Matias, Rolyn Mari C.

BSHM 3-1

McDonald’s Case Study

Executive Summary:

With operations in over 121 countries and over 30,000 restaurants around the globe, McDonald’s
Corporation is the largest fast food service and supplier in the world. To serve all of the their customers
and demonstrate the incredible size of the company, McDonald’s has more than one and a half million
employees and serves more than ninety-six percent of the world’s population at least once a year.
McDonald’s operates in the fast food industry and its core product lines include hamburgers and french
fries, but the chain also sells chicken, salads, and fish products among others16 McDonald’s utilized an
intense, rapid expansion into foreign countries through three primary methods, franchising, company
owned restaurants, and joint ventures. With the majority of international restaurants stemming from
franchising agreements, McDonald’s management relied on this method to aid in the acceptance of a new
style of eating into unfamiliar market.

Findings:

McDonald’s innovation was creating a better business system better methods, systems and controls than
existed at the time in the food industry so that it could lower its costs and sell its products cheaper to the
public, which allowed it to grow and be more profitable. But there are some issues that McDonald’s is
facing such as: bad food image; slow inaccurate service; price sensitivity and increase competition.
Discussion/Implementation/Recommendations: To defend the image of its food, McDonald’s launched a
social media last week inviting customers to ask questions about ingredients it uses. Showing just how
bad perceptions can be, among the first questions McDonald’s addressed where “Why doesn’t your food
rot?” and ‘Do you use real chicken in your Chicken McNuggets? The company has run similar programs
in Canada and Australia, where it says the program has built trust with the customers. Slow inaccurate
service which customers seem to be turned off by slow service at McDonald's and it's creating a major
problem for the fast-food chain. McDonald's slowing service may be driving customers away from the
chain. The fast-food giant has struggled to quickly serve customers as it has added new items to the menu,
like all-day breakfast. With regards to price sensitivity, The fast-food giant has struggled to quickly serve
customers as it has added new items to the menu, like all-day breakfast. Managers of McDonalds are
trained professionally. As a result, they can train employees well. McDonald’s employees are evaluated
high by customers because of their behaviors as well as attitude. However, customers are not pleased at
the idea of waiting in long lines and insufficient employees to handle the volume of customers. Just the
minority, but sometimes the employees are rude forcing the customers to go to a competitor’s restaurant
next time. At the market which has high market share and very huge number of customers such as USA,
Canada or United Kingdom, this issue occurs more frequently. McDonalds should find a way to solve it.
For example, the company has to rent more employees and increase their salary in order to keep them
working for a long time. This time is just enough for them to get skills to service customers well. Besides,
it is necessary to increase the number of employees at the weekend or in the lunch time. More employees
means that pressures are shared and avoid the bad attitudes

Recommendations

1. Service Differentiation: McDonald’s needs to focus on service differentiation strategy in order to

position the restaurant as a superior service restaurant in the minds of the target consumers. The service
differentiation strategy implies that McDonald’s shall offer superior services at each step of the customer
touch points right from the placement of order through the delivery of the products.

2. Personnel Differentiation: The availability of well-trained staff is essential for delivery of high quality
service to the customers. McDonald's should continue to invest in the training and development of its
employees to ensure high service quality. Well-structured training programs shall ensure the long term
growth of the organization.

3. Integrated Promotional Mix: McDonald’s can implement an integrated promotion mix that has a
balance of both traditional and modern digital media for brand promotions. McDonald’s must recognize
the importance of digital media in the promotional mix for organizations, and should devise digital
marketing strategies to engage with the online customer base.

4. Product Augmentation: McDonald’s can offer additional product and service features such as food on
demand and home delivery so as to provide convenience to customers. Product quality can be further
enhanced with fresh ingredients. McDonald’s should continue to invest in menu customization and menu
standardization strategies to attract and connect with target customers in diverse geographical markets.

Conclusion:

McDonald's Finds Ways to Make Customer More Satisfied with Fast Service Historian Love writes that
the McDonald's brothers "defined a totally new food service concept... (Their hamburger stand was) the
birthplace of a new generation of restaurants" The McDonald brothers applied a Factory-line assembly
design to a commercial kitchen, to make a faster and precise product. They cut the serving time down
from 20 minutes to 30 seconds. Ray Kroc who later took over McDonald's implemented having two
separate windows for drive-thru (one to pay, one to get food). This created a faster flow through drive-
thru which decreased wait times. McDonald's Finds Ways to Make Customer More Satisfied with Higher
Quality Products McDonald's has a strict regimen for safety and food quality standards. There have been
questions about chicken McNuggets, which McDonald's debunks through their video. McDonald's Finds
Ways to Make Customer More Satisfied with Affordable Prices, They found new ways to streamline the
foodservice workplace and employ cheap labour. For example, McDonald’s utilizes self kiosks. They
found ways on cutting back costs with encouraging more independence from the consumer such as people
serving themselves and throwing out their own thrash. McDonald's Sustains Their Competitive
Advantage with Innovation They utilizes Culinary Head Chefs that innovate and create new menu items
to be relevant and provide high-quality taste. As per their recent menu changes, this is just one example of
how they are continually innovating and adding new products.
SWOT analysis:

Strength Weakness

1. Strong Brand. 1. Unhealthy food image

2. Customer’s intimacy.
3. Product innovation. 2. Customer loses due to fierce
4. Supplier integration. competition
5. Broad geographic location.
6. Large market share.
3. Unbalance meal

4. Dissatisfied Franchisees.

Opportunity Threat

1. Newer product 1. Growing health conscious

2. More franchises population.
3. High growth in china and 2. Public health crisis
Russia. 3. Economic recession

Mission and Vision of McDonald’s

The mission of McDonald’s is to be the customer’s favorite place to eat and drink  (McDonald's, Mission
& Values, 2014). The company strives to provide a superior service experience to its customers all over
the world. It also aims to grow its business profitably while contributing to community development.

McDonald’s also emphasizes the growth and development of its employees, focusing on their higher
education and training within the organization. Such polices and values together with workforce diversity
have created a positive brand image for the organization. They also represent an investment rather than a
cost: more highly-trained employees are more valuable employees. They are worth more to the
organization of which they are a part, either present or future.

References:

https://www.slideshare.net/umarshk/mc-donald-case-study-1?next_slideshow=1
https://www.getchee.com/case-study-mcdonalds/
https://mcdonalds600.weebly.com/recommendations.html?
fbclid=IwAR23uKtL_RkShDms7nieKVnH8zu4OYgz9zF9_ZnRxnsizIqZU7yjv-z_DHM
https://mcdonalds600.weebly.com/mission--vision.html