Mcdonalds Has Grown From A Family Burger Stand

Published Date: 02 Nov 2017

TASK 1: Compare the purposes of McDonald with that of any known non- governmental organization.

TASK 2: Identify the responsibilities of McDonald's within its environment and the strategies it has adopted to meet them.

TASK 3: Investigate the behavior of the organization in its market environment.

TASK 4: Assess the impact of the EU policies on McDonald.

TASK 5: Analyze the impact of global factors on business organizations using McDonald as a case in point.

INTRODUCTION

McDonald's has grown from a family burger stand to a global fast food, with

more than 30,000 locations in 118 countries. McDonald's in Malaysia has more than 200

restaurants located nationwide and currently expanding about 20 to 25 restaurants

annually. McDonald's top menu are Hamburgers, Cheeseburgers, French fries and

McNuggets. Their popular desserts are also apple pie, breakfast sandwich and Egg

McMuffin.

McDonald's originally started as a small hamburger stand in Bernardino,

California owned by Dick and Mac McDonald. McDonald's current Chief Executive

Officer is James Skinner. James Skinner started his career in McDonald's as a restaurant

manager trainee in 1971 which is located at Carpenterville, Illinois. After that, he started

to held other several management and leadership positions.

The mission of the McDonald's is " To be our customers's favourite place and

way to eat". Their promise is " To provide Simple Easy Enjoyment to every customer

at every visit". The actions which they took to achieve their mission are place the

customer experience at the core of all they do, they are also committed to their people,

believe in the McDonald's system, operate their business ethically, they give back to

their communities, grow their business profitably and strive continually to improve.

Task 1

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

organization.

McDonald's and burger king are fast foods that are currently one of the biggest

businesses in the United States. People who doesn't have time to cook at home, they

often choose McDonald's or Burger King. This is the main reason McDonald's and

Burger King has become a successful fast food.

McDonald's Corporation is also the world's largest chain of hamburger. In United

States, the company began in 1940 as a barbeque restaurant which was operated by

Richard and Maurice McDonald. Ray Kroc, a businessman has joined the company as

a franchise agent in 1955. After that, he purchased the chain from the McDonald's

brothers. Burger King's company began in 1953 as Insta - Burger King, a Jacksonville,

Florida based restaurant chain. After Insta - Burger King started to have financial

difficulties in 1955, its two Miami based franchisees, David Edgerton and James

McLamore, purchased the company and renamed it as Burger King.

McDonald's is facing problems in rising commodity costs. As the world's largest

restaurant chain by sales, it benefits from leveraging its size in puchasing food. The

company also has projected its food costs will increase from 4.5 % to 5.5 % in 2012,

which creates a tough balancing act between franchisee profitability and keeping prices

low. Burger King faces some important challenges such as the cost of doing business

has increased due to rising food prices while intense competition from McDonald's.

McDonald's advertises making things easy on the parent, as in "You deserve a break

today". While Burger King advertises choices, "Have it your way". McDonald's seems to be

trying to change its image by offering healthier choices, Burger King has not, as yet, made this

made this an advertising priority, if they are going that direction at all.

TASK 2

Identify the responsibilities of McDonald's within its environment and the strategies

it has adopted to meet them.

EMPLOYEES

All McDonald's employees are dedicated to their jobs, customers and also to

behave as ambassadors of the company. They also believe it is important to recognize

the community that supports each McDonald's restaurant and to return that support to

the community. A system was also recognized to train each employee in more than just

how to perform jobs technically. It also required a planned orientation that could teach

the employee about the right values and many more. A employee's everyday jobs

is to delight other workers or customers with respect. They should communicate very

well to their customers. Besides that, as an employee they are not allowed to be a

nuisance to anyone. Violent actions are also not allowed. All these are the employees

responsibilities to help out create an environment that is not hateful. The employees

practices safety at all times to ensure not his or hers comfort but that of others.

Stakeholders

McDonald's stakeholders are Customers Pressure groups, Local Community,

Managers, Employees, Financiers, Suppliers Owner. Each of them has their own interests

for different reason. Customers are interested because they want an interest on the new

burgers and salads and the offers which are been offered to them. Managers are

interested because they want to know whether their meals and offers brings more

customers to them and gives profit. Suppliers are also paying an interest because

they need to know whether their products are having more sales or not. Employees for

McDonald's also keeping an interest in the business because they want to make more

sales as they can to get good wages.

SUPPLIERS

Suppliers form an important link in the company's overall customer value delivery

system. They also provide the resources needed by the company to produce its goods

and services. The McDonald’s supply chain is comprised of many different local and

regional supply chains around the world that are tied together globally by strategic

frameworks and policies and the McDonald’s Worldwide Supply Chain department.

McDonald's is the largest user of beef in Europe. All of their European sold beef is

supplied from Europe and the great majority of their British sold beef is sourced from

Britain. McDonald's are committed in sharing the best practice with all their suppliers

including the beef farmers who benefits from the commitment because it helps in

improving quality and increasing value.

COMPETITOR

The marketing concept states that to be successful, a company must provide a

greater customer value and satisfaction than its competitors do. McDonald's is the leader

of the fast foods industry. Its biggest competitor is Burger King. Burger King is the

second largest hamburger fast food chain. There are more Burger King restaurants are

franchised than McDonald's restaurants, Burger King franchise revenues trail behind of

its competitor, mainly due to the McDonald's size advantage. Yum! Brands runs

Kentucky Fried Chicken, Taco Bell, Pizza Hut, Long John Silver’s, and A &W All-

American Food Restaurants. Currently, Yum! brands are dominating the China market,

posing a challenge to McDonald’s attempts to enter the market. While McDonald’s

Corporation focuses on its flagship brand, Yum! splits its resources among a wide variety

of restaurant.

CUSTOMERS

Customers are the most important actors in a company's microenvironment. The

aim of the entire value delivery system is to serve target customers and create a strong

relationships with them. McDonald’s prides itself on delivering only the highest levels of

quality, service and cleanliness to all of its customers in each and every restaurant.

McDonald's biggest customers are the middle class families. McDonald's also help their

customers build better communities. Their customers are provided with high - quality

food, services in a clean and welcoming environment at a great value. McDonald's also

encourage their customers to give them feedback about McDonald's services. McDonald's

have prepared facilities such as free Wi-Fi, Play Places for kids, and a place to celebrate

any parties.

DISTRIBUTOR

McDonald's USA recently selected The Martin-Brower Company, a distributor for

many of McDonald's restaurants, as the 2009 Supplier of the Year. The McDonald's U.S.

Supplier of the Year Award is presented annually to the food, paper or product supplier

that makes the most significant impact on, and contribution to, McDonald's U.S. business

results from the previous year. The award recognizes criteria including commitment to

quality and food safety, product, equipment and process innovation, exemplary customer

service and value. Martin-Brower has provided services to McDonald's Corporation since

1956. Today the company is McDonald's largest distributor in the United States, Canada,

Ireland and Latin America.

MARKETING STRATEGIES

Marketing strategies is the logic by which the business unit hopes to create

customer value and achieve profitable customer relationships. The marketing strategies

which contains in McDonald's are:

Demographic segmentation

Geographic segmentation

Psychographic segmentation

Demographic segmentation

Demographic segmentation consists of dividing the market into groups based on

variables such as age, gender, income, occupation, religion, race, education and nationality.

In demographic segmentation, most of the McDonald's products is targeting the children

and their mothers. Various kinds of children products has been developed over time and

marketed towards the target market. For example, McDonald's breakfast package was

developed to serve employed people.

Geographic segmentation

Geographic segmentation tries to divide markets into different geographical units.

McDonald's initially served similar products to all its market. For an example, Cheddar

McMelt is only found in Brazil while Guava juice is served in some tropical countries

while they are not served in other countries.

Psychographic segmentation

This type of segmentation divides the market into groups according to

customers’ lifestyles. McDonald’s has developed products to serves particular

psychological needs to its customers. Healthy products such as fruits, fruit salad and

juices have been developed for this factor. In addition, McDonald has introduced of

withdrawn various products in response to psychological factors.

MARKET TARGETING

Market targeting involves evaluating each market segment's attractiveness

and selecting one or more segments to enter. A company should target segments in

which it can be profitably generate the greatest customer value and sustain it over

time. McDonald's target market is mostly adults or teens who is looking for a quick

meal and families who are having young children.

POSITIONING

Positioning is arranging for a product to occupy a clear, distinctive, and

desirable place relative to competing products in the minds of target consumers.

McDonald’s has made itself to be the family friendly low cost restaurant in the fast

food business. In recent years McDonald's have tended to broaden their capacity to

appeal to more customers. In recent years due to lost sales McDonald's have started to

make our menu a more healthy option. McDonald's still try to keep their target market

narrowed down to families, but others deserve attention as well.

MARKETING MIX

Marketing mix is the set of controllable, tactical marketing tools that the firm blends to

produce the response it wants in the target market. Marketing mix also consists of

four factors as shown below:

PRODUCT

McDonald’s places significant importance on increasing a menu which customers want.

Survey establishes exactly what this is. However, customers’ necessities change over time.

In order to meet these changes, McDonald’s has introduced new products and phased out

old ones, and will continue to do so. In India McDonalds has a diversified product

range focusing more on the vegetarian products as most consumers in India are

primarily vegetarian.

PRICE

The customer’s perception of value is an important determinant of the price charged.

Customers draw their own mental picture of what a product is worth. A product is more

than a physical item, it also has psychological connotations for the customer. It is

important when deciding on price. McDonald's also fix a best and reasonable price for

its fast foods.

PLACE

McDonald’s outlets are very equally spread throughout the cities making them very

easy to get to. Drive in and drive through options make McDonald’s products further

convenient to the consumers.

PROMOTION

The McDonald's advertise its promotions through TV, radio, online, posters and in the

press for example in newspapers and magazines. Other promotional methods include sales

promotions, point of sale display, merchandising, direct mail, loyalty schemes, door drops.

The skill in marketing communications is to develop a campaign which uses several of

these methods in a way that provides the most effective results. For example, TV

advertising makes people aware of a food item and press advertising provides more

detail.

TASK 3

Investigate the behavior of the organization in its market environment.

PESTEL is an analysis of the external macro environmental in which a business operates. Those factors are listed below:

- Political factors

- Economical factors

- Social factors

- Technological factors

- Environmental factors

- Legal factors

POLITICAL FACTORS

The international operations of McDonald’s are highly influenced by the individual country’s policies enforced by each government. For instance, there are certain groups in Europe and the United States that clamor for state actions pertaining to the health implications of eating fast food. Since it is apparent that the company is expanding continuously, it is wise to deal directly with the proper authorities in the respective markets that they intend to operate in. It is advisable that the company rests on the good graces of the government on which they will be penetrating.

ECONOMICAL FACTORS

Even in food industries there are distributes and troubles even McDonalds's also have it own problems they are also involved in economic factor. Branches and franchises of fast food chain like McDonald's has to face many problems due to economic factors such as inflation, exchange rates, recessions, income and interest rates. For example: In (2004) McDonald's was economically affected by the response of the costumers and through there general sales. At that short of time the food company's like McDonald's started to import lots of raw materials into an important area where there is shortage of supply.

SOCIO - CULTURAL FACTORS

McDonald's is becoming a multi-faced character of business For example: in (2005) the peoples who were below 35 age were the most frequent customer as a food was like by them, and as there was a free gifts for the children's so they were the next high customers. In different country there are different type of advertise to make people there customers. In many cultural festivals they provide different cultural advert and services For example: During New Year they have different ways of attracting the customers such as through many offers.

TECHNOLOGICAL FACTORS

McDonald's uses very low technology but uses its idea to generate demand for their products. In (2006) the company made television as a tool for marketing and they succeed and there are few more issues for what McDonald's are inclined to interest the younger populations more. Other advertising operations employ popular celebrities to promote their products. The integration of technology in the operations of McDonalds tends to add value to their products.

ENVIRONMENTAL FACTORS

McDonald's market never remain stable because it's always goes on changing depend on the type of product produced in the business. So there for business has to gain or lose customers some of the reasons of changing market are as follow:

Customers taste always gets changed so they need something new.

Because of new competitor and its new product.

Due to New technologies new products can be made.

Government introduces new legislation

For Example: increases minimum wage.

So McDonald's has to change its food product as per the change in taste of the customers.

LEGAL FACTORS

There are many competitor mainly to the food industries thus the McDonald's has to be

more careful with their own responsibilities for this reason legal factor affect McDonald's as per

the responsibilities concern MacDonald's has to provide their customers the relevant data that

they need with reference to the nutritional substances of their products. .In (2005) there was

an issue regarding consumption McDonald's food it result in obesity through this the

customer can have more options towards the various product of the McDonald's.

TASK 4 & 5

The European Union Policy's goal is to create a barrier - free trade zone and to

enhance economic wealth by creating more efficiency within its marketplace. The

European Union Policies are Culture and Economy.

ECONOMY

McDonald’s, the largest fast-food chained, has been known for the ability to increase its profit

even in rough economy. However, couple of weeks ago McDonald’s officials informed that the

company was facing consumers confidence issues. It all started in Southern Europe, which had

been most affected by the economic crisis; but consumers confidence issues became known

world-wide.

Two weeks ago McDonald’s anticipated that its global same-stores sales would be positive in

July; however, it would be below the second quarter’s rate of 3.7 percent. Sales at the

company’s locations dropped 3.2 percent in July; analysts had predicted the increase of 2.3

percent for the global same-store sales. The last time the McDonald’s global sales figures

dropped was in 2003, April. Since then the sale figured had increased every month.. European

sales edged down 0.6 percent after a 5.3 percent growth a year ago. And even though

McDonald’s increased its spending on promotion, it did not have expected results.

CULTURE

There has been a loss of traditional values with the introduction of non traditional food into the

culture of foreign countries. The types of foods are symbolic to particular regions ,and

religions. In India, to the Hindu people, the cow is considered to be sacred as part of its religion.

McDonald’s is viewed as American and the movement away from traditional foods towards fast

food is considered to be "Americanization" of the diet. This concept has more far reaching

effects than is seen on the surface. The "Americanization" of the food also means that of the

culture and a way of thinking which in not acceptable to many nations.

TASK 5

ECONOMIC FACTOR

Fast food restaurants tend to fare better during an economic downturn than pricier restaurants do.

Consumers living on a tight budget in a bad economy often turn to fast food chains for

reasonable meals, according to "The Economist" magazine. However, the magazine notes that

a long-term recession makes even fast food restaurants vulnerable to profit losses if consumers

eat at home more often to save money. In such cases, big restaurant chains may respond by

cutting their prices further and increasing advertising to lure consumers back to their restaurants.

Smaller chains may not have the budgets to do the same to protect their profits.

TECHNOLOGICAL FACTOR

Recent technological developments, Technology's impact on product offering, Impact on cost

structure, Impact on value chain structure, Rate of technological diffusion etc.

ENVIRONMENTAL FACTOR

Environmental issues are now a big concern for the society. People of a society belief

organization will do welfare for the environment and keep them away from environmental

pollution. Though McDonald's once sued for doing environmental pollution, now they develop

their food packages that are environment friendly. For protecting rainforest McDonald's

announced that they will give further backing as their corporate social responsibility. Thes

e environmental issues may reason for goodwill as well as malice.

CONCLUSION

The last half of the twentieth century witnessed the development of many fast food chains. None

were as successful as McDonald’s at maximizing profit and minimizing cost. The rapid growth

of McDonald’s from one small store in 1948, to its first restaurant in 1955, to its worldwide

dominance and market saturation at the turn of the twenty-first century, is a story of capitalist

enterprise, sometimes at its worst and (to its shareholders) sometimes at its best.

The business practices of McDonald’s are, to put it kindly, slightly suspect. By keeping

employee wages low and refraining from hiring full time workers, the company was able to save

money on health care packages and employee benefits. In addition, McDonald’s was able to

gain ground on its competitors in the 1970’s when a depression caused most other fast food

chains to halt their growth. McDonald’s used its superior resources to continue to grow and

expand. Now, the restaurant is perhaps the greatest symbol of contemporary American

capitalism.