Essay on Mcdonalds Case Study
3346 WordsSep 26th, 201414 Pages
McDonald’s Corporation in the New Millennium
J. Paul Peter and Ashish Gokhale University of Wisconsin—Madison
Jack Greenberg, CEO of McDonald’s Corporation, stared into the clear September skies thinking about the “Big Mac Attack.” At one time, the term was an advertising slogan referring to a craving for a McDonald’s Big Mac burger. However; “Big Mac Attack” now referred to McDonald’s earnings declines in the late 1990s and early 2000s. Dynamic market expansion, new products, and special promotional strategies had made McDonald’s Corporation a leader of the fast-food industry. However, sales growth in the United States had slowed to below the industry average in recent years. Jack Greenberg was trying to decide on a set of appropriate…show more content…
The average fast-food restaurant has sales of about $560,000 per year.
Another segment of the fast-food industry is comprised of a number of non- hamburger fast-food restaurants. Major players in this segment include Pizza Hut, KFC (Kentucky Fried Chicken), and Taco Bell. Sales in these restaurants have grown faster than hamburger chains in recent years. A growing trend is the move by customers to non-hamburger sandwiches. Subway dominates the market with more than 13,200 U.S. outlets. Prepared meals and sandwiches available in supermarkets, convenience stores, and gas stations are competitors as are the variety of microwave meals available to consumers.
Another trend is the recognition of the importance of heavy users of fast-food restaurants. It is estimated that heavy users comprise 20 percent of customers but account for 60 percent of all visits. Some of these customers visit fast-food restaurants 20 times per month and spend up to $40 per day in them. Heavy users have been described as single males, under 30 years of age, who have working-class jobs, love loud music, don’t read much and hang out with friends.
A major change in the fast-food industry is the increase in the fast-casual segment that includes restaurants like Boston Market, Panera Bread Company and Atlanta Bread Company. These chains offer deli sandwiches and meals that are more upscale than traditional fast food, served in nicer restaurants with more comfortable
Mcdonalds Case Study
...McDonald's Operation in South Africa A Case Study Abstract: The case focuses on the strategies adopted by the world's leading fast food restaurant chain, McDonalds Corporation (McDonald's) in South Africa. McDonald's opened its first restaurant in South Africa in November 1995. Today McDonald's operates 170 restaurants in nine of South Africa's provinces-Gauteng, Western Cape, Eastern Cape, KwaZulu-Natal, Mpumalanga, Free State, Northern Province, North West and Northern Cape. In March 2011, Shanduka Holdings, owned by Cyril Ramaphosa, acquired control of McDonald's South African operations. The deal gave Ramaphosa exclusive rights for 20 years; including the powers to lease out real estate of its stores. McDonald's has struggled under fierce home-grown competition. Famous Brands, its main rival has more than 1100 outlets operating under names such as Steers, Wimpy and Mugg and Bean. Since then, McDonald's has been expanding heavily in South Africa providing quality, service, and value to its customers. South Africa has proven to be one of the most successful markets for McDonald's at one point opening a staggering number of 30 restaurants in record time. This case concludes by addressing challenges faced by the new owners of McDonald's with increasing competition, commodity price fluctuations, and variances with direct costs. Issues: * Examine some of McDonald's efforts to localize its offerings in South Africa. * Understand McDonald's marketing......
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Mcdonald Case Study
...MC DONALDS CASE STUDY ANALYSIS OF THE COMPANY McDonald's Corporation is the world's largest chain of hamburger fast food restaurants, serving around 68 million customers daily in 119 countries Headquartered in the United States, the company began in 1940 as a barbecue restaurant operated by Richard and Maurice McDonald; in 1948 they reorganized their business as a hamburger stand using production line principles. McDonald's operates over 34,000 restaurants worldwide, employing more than 1.7 million people. Businessman Ray Kroc joined the company as a franchise agent in 1955. He subsequently purchased the chain from the McDonald brothers and oversaw its worldwide growth. McDonald's predominantly sells hamburgers, various types of chicken sandwiches and products, French fries, soft drinks, breakfast items, and desserts. In most markets, McDonald's offers salads and vegetarian items, wraps and other localized fare. McDonald's operates over 34,000 restaurants worldwide, employing more than 1.7 million people. In 2006, McDonald's introduced its "Forever Young" brand by redesigning all of its restaurants, the first major redesign since the 1970s.McDonald's has invested $1 billion to redesign nearly all of the 14,000 restaurants by 2015. SWOT analysis of McDonald's Strengths 1. Largest fast food market share in the world. McDonald’s is the largest fast food restaurant chain in terms of total world sales (8%). It is the second largest outlet operator with more than 34...
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Mcdonald- a Case Study
...and when to spend their money. Keeping that in mind McDonald places considerable emphasis on developing a menu which customers want based on market research and market testing. Marketing team needs to continuously monitor the changes that take place in the market as the food industry is a highly volatile market. What the customers like today might not be their want tomorrow. The type of marketing undertaken and the resources invested will be different depending on the stage a product has reached. For example, the launch of a new product will typically involve television and other advertising support. At any time a company will have a portfolio of products, each in a different stage of its cycle. Some of McDonald’s options are growing in popularity while arguably the Big Mac is at the ‘maturity’ stage. While offering new and differentiated products, the product cycle should also be kept in mind. * Promotions Key objectives of advertising are to make people aware of an item, feel positive about it and remember it. Since McDonalds know about the customers it is serving, it is able to communicate well and achieve its marketing goals. Messages should gain customers’ attention and keep their interest. The next stage is to get them to want what is offered. Showing the benefits which they will obtain by taking action is usually sufficient. The right messages must be targeted at the right audience, using the right media. McDonalds has come up with punch lines like ‘I am loving......
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Mcdonald Catfish Case Study
...information would be obtain from the reliability of the research. After conducting the market testing, the same results should be consistent around the board to confirm the product would be a success in the particular region that is being tested. We cannot forget stability should also play a factor in this research as the study of situational changes could occur while attempting to place this new product on the market. If during the time frame, there is a severe layoff across the board, which could affect the amount of product that would be purchase, which will then affect the validity and reliability of the research. Conclusion Although, people measure things differently in life, research is very important. Research is how we obtain information in order to successfully do things. Research is reliable only if it provides consistent results. In order for the McDonalds Catfish sandwich test to be successful management took into consideration of the competitive environment, market size, patterns of media coverage, product usage, housing, population size, income, attributes, and ethnic characteristics. This will provide an optimal balance and give McDonalds the best results needed to successfully launch their new product. Reference Cooper, D., & Schindler, P. (2014). Business research methods 12th edition. (12 ed.). New York: McGraw-Hill, Inc....
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Mcdonalds Case Study
...this expansion, McDonald’s has faced the challenge of transferring a symbol of American culture to places where there are significant national, cultural and religious differences. This essay will analyse some management issues that McDonald’s has experienced. Firstly, the strategic debate regarding global integration versus national responsiveness will be examined. Associated with this issue, is the matter of diversity across different regions. Finally, the essay will consider McDonald’s corporate image of social responsibility in relation to environmental sustainability and increasing problems of worldwide obesity. McDonald’s as we know it today is a result of Ray Kroc taking the entrepreneurial hamburger ‘stall’ established by the McDonald brothers, and franchising the business with Ted Turner to create an international organisation (McDonald’s Australia, 2014). In the 1950s there was significant domestic growth in the United States of America. International expansion began in the late 1960s and 1970s, initially targeting Canada, the United Kingdom and western European countries of Germany, the Netherlands and Sweden (Stonehouse, et al, 2004). The first restaurant opened in Australia in 1971 (McDonald’s Australia, 2014). In 2001, McDonald’s was one of the top 10 brands and the leading food retailer serving 46 million customers per day, worldwide (Rowley, 2004). Today over 50 million customers will consume a McDonald’s product each day (McDonald’s Australia, 2014).......
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Case Study of Mcdonalds India
...faced with many different possibilities, but encouraged by previous failings from rival companies in KFC and a vast amount of research into India and its markets McDonald'. McDonald’s is a global fast food operator which operates in India with a joint venture partner in 1995. The McDonald’s brand and business system is globally renowned and the Indian operation has been going since 1995 and in December 2002 had 46 restaurants and more than 250 outlets are currently serving throughout India. India is a huge and diverse market with 1 billion people and even though the typical global McDonald’s product is beef burgers, McDonald’s has so far been successful with offerings such as vegetable, mutton and chicken burgers. History of McDonalds: 1955 | Ray Kroc opens his first restaurant in Des Plaines, Illinois and the McDonald's Corporation is created. | 1957 | Quality, Service, Cleanliness and Value (QSC& V) becomes the company motto. | 1959 | The 100th McDonald's opens in Chicago. | 1961 | Hamburger University opens in Elk Grove, near Chicago. | 1963 | One billion hamburgers sold. Ronald McDonald makes his debut. | 1965 | McDonald's Corporation goes public. | 1974 | The first Ronald McDonald House opens in Philadelphia. The Happy Meal is launched. | 1984 | 50 billionth hamburger sold. Ronald McDonald Children's Charities is founded in Ray Kroc’s memory to raise funds in support of child welfare. | 1989 | McDonald's is listed on the Frankfurt,......
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Mcdonald Case Study
...would expect to sell 110 units this week. However, this was a simple method and involved no calculations to take account of factors such as national promotions or school holidays. It took up a lot of the Restaurant Manager's time, leaving them less time to concentrate on delivering quality food, service and cleanliness in the restaurants. The new system In 2004, McDonald's introduced a specialist central stock management function known as the Restaurant Supply Planning Department. This team communicates with restaurant managers on a regular basis to find out local events. The team builds these factors into the new planning and forecasting system (called Manugistics) to forecast likely demand of finished menu items (e.g. Big Macs). This case study looks at how McDonald's manages its stock through its management systems and what benefits this brings....
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Mcdonalds Case Study
...of the fast-food industry. However, sales growth in the United States had slowed to below the industry average in recent years. Jack Greenberg was trying to decide on a set of appropriate strategies for the future in order to reverse the declines and to stay ahead of competition. The Fast-Food Industry Years of profit drains and flat sales are driving fast-food chains to find new marketing strategies to compete in a mature market. While McDonald’s and most other hamburger chains continue discounting and offering a variety of new products to attract customers, they also seek to shed their “cheap and greasy” image with new store designs. Major competitors in the hamburger segment of the fast-food industry in order of annual sales are McDonalds, Burger King, Wendy’s, and Hardees. Since these chains recognize the importance of drive-through customers (65 percent of sales), they are all trying to increase the speed of drive-through delivery. Strategies include using timers to encourage employees to prepare and deliver food faster, training employees in faster food preparation methods, having separate kitchens and food preparation facilities for drive-through customers, and even windshield responders that automatically bill customers. Drive-through sales are expected to grow three times faster than on-premise sales. It is estimated that increasing drive- through efficiency by 10 percent increases average fast-food restaurant sales by $54,000. The average fast-food restaurant......
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Mcdonald Case Study
...McDonald’s case study Ans1. The taste of the costumer are changing rapidly because of the variety of burgers the competitors are providing in the market and the promotions of these burgers about by 2 and get 1 free, the impact the would have in the McDonald’s is that they would lose the business if they don’t come up with a better solution. Ans2. The changes in the customers taste and preference are being well reflected by the competitive strategy because of which the customers and going for different tasteful foods and which are affordable McDonald need to breakthrough that will provide new revenues of growth. Ans3. The strength of McDonald’s is the counter attack of the “BIG MAC ATTACK”, and the weakness is that McDonald’s don’t have a segment in the burger. Ans4. Yes, McDonald should develop separate strategy for the heavy user segment of the fast food industry because it is losing business and profits due to their competitors which have a separate segment of burgers. Ans5. To grow sales and profits, Jack Greenberg should create awareness with in store team members of what constitute the true fast food experience. Install a computer –based customer feedback in every restaurant, set up a similar feedback system for drive thru customer. IKEA’s case study Ans1. IKEA's firm specific advantages are clear-cut as the low cost furniture manufacturer and retailer aims to the young and price-conscious consumer. IKEA has been developing innovative......
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Mcdonalds Case Study
...at British outlets by the end of the year, amid a backlash against firms blamed for a an "obesity epidemic". Medical experts have drawn a direct link between increasing obesity and giant portions of everything from fast food to chocolate bars and crisps. A super-size portion of fries at McDonald's contains 486 calories, more than double the 206 calories in a regular serving. McDonald's said of its salad that without the creamy dressing and croutons, the fat falls away and the less calorific balsamic vinegar dressing contains just 2g of fat. A spokeswoman added: "Free of dressing a chicken salad has only 222 calories. It's the Italian cheese that makes the difference". Read more: http://www.dailymail.co.uk/health/article-299653/McDonalds-salad-fatty-burger.html#ixzz3QV8gPeGJ Follow us: @MailOnline on Twitter | DailyMail on Facebook...
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Mcdonalds Case Study
...intimacy new products and business models : information system is very useful to enhance the way the company produces , delivers and sells to create wealth. Improved decision making , the competitive advantage or even the concern of survival. We will see below how does IT help McDonalds to minimise the threats based on the porter 5 forces and how does it enhance their value chain 2-Introduction: McDonald’s corporation is global company of fast food restaurants spread in 119 countries and serving around 68 million of customers every day via 32000 places . founded in 1940 by Richards and Maurice McDonald in San Bernardino in California , they started with the famous American style of ‘car hops ‘, 8years later under the pressure of a full menu and the increasing customers they decided to follow the idea of a limited menu “ only ham and cheeseburgers fries and drinks “because it was cheaper and could be cooked quickly , which led to an increase of customers , and on the end of 1948 , the new restaurant opened and during the next few years, the restaurant became more and more famous and the restaurant were redesigned with more yellow and 2 arches that will be joined later to make the Famous M . McDonalds is now a symbol of globalization and the American life style http://mcdonaldsmis.blogspot.co.uk/p/overview-of-mcdonalds.html 3-Porter’s 5 forces 1st Figure 3-1 The competition threat -The market of fast food industry is very tough , and......
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Mcdonalds Case Study
...McDonald’s Restaurants law case Introduction The famous 1994 Liebeck v. McDonald’s Restaurants law case, popularly known as “the hot coffee lawsuit” sparked a debate in the U.S on product liability. The case resulted from the severe burns Mrs. Liebeck got from her coffee spill. Having bought coffee from McDonald’s, Liebeck told her grandson to stop the car so that she could add sugar to her coffee. She placed the cup on her lap but it got spilled causing a third degree burn to six percent of her body and less serious burn to sixteen percent. She was hospitalized for eight days and had to undergo skin grafting. She also spent the next two years on medication. Liebeck filed a lawsuit against the fast food restaurant and was awarded $640,000 by the trial judges. The parties however, decided to settle for a confidential amount before an appeal could be decided. Many people saw the case as worthy as many people before had received burns from McDonald’s coffee but not much was done toward it. Laws and ethical principles violated The serving of very hot coffee by the McDonalds violates the product liability law (Allee 1984). Coffee at temperatures between 180-190 degrees is well known to burn when spilt. The fast food chain knew this very well and it still continued serving this very hot coffee even after over 700 previous cases of burnt reported to it. This demonstrated very well that the food chain was not ready to take any responsibility for any health effect its......
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Mcdonalds Case Study
...savings technologies (Rothaermel, 2015). International Strategy McDonald’s leverages a transnational mentality as their international strategy. The text defines a transnational strategy as one that “combines the benefits of a localization strategy (high local responsiveness) with those of a global-standardization strategy (lowest cost position attainable)” (Rothaermel, 2015, p. 340). Although McDonald’s uses many of the same core items around the world, their individual locations also have alternate menu choices that correspond to the culture and tastes of the particular part of the world that they are located in. At the same time, much of McDonald’s is standardized. They use the same type of presentation, such as the golden arches, Ronald McDonald, and their color schemes. Implementation: Focus on Recommendations and How to Execute Them Organizational Structure CEO Don Thompson’s strategic plan consists of three major action items. These are “focusing on optimizing the menu to keep pace with evolving consumer preferences, improving the customer experience so that they would come back again, and making McDonald’s more accessible to a broader market base” (Rothaermel, 2015, p. 538). In order to achieve this strategic plan, there are several changes that the organization must adopt to be successful. First, they need to be more innovative to appeal to the changing consumer preferences. With many of McDonald’s classic menu items being created by franchisees, perhaps the......
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Mcdonalds Case Study
...McDonald’s Case Analysis Nick Brown BUSN412 Business Policy May 14, 2010 CASE ANALYSIS McDonald’s COMPANY NAME: McDonald’s Corporation INDUSTRY: Food McDonald’s Corporation COMPANY WEBSITE: (www.mcdonalds.com) COMPANY BACKGROUND: Ray Kroc found McDonald’s corporation, a successful fast food restaurant, in 1955 were his vision was to create McDonalds restaurants all over the U.S, and within 3 year of establishing the franchise the corporation was already selling its 100 millionth burger. The franchise has now became a successful global fast food restaurant that sells a variety of items and has a unique philosophy that Ray Kroc envisioned with building this franchise which was “To Build a restaurant system that would be famous for food of consistently high quality and uniform methods of preparation”(McDonald’s Corporation 2009). He wanted, “To serve burgers, buns, fried and beverages that tasted just the same in Alaska as they did in Alabama”(McDonald’s Corporation 2009). The case study concentrated on the financial strengths and struggles of the franchise. With the early millennium years 2001, 2002 and 2003 the franchise seen a tremendous dip in total revenue and net profits, it wasn’t until 2007 when the company seen a turnaround in total revenue and net profits. Things were starting to look up for franchise. Currently the CEO at McDonald’s Corporation is Jim Skinner and he is providing the same vision that Ray Kroc was envisioning when he opened the doors.......
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Mcdonalds Case Study
...1. After updating McDonald’s corporation summary of financial data from 2003 to 2011, I found that sales were on a rise. Looking closer into McDonalds total system wide sales, I noticed that sales have been increasing since 1997. When looking even closer into the company’s total system wide sales, I found that from the year 1997 to 2010, sales over doubled. When looking at the percent change between years, I noticed that the percent change was much higher in some cases, but sales were always on the up. For example, in the year 2007 total system wide sales were up 11.9% from 2006, but in 2006 sales were only up 7.3% when compared to 2005. Overall sales wise, McDonalds has done an excellent job, in continuing and meeting new sales growth each year. 2. One of the key macro environmental trends is the recognition of the importance of heavy users of fast food restaurants. Heavy users make up 20 percent of customers but account for 60 percent of all visits. Another major change in the fast food industry is the increase in the fast-casual segment. Restaurants in the fast- casual segment include, Boston Market, Panera Bread Company, and Atlanta Bread Company. The fast casual sector is growing at a rate of 15-20% a year, because customers are willing to spend a couple dollars more for a better dining experience. Americans are beginning to eat out less compared to previous years and eating habits are changing. Part of the reason is the recession, but that should affect......
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