McDonald's has strong organizational capabilities that allow it to efficiently utilize its tangible and intangible resources. It emphasizes leadership skills at all levels of management to maintain consistent corporate culture and quality products. McDonald's continues to innovate its products and services to differentiate itself from competitors and satisfy changing customer demands in the fast food industry.
A free version of McDonald's Corporation SWOT analysis 2017. To get the full presentation buy the SWOT here: https://www.strategicmanagementinsight.com/swot-analyses/mcdonalds-swot-analysis.html
A free version of McDonald's Corporation SWOT analysis 2017. To get the full presentation buy the SWOT here: https://www.strategicmanagementinsight.com/swot-analyses/mcdonalds-swot-analysis.html
This presentation is based on McDonald Case Study which is created under the guidance of Professor Sameer Mathur ,during Marketing Management internship under him.
This is a part submission as a requirement of Internship under professor Sameer Mathur, IIM Lucknow. The case study of my choice is Mc Donald's. Chapter No 11, Marketing Mangement, Kotler et al.
Vision of Ray Croc for McDonald's. McDonald's current position in international market. SWOT analysis for McDonald's. PESTEL analysis for McDonald's. Porter's Five forces of market. Conclusion. McDonald's customer satisfaction approach of business. King of international fast food chain.
This presentation is about how MacDonald's has created its presence in Indian Market and the unique techniques and ways it uses to create value for its customers enhancing the brand image.
This presentation is based on McDonald Case Study which is created under the guidance of Professor Sameer Mathur ,during Marketing Management internship under him.
This is a part submission as a requirement of Internship under professor Sameer Mathur, IIM Lucknow. The case study of my choice is Mc Donald's. Chapter No 11, Marketing Mangement, Kotler et al.
Vision of Ray Croc for McDonald's. McDonald's current position in international market. SWOT analysis for McDonald's. PESTEL analysis for McDonald's. Porter's Five forces of market. Conclusion. McDonald's customer satisfaction approach of business. King of international fast food chain.
This presentation is about how MacDonald's has created its presence in Indian Market and the unique techniques and ways it uses to create value for its customers enhancing the brand image.
Case Study of the world's leading fast-food restaurant chain McDonald's. References: Marketing Management by Kotler. Created by Kandukuri Sai Omkar during a marketing internship under Prof. Sameer Mathur
A case study on McDonald's created by Krishna Kumar Bajoria, MMMUT, during an internship with Prof. Sameer Mathur, IIM Lucknow.
PS: Animations and voice-over used
Factors Affecting Consumers’ Preferences on Fast Food Items in BangladeshDr. Nazrul Islam
Fast food industry is a high growing sector of Bangladesh. It is concerned with the tastes and habits of the people. The food-taking habit especially in fast food segment has been changing very fast over last decade among the people of Dhaka - the capital city of Bangladesh. The reasons could be attributed by the increase of awareness, growth of education, development of information technology, and expansion of television channels and print media in Bangladesh. Hence, this paper aims at identifying the preference factors of fast food consumers living in Dhaka city. This study was conducted among the university students who usually eat fast food at their leisure time. To conduct the study, a total of 250 respondents were interviewed with a structured questionnaire. Both descriptive and inferential statistics were used in analyzing the data. Multivariate analysis technique like factor analysis was performed to identify the preference factors of the fast food student-consumers of Bangladesh. Multiple regressions were run to identify the relationship between the factors identified and the overall preference of the consumers. Results show that the consumers give most importance on brand reputation of the food item followed by nearness to receive and accessibility, similarity of taste with previous experience, cost and quality of the food, discount and taste, cleanliness and hygiene, salesmanship and decoration, fat and cholesterol level, and self-service factors. This study suggests that the brand reputation, nearness and accessibility, similarity in taste, and cost and quality relationship should be emphasized to improve the attraction of the university students towards the fast food items in Bangladesh.
Running Head INTERNAL AND EXTERNAL ENVIRONMENTAL ANALYSIS1INTE.docxcowinhelen
Running Head: INTERNAL AND EXTERNAL ENVIRONMENTAL ANALYSIS 1
INTERNAL AND EXTERNAL ENVIRONMENTAL ANALYSIS 2
Internal and External Environmental Analysis
Samaly Rodriguez
BUS/475
June 10, 2016
Tosh Stuart
Introduction
McDonald’s is a well-known chain of restaurants serving over 68 million customers and whose brand is recognized globally. Over 80% of the restaurants operate under a franchise system whereby a given entrepreneur acquires the right to operate under the McDonald’s brand by providing products related to the brand. McDonalds obtained its strong brand name through its business model that seeks to provide a consistent dining experience as well as quality and first service throughout all the restaurants. However, with its strong recognition the company faces various challenges as discussed in the SWOT analysis below. This study also analyzes how the company adapts to change and opportunities it can utilize to maintain its market relevance.
Economic, Legal and Regulatory Forces and Trends
Economic forces and trends entail factors that have an impact on the spending as well as the consumer purchasing power. Different economic factors that influence McDonald’s for instance since it operates within various countries it will have to set product prices about the economic status of these countries. A competitive pricing has been McDonald’s strategy in curbing competition and ensuring economies of scale. Most of McDonald’s market is within America where the economy is stable giving it an opportunity to grow in a steady manner. However, the dependence on this market could pose threats if economies change. Economies in other countries are mostly unstable with high economy recession posing a threat to the company’s businesses, for instance, the Chinese economy has not been stable to assure a sustainable business (Greenspan, 2015).
Different policies and laws govern the operations and mandate of McDonald’s while the governments that the company operates in initiate these regulations. In the U.S, the company has to follow strict employment policies that for instance set out the minimum wage levels. McDonalds must meet local health regulations for the food as well as animal welfare regulations within the supply chain operations. Due to the threat of lawsuits about the health status of their food McDonald’s is trying to ensure the provision of healthy products.
How McDonalds Adapts to Change
There are different ways in which McDonald’s has ensured that it has adapted with the changes in the market. According to (Mourdoukoutas, 2011) uniformity is one strategy that the company has used to ensure that they remain competitive. It is amazing that no matter the McDonald’s outlet one visits they will experience the same services since all its operations are standardized and with the same marketing strategies. Segmentation has been a strategy for adaptation of the company, most of their marketing has been targeting children for instance in ...
Running Head MCDONALD’S SITUATIONAL ANALYSIS 1 .docxanhlodge
Running Head: MCDONALD’S SITUATIONAL ANALYSIS
1
McDonald’s Situational Analysis
Samuel A. Sample
BUS 330 Principles of Marketing
Professor Sadeghinejad
February 16, 2016
MCDONALD’S SITUATIONAL ANALYSIS
2
McDonald’s Marketing Plan: Frieday with RedBox
Brand or Company Description (minimum 25 words)
McDonald’s is the world’s largest fast food chain with over $25B in annual sales and more than
35,000 retail locations in more than 100 countries (McDonald’s Corporation, 2015).
Core Products or Services (minimum 25 words)
Beyond the burgers, french fries and milkshakes that they’ve been selling since its founding,
McDonald’s sells a variety of wraps, salads, sandwiches and beverages – more than 200 items in all (The
Economist, 2015). McDonald’s locations are typically open for breakfast, lunch, dinner and late night
dining and many feature drivethru service.
A Brief History (minimum 50 words)
The first McDonald’s restaurant was opened in 1948 by Richard and Maurice McDonald. It
brought production line techniques to the burger business and challenged the dominant carhop drivein
business model. Ray Kroc was one of the earliest franchisees and the key figure in the rapid expansion of
the business after he bought out the McDonald brothers 1961. McDonald’s became a public company in
1965 and opened its first international location in 1967. Sales and locations have continued to grow every
year since.
Key current competitors (minimum 50 words)
Historically, McDonald’s primary competitors were identified to be the large fast food burger
chains like Burger King and Wendy’s. But given McDonald’s size and the expansion of their menu, the
competitive set must be viewed more broadly to include sandwich shops like Subway, other fast food
concepts like ChikfilA, more upscale fast casual restaurants like Panera and Chipotle, as well as coffee
shop chains like Starbucks and Dunkin’ Donuts.
MCDONALD’S SITUATIONAL ANALYSIS
3
SWOT Analysis (minimum 500 words)
SWOT Analysis: Strengths (Describe a minimum of 3 positive controllable factors)
1. Anytime, anywhere convenience
With over 14,000 locations in the U.S. alone, there’s a McDonald’s within a short drive of almost
everyone and most are open from 6am to 11pm. The number of locations also means that McDonald’s can
purchase media nationally which is more cost efficient than buying locally.
2. Brand equity
As a results of its many locations, consistent brand experiences and hundreds of millions of
dollars spent on marketing each year McDonald’s has developed a very strong brand. For example, they
ranked 5th on BrandZ’s 2014 most valuable global brand list (Rooney, 2014).
3. The Best French Fries
McDonald’s french fries are universally loved even by people who don’t otherwise like
McDonald’s food. McDonald’s fries were voted #1 in a 2015 YouGov study (Peterson, 2015).
4. Kid appeal
Mc.
The McDonald's Corporation is one of the largest hamburger and fast food retailers across the globe. Experts calculate that they serve nearly 60 million customers every day and have around 30,000 restaurants and franchises in more than 100 countries. It is an incredibly successful brand, and its logos and slogans are recognized across the world.
Running head EXTERNAL ENVIRONMENTAL SCAN .docxcowinhelen
Running head: EXTERNAL ENVIRONMENTAL SCAN
1
EXTERNAL ENVIRONMENTAL SCAN
2
External environmental scan of McDonald’s
Student’s name
Course number
Instructor’s name
Date
External environmental scan of McDonald’s
Introduction
McDonald's Corporation is the world biggest chain of fast food eating place and franchises system in the globally. The organization was found or established in 1940 east of Pasadena, California by two brothers Richard and Maurice McDonald. Presently the organization has 35,000 braches across the world in 125 countries with an estimated daily customer of 69 million. In the year 2013 the organization recorded an operating income of approximately US$ 9 billion which is a clear indication of the success since the establishment in 1940. Due tot hat fact that its the biggest food chain across the globe its gets affected by all the external factors such as political situation in the countries, economical circumstance, local competition, buyer behavior, legal rules and regulation across the nations and societal factors.
The organization faces two major external factors including the substitution of new products that are healthier as compared to fast food and the entrant of new competitors in the market. This essay does the study of these external aspects that are affecting or can affect the McDonald in a constructive or unconstructive manner. The paper also comprises five force examination of fast food analysis to cover all features of external factors impacting this commerce.
Porter's Five Forces Analysis
Porter's five force analysis is a type of structure that is utilized by the organization to determine the competition levels in the market and provided vital information that will be used to developed strategies that leads to competitive advantages (Burks, 2015). This analysis provide the evaluation or information that can be used by new entrant or existing organization as the negative and positive market current and future conditions are exploited. Higher competition levels are presented in the industry of fast food.
Threat of New entrant - At the present time there is no much competition due to new entrant in the market that can have the significant effects to McDonald as they have already established brand name in the market. Due to that fact that McDonald has invested more on their employees and the products hence providing acceptable standards in the market there has been a barrier blocking some of the new small entrant to the market. Creating a good image and provision of better services to the client is one of the main aspects to consider in the food industry to win the customer loyalty.
The existing major competitors of McDonald are Burger King and KFC. However individuals are having high preference to McDonald products as they are high quality and within the affordable prices. So at this time for M ...
Its the analysis on the project of MacDonald UK and other cities including all model to analyse such as Ans off models and Porter diamond model of market.
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[BUS444-Strategic Management] McDonald's Case Study Analysis
1. VIETNAM NATIONAL UNIVERSITY
INTERNATIONAL SCHOOL
CASE STUDY
McDonald’s
MEMBERS: DOAN QUYNH TRANG – ID: 436007
HOANG THI HAI YEN – ID: 435370
LE MAI ANH – ID: 435373
TRAN NGOC HUONG GIANG – ID: 435450
CLASS: VISK2010D
2. May 20, 2013
Contents
Contents......................................................................................................................................................2
1.External environment analysis..................................................................................................................3
A, A Porter 5-forces model of the fast food industry...............................................................................3
The threat of new entrants..................................................................................................................3
The bargaining power of buyers..........................................................................................................4
The bargaining power of suppliers.......................................................................................................4
The threat of substitute products and services...................................................................................5
The intensity of rivalry among competitors in an industry..................................................................5
B, Key factors in the general environment that have a significant impact on the fast food industry......6
Demographic.......................................................................................................................................6
Socio-cultural.......................................................................................................................................6
Economic.............................................................................................................................................7
Global issues........................................................................................................................................7
2.Internal environment analysis .................................................................................................................8
Tangible Resources..................................................................................................................................8
Financial...............................................................................................................................................8
Physical................................................................................................................................................8
Technological.......................................................................................................................................9
Organizational......................................................................................................................................9
Intangible Resources..............................................................................................................................10
Human...............................................................................................................................................10
Innovation..........................................................................................................................................11
Reputation.........................................................................................................................................11
2
3. Organizational Capabilities....................................................................................................................12
Organizational capability of McDonald’s is to combine tangible and intangible resources to run business
efficiently. First, making use of time and capital and human resources combining with sustain leadership
skills, McDonalds can keep its value and satisfy customers’ needs. They put emphasize on leadership in
all level of management such as teamwork and have a clear requirement for their employees’ works.
They also give more concerns on the quality of leaders, and then educate and train them to improve
their missing skills. As a result, company can maintain a consistent corporate culture between managers
and employees, and provide the best quality products and services to their customers. McDonald’s can
gain and maintain their core competencies to compete with the intense of rivalry among competitions in
fast-food industry......................................................................................................................................12
3. Differentiation Strategy.........................................................................................................................13
References.................................................................................................................................................14
(2013, March 14). Retrieved May 15, 2013, from United States Census Bureau:
http://quickfacts.census.gov/qfd/index.html............................................................................................14
Joan, V.G. (2011, November 1). Human Resource Management in McDonald's. Retrieved May 16, 2013,
from: http://jpkc.szpt.edu.cn/english/article/Human%20Resource%20Management.htm......................14
Leadership Best Practices from Ronald McDonald. Retrieved May 15, 2013, from:
http://theleadershipprofessor.com/2011/11/leadership-best-practices-from-ronald-mcdonald........14
Pirzada, K. (n.d.). McDonald. Retrieved May 13, 2013, from Scribd:
http://www.scribd.com/doc/28290117/Mcdonalds-Mini-Report.............................................................14
1. External environment analysis
A, A Porter 5-forces model of the fast food industry
The threat of new entrants
The infant businesses which first enter into the fast food industry may have to face some
challenges regarding to economies of scale, brand loyalty, capital required and government
regulation. Nevertheless, these challenges do not pose a large threat to the existing companies.
Thus, the threat of new entrants within this industry to the existing companies is not high. In
terms of economies of scales, because of the high volume of production and the number of
3
4. outlets, big business may easily achieve economies of scales; whereas, those small business get
difficulty in gaining economies of scales due to the low volume of production.
Furthermore, big organizations have gained a large base of loyal customers while new
entrants have to spend more time on building brand recognition and customer base. Additionally,
a start-up company may face a lack of capital, management and networking resources, so they
cannot compete with those existing companies. Last but not least, government may pose some
threats to infant companies by regulating strictly in some categories such as health, safety,
hygiene and facilities.
The bargaining power of buyers
As there are lots of substitute products within this industry, McDonald’s will have to pay
much attention to customers’ demands to gain new customers while maintaining a base of loyal
customers. Customers pay much concern about their health and the rise of obesity in the U.S.,
fast-food companies like McDonald’s will have to provide healthier food such as salads and
fruits and remove trans-fatty acids from the oils used to make foods. Additionally, fast-food
companies may face lawsuits from loyal consumers when their health is affected by these foods.
For instance, with a rising concern about the unhealthy food of McDonald and these concerns
has been emphasized by the release of Super Size Me, this made McDonald face some lawsuits
from loyal buyers. Thus, McDonald’s would have to provide nutrition information on food
packages to show the calories, fat, and sodium in each portion.
The bargaining power of suppliers
In the fast food industry, companies needs to have a stable and continuous raw material
supply to run the business to satisfy the high demand of the large number of customers. Thus,
building a strong relationship with suppliers is important to maintain good quality of raw
4
5. materials. The source of fast food companies’ main products comes from bread, chicken,
potatoes, vegetables, and fruits. Thus, they need to build a strong connection with farmers who
supply these materials. Moreover, the relationship with key beverage companies such as Coca
Cola and Minutes Maids, and sauce supply companies like Heinz should be taken into their
considerations. Nevertheless, regarding to McDonald’s, they are their own suppliers for their
products, for example, potato, so McDonald’s does not rely mostly on suppliers.
The threat of substitute products and services
The threat of substitute products in the fast food industry is very high. Due to
globalization, many foreign food companies have made an entrance into local market and change
the taste of local buyers. In fast food industry, customers have a wide range of options to choose
for their meals. For instance, the chain is facing a rapidly fragmenting market, where changes in
the tastes of consumers have made foreign foods like sushi and burritos everyday options.
Additionally, they may face a threat from quick meals of all sorts that can be found in
supermarkets, convenience stores, vending machines and hotdog stands. Moreover, due to the
changing trend in lifestyle, the menus with more vegetable are much more favorable than the
ones with fat as McDonald’s. Therefore, these substitute products may threaten McDonald’s
food.
The intensity of rivalry among competitors in an industry
The intensity of rivalry among competitors within the fast food industry is the most
powerful factor among those five forces. The competition in this industry is very strong because
there are lots of brands competing in price and quality services such as KFC, Wendy’s, Burger
King and Pizza Hut. Therefore, the firms should provide an affordable price, improve quality of
5
6. customer and delivery services, and build a strong brand awareness to survive in this strong
competitive industry.
B, Key factors in the general environment that have a significant impact on
the fast food industry.
Demographic
More than half of American population (78.1 percent in 2011) was white people whereas
black persons accounted for 13.1 percent and Asian people made up only 5 percent in 2011
(http://quickfacts.census.gov/qfd/states/00000.html). Therefore, fast-food companies should not
target on the majority but also the minority ethnics and offering foods and drinks that suit with
their tastes. In addition, according to the United States’ Census Bureau, the percentage of people
are less than 18 and over 65 years were 23.7 percent and 13.3 percent respectively in 2011 and
more than half of population was people in the age range from 18 to 65. Thus, fast-food
companies will have to focus their marketing on young adults, teenagers and working adults and
diversify their products to satisfy the need of different groups. For example, McDonald’s has
also been trying to include more fruits and vegetables in its well-known and popular Happy
Meals. In many locations, the firm is offering apple slices called Apple Dippers in place of
french fries in the children’s Happy Meal.
Socio-cultural
American people nowadays take greater concern for physical fitness and healthy diet.
Thus, most fast-food customers start to change their taste to food that is much healthier and
better tasting. Hence, the fast-food companies like McDonald’s should introduce more products
that are nutritious but less fat. For instance, they need to introduce more kinds of salads with
premium quality. They should also remove the artery-clogging trans-fatty acids from the oil that
6
7. is used to make french fries. Additionally, all of the nutrition information should be provided on
the package of their products to make people aware of the calories that they take every day.
Economic
The economy has a great effect on every industry from firms that supply raw materials to
those that manufactures finished goods and services and that is, fast-food industry is certainly no
exception. Since the economy is slowing down and facing a high unemployment rate, the
Americans have to cut down their spending. Hence, the slow-down economy put a strong threat
on profit creation of fast-food companies. Thus, companies should base on the growth of
economy to change their strategy effectively and flexibly.
Global issues
Thanks to globalization, it helps companies have an approach to larger potential markets
and valuable production factors such as cheap labor, better source of raw materials and skilled
managers from other countries. Furthermore, fast-food companies can take advantage of
globalization to enter into many different countries all over the world. Nevertheless, it poses
some threats to fast-food industry. For instance, foreign foods such as sushi and burrito will have
opportunities to enter into the U.S. local market and threaten fast-food companies. Customers
will tend to change their tastes to these foods and neglect fast food because of its unhealthy
ingredient. Thus, fast-food companies need to change the ingredients of their food to make it
appeal to customers. Additionally, since companies tend to seek for a cheap labor force in
countries such as China and Vietnam, the United States will have to cope with a high
unemployment rate and that is a risk for the growth of economy. Due to high unemployment rate,
it will also have an effect on profit creation of fast-food industry since people will try to cut
down their spending and they will choose to have meals at home rather than eating out.
7
8. 2. Internal environment analysis
Tangible Resources
Financial
Firm’s cash and cash equivalents during the period of 2006 and 2008 decreased slightly
from 2,136,400 to 2,063,400 thousand dollars. Thanks to Skinner’s effort, McDonald’s sales
have increased sharply from 21,586,400 to 23,522,400 thousand dollars between 2006 and 2008.
Although during this period the economy was slowing down and people were trying to cut down
their spending, McDonald’s sales still grew because of its “Plan to Win” strategy which
emphasized on increasing sales at exiting locations by improving the menu, refurbishing the
outlets and extending hours. Moreover, Skinner tried to control the price and keep it at an
affordable price without hurting the profit margins. Despite of an increase in cost, McDonald’s
has maintained the pricing on its Dollar Menu, which generates almost 15 percent of total sales.
Therefore, with the healthy finance situation of McDonald’s, they can have capacity to raise
equity and make profits.
Physical
The total number of McDonalds’ outlets increased slightly from 30,946 in 2004 to 31,967
in 2008. However, the number of outlets owned by McDonalds decrease steadily from 8,179 to
6,502 while the number of franchised outlets rose sharply from 22,317 to 25,465 between 2004
and 2008. More than 75 percent of its outlets are owned by franchisees and other affiliates. This
will help McDonald’s build their brand recognition in all over the world while saving money for
establishing new business but still earn lots of money from franchising.
Moreover, in order not to be left behind by its competitors, McDonald’s tried to refurbish
its outlets all around the world to make it more attractive to customers. The interiors feature
8
9. armchairs and sofas, modern lighting, large television screens, and even wireless Internet access.
The firm also provides features for its drive-through customers and that include music aimed at
queuing vehicles and a wall of windows on the drive-through side of the restaurant, allowing
customers to see meals bring prepared from their cars.
Technological
The biggest innovation of McDonald’s came from their drive through section with a touch-
activated screen that made it easier for customers when ordering. When ordering foods,
customers only need to punch in their orders without queuing. They also provide features include
music aimed at queuing vehicles and a wall of windows on the drive-through side of the
restaurant to allow customers to have a look at their meals being prepared right from their cars’
windows. Moreover, inside of their outlet, they also provide free wireless internet access so that
their customers can easily browse internet while eating. Additionally, thanks to the presence of
an online website mcdonalds.com, customers are provided information about menu, nutrition
facts, promotion, and store locations, and they can order foods right on this website. Besides, it is
a channel for potential employees to get information about company and recruitment campaigns.
Organizational
In terms of functional structure, McDonald’s has a multi-level organizational structure,
which is headed by CEO and the boards of directions in each region such as Greece, Asia and
Pacific. CEO’ is in charge of managing the overall business of the company as well as
employees, finance and customers. They are also responsible for managing business asset and
company resources to make profits and have a tight control of the firm. Moreover, the CEO leads
a group of junior managers who are responsible for different fields of McDonald’s namely,
marketing and human resources.
9
10. The total number of outlets of McDonald’s around the world is more than 30,000 stores
and serving around 52 million customers in over 100 countries per day, and most of these outlets
are operated by franchising. Each outlet has one business manager, first assistant and shift
manager such as breakfast shift managers, daytime shift managers, closing shift managers and
over-night shift managers. McDonald’s has over 1.5 million people and divided by many groups
of crew members. The organization structure of McDonald’s is consistent in all stages to ensure
business to run 24 hours. Employees are delegated to suitable tasks in different shifts by shift
managers to complete jobs smoothly in a fast manner. In our opinion, managers should enhance
atmosphere of corporation and teamwork to foster employees’ performance.
Intangible Resources
Human
McDonald’s has provided thousands of jobs for American population. Employees of
McDonald's divided into three groups including restaurant workers, corporate staff, and franchise
owners. McDonald's usually hires between 50 and 65 people in each local restaurant and most of
these positions are part-time workers. Nevertheless, the chain ran into more problems because of
the tighter labor market. McDonalds began to cut back on training as it struggled hard to find
new recruits, a policy that led to a dramatic falloff in the skills of its employees. Therefore,
McDonald’s should invest more money on training employees to provide necessary skills for
employees. For example, they need to have a training room in each outlet and instruction video
to help staff understand how to satisfy customers’ needs.
Furthermore, workers in McDonald’s often are paid low, so the morale of employees is not
high. The manager’s salary is slightly higher than the crew member’s one. Employees are not
paid extra money even when they work longer hours. As a result, they feel unsatisfied with their
10
11. low wage and lack of commitment to the company because their pays do not deserve their
scarification and contribution. That is, this leads to high staff turnover rate. It is recommended
that McDonald’s should concern thoroughly about employees with frequently motivational
support to retain skillful and expert staffs who are willing to move to other competitor
companies. Moreover, it also helps reduce recruitment and training expenses.
Innovation
The innovation of products is the priority concern of McDonald’s to increase the revenues
and maintain a base of loyal customers. For instance, they remove the trans-fatty acids in the oil
that is used to make french fries and salt content of its products that without changing the taste of
their food. Moreover, they also introduce the McGriddles breakfast sandwich, offering a couple
of syrup-drenched pancakes and a sandwich filled with eggs, cheese, sausage, and bacon in three
different combinations. It is suggested this change may help McDonald’s attract more customers
and satisfy the demands of different consumers. Additionally, in order not to be left behind by its
rival, McDonald’s applies innovative technology in doing business. For instance, a touch-
activated screen is provided in drive-through area, permitting customers to punch in orders
without queuing. This renovation will bring interests to customers, especially children as well as
save time in ordering food.
Reputation
McDonald’s is famous for selling hamburgers and cheeseburgers under the traditional
symbol of a golden arch. Since it was established, the number of McDonald’s outlets has risen
significantly, from a single outlet in a nondescript Chicago suburb to one of the largest chain of
outlets spread around the globe.
11
12. To improve the reputation with customers, McDonald’s should improve the quality of food
and introduce healthier foods to satisfy the demands of customers. The website of the company is
a channel for consumers to give feedbacks or comments on their services and delivery systems
and this is the fastest way to receive feedbacks from consumers. Moreover, they need to put
emphasize on the hygiene and safety of food to bring the best quality to customers and enhance
their images. Besides, they also do some charity works for community such as Ronald McDonald
Charity program because McDonald’s want to bring positive impacts on children, so they
donated “$400 million” dollars for children all over the world. The company also makes an
annual global fundraising on World Children’s Day and they participate in some children
fundraisings such as the Ronald McDonald House Charities. By doing community projects, they
can build nice image in customers’ eyes.
Organizational Capabilities
Organizational capability of McDonald’s is to combine tangible and intangible resources to
run business efficiently. First, making use of time and capital and human resources combining
with sustain leadership skills, McDonalds can keep its value and satisfy customers’ needs. They
put emphasize on leadership in all level of management such as teamwork and have a clear
requirement for their employees’ works. They also give more concerns on the quality of leaders,
and then educate and train them to improve their missing skills. As a result, company can
maintain a consistent corporate culture between managers and employees, and provide the best
quality products and services to their customers. McDonald’s can gain and maintain their core
competencies to compete with the intense of rivalry among competitions in fast-food industry.
Additionally, because of fast changing in technology, demographic and globalization, to
achieve their goals, McDonald’s must adapt to those changes. Thanks to large network of outlets
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13. all over the world, McDonald’s can make different teams in different locations to investigate in
the tastes and preferences of local people. Thus, they can change their menu and create special
ingredients to suit with the interest of various consumers.
3. Differentiation Strategy
It is recommended that McDonalds should apply differentiation strategy by providing
stand-out services. It will protect McDonald’s against rivalry from its competitors in a very
strong competitive industry such as KFC, Wendy’s, and Pizza Hut. First, McDonald’s will have
to make their products differentiate from their competitors by offering new healthier foods and
beverages for consumers. For example, they can offer new kind of foods that their competitors
have not done yet such as milkshake, fresh breads and cookies in their McCafes. They can offer
new menu to new targeted customers such as customers who are vegetarians or those who likes
eating low-carb. They also need to improve the delivery and customer service to become the best
in delivery and customer service. The faster delivery speed is, the higher customer loyalty is.
Moreover, McDonald’s can promote sales by giving discounts and coupons for customers in
special occasions. As a result, the brand name of McDonald’s will be enhanced in customers’
minds.
To summarize, when McDonalds’ apply differentiation strategy, it will help them build a
strong base of customer and win back customers from its competitors. Plus, it will create a
higher barrier for the new entrants and make them get more difficulty to compete with
McDonald’s.
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14. References
(2013, March 14). Retrieved May 15, 2013, from United States Census Bureau:
http://quickfacts.census.gov/qfd/index.html
Five forces analysis of the fast food industry. Retrieved May 15, 2013, from Scribd:
http://www.scribd.com/doc/30964168/8/Five-forces-analysis-of-the-fast-food-industry
Joan, V.G. (2011, November 1). Human Resource Management in McDonald's. Retrieved
May 16, 2013, from: http://jpkc.szpt.edu.cn/english/article/Human%20Resource
%20Management.htm
Leadership Best Practices from Ronald McDonald. Retrieved May 15, 2013, from:
http://theleadershipprofessor.com/2011/11/leadership-best-practices-from-ronald-
mcdonald
Pirzada, K. (n.d.). McDonald. Retrieved May 13, 2013, from Scribd:
http://www.scribd.com/doc/28290117/Mcdonalds-Mini-Report
Resources and Capabilities of McDonald. (2010, February 2). Retrieved May 14, 2013, from:
http://ivythesis.typepad.com/term_paper_topics/2010/02/resources-and-capabilities-of-
mcdonald.html
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