Mc Donald`s Corporation
McDonald's Corporation is the world's leading food service organization.
The
corporation started out as a small drive-through in 1948 by two brothers,
Dick
and Mac McDonald. Raymond Albert Kroc, a salesman, saw a great
opportunity in
this market and advised Dick and Mac to expand their operation
and open new
restaurants. In 1961 Kroc bought out the McDonald brothers. By
1967 McDonalds
expanded its operations to countries outside the U.S.A. This
unyielding
expansion led the Corporation to open 23,000 McDonald's
restaurants in 110
countries in 1994, producing $3.4 bn in annual revenues.
In addition, McDonald's
opens a new restaurant every three hours. Also,
McDonald's has twice the market
share of its closest U.S. competitor, Burger
King, representing 7% of total U.S.
eating-out sales. Similarly, McDonald's
serves about 1% of the world's
population on any given day through its 23,000
restaurants internationally.
"Big Mac", the world's most sold hamburger was
developed by Jim
Delligutti in 1967 to feed construction workers. 'Big
Mac' is the biggest
attraction and backbone of the corporation. Moreover,
McDonald's maintains its
competitive advantage by constantly creating new
items to add onto its menu.
This shows us that McDonald's practices an
analyzer type of strategy,
introducing new items and defending its existing
ones. McDONALD'S MISSION AND
VISION: "We serve people with good quality
food, fast and at low
cost." McDonald's vision is to dominate the global
food-service industry.
Global dominance means setting the performance
standard for customer
satisfaction and increases market share and
profitability through successfully
implementing our convenience, value and
execution strategies. THESIS STATEMENT:
To have a clear picture of
McDonald's corporation we need to look at its Task
Environment, which
includes its: .Customers .Competitors .Strategic Allies
.Suppliers
.Regulators We shall also explore McDonald's Workforce Diversity and
its
Total Quality Management. CUSTOMERS: Customers are those who pay money
to
acquire an organization's goods or services. For many years McDonald's
mostly
targeted the young people, however this has changed in this decade;
McDonald's
has turned towards a more general market. By doing this McDonald's
concentrates
on the family, targeting a diverse market which includes
consumers ranging from
children to elderly people, using products such as the
"happy Meal"
for children and "Egg McMuffin" for the elderly. McDonald's
also
realized the changing world we live in and the need for healthier food,
since
there is an ever changing demographic group, who demand fast, top
quality food
that is low in calories. McDonald's responded to this
opportunity and introduced
a new and innovative product. This new product was
a regular hamburger that
tasted like the real thing but was made of plant
material like Soya beans. This
same product also targets another demographic
group, vegetarians. McDonald's
mostly uses psychographic segmentation
targeting the working and middle classes.
These are the people that are
more susceptible to enter a fast food restaurant,
since these are the people
that lead a fast moving life and thus require a fast
meal. In brief
McDonald's customers are of all classes, but largely working and
middle
classes, and people of all ages. COMPETITORS: A competitor is an
organization
that competes with other organizations for resources. In our
findings,
McDonald's has two types of competitors in the Lebanese market:
..Indirect
..Direct Indirect Competitors: Indirect refers to firms producing one
or two
products that compete with McDonald's products and therefore be a threat
to
the company. We have identified four indirect competitors: Henry J.
Beans,
T.G.I. Friday, K. F. C. and Popeye's. Henry J. Beans offers
hamburgers and fries
on its menu, therefore competing with McDonalds for
customers of these products.
However, Henry J. Beans also known as Hank's
is a more of a bar restaurant and
therefore a hang out place, as a result
charging more money for its products.
Hank's targets middle to upper
class customers, so where most of these customers
overlap are in the middle
class. T.G.I Friday is another indirect competitor
reflecting the same
characteristics as Henry J. Beans. Other indirect
competitors are K. F. C.
and Popeye's, both competing for the chicken nuggets
and fries customers. In
brief, Hank's and T.G.I. Friday's competes with
McDonald's by offering
hamburgers and fries, whereas K. F. C. and Popeye's
compete with McDonald's
by offering chicken nuggets and fries. Direct
Competitors: Direct
competitors refers to firms producing the same products or
services as
McDonald's does. Here we found that McDonald's has three direct
competitors:
Burger King, Wendy's and Hardee's. McDonald's closest rival is
Burger
King, which operates a total of 9644 restaurants in 110
countries.
Wendy's is McDonald's second largest rival, which is also in
the fast food
business, where Wendy's operates 6776 restaurants in 32
countries. Hardee's,
McDonald's third largest rival is also in the fast
food business and is the only
direct competitor apart from Juicy Burger in
the Lebanese market. Hardee's
operates 3080 restaurants in 20 countries. As
we have illustrated McDonald's
faces stiff competition from three major
competitors, Burger King, Wendy's and
Hardee's. Suppliers: Suppliers is
an organization that provides resources for
other organizations. McDonald's
has practiced a backward vertical integration,
by replacing most of its
suppliers. It has done so for two reasons, 1) To reduce
costs, and 2) To
ensure that its products are of top quality. These supplies
include beef and
milk to be used in its products, which it gets from its farms.
Other
suppliers include local grocery stores that supply McDonald's with
fresh
vegetables. Soft drinks are supplied exclusively by Coca-Cola, which is
also its
ally. McDonald's supplies also include raw material such as flour,
sugar, yeast,
etc.,. Strategic Allies: A strategic ally is an organization
working together
with one or more other organizations is a joint venture or a
similar
arrangement. McDonald's has formed a strategic alliance with:
Walmart, Chevron,
Amoco, Disney and Coca-Cola. Walmart, which is a large
shopping mall chain in
the U..S. and several neighboring countries, is allied
with McDonald's, which
offers great opportunities for both companies.
McDonald's has restaurants in
each Walmart, offering its customers
conveniences and excellent fast food at a
low cost ease of accessibility.
McDonald's corporation describes it best in this
scenario: "Imagine a busy
shopping day at your local Walmart and having the
ability to sit down with
the kids and enjoy many of our McDonald's favorites,
like 'Big Mac'
sandwiches, world famous fries and kids favorite 'Happy Meal'.
McDonald's
understands your busy lifestyles and the demands on your time. That's
why we
are making it easier for you to do more things in less time."
McDonald's
is engaged in an alliance with two petrol companies, Chevron and
Amoco.
This alliance represents the ultimate in convenience. At these locations,
one
finds a full-menu McDonald's restaurant with dining room service. Nothing
can
be more convenient, because one can fill up the car with gas and get a
meal
all in one stop. Another important alliance that McDonald's has is with
Disney.
Here McDonald's has the sole right to sell fast food in Disney's
theme parks
around the U..S. and other Disney operations in the world. Under
the terms of
the agreement, McDonald's will operate restaurants and Disney
will promote its
films through McDonald's. Regulators: Regulators are groups
or governmental
agencies that can control and influence the organization's
policies and
practices. An example is Lebanon a few years ago when the U..S.
government
banned all U..S. citizens and organizations to come or operate in
Lebanon.
Another good example would be the embargo imposed on Iran where
U..S.
organizations were banned to operate in this country. Another group
of
regulators called interest groups can and have influenced McDonald's to
treat
its animals (cow and chickens) in a much more humane manner, which
resulted in
the restructuring of McDonalds' farms throughout its operations
around the
world. The summary of the task environment which is by definition
a specific
organizations or groups that affect the organization, which
includes
competitors, suppliers, customers, strategic allies and regulators.
Here we
described the task environment's importance to McDonald's, where
McDonald's
faces both opportunities and has threats in its environment.
Workforce
Diversity: Diversity exists in a group or organization when its
members differ
from one another along one or more important dimensions such
as age, gender, and
ethnicity. Diversity is very important for McDonald's.
Here millions of teens
start out by working at McDonald's. Here some of the
teenagers move on to get
various jobs such as movie stars, skilled workers,
famous athletes, management
positions and other educated positions in
society. At McDonald's two thirds of
middle and upper management started out
as crewmembers in a McDonald's
restaurant. There are opportunities for
everybody in McDonald's from teenagers
to elderly workers, and from people
just entering or reentering the job market.
Moreover, McDonald's offers
special jobs for people who have disabilities, such
as people who are in
wheel chairs and those who must use crutches permanently.
Furthermore,
McDonald's offers their workers flexible working hours. For
example, hours
for people seeking just a few hours of work per week and those
who seek full
time positions. The work force at McDonald's also have some say in
their
working hours, such as if they prefer the morning, mid-day, or evening
shifts
in the restaurant. So, McDonald's uses diversity to create a good
atmosphere
in their work places among workers and management. Here they offer
work to
all kinds of people without discrimination and the workers have
flexible
hours that provides customer satisfaction. Top Quality Management:
Quality is
the totality of features and characteristics of a product or
service that bear
on its ability to satisfy stated or implied needs. For
McDonald's, total quality
management (TQM) involves that the employees are at
work on time, are neatly
dressed, and are clean. The employees must make sure
that the customers
constantly receive safe food, which implies that the
employees must wash their
hands often to remain clean. Moreover, the
employees must follow certain
Standard Operational Procedures, so the
customers always receive exceptional
quality and service. This includes the
employees using plastic gloves when they
prepare the food, that the meat and
fries are properly fried, and that the
vegetables are thoroughly washed when
used in the food. Another TQM is that the
employees rely on teamwork and high
energy to get the job done, so that the
customers do not have to wait long
for their food. Furthermore, McDonald's
management emphasizes that their
restaurants should be clean. This involves that
the restaurants are tidy,
sparkling and spotlessly clean. As McDonald's
illustrates the quality is that
the employees delivers fast, accurate and
friendly service with a smile.
CONCLUSION: In conclusion, we have explored a
large corporation such as
McDonald's and shown how its Task Environment,
Workforce Diversity and
Total Quality Management can have a profound effect on
the organization. In
order for such a corporation to remain a leader in its
field, it must stay
growth oriented and constantly have contingency plans to
overcome turbulence.
Another important factor is the type of strategy that it
follows. McDonald's,
Daimler Chrysler and Benz follow an analyzer type of
strategy, constantly
introducing new products while defending their existing
products.