Compare The Purposes Of Mcdonald

Published Date: 02 Nov 2017

NAME : ELANGOVAN A/L VEDIPPEN

IC : 931213025275

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TABLE OF CONTENT

INTRODUCTION

TASK 1

TASK 2

TASK 3

TASK 4

TASK 5

CONCLUSION

REFERENCES

APPENDICES

INTRODUCTION

McDonald's Corporation is the world's largest chain of hamburger fast food restaurants, serving nearly 47 million customers daily. At one time it was the largest global restaurant chain, it has since been surpassed by Yum!, operator of KFC and other chains, and Subway.

In addition to its signature restaurant chain, McDonald's Corporation held a minority interest in Pret A Manger until 2008, and owned the Chipotle Mexican Grill until 2006 and the restaurant chain Boston Market until 2007. The company has also expanded the McDonald's menu in recent decades to include alternative meal options, such as salads and snack wraps, in order to capitalize on growing consumer interest in health and wellness.

Each McDonald's restaurant is operated by a franchisee, an affiliate, or the corporation itself. The corporations' revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants. McDonald's revenues grew 27% over the three years ending in 2007 to $22.8 billion, and 9% growth in operating income to $3.9 billion.

McDonald's primarily sells hamburgers, cheeseburgers, chicken products, French fries, breakfast items, soft drinks, milkshakes, and desserts. In response to obesity trends in western nations and in the face of criticism over the healthiness of its products, the company has modified its menu to include such healthier alternatives such as salads, wraps and fruit.

TASK 1

Compare the purposes of McDonald with that of any known non-governmental organization.

McDonalds, and Burger King are two of the most famous fast food chains around the world.  They also create debates on which one of these is the superior restaurant.  Based on the information gathered, McDonalds doesn’t serve better, and healthier food than Burger King.

  First off, McDonalds has smaller portions than Burger King, so it makes the customer eat less of the harmful ingredients, such as trans-fat, sodium etc.  McDonalds has less Trans Fat, and other categories than Burger King (based on statistics).  For customers, McDonalds is cheaper than Burger King, and has more value.  An example of this is the meal, which means that for every product bought, the customer can pay a little more to get a large coke, and fries.  This is why 64 million people on average go to McDonalds per day, versus the 11 million people who go to Burger King.  This may sound good for the average layman, but no matter how McDonalds compares to Burger King, or Wendy’s, A&W, McDonalds will still make you fat, and you’ll likely have health problems.  The sodium levels on the Big Mac alone are 1040mg per serving.  Compare that to a normal sandwich, which will have approximately 255mg of sodium.  There’s a significant difference between these 2, and the more sodium there is, the more chance of high cholesterol, and high blood pressure, which can amount to a stroke, or a heart attack.  Which makes a sandwich a healthier choice compared to the McDonalds Big Mac or any other meal at a fast food place. Plus, there is a low chance of customers getting health problems by eating too many sandwiches.  This is why McDonalds does not serve better food than Burger King.

  Burger King is almost the same as McDonalds, except Burger King has greater numbers in the health categories than McDonalds.  There’s one difference, McDonalds may have less of each of the categories (below), but in fact, McDonalds uses more artificial ingredients than Burger King.  Take for example the Fries statistics (located in Appendix A). Looking at the sodium, McDonalds has less than Burger King.  But fact is, the salt McDonalds uses is artificial, meaning that there might be less than Burger King, but it pacts just as bad ingredients as Burger King’s 820mg of Sodium.  Burger King, on the other hand uses sea salt.  Another example would be a cheeseburger left for 4 years, the difference in appearance between the newly made burger, and a 4-year old burger is nothing!  They look exactly the same appearance wise!  Burger King may have more pure ingredients than McDonalds, but they pack just as big of a punch, both can cause strokes or heart attacks which can lead to death, in fact, if you take into account everything, McDonalds is equally as bad as Burger King.  So this just adds to the fact that McDonalds does not serve better and healthier food than Burger King

On the health scale, McDonalds outshines Burger King.  As we can see, McDonalds has less in most categories.  Over the long run, the person relying on solely Burger King would be a tad bit unhealthier.  In fact, both people eating McDonalds, and Burger King only would have so many health problems; they might not even be alive.  So both aren’t a good choice.  For example, looking only at the sodium, 1040, and 1020 are huge numbers, and will likely result in high blood pressure, and eventually a stroke.  This is in fact why McDonalds doesn’t serve better and healthier food than Burger King.  In fact, both of them are so bad that the best alternative would be eating at Chinese restaurant, because the amount of sodium in both these restaurant, compared to Chinese restaurant will be exponential, in favor of Chinese restaurant.

  In conclusion, McDonalds doesn’t serve better food than Burger King, because of the artificial ingredients they use, and the health problems that could amount by eating McDonalds.  On the other hand, Burger King is just as bad, because of the high calories, fat. For example, which can amount to strokes, or heart attacks.  This is why McDonalds does not serve better and healthier food than Burger King; in fact, both McDonalds, and Burger King are just as bad.

Appendix A:

McDonalds Fries vs. Burger King Fries

Criteria

McDonalds

Burger King

Calories

570

500

Total Fat (g)

30

28

Saturated Fat (g)

6

6

Trans Fat (g)

8

6

Carbohydrates (g)

70

57

Sodium (mg)

330

820

 

 

Task 2

Identify the responsibilities of McDonalds within its environment and the strategies it has adopted to meet them.

The main organization in McDonald market is customers, employees, suppliers, shareholders, media and competitors. And the behavior are:

Customers

As all businesses need customers, they should be Centered (Orientated) around customers. The firm's marketing plan should aim to attract and retain customers through products that meets their "wants and needs" and excellent customer service.

Employees

Employing staff with relevant skills and experience is essential. This process begins at recruitment stage and continues throughout an employee's employment via ongoing training and promotion opportunities. Training and development play a critical role in achieving a competitive edge; especially in Service Sector Marketing. If a business employs staff without motivation, skills or experience it will affect customer service and ultimately sales.

Suppliers

Suppliers provide businesses with the materials they need to carry out their business activities. A supplier's behavior will directly impact the business it supplies. For example if a supplier provides a poor service this could increase timescales or product quality. An increase in raw material prices will affect an organization’s Marketing Mix strategy and may even force price increases. Close supplier relationships are an effective way to remain competitive and secure quality products.

Shareholders

As organizations require investment to grow, they may decide to raise money by floating on the stock market i.e. move from private to public ownership. The introduction of public shareholders brings new pressures as public shareholders want a return from the money they have invested in the company. Shareholder pressure to increase profits will affect organizational strategy. Relationships with shareholders need to be managed carefully as rapid short term increases in profit could detrimentally affect the long term success of the business.

Media

Positive media attention can "make" an organization (or its products) and negative media attention can "break" an organization. Organizations need to manage the media so that the media help promote the positive things about the organization and reduce the impact of a negative event on their reputation. Some organizations will even employ public relations (PR) consultants to help them manage a particular event or incident.

Consumer television programmers with a wide and more direct audience can also have a very powerful impact on the success of an organization. Some businesses recognize this and will change their reaction when consumers mention that they are going to contact a consumer television programmer or the newspapers about the business.

Competitors

The name of the game in marketing is differentiation. Competitor analysis and monitoring is crucial if an organization is to maintain or improve its position within the market. If a business is unaware of its competitor's activities they will find it very difficult to "beat" their competitors. The market can move very quickly for example through a change in trading conditions, consumer behavior or technological developments. As a business it is important to examine competitors' responses to these changes so that you can maximize the impact of your response.

Task 3

Investigate the behavior of the organization in its market environment.

McDonalds is a global company. Therefore, this company faces a great deal of issues. We took the model of PESTEL analysis-the study of Political, Economic, Socio Cultural, Technological, Environmental and Legal factors. All these provides a useful starting point to any analysis of the general environment surroundings an organization.

Political factor:

There are various policies, rules by different government impacting operation of McDonalds. As the political decision changes over time. Therefore McDonald have to adjust their operation along with the change of the politics of the concerned place of operations. International pressure group influence lot of political decisions. For Example ,Environmental organizations such as friends of the Earth International has huge influence in the political systems worldwide. Most of the fast food businesses do not hold as much public interest and therefore the most of the political decisions does not affect them. But global company like McDonald has to face the storm of any adverse policies.

No political parties, alignments, trade blocks etc. are going to affect their business with much significance except in china. But McDonald is trying to maneuver to shift the changes. It has announced a partnership with Sinopec, the state owned oil giant that operates petrol service stations across China, that will rapidly accelerate its expansion strategy. Along with the rising population, spreads of average income the prospect of the fast food business is growing. McDonald has 760 restaurants and planning to open 1000 more by year 2008.

Economic Factors:

Definitely turbulence in economy also plays vital shift of demands of the market segment. Recent world economy is shaken by the Credit crunch issue, citizen has less disposable income, there is wild redundancy and less GDP in almost every economy. The major geographic markets of McDonalds are also affected by higher interest rate and inflation. So, cost of doing business has increased and sales is generally decreased. This has affected also the sales of McDonalds like all other businesses throughout the world.

McDonalds has recognized this issue & reduced their menu to a reasonable prices and also offering a wide range of foods.

Socio-cultural Factors:

Various regions got different socio-cultural backgrounds. This subsequently affect the business operations. For example, they have to adopt halal concept for arrangement of meat for burgers in Muslim countries. On the other hand, the non-vegetarian menu includes chicken and fish items only for India but not the beef as cow is a sacred animal there.

It is reported by Tommy G.Thompson, secretary of Health and Human services on McDonalds that,64% of the adults are overweight and obese with the total cost estimated to be $117 billion annually. Case of such is stressing legal concern of declaration of ingredients.

Change in life style, education, health consciousness etc. has a considerable effect on formulating strategy. Growing public awareness of fast food being unhealthy is a big environmental issue being faced by McDonald now a days.

Apart from these, McDonalds has built a good reputation through taking part in different social events. They are offering good services plus of showing their appreciation back to the community both locally and globally by serving efficiently.

Technological factor:

Till now, the market trend does not reveal high impact on fast food restaurant for technologies. However, the general equipment’s, temperature regulators, control devices, point-of-sales(POS) systems, inventory management, financial information and communications are all linked to different technologies. Any improvement of integrating better technologies for better purposes will give an edge of operations and can also help it better marketing strategies.

For example, recently McDonald has installed facility for free access to internet at their restaurants through Wi-Fi systems. This has increased the value of brand & market positioning.

Environmental factors:

Green issues, renewing energy sources, recycling of rubbish or waste disposal all are a matter of concern. But these are less of a significance for McDonald for the moment.

Environment is the biggest challenge due to its commitment towards the environment, it has adopted Rain Forest Policy. This states its assurance for beef purchasing practices that do not cause tropical de-forestation by any means. It fully aware of the fact that enormous utilization of the natural resources can imbalance the eco system. That is why, it is recycling vegetable oil, grease etc. by converting them as fuel for their diesel trucks.

Legal Implications:

Laws has a good implication on the food & restaurant industry. Health and safety have a impact on the operations of McDonald in different countries.

Other legal requirement that the business owner should follow as stipulated in laws of the land are such as operating hours, business registration, tax requirement, labor and employment laws and quality & environment certification (such as ISO) in which the outlet has been certified. Maintenance of the legal requirements are very important. The offenders will be fined or have their business prohibited from operating which can be disastrous. Any of such action will also give a negative impression.

It is mentioned in the annual report,2008 of McDonald corporation in page 6 that there is impact of new, potential or changing regulation that affects or restricts elements of McDonalds business, particularly those relating to advertising to the children, nutritional content and product labeling and safety.

In page 4 of annual report,2008 of McDonald Corp. it is pointed that there is continuous adoption of new or amended rules or laws, the company is not aware of any federal state or local environmental laws or regulation that will materially affect its earnings or competitive position or result in material capital expenditures in the foreseeable future.

Separately from the above described PESTEL analysis, there are other key drivers impacting operations of McDonalds.

Demographic Factors:

The market segment for McDonalds heavily influenced by demographic factors such as Worldwide population growth, population age mix, Ethnic and other markets, educational groups, household partners, geographical shift in population.

Task 4

Assess the impact of the EU policies on McDonald.

POLICY STATEMENT

McDonald's will:

Purchase supplies from local producers wherever possible providing they can meet McDonald's exacting product and hygiene standards and are competitive. Monitor suppliers in terms of their environmental, social, animal welfare and agrochemical policies.

Only buy from suppliers who operate responsibly and humanely and in accordance with government and EU regulations and guidelines. Work with suppliers to help them achieve even more exacting quality and efficiency standards and to develop better methods of

production.

Develop long-term relations with key suppliers. Settle suppliers' invoices promptly.

Communicate changes and development opportunities to suppliers in areas which affect their work with McDonald's.

ANIMAL WELFARE AND HUSBANDRY POLICY STATEMENT

McDonald's will not work with any supplier who does not adhere to the standards required by UK and EU legislation regarding animal welfare, transportation and husbandry. McDonald's insists that all meat used in its products has come from a clean, safe, hygienic, comfortable environment, and that humane slaughter methods have been used.

McDonald's will not accept beef originating from cattle subjected to

hormonal growth promoters. McDonald's only uses EU produced beef from EU approved

abattoirs under the auspices of qualified veterinary surgeons and health inspectors. All premises used at every stage during the production of McDonald's products must regularly undergo EU

approved inspections and ensure continued compliance with quality and hygiene standards.

McDonald's encourages its suppliers to explore continually advances in animal rearing and husbandry and to encourage their own suppliers to do the same. McDonald's supports the Government's measures to increase animal welfare awareness on farms.

GENERAL FACTS

[]Nowhere in the world does McDonald's use of beef threaten, or

remotely involve, tropical rainforests.

[]Food and beverage is provided for around 1.2 million people per

day in the UK.

[]Expenditure on food and non-food items in the UK in 1994 was

£245 million.

[]The 1994 expenditure on food in the UK was £220 million.

[]McDonald's menu concentrates upon five main products: beef,

chicken, bread, potatoes and milk which account for £151 million

(69%) of all food expenditure.

[]In 1994, McDonald's customers in the UK consumed: £45 million

of beef, £28 million of chicken products, 42,000 tones of

MacFries, 5.5 million gallons of milk and 335 million buns.

[]In order to be able to supply the necessary quality and quantity

of products, McDonald's suppliers have made substantial

investments on the company's behalf. For instance, six new food

factories have been opened over the last six years at a cost in

excess of £33 million.

Task 5

Analyze the impact of global factor on business organization using McDonald as a case in point.

McDonald have always strived to be an environmentally responsible business and they have made significant changes throughout the history of their operations as our understanding of environmental impacts has improved.

McDonald have an environmental sustainability framework in place to assist the business to define and deliver appropriate initiatives against these five major environmental themes. For example, restaurant operation, corporate operation, sustainable supply, advocacy and partnership and culture and communication.

Restaurant operations

McDonald impact on the environment is most significant in our restaurant operations in the areas of energy use, greenhouse gas emissions, water consumption and waste generation. They continue to concentrate on these key areas in performance management and improvement targets, and we have a number of new initiatives and trials underway to help them meet the environmental goals.

Energy use and greenhouse emissions

In McDonald’s operations, energy use accounts for the bulk of C02 emissions so our focus in this area is primarily on reducing electricity consumption. They participate in the federal government’s Energy Efficiencies Opportunities (EEO) Program and their EEO public report outlines our energy usage and identifies opportunities for improvement. they are also required to report our greenhouse gas emissions under the federal government’s National Greenhouse and Energy Reporting Act and the results for this are published online by the Department of Climate Change.

Water usage

They have participated in the Sydney Water Every Drop Counts business program since 2001 and currently 194 restaurants in the Sydney Water Catchment are registered with the program. Participation in the program helps monitor water usage, identify opportunities for improved water management practices and helps implement water saving measures.

Keeping the streets clean

McDonald’s Clean Streets program includes initiatives designed to keep the area around they restaurants tidy and clean. The key to this is the Litter Patrol program which is a structured and regular task for crew members who pick up litter from within the restaurant grounds and in neighboring streets. Within the Clean Streets program we also use packaging, restaurant tray mats and car park signage to remind the customers not to litter.

Sustainable supply

Responsibility to the environment spans the entire life cycle of our products. It starts with the fresh ingredients at the farm and the design of our food packaging, and extends through food manufacture, customers and waste disposal.

Advocacy and partnerships

More and more they are working with experts, environmental organizations and government agencies to learn from them, offer our support and build cooperative relationships. In 2010 McDonald signed up to the Sustainability Advantage program run by the NSW Department of Environment, Climate Change and Water to assist us in improving our sustainability initiatives.

Culture and communication

A focus on the environment is part of our culture and affects the decisions we make every day. Continuous improvement is also an important part of McDonald’s overall business culture and this attitude also directs our journey towards environmental sustainability. We have numerous communication channels in place to inform our people of environmental initiatives and encourage participation in events such as Clean Up Australia Day and Earth Hour.

CONCLUSION

The strength of the alignment among the Company, its franchisees and suppliers (collectively referred to as the System) has been key to McDonald’s success. This business model enables McDonald’s to deliver consistent, locally-relevant restaurant experiences to customers and be an integral part of the communities they serve. In addition, it facilitates the ability to identify, implement and scale innovative ideas that meet customers’ changing needs and preferences.

McDonald’s customer-focused Plan to Win provides a common framework for our global business yet allows for local adaptation. Through the execution of initiatives surrounding the five elements of our Plan to Win – People, Products, Place, Price and Promotion – we have enhanced the restaurant experience for customers worldwide and grown comparable sales and customer visits in each of the last eight years. This Plan, combined with financial discipline, has delivered strong results for our shareholders.