The Power Of The Mcdonalds Brand Business Essay Example
The Power Of The Mcdonalds Brand Business Essay Example

The Power Of The Mcdonalds Brand Business Essay Example

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  • Pages: 11 (2793 words)
  • Published: October 10, 2017
  • Type: Research Paper
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McDonald's, a globally operating fast food brand founded in the 1950s, has approximately 30,000 restaurants. These well-designed establishments are renowned for their famous branding and societal importance. McDonald's success can be credited to its effective promotional strategies such as featuring toys and movies, actively engaging in charitable initiatives, and conducting extensive advertising campaigns. Notably, over 75% of McDonald's restaurants are owned by local individuals. The astonishing daily customer count exceeds 40 million.

Macdonald generates 80% of its revenue from eight countries: Canada, Brazil, Germany, France, Japan, UK, Australia, and USA. The company's notable achievement is embedding an image of itself in people's minds and introducing them to fast food culture. Its capacity to deliver quickly, provide exceptional customer service, and maintain hygiene standards are the primary factors that attract a significant number of customers.

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Through consistent advertising efforts, Macdonald has successfully created a corporate symbol and established a brand image and logo in the minds of millions.

McDonald's has a strategic program called the "Program to Win" which aims to make them the best fast food chain, not just the largest one. The program focuses on improving customer experience through various initiatives related to exceptional customer experience factors (McDonald's, 2009). One key aspect of McDonald's strategy is owning all properties they operate on, whether franchised or company-owned. Rental income from these properties is estimated to be higher than franchise fees.

The success of MacDonald can be attributed to the client service it provides, as well as its consistent high quality food and unvarying methods of preparations. MacDonald has revolutionized the restaurant industry with its invention of the limited menu fast food restaurant. Innovations such as introducing indoo

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seating, drive-through windows, and play areas have also been made by MacDonald. The company continues to develop new innovations to facilitate the mass customization process.

In 2001, McDonald's began standardizing its engineering for its point of sale system with the office system in over 11,000 shops in the United States. The company is implementing a common point of sale that can be used worldwide in all of its branches. McDonald's values customer satisfaction by matching the money paid by customers with quality and variety of products and services, ensuring that customers feel they have received their money's worth and more. McDonald's also caters to the preferences of customers to make them feel satisfied with the value exchange. McDonald's is recommended for family or friends gathering as well.

McDonald's Vision

To be the best and leading fast food provider worldwide.

Mission Statement

McDonald's vision is to be the world's best fast service restaurant experience.

Bing the best agencies supplying outstanding quality, service, value, and cleanliness so that we make every client in every eating house smiling ''

Operations and Business Strategy

The definition of concern scheme is a long term program of action designed to accomplish a peculiar end or set of ends or aims. Strategy is direction 's game program for beef uping the public presentation of the endeavor. It states how concern should be behavior to accomplish the coveted ends. Without a scheme direction has no roadmap to steer them. In McDonald the concern scheme for the company is to do nutrient fast available to its clients at a really low competitory monetary value but to acquire net income as good by cut downing the cost of the merchandise and spread outing

the concern universe broad.

Operation management schemes are crucial for achieving organizational goals. They enable an organization to control and maintain all of its operations effectively. Thus, these strategies should be developed after conducting a comprehensive marketing analysis, taking into consideration the capabilities and resources of the organization. At McDonald's, the top management is responsible for creating the operation management strategies.

McDonald's implements these schemes across all its subdivisions and distributes them in written form to its franchise subdivisions. Consequently, there are operational directors who oversee all operational activities in each subdivision. McDonald's has developed three schemes for its future scenarios, focusing on client values, client convenience, and optimum operations.

Together with the digital schemes, it aids in generating fresh ideas for the company. The stores are recognized by the operations team as lighting manufacturing facilities, with the goal of enhancing the production process through implementing inventory control, production planning, financial control, and point of sale order entry systems that benefit the store (bized, 2009).

Reducing Costs through More Efficient Equipment

The challenge faced by global equipment providers when designing fryers for our restaurants is to create equipment that not only saves energy and provides better taste but also enhances crew efficiency and reduces cooking oil usage. Our next generation fryer, known as the Low Oil Volume Fryer (LOV), tackles these challenges. LOV improves cooking efficiency, simplifies filtering and cleaning processes, and offers improved environmental advantages.

The LOV's advanced design enables restaurants to cook the same amount of food with approximately 40% less oil and uses about 4% less energy compared to standard fryers (Gallagher, 2003). In McDonald's, lighting plays a crucial role in reducing operational costs, and they utilize fluorescent

low consumption lighting in the kitchen.

Trials have shown that every restaurant saves 11,000kWh of electricity per year. Boxing plays a crucial role in the McDonald's brand, ensuring quality, integrity, safety, and visibility for our customers. McDonald's also utilizes its cooking oil in its transportation operations, resulting in significant cost reduction. The employee manuals at McDonald's not only emphasize the organization's slogan and QSCV, they also provide comprehensive instructions on efficient task performance. This includes detailed guidelines on cleaning, food preparation, employee training, and hygiene.

McDonald's is emphasizing cost reduction in its operational activities to achieve its business strategy goals. It achieves this by purchasing its potatoes directly from corporate farmers in agricultural regions, rather than relying on the commodity market. This approach helps McDonald's control costs and mitigate potential price fluctuations. Additionally, McDonald's has expanded its offerings to include family treats and has become a gathering place for senior citizens in the community.

Additionally, McDonald's has begun providing indoor resort areas and promotional toys to its children customers. As this trend persists, there is a demand for the development of more service-oriented technologies. To identify the most effective options that align with the company's objectives, they can conduct studies and research. This may involve implementing robots to take orders instead of humans and automating food production processes (typepad, 2009). McDonald's aims to maintain its position as a market leader.

McDonald's maintains its leading position by keeping costs low and generating more income through affordable food prices. The constant advancements in technology require fast services from McDonald's employees, but machine-made food is considered hygienic. To aid them, computers and smart tellers are used to prevent confusion, and a customized

database management system is accessible. These operational activities are implemented in all McDonald's branches worldwide to successfully execute the company's business strategy.

McDonald Layout, Process Type, and Use of Technologies

The overall working environment and general atmosphere offered by McDonald's are encompassed within the strategy.

Customer satisfaction is of great importance to McDonald's as it plays a crucial role in the company's operations. McDonald's aims to provide customers with fast and affordable high-quality food. This commitment to customer satisfaction is evident in all aspects of the McDonald's experience, such as personal service, product arrangement, and outlet design.

McDonald's has a specially designed layout to efficiently cater to customers and fulfill their requirements. The layout comprises of several counters where staff members can rapidly serve clients, with an average serving time of approximately one minute per client. The seating arrangement is strategically planned to reduce waiting time for queueing individuals. In the kitchen, McDonald's utilizes high-efficiency fryers that quickly cook French fries.

The Operations Director assigned the task to various staff members based on their abilities. McDonald's main headquarters provides most of the items in a ready-to-serve form, which reduces food production costs and helps McDonald's maintain consistent quality across all its stores. McDonald's staff only needs to fry the food, and it becomes ready to serve. This also helps McDonald's save a lot on storage costs. To ensure smooth operations, McDonald's maintains good relationships with its suppliers.

The provider guarantees McDonald a minimal delivery time (Swearingen, 2003).

Importance of Layout Strategy

A proper layout allows for:

  • Increased utilization of space, equipment, and personnel
  • Improved flow of information, materials, or people
  • Enhanced employee morale and safer working conditions
  • Improved customer/client interaction
  • Flexibility
  • The design of the layout encompasses the overall working and general environment provided by McDonald which includes personal level, service and product layout, interior and exterior, etc.

    Schemes:

    Outside

    McDonald ensures that its premises are properly arranged to handle any number of customers smoothly.

    The design of the edifice is standardized globally, but there may be some variations in size or exterior depending on the location. This allows them to save time, satisfy their customers, and provide a comfortable environment for both employees and customers. In 1955, Ray Kroc opened the first McDonald's franchise, and now there are over 30,000 restaurants worldwide. McDonald's objective was to renovate older McDonald's buildings with a fresh new look while still maintaining the iconic design and exterior elements. The restaurant design had to bring the restaurants into the next decade and adhere to their unique "Forever Young" branding.

    Inside:

    Insides are set to be "depoliticized."

    ''In addition to implementing new restaurant lighting, menu boards, graphics, and artworks, McDonald's will also provide a variety of options for decor. Technological advancements include Wi-Fi, programmed music, and video. (Typepad, 2009)"

    "McDonald's Implementation of Technology"

    McDonald's in the United States has established a Store Technology Board to help introduce the Plan to Win.

    The board, which is composed of representatives from both corporations and franchisees, oversees the advancement of technology in McDonald's U.S. restaurants. Its responsibilities include guiding development, ensuring efficient delivery of high-quality technology solutions at a reasonable cost, facilitating effective communication with stakeholders, and utilizing existing technology talent and resources. McDonald's began standardizing its technology in 2001 by integrating point-of-sale and back-office systems across over 11,000 restaurants in the United States.

    The company is currently

    implementing a universal POS system. Savista has developed a product called New-POS, which will improve restaurant productivity and enhance the customer experience at McDonald's. Additionally, this move will create a common platform worldwide and allow McDonald's to take advantage of future technology in its restaurants. Alongside this, McDonald's has introduced an integrated electronic payment system that can adapt to future technological demands. The company invested a significant amount of time and effort in finding a solution that can process debit, credit, and gift card transactions through the standard POS system in less than four seconds (Swearingen, 2003). McDonald's utilizes top-notch equipment for its daily operations at the establishment.

    The analysis of McDonald's Value Chain and Quality - Porter's Five Forces Analysis shows the competition in the restaurant industry.

    Competition

    McDonald's has faced fierce competition from various small fast food businesses seeking to grow their customer base. Despite this, since its establishment in 1940, McDonald's has been successful in this sector. To remain competitive, McDonald's introduced MCafe which helped it maintain its position as a key player in the fast food industry.

    The introduction of McDonald's breakfast to compete with other prominent breakfast-serving establishments has amplified the competitiveness of this industry. To stay relevant, McDonald's must stay updated with customer preferences and tastes. McDonald's places great importance on quality to remain in the market, while simultaneously striving to maintain low prices to sustain their cost advantage.

    Ease of Entry

    Entering the restaurant business is challenging due to the significant investment required and the difficulty in establishing a distinctive brand name. There are entry barriers in the market, including high research and development

    costs.

    Large established companies like McDonald's face challenges in entering and succeeding in the market. New entrants encounter price competition from existing chain restaurants. However, McDonald's strives to maintain consistent quality over time. The company recognizes that compromising on quality would make it easier for new entrants to attract customers with superior food products.

    Substitutes

    McDonald's closely monitors its quality because it is aware that customers have many alternatives for its food products, such as MDC Burgers, Beverages, and dairy products.

    Strength of Suppliers

    The power of suppliers in the fast food industry is relatively small unless there is a scarcity or unavailability of the main ingredient for the products.

    Strength of Buyers

    The strength of buyers within this industry is relatively low (Ifm, 2009).

    Porter's Five Forces Analysis of Value Chain

    The primary goal of these activities is to provide customers with a level of value that exceeds the cost of activities, resulting in profitability for McDonald's. Figure 1.2 illustrates the main value chain activities.

    Inbound Logistics

    This involves receiving and storing raw materials and distributing them to manufacturing as needed.

    Unified andversion:
    The power wielded by suppliers in the fast food industry is generally limited unless there is a scarcity or unavailability of essential ingredients. Conversely, buyers do not possess significant influence within this industry (Ifm, 2009). The primary objective behind Porter's Five Forces Analysis on Value Chain activities is to deliver customer value that surpasses activity costs and generates profits for McDonald's. These activities include inbound logistics, which encompass receiving, storing, and distributing raw materials as required by manufacturers (Ifm, 2009; Figure 1.2).

    McDonald has an effective storage and transportation system for its subdivisions. All merchandise is produced in the storage facility and distributed based on

    each subdivision's demand.

    Operations

    The process of converting inputs into finished products and services. McDonald has a strong operational system with trained staff for each task in the kitchen.

    Most of the merchandise at McDonald's is already in ready-to-serve form. All they need to do is place them in the ovens or fry them, and the merchandise is ready to serve in a short amount of time, usually 1-5 minutes.

    Outbound Logistics

    This refers to the storage and distribution of finished goods. McDonald's has a well-established transportation system. Since all their products are prepared at the warehouse, they have implemented IT technology to improve the distribution process. This technology informs the warehouse body about which section is running out of products. This way, before the products run out, they make them available immediately to that section.

    This procedure is highly cost-effective as divisions do not need to have the stock room for the goods.

    Marketing & Sales

    The identification of customer needs and the generation of sales.

    Service

    The support of customers after the products and services are sold to them. The primary activities are supported by:

    Technology development

    Technologies to support value creating activities.

    The value concatenation theoretical account is a utile analysis tool for specifying a firm's nucleus competences and the activities in which it can prosecute a competitory advantage as follows:

    Cost advantage

    By better apprehension costs and squashing them out of the value adding activities. As per the porter's five forces analysis McDonald deals with factors outside a industry that influence the nature of competition within it, the forces inside the McDonald influences the manner in which the houses compete, and so the industry's likely profitableness is conducted in the Porter's five forces manner. ( Ifm,

    2009 ) Figure 1.3 Further there are Secondary support activities which straight back uping the operational activities of the concern. HRM section make it possible for the concern to acquire the energetic people to execute the operations. They always keep actuating the staff to work hard. The Management makes possible to choose the engineering which is cost effectual together with the efficiency.

    Decision

    McDonald is a well-established organization that has achieved success through thorough market research. This research includes studying the behaviors, cultures, purchasing power, and societal issues of specific regions. McDonald places great importance on the location of its businesses, as well as the interior and exterior mindset and technologies used to maximize production efficiency. Ultimately, McDonald's focus is on the quality of its products and how they are influenced by market forces.

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