organization uses to advance the interest for its image or product. The main components of this model are 4Ps: Product, Price, Place and Promotion. So let us look at McDonald’s marketing mix strategy in the coming section.
We have written a separate blog taking a deeper dive into the marketing mix of McDonald’s if you wish to learn more.
Product Strategy of McDonald’s
Being a fast-food company, it primarily sells burgers, french fries, breakfast items, soft drinks, milkshakes and desserts.
McDonald’s menus are known around the globe, although there are geographic variations to suit the local preferences & tastes of customers. The company continuously improves its products and services based on the changing needs and tastes of consumers
The core value of what McDonald’s offers has always been fast service which is a huge value-addition. Nowhere else can you get such a range of items at even lower prices with such efficiency, convenience and customer service.
Price Strategy of McDonald’s
The pricing strategy of McDonald’s has always been to offer food at low prices. This is what has allowed the restaurant to be successful for many years.
This also has primarily helped McDonald’s build its reputation as one of the top fast-food brands in the world. However, with the costs of living continuing to rise, McDonald’s has begun offering combos and specials in an effort to entice customers and churn out profits through economies of scale.
In India, the brand came up with a punchy line – “Aap Ke Zamane Mein, Baap Ke Zamane Ke Daam” . This was done back in 2008 to attract lower and middle-class customers to experience the offerings of McDonald’s India and it worked out very well.
Place and Distribution Strategy of McDonald’s
McDonald’s is one of the world’s leading quick-service restaurants (QSR) with over 38,000 restaurants in 100+ countries. It recently opened nearly 1,000 new restaurants globally & also modernized another 900 restaurants in the US.
It has opened different restaurant formats as well as drive-ins, online ordering and tying with food delivery partners. These new formats allow the customers to get the desired food at a particular time and place which also helps them to have a better experience overall.
The stores themselves are clean unlike others as they always keep their outdoor seating space cleaned while having indoor seating areas for an elegant ambience.
Promotion Strategy of McDonald’s
McDonald’s uses a lot of promotional techniques as promotional activities helps build brand loyalty and interest. It gives people who may not normally go to McDonald’s a reason to go there.
Just like any other company, McDonald’s also sponsors various promotion campaigns to push their brand. Promotions help in creating a sense of community and association between the company and its customers
Now that we know about McDonald’s offerings and its promotional tactics, let us now go through the core marketing elements of its marketing strategy in the coming section.
Marketing Strategy of McDonald’s
With an innovative approach to marketing and consumption patterns through value-added menu improvements, McDonald’s aims to significantly improve market share in key markets through continually improving customer satisfaction and attracting new customers through cost savings, operational efficiencies and improving brand awareness.
So let us look at some of the marketing strategies implemented by McDonald’s over the past years.
McDonald’s – I’m Lovin’ It…. Para Pap Pap Paa:
“I’m Lovin’ It… Para Pap Pap Paa” is a very well-known jingle that has been used by McDonald’s for a very long time now.
This jingle highlights the positive experience one can have while dining at McDonald’s. The jingle is memorable because it speaks about how happy people are during their meals there, and how helpful and friendly the employees are.
Brand Mascot of McDonald’s
What is the best McDonald’s brand mascot? A funny clown character that McDonald’s is able to successfully market to both children and adults. The brand mascot strategy was first implemented by McDonald’s in 1963 and since then this mascot has become an integral part of the company’s legacy.
Collaborations of McDonald’s
McDonald’s has been having a long history of collaboration with various companies and artists. The motive behind these collaborations is to maintain its brand reinforcement in the minds of its customers. This goes beyond simply creating advertising campaigns that promote the value of its products.
It very recently collaborated with BTS – the very popular South Korean Music band where it introduced a special McDonald’s meal called the BTS Meal. Likewise, it has collaborated with artists like Travis Scott, J Balvin as well as Companies like Coca Cola.
Marketing & Advertising Campaigns of McDonald’s India
A marketing campaign can have many goals, but at the core, they are all about getting more customers. An effective and well-timed campaign will create a demand which then supports the product or service.
When it comes to McDonald’s, it has a very strong strategy in place. Right from showcasing its delicious burgers along with bringing out the positive “McDonald’s vibe” to ending the commercials with slogans like, “I’m Lovin’ It… Para Pap Pap Paa” .
So let us look at some of the popular campaigns of McDonald’s.
There’s A McCafe for Every Moment – A Marketing Campaign of McDonald’s India
McDonald’s India came up with this campaign to highlight its beverage range, McCafe and how they are there for all the good, bad and neutral moments of life.
This campaign was released back in 2017, showcasing all the minute elements of life through a catchy theme song.
Family time means McDonald’s #Mealsmakefamilies – A Marketing Campaign gaining lots of love
McDonald’s India came up with this campaign to highlight how meals bring families together.
This campaign which was launched recently showcases some relatable moments people share with families while having a McDonald’s meal.
Marketing & Advertising Campaigns of McDonald’s during the Covid-19 Pandemic:
McDonald’s released a series of advertising commercials showcasing how so many things have changed since the pandemic. The basic idea behind the campaign was to highlight how life has changed but McDonald’s is still there, offering the same positive experience with extra hygiene and safety measures.
#MatchedByYou – A Marketing Campaign of McDonald’s India
McDonald’s introduced an exciting campaign #MatchedByYou. It shows a love triangle between burgers, fries, and cola. This campaign showcased the offering of food combos for the price as low as ₹45.
Now that we have seen the marketing strategy and the type of campaigns done by McDonald’s, let us now take a look at the company’s SWOT Analysis.
SWOT Analysis of McDonald’s
SWOT-analysis helps in getting an overall view of the company with respect to its Strength, Weakness, Opportunities and Threats. It provides a quick look at how competitively strong the company is relative to its peers in similar industries and industry sectors.
For a deeper dive into the SWOT analysis of McDonald’s , you can check out a separate blog on it written by us. So let us take a quick look at McDonald’s SWOT analysis.
Strengths of McDonald’s
- Customers receive hygienic meal preparation and prompt service.
- Strong marketing efforts, making it a top-of-mind brand.
- McDonald’s happy meal is an excellent way to attract kids, especially with toys.
Weakness of McDonald’s
- McDonald’s has been sued numerous times on environmental, animal rights, and other issues.
- For many consumers, the menu is limited, especially when they come in large groups.
Opportunities for McDonald’s
- The brand can make further improvements to home delivery services.
- More new items for vegan clients are needed.
- More menu options could be added to supplement the present ones.
Threats for McDonald’s
- People who are health-conscious avoid fast food.
- Food regulatory agencies’ constant vigilance might have an impact on their business operations.
With this, the case study on McDonald’s comes to an end. Let go through a quick summary in the coming section.
McDonald’s is one of the world’s most recognized fast-food restaurants. With annual revenues in excess of $19 billion, it is no doubt that McDonald’s has a major influence on society in terms of food choices.
Its reach extends far beyond the borders of its home country and geographically encompasses many nations around the globe. With a strong presence on both offline and online marketing, cruise control over the production and distribution, McDonald’s looks very well placed to take up industry-changing challenges.
Let us know your thoughts on this case study in the comment section down below. Thank you for reading, and if you liked our then do share this in your circle.
Liked our work? Interested in learning further? Do check our website for more. Also, if you’re interested in Digital Marketing, you can check out our Free Digital Marketing Masterclass by Karan Shah.
Until then, see you next time!
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Aditya Shastri
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Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs...... [Read full bio]
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Business Strategy McDonalds
Business Strategy enhance the message that McDonald’s is value driven on behalf of its customers by emphasizing their profitable value-meal combinations provide exceptional customer care by exceeding customer expectations, including finding ways to add personal touches that go beyond convenient locations, quick service, clean restaurants and quality products remain an efficient producer while maintaining quality by looking to innovations in food processing, construction and design operations that will increase global profits McDonald’s founding principles
Quality, Service, Cleanliness & Value ( Q.
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S. C. &V. ) Longevity in various community projects like education, healthcare, medical research and rehabilitation. Environmental Concern in General Environmental concerns have become important in recent years, with the wider impact of doing business increasingly recognized by consumers as a factor in their buyer behavior. Ways to minimize the environmental impact of their operations.
Many businesses are the impact of their positive effect of a attitude is that it may prefer to purchase products. Cooking for ways to lower energy consumption. The responsible environmental attract new customers who more ethically derived Environmental Concern for McDonald’s Faced criticism for its environmental policies especially for Polystyrene Clamshell containers in the late asses Protest by Citizen Clearinghouse Hazardous waste (CHEW) during 1987 Protest by school children under group “Kids Against Polystyrene” in 1989 Praise for its competitor, Burger King for taking suitable initiatives on environmental issues.
Why is the environment strategy important to McDonald’s 0 Being leading brand globally, it is rather greater social responsibility of any organization to be accountable for environment 0 McDonald’s founding principles and strategic priorities towards being a value driven company 0 Several stage wise protests by Citizens Clearing House for Hazardous Waste namely “Ronald Mac Toxic Campaign” and “Mockup’ 0 Protest by the important customers like school children under group called ” Kids Against Polystyrene”. Praise for competitor “Berger King” for better environmental initiatives stunt US Regulations on the issues of Environmental Regulations 0 To safeguard own business interest as huge UAPITA investment and sales turnover 0 To be accountable to the public who are also existing customers and mode for revenue generation 0 To protect the environment for future 0 To establish the belief that business leaders must also be environmental leaders 0 Accountability towards stakeholder In what way McDonald’s incorporated an environmental strategy in its operation 0 Joining hands with Environmental Defense Fund (EDP) to resolve issues related to disposal of solid 0 Creation to task force consists of experts from EDP, McDonald’s and Packaging purchaser 0 Making policy for taking lifestyle approach to educing and managing solid waste up to great extent.
Educating customers about the company’s environmental activities and positions 0 Preparation of Environmental policy and delegating authority to Environmental Affairs Officer for enforcing adherence to standards. 0 Adopting collaborative approach by including suppliers and organizing annual environmental conference intended to train suppliers along with reviews and evaluations. 0 Developing following initiatives for protecting the environment: 0 Source Reduction-An initiative to reduce the weight and quantity of materials being used for snacking and responsible for solid waste generation at source level itself 0 Reuse-Thrust on using such materials in behind the counters ( where 80% waste are generated) which can be reused.
Recycling- Using packaging materials which may be recycled easily and should adhere the regulations set by largest user of recycled paper in US Composition-selecting packing materials ( mainly paper packaging) in such a way that the same along with food organics could be composed. Accomplishments Redesign of Cold cup Reduced large Cold cup Reduced density of breakfast leads Reduced density of slain Machine package Reduce density of Small Clamshell Smaller Napkin Oriented unwrapped bulk cutlery Convert to Jumbo roll toilet tissue Reduce gauge of Sundae Cup % Weight Reduction 10.
20% 6. 00% 14. 50% 6. 60% 8. 50% 23% Reduced breakfast sandwich foam with Sandwich Wrap Increased corrugated usage for 10:1 Meat Boxes Replace Sandwich foam with Wrap (I)weight (ii)Volume Down sized Mac D. L.
Package 59% 1% 32% an environment strategy by McDonald’s Being a leader in own business is not necessarily the leader of other field also, hence partnership with competent person/ organization is needed Environmental issues are concern for every member of society hence it should be responsibility of all concerned to actively participate in it. It was need of the time to take help from the expertise in the field of environmental protection. Preparation of Joint Task Force with EDP, educating customers and collaborating with suppliers is example of partnership in dealing with environmental issues and implementation of environmental strategy. Taking feedbacks, ideas from expertise and involving all stakeholders may be better idea to implement environment strategy. Thank You
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Case study on McDonalds
Introduction
McDonald has been a well-known and valuable brand for over half a century. The company’s mission and vision is striving to be the world’s best quick service restaurant and formalizing their beliefs into “People Vision and People Promise.” “Quality, Service, Cleanliness and Value (Q.S.C. and V) also became the company’s motto. The company’s first McDonald store was built in 1940 by the original McDonald brothers, Dick and Mac. Later in 1954, Ray Kroc became the first official franchisee appointed by Dick and Mac McDonald in San Bernardino, California. Soon after, Mr. Kroc opened his first restaurant in Des Plaines, Illinois, and the McDonald’s corporation was created.
The new franchise began to grow rapidly as a result of its success. It wasn’t long before the 100 th McDonald’s restaurant opened in Chicago in 1961. Less than ten years after the opening of Ray Kroc’s restaurant the company began to expand all over the United States. Ray Kroc bought all rights to the McDonald’s concept from the McDonald’s brothers for “2.7 million in 1961.”
McDonald’s continued to have enormous growth during the 1960’s. In 1963 alone, McDonald’s sold their one billionth hamburgers, opened their 500 th restaurant, “Ronald McDonald” made his big debut, and McDonald’s net income exceeded $1 million. In 1966 McDonald’s was first listed on the New York Stock Exchange, and in 1967 McDonald’s went global. The company kept expanding with the introduction of the “Big Mac” and the opening of its 1,000 th restaurant, which was where it all started- in Des Plaines, Illinois.
McDonald’s began to mature as a successful global business toward the beginning of the 70’s. By 1970, there was at least one McDonald’s restaurant in every U.S. state, and several in different countries around the world. Countries including France, Japan, Germany, and even Guam all had McDonald’s. And in 1972 the company’s assets reached an all time high of “500 million” while sales reached the billions. Statistics showed that a new McDonald’s was being opened each day around the world. With all this success, the company kept expanding globally. In 1972 the 200 th restaurant opened, again in Des Plaines, Illinois. The company also continued to develop their product with the introduction of the Quarter Pounder. And in 1975 McDonald’s first drive-thru opened in Sierra Vista, Arizona.
Along with the company’s many successes, they also faced some significant challenges. Ray Kroc made a $250,000 donation presidential campaign in 1972, a donation which was subject to investigation during the Watergate scandal. According to the “Behind the Arches Book,” which was written with the backing and assistance of the McDonald’s corporation, the donation was made during the time that McDonald’s executives were lobbying to prevent an increase in minimum wage. In 1984 there was a terrible incident in San Diego, California where a man named James Huberty opened fire in a McDonald’s restaurant and 22 people were killed. As a result, the company had a lot of public relations to deal with along with its damaged reputation. In 1987 the Attorney Generals of Texas, California and New York threatened to sue McDonalds under the consumer protection laws because of an add campaign claiming that McDonald’s food was nutritious, meaning healthy and well-balanced. There have also been matters of food poisoning, and other related law suits.
Even today the company continues to expand. More countries around the world are opening more McDonald’s. There are many restaurants in the U.K., Hong Kong, Switzerland, and Spain and so on. The company’s sales and revenues are immeasurable, well into the billions. McDonald’s employs millions of people around the world. In America, many of the company’s employees are young and Latino. In other countries, employees seem to depend on the population of the country.
The McDonald’s company has a wide range of loyal customers. Many people feel as if they grew up with McDonald’s. People trust the company, and the McDonald’s concept just seems to make people feel good. That’s why their customers are rich, poor, old, young, black, white, Asian, and European. Though many of McDonalds’ competitors are also successful, they are no match for the giant franchise. Other restaurants such as Burger King, Jack in the Box, and Taco Bell simply don’t have the same image as McDonald’s. The company focuses on marketing strategies that effectively attract a wide variety of people. They especially appeal to children in hopes that they will become lifelong customers.
CURRENT STATUS OF COMPANY :
“”Billions served,” indeed. McDonald’s is the world’s #1 fast-food company by sales, with more than 30,000 of its flagship restaurants serving burgers and fries in more than 100 countries” . Today, “McDonald’s operates over 31,000 restaurants worldwide, employing more than 1.5 million people.” In terms of countries, it operates in more than 119 countries on six continents. 70% of the locations are run by franchises while the corporation owns the other 30%. The Boston Market and Chipotle Mexican Grill fast-casual chains are also owned by McDonald’s. There are some quick-service kiosk units located in retail areas and airports; the other locations are free-standing units. On a day to day basis, more than 47 million customers world wide are served by McDonalds. Over the years, McDonald has brought different promotions into the market to make the consumer purchase a fun experience. The most recent promotion was the Monopoly Best Chance Game 2004 which lasted from October 12 – November 15. It is also very important for the company to have a standard reputation. Therefore, the corporation makes sure that a Big Mac purchased in Pittsburgh tastes the same as one bought in Beijing by using standardized procedures.
The key numbers and key people for the company are as follows:
Key Numbers
More Financials
The company location and other related information is as follows:
McDonald’s Corporation (NYSE: MCD)
McDonald’s Plaza Oak Brook, IL 60523 (Map)
Phone: 630-623-3000 Fax: 630-623-5004
Since McDonalds is such a huge corporation, serving so many customers world wide, it greatly relies on its suppliers. “McDonald’s suppliers in the U.S. operate over 40 distribution centers, strategically located to be accessible to more than 12,000 restaurants in the country. They provide a diverse range of products and services for our restaurants. It is crucial that the suppliers reflect the diversity of our customers around the world” 8 By maintaining current relationships with suppliers and also establishing new contacts, McDonalds continues to leverage the diversity within the supplier community. According to the corporation, the only way to serve a wide, diverse group of customers is through a wide, diverse group of suppliers.”
McDonald’s is in the fast-food business, and nowadays, there is huge competition for that. A competitor for McDonald’s can be anywhere from an upscale restaurant to a measly hot dog stand at a football game. The following is a list of companies that are in the same business as McDonald’s and qualify as major competitors:
- Burger King
- In & Out
- Jack in the Box
- Round Table Pizza
- Wenerschnitzel
Of those, Burger King, Subway, and Yum are listed as the top three competitors.
The company uses IT and IS in a number of ways. In fact, without the technology, McDonald’s would not be able to operate as it does today. From taking orders to completing the orders everything involves a computer. A network system is used to take the order which is then sent in the back also through the system in order for the food to be cooked. The following are a few systems used by McDonald’s: POS (Point of sale) – this system allows orders to be placed, check the amount of inventory on hand, see the number of transactions that have occurred in the last few days or even years, see the labor percentage, total cost of waste, check the drive thru time(TTL). KVS (Kitchen valiance system) – this system allows the orders taken up front and in the drive thru to be displayed and transferred to the monitors in the grill area. The Porter Five Forces
The fast food industry is a revolutionary industry, which has taken the world by storm. With fast food restaurants showing up, what seems like on every corner, it’s interesting to analyze the competitive strategies companies in this industry use in order to survive. McDonald’s, with more than 30,000 restaurants worldwide is certainly no exception. A good way to analyze the strategies is by using the Porter five forces competitive model. The Porter model looks at what strategies a company uses to “effectively counter 1) the rivalry of companies in the industry, 2) the threat of new entrants, 3) the threat substitutes, 4) the bargaining power of customers, and 4) the bargaining power of suppliers.
The first of the five forces looks at rivalry within the industry. For McDonald’s, this includes all other fast food businesses. “ McDonald’s recognizes that it is up against not only other larger burger and chicken chains but also independent owned fish and chips shops and eat-in or take-out establishments.” Some of McDonald’s competitors include: Burger King, Wendy’s, In and Out, Taco Bell, and Jack in the Box. As mentioned above, the fast food industry is a very dynamic and competitive industry, so it is important for the McDonald’s corporation to develop strategies which will keep them ahead. Judging by the success of McDonald’s, it is clear that the corporation has developed some very effective strategies to stand out in the crowd.
One strategy McDonald’s focuses on is a differentiation strategy, partly combining it with the innovation strategy. By creating unique brand products, (chicken McNuggets, Big Mac, McFlurry) McDonald’s is setting self apart from its competitors. The innovation strategy is used by creating new and unique products (chicken tenders, Newman’s own salads, as well as specific products catered to specific region in the world), special celebrity endorsements (athletes, actors/actresses), partnerships/sponsorships (Music, Olympics, special movie toys), charities (Ronald McDonald House), games/promotions (monopoly game, special movie toys), which allow McDonald’s to develop their unique corporate image that sets them apart from their rivals. Another important role in staying competitive is McDonald’s online presence. The website (www.McDonald’s.com) is great opportunity to connect with the customers and stay competitive. Through the website, the company shows company facts, product information (nutrition facts), and links to the charity website, as well as games promotions (monopoly).
The second force that acts on the industry is the threat of new entrants. Fortunately for McDonald’s and it’s over 30,000 restaurants world wide, the corporation has set itself in a position of dominance. Using a growth strategy, McDonald’s is continuously expanding its reach which makes it increasingly difficult for new fast food restaurants to enter the industry. Through franchising, McDonald’s is able to reach nearly every corner of the globe. In addition, by using an alliance strategy, they are able to set up operations in Wal-Mart’s and sports stadiums and other firms which help support the industry.
The third force involves the threat of substitutes. For McDonald’s, any other food industry is a substitute. From classy restaurants, to hotdog stands, to grocery stores, McDonald’s faces a very large amount of substitutes. By continually offering different products, however, McDonald’s can be sure to remain on people’s list for a place to eat. Don’t forget the fact that one can get a lot of value for his/her money with McDonald’s dollar menu. Furthermore, by offering healthier alternatives, the company will be able to enter into new segments and increase their customer base.
The fourth force acting on McDonald’s is the bargaining power of buyers. This is a very powerful force, since McDonald’s relies on a strong customer base. In order to keep and gain new customers, the company must pay attention to the demands of consumers. With an onslaught of health books and diets, Americans are increasingly becoming aware of their health. As a result, consumers are demanding healthier products from the fast food industry. McDonald’s leads the industry by offering salads with organic Newman’s own dressing, as well as changing the oil they cook their fries in to a healthier substitute. In addition, they showcase all the ingredients in their foods in their restaurants and on their website. Also because of movies like “Super Size Me,” and books like, “Fast Food Nation” by Eric Schlosser, McDonald’s is aware of consumer trends and worries and is taking steps in that direction. An example is the removal of the super size option. Since the movie “Super Size Me,” people have taken notice to how bad super sizing is for your health. McDonald’s is the first to take action.”
The fifth and final force affecting the company is the bargaining power of suppliers. This is an important aspect of this industry. The supply chain going all the way to the farmers needs to be kept strong and connected. Especially, relationships with key firms like Coca Cola, Minute Maid, Heinz, Newman’s Own and others, needs to remain strong. “It is crucial that the suppliers reflect the diversity of our customers around the world. McDonald’s seeks to leverage the diversity within our supplier community through growing our existing supplier base, as well as developing new supplier relationships.”
McDonald’s is successfully taking measures to ensure their dominance in this food industry; they are continually growing, in size, in the products they offer and in charity work. It’s no surprise that McDonald’s is number one in the fast food industry.
The strategy the company is using to maintain or improve its competitive position is lowest total cost, expanded menu, having more than 30,000 stores, Hamburger University, celebrity endorsements, partnerships/sponsorships in music and Olympics, and Ronald McDonald Charity/Corporate responsibility. With the Ronald McDonald Charity program the company has awarded more than “$400 million” dollars in grants worldwide towards the mission to make an immediate and positive impact on as many children as possible. The company also participates in for World Children’s Day, an annual global fundraiser which benefits the Ronald McDonald House Charities and local Children’s causes. In addition to the Ronald McDonald House Charities, corporate responsibility is also an important factor of McDonald’s heritage. The company has a record of industry leadership in community involvement, environmental protection, diversity, opportunity, and working with their suppliers to improve their practices. By having these programs the company is doing a very good job in building a relationship with the community.
Challenges and Opportunities:
Like many other companies, McDonald also struggles with many challenges and opportunities. There are opportunities as in continuous deliverance of quality, cleanliness, service, and value to their consumers. The company has to face challenges of other competitors which include Wendy’s, Burger King, In and Out, Jack in the box, etc. In addition to competitor challenges, the company also faces unionized workforce. They are ideologically hostile to unions. They regard unions as third parties and they refuse the legitimacy of a union as an expression of the interests of the employees that they’re dealing with. Dan Gallian who is the general secretary of IUF said, “They have accepted unions, and collective bargaining, if the alternative was to close altogether or suffer major public relations damage. But even when they have allowed a union, they’ve then tried to chip away at union recognitions.”The company only follows the Donald’s manual, which is their form of regulatory compliance. With this being the issue, IT/IS can definitely help the company out in many ways. The company needs to make sure all challenges and opportunities within the organization are easier for everyone to understand and ensure that all employees follow the company’s compliances. IT/IS allows employees within the corporation to communicate effectively and ensuring everyone is on top of everything. Do to this; it is very necessary that an intranet website is made which goes into detail about all of these concepts, that way everyone within the company is on the same page. Information system can also allow the company in supporting business processes, decision making, and competitive advantage. By utilizing Information system it helps store managers to make better decisions and attempt to gain a competitive advantage. For instance, what lines of merchandise need to be added or discounted, and it helps them looks for ways to gain an advantage over their competitors in competition for customers.
Internal Strength/Weaknesses:
They are many strengths and weaknesses in the McDonald’s corporation. The first strength is that the company can offer a meal with low prices. They also have a healthy menu which consist of Low carbohydrates options which cost only $1.00. One of the weaknesses the company faces is the low market share in chicken products since Wendy’s is the leader with the biggest market share in chicken products. The company can further improve their business with other IT/IS. First of all, there are many ways to use IT/IS because it helps in business activities, resolving problems, and business opportunities. By utilizing IT, McDonald can create an interactive marketing process which is “a term used to describe a customer focused marketing process that is based on using the intranet, internet, and extranet to establish two-way transactions between a business and its customers.” By utilizing IT to create an interactive marketing, McDonald can use the network to attract and keep customers. This also allows them to get feedback from customers since interactive marketing encourages customers to be involved with the company’s services and delivery issues.
Through researching McDonalds Corporation these last few weeks we have learned a lot about the company’s responsibility and how they have contributed to the community in children’s life. As consumers we all value how important time is, with McDonalds offering more than 30,000 restaurants for services, it is going to surely make getting food faster and cheaper.
Division of Labor
Isabel Soboszek:
She was assigned the task of finding background information on the company, history, the founder, executives, and significant challenges the company may face.
Meghan Dilawari:
She did the current status of company which includes all information on sales/revenues, share of market, company locations, and number of employees, suppliers, customers, and competitors. She also assists in putting the reference page together.
Matt Salisbury:
He was responsible for the Porter’s Competitive Forces Model and doing researching on the company’s key external challenges and opportunities.
Farhan Latif:
Strategy, cost leadership, differentiation information. Researching information as well.
Tammy Huynh :
I worked on the challenges/opportunities for the company, as well as the strength and weaknesses. I also help put the project together and ensuring that things are correct with the help of Meghan.
McDonald’s Brand
Assignment on profile of ab bank limited, building local partnerships on unilever bangladesh limited, behavioral approach to leadership, the doctrine of legitimate expectation in bangladesh, construction induction training, sustainable liquid fuels are made possible by reaction understanding, bi cygni – a red supergiant in the cygnus constellation, define investment, fault tolerance, latest post, how a wild plant became a widespread weed as a result of intensive agriculture, upsilon andromedae – a binary star, causes of economic collapse, understanding network hidden geometry to better comprehend complex systems like the brain, self-assembling nanoparticles harvest solar energy, combating food shortages driven by climate change may rely on genetically engineered rice.
McDonald’s – Business Strategy in India
January 8, 2010
Case Study Abstract
This case study discusses how McDonald’s India managed to buck the trend in a struggling economy, its early years and business strategy to get more out of its stores in India. The case also briefly discusses how McDonald’s adapted to local culture in India, its localization and entry strategy, its strong supply chain and pricing strategy.
Table of Contents
- Introduction
- McDonald’s entry into India
- Exhibit I: McDonald’s – Country – Entry Year
- The Indian Market – Top 10 per cent of the busiest markets globally
- Localization Strategy
- McDonald’s JV in India
- Initial Challenges – ‘Culturally Sensitive’ Food
- Understanding Indian Customs and Culture
- An Indianized Menu, Re-engineered operations and no beef burger
- Competition – Major Competitors in India and Globally
- McDonald’s – Quick Facts
- Time line of McDonald’s in India
- Pricing Strategy – The Rs-20 trap and ‘Purchasing Power Pricing’
- Kiosks at store entrances for customers in a hurry
- Home Delivery – McDonald’s Delivery Service or McDelivery
- Out-of-home Breakfast – International McDonald’s format with local taste
- McDonald’s Supply Chain Management (SCM)
- Unique cold chain
- Cutting costs
- Exhibit II: McDonald’s Suppliers in India
- Exhibit III: The Menu at McDonald’s India
- Exhibit IV: McDonald’s – Early History and Growth
- Exhibit V: Principles to McDonald’s business success
- Questions for Discussion
Case Study Keywords: Fast-food Retailing, McDonald’s India, Joint venture, Amit Jatia, Vikram Bakshi, localization strategy, pricing strategy, McIndia, quick service restaurants, cultural adaptation, local culture, supply chain management, SCM, McDelivery, unique cold chain
Case questions for discussion.
- McDonalds has become the poster brand for recession-resilient business. What is McDonald’s doing right in India? What elements of its business strategy are working for it and how does it manage to get more out of its stores?
- Does local adaptation contribute to business growth in a country? Explain McDonald’s efforts to adapt to the local culture in India. What challenges did McDonald’s face in India?
- Have you ever visited a McDonald’s store? Compare and contrast your experience with another quick-service restaurant or fast-food joint you visited earlier. How can McDonald’s improve? Should it alter its strategy?
Case Updates/Snippets
- World’s leading food service retailer – McDonald’s has more than 32,000 restaurants serving over 50 million customers each day in more than 119 countries.
- McDonald’s competitors in India – McDonald’s competes with fast food chains like Pizza Hut, Domino’s Pizza, Papa John’s, Nirula’s and KFC in India.
- McDonald’s Supply Chain – McDonald’s has a dedicated supply chain in India and sources 99% of its products from within the country. The company has strong backward integration right up to the farm level.
- Quick service restaurants in India – By October 2009, McDonald’s India had more than 170 quick service restaurants in India. Domino’s Pizza, which began operations in India in January 1996, has over 275 stores across 55 cities in the country. KFC has 46 restaurants across 11 cities in India. (KFC is one of the 5 brands owned by Yum!. KFC is a $12 billion global brand and a leading quick-service restaurant (QSR) in many countries.) Nirula’s, one of India’s oldest food chains (completed 75 years in service in March 2009), has a network of around 62 outlets in five states across Northern India. Nirula’s, established in 1934 has interests in hotels, restaurants, ice cream parlours, pastry shops and food processing plants. Nirula’s was the first to introduce burgers in India.
- Food Industry in India – In India, food industry and particularly informal eating out market is very small. In India, over quarter of a million customers visit McDonald’s family restaurants every day. The Indian fast food market is valued at $1-billion (Rs 4,547 crore) aprrox.
- MFY (Made for You) food preparation platform – MFY is a unique concept (cooking method) where the food is prepared as the customer places its order. All new upcoming McDonald’s restaurants are based on MFY. This cooking method has helped McDonald’s further strengthen its food safety, hygiene and quality standards. McDonald’s has around 10 MFY restaurants in its portfolio.
- How McDonald’s manages to keep its prices down? – Fast-food chains face a tough time balancing between margin pressures and hiking prices which can hurt volumes. Consequently, the chains have to increase rates or rework their strategies. Affordability has been the cornerstone of McDonald’s global strategy. Some of its measures to achieve this include – Bulk buying, long-term vendor contracts, and manufacturing efficiencies .
- McDelivery Online – In India, McDonald’s first launched home delivery of meals in Mumbai in 2004. McDonald’s now has plans to launch web-based delivery service in India (across 75 McDelivery cities) in 2010, a pilot for which has already been tested by it in Hyderabad. The company hopes to add 5 per cent to sales via Web delivery. McDonald’s web-based delivery model will be based on serving the customer quickly wherein the drive time does not exceed seven minutes because its food has to be eaten within ten minutes of preparation. The footfalls in India are amongst the highest in the world, but the average bill is amongst the lowest. At present (March 2010), Domino’s Pizza (operated by Bhartia Group-promoted Jubilant Foodworks under a master franchise agreement) has a 65% market share in the home delivery segment .
- Most Preferred Multi Brand Fast Food outlets : In 2009, McDonald’s India won the CNBC Awaaz Consumer Awards for the third time in the category of the Most Preferred Multi Brand Fast Food outlets.
- McDonald’s India in 2010 – In 2010, McDonald’s India plans to open 40 more outlets. The company has also earmarked a budget of Rs 50-60 crore to market its new products and initiatives for consumers. Its new marketing campaign is titled – ‘Har Chotti Khushi Ka Celebration’ – in other words ‘celebrate little joys of life’ where it positions McDonald’s as a venue for enriching life of consumers. In South India, McDonald’s has 29 outlets and plans to add 10 more by end of 2010.
- Taco Bell in India – In March 2010, Taco Bell, the Mexican specialty chain owned by US-based fast food brands operator Yum! Restaurants launched its first outlet in Bangalore, India. The company which also operates brands like Pizza Hut and KFC plans for contract farming to open up to 100 outlets by 2015 and also expand into Tier-II and -III Indian cities eventually.
- Local Vegetarian Menu : In India, McDonald’s does not offer pork or beef-based products. It’s menu is more than 50 per cent vegetarian. The fast food retail chain has separate production lines and processes for its vegetarian and non-vegetarian offerings.
- High Real-Estate costs in India : In many countries, in a Quick Service Restaurant (QSR) a customer comes in, buys and then leaves. This is known as a revolving door concept . But an Indian customer believes in a dine-in culture . This adds to the real estate costs which goes as high as 20-25 per cent as compared to 10-15 per cent globally. The cost of opening a new McDonald’s restaurant in India costs about 3 crore rupees.
- The most important meal for QSRs- Morning Meals (Breakfast) :According to market research company, the NPD Group, breakfast accounted for nearly 60 per cent of the restaurant industry’s traffic growth over the past five years in the U.S. Quick service restaurants sold 80 per cent of the over 12 billion morning meals served at US restaurants for the year ending in March 2010.
- OOH Branding : According to Rameet Arora, senior director – marketing, McDonald’s India (West and South), McDonald’s India may be the largest out-of-home branding (OOH) in the country. McDonald’s India has restarted OOH (out-of-home branding) after a 7 to 8 year break to reach to their target group.
- Employees and Customers : In India, McDonald’s employs 5,000 people and serves half a million customers a day via its 169 family restaurants. (Update) – McDonald’s India employees number 12,000 approximately (most of them students). McDonald’s has 85,000 employees and serves 2.5 million customers a day in the UK.
- KFC – New Menu “Streetwise” – In February 2011, KFC, the fast food retail chain announced a new menu called “Streetwise” to offer products at more affordable prices to attract the college crowd. KFC has around 108 stores in India and Streetwise would help it compete better against McDonald’s youth brand offering in India (products priced at Rupees 20). KFC’s products were typically priced between Rs 65 and Rs 500 but with the new menu – between Rs 25 and Rs 100.
- New Business Channels – To boost sales, McDonald’s is looking at new business channels instead of rapid expansion. New business channels include home delivery, kiosks, breakfast, extended hours and drive-throughs. As per estimates, home delivery can increase store sales about 15% and drive throughs by 50%.
- Spending on food : According to Euromonitor International and Credit Suisse Emerging Consumer Survey, Indian people spend less ($11) compared to the Chinese ($60) on fast food. Indians spend approx 23% of their earnings and the Chinese approx 20% of their earnings on food. The U.S. spends less than 15% on food.
- Local Sourcing : By 2014, McDonald’s India estimates that it would source 50,000 Metric Tonnes (as compared to the current 30,000 MT) of potatoes from McCain Foods Pvt Ltd. in India. McCain has been working with more than 800 farmers on approx. 4000 acres of land across Gujarat (West India) under contract farming of potatoes.
- McDonald’s India’s total investment in India would touch 1500 crores by 2014. In June 2012, McDonald’s announced that it would open around 250 new restaurants in the next 3 to 5 years with an investment of 750 crore rupees.
- Cluster wise expansion strategy : McDonald’s adopts a cluster wise expansion strategy in India. Accordingly, McDonald’s concentrates and consolidates stores in one region before moving to another. The company plans to begin with East Indian region (Kolkata) and then move to cities in other regions like Chandigarh and Ludhiana.
- All-vegetarian restaurants in various pilgrimage sites : McDonald’s plans to open all-vegetarian restaurants (by middle of 2013) at various pilgrimage sites across India. To begin with, the company plans to target pilgrims at sites like Vaishno Devi in Katra, Jammu and Kashmir and at the Golden Temple in Amritsar. It already has one outlet in Katra.
Talent Management - Case Study for McDonald's Business
Added on - 2020-03-02
In this document, the Case Study for McDonald's business is discussed to understand the business strategies concerning the talent. The employees are the most important asset management of any business because they convert all other assets/ resources into revenue. The business needs to hire, retain, and manage the employees with the right skills, knowledge, capabilities, and aptitude. Talent management is an important element of human resourcing procedures, programs, and approaches used for identifying, assessing, developing, and retaining talent.
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In brief, we conclude the business strategy for McDonald's is focused on customer satisfaction and therefore it hires talented people who can help the business in maintaining the trust. The strategy of competitive advantage through customer satisfaction can be achieved by keeping the staff members satisfied and retaining the skilled are talented workers, who can add value to the client experiences. It is important to hire a talented pool of people, but it is further necessary to retain that talent within the organization. This case study has been utilized for understanding the need for talent management for any business to stay competitive.
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McDonald’s Case Study Harvard Case Solution & Analysis
Home >> Harvard Case Study Analysis Solutions >> McDonald’s Case Study
McDonald’s Case Study Analysis
Motivating Forces
Product Advancement
McDonalds has brought many innovations in its food items, andso has introduced many products that have appealed to most of the clients. The most popular is the product that McDonalds has launched for the kidscalled’happy meal’. It has integrated many digital games for the kids like 'Rocking Horse'. McDonalds aims to bring innovation in its products according to the taste of the region it operates in.
Technology enhancement
Technological enhancement is very important for McDonalds’ business, as it is of significantimportance because the business needs to be connected with the kitchen and different restaurants. McDonalds needs to stay connected on social media, to reach toits clients, because mainly most of its clients are on social media, so connecting through technology can improve its sales; making it more efficient as well as effective.
Creating new cultures
The company can change the culture of the organization. The customer can be encouraged to take pictures of their meals, which can an interest among the customers. This will help the customer to stay engaged with the restaurant and contribute in the competitive growth of the market.(hearth codes, 2018).
Marketing Mix strategies
McDonalds incorporates distinctive value price procedures that offer a bundle of products with dinners as well as various things for customers. To ensure that the customers buy more products; McDonald's concentrates on the mental assessing methodologies in its marketing mix, which appear to be sensible to its clients. The pricing of the products caters to the middle class, mostly.McDonalds offers many bundle discounts and deals in a few of its products on its little menu in order to attract more clients.(hearth codes, 2018).
McDonalds’ outlets exist in many countries throughout the world. It has 36,000 restaurants all over the world. The formats of different McDonalds’ restaurants' are: McDrive and McCafé. McDonalds also has its drive-through services and facilities an internal and external seating arrangement for dine-in customers.
McDonalds has adopted different techniques for addressing its clients and treatits employees and staff very politely. The employee has a proper dress code and is trained enough to handle the customers from the moment they enter the outlet. The employees are customer friendly and handle clients with affection. The company aims for customer satisfaction and gives utmost priority to service delivery. McDonalds ratesits staff depending upon their performances who are also included in the decision making of the organization. The employees are trained to take special care of their hygiene.(hearth codes, 2018).
McDonalds spent tons of money on its advertising campaign, by using newspapers, magazines, billboards, and through sponsoring different big events, like: FIFA, World Cups. McDonalds uses an aggressive promotional strategies to meet its marketing mix demand. One of the prime ways of advertisement is to use more television media. McDonalds never targets its competitors negatively. Its promotional strategy is according to the cultures of the specific region, for example in India; the brand does not use beef because of religious rituals, and also takes extra care about its offers in vegetarian and non-vegetarian regions.(hearth codes, 2018).
Marketing Segmentation and Positioning Strategies
The perception of a customer is very important for the success of the product. Marketing segmentation is dividing the market into different segments, depending upon the geography, demography, behavioral, and psychographic segmentation.
Geographical Segmentation
The market is divided into different segments, according to geographic standards. McDonalds breaks its business in a different kind of geographical division, for example: America, Asia, Middle East, and Africa. Recognizing these geographical segments; McDonalds offers different deals and food offerings to cater to the need of the people, depending upon their cultures and taste.
Demographical Segmentation
Segmentation, as indicated by demography, is based onconsumer-segment factors, for example: age, pay family size, financial status,etc. McDonalds, for the most part, sections the market beneath socioeconomics age 8-45: young, newly married couples, single, and students.
Behavioral Segmentations
This segmentation is very important because here it depends upon the behavior and likeness as well as the willingness of the consumers if they want to pay for the brand, and also to spend quality time with their family members and friends within and outside the house, in a very relaxed and comfortable environment.
Alternate group
In light of the issue being observed by McDonald's; different options are enrolled underneath, alongside its reason behind choosing the ideal one:
- It would guarantee the exact and cautious usage of assets, which incorporates huge waste decrease and practical dynamic.
- It would permit the organization to make upgraded plans, adjusting its conveyance execution and creative productivity.
- The operational productivity would guarantee the speed, moderateness, and nature of items,as it contains different perspectives, for example: creation, stock administration, and circulation.
- As operational administration is delivery centered; it would permit the organization to guarantee its creation to be completed productively.
- The outcomes are ensured just if the arrangement is completed in legitimate and proper way.
- The arrangement of the mechanized framework for operational productivity requires a capital venture.
Recommendations
In the wake of thinking about the advantages and disadvantages of every other option, McDonalds is encouraged to go with elective 1, because of the way that presents the organizations’ needs to make the conveyance quicker and lure the clients. It would permit the organization to adjust the speed, quality, and moderateness, and simultaneously react to the competitive dangers by receiving a wide differentiation system through separating the items’ contributions from the market contenders, by offering top-notch items that intrigue to the wide range of buyers.
Adding to this, the organization is prescribed to consolidate the current input of the consumers and keep up the offer of "close relationship" with the buyers. Therefore, McDonalds would have an option to strengthen the incentive and the consistency of the contributions, alongside synchronization of buyers' "in a hurry" practices. To increase an extra piece of the overall industry; the organization should consolidate reward projects to urge the individuals to purchase McDonalds’ products and use the focus for their next buy, improving the rehashed buy and restricting the purchaser, which would result in high retaining of its clients.
McDonalds is the world's biggest café network with 36000 stores in more than 100 nations, acclaiming its situation as a world leader and inexpensive food monster. Such an expansion in the number of stores portrayed not just a forceful development of McDonalds in the market , but so did portray a powerful brand selection of the customers. Working as the world's driving speedy help café brand, gave McDonalds a solid serious edge in the profoundly serious market field. The organization aims to be the most loved spot of clients. Alongside its client esteem suggestion; this tends to infers esteem creation for the general public as far as accommodation and reasonability. Besides, the organization promotes different corporate qualities, which include: nearby joining, progressiveness, comprehensiveness, and authority.
McDonalds is making a good effort to expand its business globally. The current strategies being used by McDonalds are very effective, but a few of its strategies need upgrading and modification. Like it needs to enhance the taste of its products according to the need of the consumers. McDonalds has gained market share substantially by developing a strong value of its brand. An increased completion from industry giants such as: Starbucks, KFC, Wendy’s etc are great threats for the brand value plan, because these competitors are offering less price for their brands as compared to McDonalds. Under these scenarios, the brand needs to develop such a plan that provides sustainability for the business, for the long term along with maintaining the image of the brand with an inclusion of retained methodology......................................
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1. StudyCorgi . "McDonald’s Company: Business Ethics Case." January 11, 2021. https://studycorgi.com/mcdonalds-company-business-ethics-case/.
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IMAGES
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The brand estimation of McDonald's is more than $88 billion; outperforming Starbucks with a brand estimation of $43 billion. The total compensation of the organization in 2017 was $5.2 billion; this worth saw an ascent of about 11% from the previous year. McDonald's is, without a doubt, the quickest developing drive-thru eatery chain on the planet.
CASE STUDY: McDonald's → McDonalds has 37,000 restaurants in 120 countries → in 2018, McDonald's ranked 11th on Forbes list of most valuable brands → 2017 report showed US$91billion in sales, showing success in maintaining competitive advantage by adapting to global conditions
This case study shows how McDonald's continually aims to build its brand by listening to its customers. It also identifies the various stages in the marketing process. Branding develops a personality for an organization, product or service. The brand image represents how consumers view the organization.
Business Case: McDonald's Download Views 1364 Companies conduct Organizational Diagnosis by gathering and evaluating information the problems being faced by them to achieve effectiveness. There are many procedures that are used by a company to collect information in order to find out a solution to a problem.
Company Overview. We have used McDonald's Business Model case study to introduce our students to various topics in entrepreneurship, including marketing, finance, business strategy, operations, and international expansion. Students have enjoyed reading the McDonald's case study. The case study is available as a standalone document, PowerPoint slide deck, and Google Docs.
In-Depth McDonald's Marketing Case Study - I'm Lovin' It Already. Aditya Shastri Updated on: Nov 29, 2022 McDonald's has been one of the leading food chains for many years in terms of the quick-service segment. They are a company with a broad understanding of the needs of their customers.
Business MCDONALD'S CORPORATION- A CASE STUDY May 2022 Report number: 2 Authors: Ayse C Sagnak Elenore Pan Francesca Sala Kim Lemuel de Guzma Show all 7 authors Abstract McDonald's today...
Abstract. Based on the "Sinicization" of McDonald's as the main research background, this paper focuses on the analysis of the group after entering the Chinese market in the organizational ...
Business Strategy enhance the message that McDonald's is value driven on behalf of its customers by emphasizing their profitable value-meal combinations provide exceptional customer care by exceeding customer expectations, including finding ways to add personal touches that go beyond convenient locations, quick service, clean restaurants and …
CASE STUDY. Essay: How did McDonald's expand its operation globally? Due to the continuously changing market prospects, notably in the area of food consumption, McDonald's is expanding its operations globally. To put it another way, McDonald's relies heavily on market penetration as a strategy for growing its customer base.
McDonald's Corporation (NYSE: MCD) McDonald's Plaza Oak Brook, IL 60523 (Map) Phone: 630-623-3000 Fax: 630-623-5004 Since McDonalds is such a huge corporation, serving so many customers world wide, it greatly relies on its suppliers.
TITLE "To analyse the benefits and drawbacks of a global business environment upon business functions of an organisation". A study on McDonald's INTRODUCTION 1.1 Overview of the study Business environment introduces as the sun or collection of all external and internal factors such as customers, employees expectations, requirements, supply and demand, clients, management, owners, suppliers ...
McDonald Business Case Fall 2021 Applicants 1 Overview of McDonalds McDonald's is the world's largest restaurant chain by revenue, serving over 69 million customers daily in 120 countries ... Case Study Guidelines For the purposes of the business case study, you are a member of a consulting firm that successfully responded to the RFP ...
From McDonald's website From the Business Studies Challenge resources: • Intro video • Case study video • Student activity pack (includes sheets 1-4 and McDonald's case studies) • Vox Pops videos From your school You may also want to provide: • A business plan template if you have a preferred layout.
A CASE STUDY. I. Introduction. McDonald's Corporation (MCD, hereafter) is the largest global food retailer, with over 31, 000 restaurants in 118 countries serving more than 58 million customers each day. ... operating their business ethically and striving continually to anticipate and respond to changing customer, employee and system needs.
Case Study Abstract. This case study discusses how McDonald's India managed to buck the trend in a struggling economy, its early years and business strategy to get more out of its stores in India. The case also briefly discusses how McDonald's adapted to local culture in India, its localization and entry strategy, its strong supply chain ...
Introduction The case study for McDonald's business has been considered to understand the business strategies with respect to the talent. The employees are the most important assets of any business because they convert all other assets/ resources into revenue. It is important for the business to hire, retain, and manage the employees with the right skills, knowledge, capabilities and aptitude ...
McDonald's Case Study Case Solution,McDonald's Case Study Case Analysis, McDonald's Case Study Case Study Solution, McDonald's Case Study Analysis Motivating Forces Product Advancement McDonalds has brought many innovations in its food items, andso has introduced many ... McDonalds breaks its business in a different kind of geographical ...
The creativity, the virality, and the measurement makes TikTok the most sought after social platform. We were thrilled to kick off the usage of the API with brand partner McDonald's - they are always on the cutting edge of culture, content, media, and measurement. This campaign embodied all four elements, driving views, engagement, and business ...
McDonald's continues to be among the top companies aggravating the problem of obesity (including childhood obesity) all over the country. Watching fast food ads, children develop a habit of accepting and approving of such brands. McDonald's attracts young viewers by offering not only a tasty meal but also a free toy. On-Time Delivery!
Business Case Study Of Mcdonald's - Jan 14, 2021. Hand-selected US and UK writers offers three types of essay writers: the best available writer aka. standard, a top-level writer, and a premium essay expert. Every class, or type, of an essay writer has its own pros and cons. Depending on the difficulty of your assignment and the deadline, you ...
Published Mar 7, 2023. + Follow. The rail sector is vital to Australian business, carrying people and commodities on over 33,000km of track across the country. The sector has an estimated annual ...