Case Study 2-McDonalds
July 10, 2015
Kimberly Pendley
BUAD455-D3
Synopsis
As a company, McDonald’s was first introduced in Des Plaines, Illinois in 1955. Ray Kroc decided that this would be a great idea of selling a chain of franchises. He buys out the brothers Richard and Maurice in 1961. Even with leading the fast food chain McDonald’s faces the ever-growing economic deficit that its customers are faced with. It also has a huge social responsibility for helping the stay healthy market that many stakeholders are now requesting. With all of the social impact and economic challenges, McDonald’s needs to find a strategic method that will capitalize on regrouping its organization along with winning the taste of its many customers.
Critical Factors of Success
McDonald’s is the largest fast food restaurant chain in terms of total world sales. It is the second largest outlet operator with more than 34,000 outlets, serving 69 million consumers every day in 119 countries. The Company’s brand is the leading recognized brand in the fast food industry and has been valued at $40 billion. It is also famous for its notorious clown Ronald McDonald that we all grew up knowing. McDonald’s spends more on its advertising market than what four fast food chains put together would spend. They have proven that good advertising brings in customers. McDonalds has accommodated its operations in many diverse cultures. This has shown its ability to adapt to local tastes where food is extremely different from those of European consumers or US. This has proven to be a great strength in the fast food market. McDonald’s has collaborated with some of the most popular brands such as Coca Cola, Dannon Yogurt and Heinz ketchup among others. More than 80% of McDonald’s restaurants are owned by individual franchises. This gives it the ability to control its marketing and customize a successful serving system. The organization successfully targets young children and parents by offering playgrounds, toys with its meals and advertisements for movies that are at high demand at the box office.
Major Problem/Opportunity
McDonald’s faces many publicity nightmares with it being heavily criticized for offering unhealthy food to its customers. This has been labeled as stimulating obesity to it young children that the advertising market targets. Although McDonald’s is forever trying to introduce healthier food choices to its menu, the menu is largely formed of unhealthy meals and drinks. This menu is one of the main focusing points for organizations fighting against the obesity and it decreases McDonald’s popularity with their campaigns.
The employment market offers low pay and this unfortunately leads to obtaining employees with low skills and very little customer service capabilities. McDonald’s then is constantly facing large turnover rates in each of its franchises, which leads to constant re-training and hiring.
McDonald’s has not been able to substantially differentiate itself from other fast food chains and this leads them to compete by price instead of by product.
Alternatives
While the demand for healthier food increases, McDonald’s could introduce some more healthy food choices in its menu. This could reverse its weakness into strength. They could offer unique menu’s such as vegetarian. They have changed their menu to adapt to other