Keywords: mcdonalds stakeholders, mcdonalds environmental factor
In this assignment we will discuss the business, its environment, factors affecting the environment, market conditions and the have an effect on of the existing market on the the business. Identify the stakeholders of the company, strategy, policies used by the business that helps them to get competitive advantage over its customers.
Strategic review really helps to analyse and review the strategies employed by the business for survival and sustainability. It can help us to comprehend the decisions considered by the management to improve the sales, market show and hence maximising income.
The Company I have chosen for this assignment is McDonald's which market head in junk food industry is. On this assignment we will discuss McDonald's stakeholder and their market position of McDonald's. We will also discuss the surroundings, strengths and the weaknesses combined with the strategies employed by McDonald's which afflicted the position of McDonald's either to increase market talk about or maximising earnings.
We will discuss the factors impacting on McDonald's. I have chosen Mcdonald's as a company having did the trick for McDonald's for about Four years make me understand the culture, composition and environmentally friendly factors that affect the organisation immediately and indirectly. Mcdonlad's follow the "plan to Gain " and being the marketplace Leader in the fast food industry with having restaurant in more than 119 countries with more than 31, 000 restaurants in operation. The factors that impact the organisation are the political, social, economic, technical and legal. Aside from those Factors like Globalisation, Variety and Ethics affect the company.
Globalisation: Globalisation helps in developing a deeper contact between various areas of the world, and also have increased the likelihood of personal exchange, shared understanding and friendship among world individuals. Corporations are extending their businesses to world market. Companies go global for the Success and sustainabilty. Mcdonald's are working in more than 119 countries with over 31, 000 restaurants in operation.
Diversity : McDonalds' s follow diversity by employing local people and having local suppliers for the restaurants. In addition, it have the different menu for different countries and follow the culture of the countries. Like not serving beef products in India and having different Entries for girls in Arab Countries respecting the social and religious values of individuals.
Global marketing decisions are no different than those made domestically but the decisions are unique to each country (Sister & Sister, 2005). McDonald's realises variety as an asset that enhances in the profitability of organisation. Variety directly demonstrates the interpersonal relationships.
Ethics: McDonald's Promote the RMHC(Ronald McDonald House Charity ) which provide room and mother board, food and sibling support at a cost of only $10 a day for families with children requiring extensive hospital health care. McDonald's sponsor Olympic runners. Ronald McDonalds Homes are situated in more than 259 areas worldwide and support Mobile care programs that offer cost effective medical, teeth and educational services to children. Furthermore with their community involvement, McDonald's has a long-standing determination to environmental coverage. Restaurants about the world have innovative programs for recycling, reference conservation, and waste materials lowering. Mcdonald's also help the African farmers by purchasing fairtrade coffee beans as well as the Rainforest Alliances.
"McDonald's is a people business"-Ray Kroc
Person, group, or corporation that has direct or indirect stake within an organization because it make a difference or be damaged by the organization's actions, objectives, and plans. (Businessdictionary, 2010)
Customers: McDonald's provide it's customer with the nutritional value of the food and have a tendency to innovate new food because of its customers and also have commitment options of drink to keep its customers. In addition, it provide healthy food choices options like salads, water, delli roll and fruits.
Franchise holders (franchisees) Franchisees are necessary to McDonald's success; they deliver its brand promises straight to the client. Nationwide, approximately 85percent of their restaurants are franchised. The sites for the restaurants and either own or leases the land and complexes. The franchisee then, in turn, leases the building from McDonald's by paying a share of sales. The franchisee also expenses the cooking equipment, furniture, play land and signage to complete the fit from the restaurant. Shared investment and distributed risk really helps to achieve sustainable growth.
Employees: Employees will be the internal stakeholders and directly affect the working of company. McDonald's provide nationwide qualification to its employees and helps to gain work experience. Mcdonald's follow equal opportunities for its employees.
Suppliers: McDonald's resource chain benefits the countries overall economy. As Mcdonald's lay emphasize on the neighborhood suppliers. But the suppliers have to keep the promise of quality for the customer, the ation, including demanding quality control in every areas of operations-including dog welfare, health insurance and safety, handling methods and cleanliness. By giving local products Mcdonald's generate job in the countries and assisting economies of thes to be company. This also improves the progress perspectives of the countries as New Zealand exports meat to United States for meat patties.
Community communities: RMHC(Ronald McDonald House Charity ) which provide room and board, food and sibling support at a price of only $10 every day for individuals with children requiring extensive hospital attention. McDonald's sponsor Olympic players. Ronald McDonald Homes are found in more than 259 neighborhoods worldwide and support Mobile treatment programs that offer affordable medical, dental and educational services to children. In addition with their community involvement, McDonald's has a long-standing determination to environmental protection. Restaurants round the world have impressive programs for recycling, source of information conservation, and waste materials reduction. Mcdonald's also help the African farmers by purchasing fair-trade coffee beans as well as the rainforest alliances. In addition, it is promoting the countrywide Olympics in 2012.
Shareholders: Based on the Annual report 2010 Mcdonald's have increased it progress 3. 8% and the earning per show of the shareholders have increased by 9% and also the total dividend sent out to shareholders between 2007 -2009 amounted to 16. 6 million dollars.
Conclude the major changes taking place in the environment that will have an impact on the strategy.
Economy is going through the downturn. It's very difficult for companies to make it through and sustain in the market. Every organisation follow the internal and exterior environment to plan any strategy. Profit Maximisation is the primary aim of the organisation apart from organisations do arrange for environmentally friendly and the public factors that help in achieving the targets and goals of the company.
Political factors: Company is managed by the procedures and legislation of functions. Specific market concentrate on different areas of matter such as health, worker cover, and environment. McDonald's while operating in India will follow the guidelines and regulations of India relating to the duty, trade laws and the privileges. For example advertising of the meats is said to be offensive relating to Hindu community specifically that of beef.
Economic factors:- Economical factors are those factors where throughout the market of the business enterprise is affected it offers a major impact on the business enterprise these factors such as interest rate, exchange rates would have a devastating effect on the business special when it a multinational business. McDonalds must ask for customer in the neighborhood currency than the standard currency and the price should be within the purchasing vitality of individual.
Social Factors: Friendly factors are factors originated generally due to the interior stakeholders in the organization, their health and safe practices. The culture in the organization can have assorted results on the output of the business enterprise and the price of the business is many more affected due social factors.
Technological factors: McDonald's use tv set advert for the for the marketing goal. Celebrities and cartoon depictions are used as an endorsement for "I m loving it" advertising campaign. McDonalds use inventory system and the management of the value chain permit the easy repayment foe their suppliers and other seller which an individual stores in individual markets package with.
Legal Factors: McDonald's is demonstrating nutritional information of the meals on the packaging and the website of McDonalds. McDonalds is using fruits, oatmeal, salad, water and orange juice to promote healthy food choices habits and deal with the obesity. Within the Muslim countries McDonald's is using the idea of Halal Food for the prospective Customers.
Other legal principles like tax responsibilities, employment requirements, and quality requirements are just some of important elements which the company has to take into consideration. Otherwise, smooth businesses shall be hard to attain.
Environment: McDonald's is using the" bin it" custom logo to promote clean society so that the rubbish packaging should not be dumped by the roadside. It is also promoting becoming enviromentally friendly to save lots of energy and minimizing wastage to save the environment and exhibiting their responsibilities towards contemporary society.
"Through careful planning and dealing with The carbon rust we ensure that people use the most efficient equipment for our restaurants according to the technology available"(Katie Saunders, Environmental Supervisor, McDonalds UK)
Mcdonald's is also using adding in environmentally friendly impact by minimizing the energy intake in restaurants, miniming the use of drinking water in restaurants like using waterless urinals in the restaurants.
Mcdonald's is trying to save the environment by reducing misuse and reducing the size of the trayliners by 10cm which results in 84 tonnes of paper saving. Additionally it is recycling the used cooking essential oil for the bio diesel. (McDonalds, 2010)
Balance Scorecard Way: THE TOTAL AMOUNT Scorecard method was presented with by Kaplan and Norton. It is a strategic strategy and the performance management system that enables organisations to convert company's eye-sight and strategy into implementation and consider four perspectives:
Financial Perspectives: Through the Financial Perspectives Mcdonald's prefer to concentrate on the Success and sales. For Increasing the sales employees are trained to market large dishes. For the Success emphases is laid on the waste materials reduction and drive thru which is having trained personnel to do the job properly. Handheld are used to less the queues on the drive thru as it lessen customer order producing times.
Customer Perspectives: Mcdonald's relate to Quality, Service and value to customers. It focus on to serve front counter-top customer in 90 secs and the drive thru customers in 180 sec. Velocity and quality is of maximum important to customers. Therefore, customers, like to friendly, fast and quality service each time. New Product like snack cover, tasty and Great Flavor of America is been brought to menu after sometime to wthhold the customers.
Business Process Point of view: From the Business processes Mcdonald's is getting to increase its business by getting global. Also Mcdonald's is adding new product line to its business by starting McCaffe's to broaden its business.
Learning and Growth Perspective: Employee Dedication is very important in the junk food industry. Employee turnover impact the business as keeping the employees is affordable as recruiting and training is costly. McDonald's provide qualification to its managers from the hamburger university or college. (maxipedia, 2010)
Firm Infrastructure: Brand Identification: Mcdonald's is internationally recognized brand.
No. 1 in Retail food industry. McDonald's is the market leader and is accessible at number no. 1 in junk food industry.
Franchising: About 85% of the restaurants are franchised.
Company Image: Company hold a strong image locally as a result of fresh and universal taste.
Financial durability: Inspite of the economical downturn Mcdonald's total annual sales increased by 3. 8 % in 2009 2009.
Job Applications: Mcdonald's follow the online application system for recruitment.
2nd greatest U. S employer
Technology: Just in time order
Delivery: Mcdonald's use the refrigerated pickup trucks for delivery as the temps of the iced meat patties shouldn't be significantly less than -18 to -22 certifications to be offered when baking.
Procurement: Sustainable presentation: Mcdonald's have reduced the size of tray liner and also use the presentation that may be recycled in their matter to protect environment.
Renewable resources: 82% of the packaging material is from green resources.
Oil recycling for the bio diesel.
Quality Control: For delivery freight pickup truck inspections are inspected and random audits happen for quality control.
Operations: Corp. Recommendations for franchisees.
Outbound Logistics: Distributor agreement
Marketing and Sales: Product:
Health and wellbeing advertising campaign and product offering
Price: Providing value to customer e. g. Pound menu, get together load up for kids.
Promotion: Coca cola endorsement
Sponsor of Olympics and "feeding the sports athletes". Mcdonald's is sponsoring Olympics 2012 along with coca cola and Cadbury.
Service : Friendly customer support.
Clean Environment for customers.
Fast food service aim for to provide front counter-top customer in 90 sec and drive thru customer in 180 seconds.
Adopted from Harbott. com, 2010
According to "The Times " Regardless of the economy downturn McDonald's is still pushing forward with the discounting menu. Numbers shown by "The Times "declare that McDonald position in the current market is unaffected by the economy downturn. It is following a strategy of the discounting or $ 1 menu rendering it to increase its earnings. It has reported the increased sale as 4. 2% of the global go up McDonald's share increased from. 38 % in early trading of 1950 to 70. 61 in 2010 2010. Mcdonald's is following a low prices strategies on fries, burgers. drinks and the deal of McCafe beverages. (Frean, 2010)
Mcdonald's is possessing strong position in market as it contains more than 32, 000 restaurant in procedure in more than 117 countries and it has also added to the new products McCaffe's in 2008 providing cappuccino's and frappacino's. Along with other drinks. Working towards the surroundings and Children welfare and the organic and natural food and also "nourishing the Olympics "allows those to fulfil their responibilty towards population.
Mcdonald's have designed to open around 1, 000 more store in 2010 2010 and spend money on $2. 4 billion to improve the brand. Mcdonald's have designed to "Reimage " the exterior and interior of the prevailing stores to improve seating, lamps and dcor and by doubling drive thru stations to improve swiftness and convenience. (Yousuf, 2009)
1) Glo Globalization: 32, 000 restaurants offering in more than 117 countr117 countries.
1) Advertisement techniques that goal children
1) Advancement: Continued adaptation such as adding on new menu such as treat cover and great style of Amaerica to wthhold the existing customers.
1) Current world economical standing: the company's revenue channels are diversified, but depending on the length of the "tough economy", they will inevitably be negatively influenced by the trickle down result.
2) Active Childrens Charity: The Ronald McDonald House aiding young families with children in clinic.
2) Consumers use disposable income to get fast food foods so when the budget it treatened, consumers redirect these funds
2) Conservation: Researching green energies and inexperienced packaging alternatives Recycling of the waste material oil to form Biodiesel. . Using Normal water less urinals waiting for you to save normal water consumption.
2) More Informal Dining Restaurants increasing their "burger" offering and decreasing the price.
3) Adjusted Materials and product offerings to adhere to upgraded health specifications considered necessary by the USDA:Mcdonalds supply the universal flavor in its menu.
3) Public belief: McDonalds has been influenced by negative press like the documentary "Supersize Me" by Morgan Spurlock in which he contributed our societies overweight to McDonalds and other junk food chains.
3) Exploration: Create new product offerings. Continue steadily to use technology to influence revenue strategy: possibly use text messages to deliver special offers offers to people who join such services.
3) People Health Turmoil. : people are definitely more foccussed on the dietry needs.
4) Earns revenue not only by fast food sales, but also as a property entrepreneur, a franchiser of restaurants. : More than 85% of the restaurants are franchised across the world.
Mcdonald's using good deal strategy Or the 1 menu which led t increase in sales by 4. 2 % globally this year 2010.
Turnaround Strategy: Change Strategy is employed by underperforming companies to normal in terms of acceptance levels of profitability, solvency, liquidity and cash flow. Therefore turnaround strategy is used to control, stabilise, fund and fix the underperforming and distressed companies.
The components of the Turnaround strategies are:
Managing the turnaround: Managing in terms of authority, stakeholder management.
Stabilising by making sure the short-term future of the business enterprise through cash management.
Funding and Recaptilising the business.
Fixing the business in strategic, operational and organisational term.
Mcdonald's adopted the turnaround strategy in 2003 when the sales dropped, , Steps for the service and quality of the string continued to show up behind its competitors. To fight back the Company began to follow a turnaround from the corporate level by having back the James R Cantalupo previous vice leader under who the company bloomed from 1990 to 2000 and gained 32, 000 franchisees.
With the coming back of Cantalupo he began the redesigning by emphasizing more on the quality, friendliness and rapid service of staff and laid focus on the more sales and expanding a lot more on business. The Mexican Grill along with the Boston which was received by the Mcdonald's were let out. McDonald's set out new Products to its Menu By opening McCaffe's throughout the world as growth in 2003. Breakfast new menu was added as pancakes with the blend of bacon, sausage and egg which was a great success along with the breakfast coffee drinks. It also added balanced diet as salads, drinks. Company also added new brand " I m adoring it" in it Adverts using Justin Timberlake to target teenagers rather than the kids to endorse Mcdonald's which turnaround a great success for the company and company started to increase its sales following the strategy. (scribd, 2010)
The changes in the external environment of the business can even be determined by the Porter five power model which exactly shows the real picture of your competition on the market.
The style of the Five Competitive Pushes originated by Michael E. Porter in his publication Competitive Strategy: Techniques for Analyzing Business and Rivals" in 1980. Since that time it has become an important tool for studying an organizations industry framework in strategic techniques. Porter's model is based on the insight a commercial strategy should meet the opportunities and hazards in the organizations external environment. Especially, competitive strategy should base on and understanding of industry buildings and the way they change.
Competition: Because the time Mcdonald's started in 1940 it is providing brilliance service to its customer. Market is challenging and tight
for fast food industry. Opening up of cafe to the product line and offering breakfast time has provided tight competition with Starbuck and other breakfast offering restaurant. Burger ruler and KFC will be the two great competitors for Mcdonald's.
Ease of admittance: it is hard for new entrants to type in the market because of the high cost of accessibility and research and development cost. Founded brand names like Mcdonald's make it even harder and new entrants have to face price competition.
Substitutes: there are many products available in the market for substites. People can go to Burger King And KFC and Starbucks looking for substitutes.
Power of suppliers: products aren't readily available from suppliers therefore the electricity of suppliers is relatively low.
Power of Buyers :Electric power of buyer is low.
Adopted from: marketing teacher, 2010
Mcdonald's is the marketplace head in the junk food industry. Fast food business fluctuates with the economy rise and doom, customer flavour, cultural differences, climatic conditions and the buying behavior of customers. Mcdonald's is a person oriented business targets the service, quality, functions and the reliability of the service delivered to customer. McDonalds will provide universal flavour of food to customers despite of their local differences. It promotes diversity among its employees and believes in similar opportunities to its employees. Regular Training and development of the staff at the operational and management level gives it a stick out position on the market. Innovation and the TV Endorsement and its own target market and motto " I m Caring it " makes it a standalone brand among the customers. To keep Customers Mcdonald's is regularly adding new menu its list and adapt to cultural differences it practices the culture of the country Like having distinct entrances for women in the Muslim Countries. , to respect religious beliefs of the folks it is adapting religious beliefs of the community as serving Halal food in the Arab Countries and Not serving Beef in India. To reduce Carbon Emission promoting Recycling, to save lots of water use recycled drinking water in toilets, to save trees reduce the packaging paper and tray liners and also recycle paper for presentation. For survival and sustainability it follows the local wage rate, local suppliers, local legal and taxation system, and local ethics.
Mcdonald's strategy is approximately the fresh and quality food to customer with friendly service. Mcdonald's "plan to succeed" and target customer with the universal preference respecting the religious and cultural beliefs. With environmentally friendly issues Mcdonald's is assisting to promote cleaner streets by sponsoring bins in conjunction with the council and also initiating visitors to have the Rubbish in Bin THROUGH THE USE OF "Bin it " motto. McDonald's is also getting back in recycling revolution utilizing the waste engine oil to get bio diesel. In its motive to Save energy and drinking water it is getting waterless urinals in the washrooms to save lots of water and want to use the recycled water. For the packaging of the food it is using more than 82% of the recyclable material and hoping to cut the 10 cm of the trayliners used to provide customer which eventually is keeping about 84 tonnes of newspaper each year. McDonald's is also doing work for the pet welfare so that that animals are given the free field to roam around and is using free range egg for it's breakfast time menu. , additionally it is using the organic and natural food to promote balanced diet and also using good trade coffee beans to help the farmers of Africa. Last but not minimal Mcdonald's is sponsoring the london 2010 combined with the coca cola and cadb ury.
Mcdonald's will still follow the strategy of plan to win and continue enhancing its quality, service, swiftness and accuracy. combined with the training and development of employees.
Conclusion :Inside the above assignment talk has been made over Mcdonald's and its insurance policies and strategies over the future which will those to sustain in the foreseeable future. Though it is a market innovator but by displaying its concern within the carbon emissions and the task ethics it is exhibiting the great deal of responsibility towards to modern culture. The moral duty is fulfilled by using variety and proper training and development. It feels in the equivalent oppurtunities to every person And require great dedication from its visitors to maintain the specifications of service, quality and friendliness so that individuals can say "I m loving it"!!!!!!!!!