Competition
Competition, not only for McDonald’s but for other businesses is also increasing. McDonald’s main competitors are subway and burger king. McDonald has about 1,250 restaurants in the UK, 63% of which are company-owned while the rest operate under franchises. Recently McDonalds had to shut down 25 of its branches in the UK. This was due to all the rumours and some facts about the products they sell. The main reason for shutting down some branches was to improve profit. The restaurants that shut down were mostly high street restaurants that were quite old and needed refurbishing. The McDonalds firm has said that the UK was experiencing a very highly competitive eating out market and lower consumer confidence levels.
Competition can have an affect on all McDonalds objectives, if sales do not increase then McDonalds will also not be able to meet needs of customers and other stakeholders especially the suppliers. The suppliers expect to be paid on time; this will not be possible if McDonald’s sales decrease. This will follow on to customers needs not being fulfilled and so again a decrease in profit as customers will move on to other fast food restaurants. As McDonalds profit will decrease they will not have enough money to expand, therefore will not be able to invest money to open up more branches.
Population growth Customers
Behaviour & Demand
How social is affecting McDonalds and its objectives
Customers
Social factors mainly revolve around what customer’s expect the business to give to them and what compliments the business expects to receive from the customers.
For McDonalds the customers are the most important as they are who make profit for the business. A few days back a rumour that was circulating on the internet claimed that a girl suffered a near death experience after eating a McFlurry. The rumour claimed that the girl was highly allergic to bird feathers. The family traced back all the food products that the girl had eaten that day. They were told that the McFlurry contained feathers. This rumour has not been proven with clear evidences. McDonalds have said that although the McFlurry resembles bird feathers, bird feathers are not added to the ingredients.
Internet is one place that nearly every person gets information from. The information can either be true or false and isn’t very reliable, unless it has been proven with clear evidences. This information has not been proven although it may affect McDonald’s reputation and profit. People that have seen this information might as well not want to buy McFlurry as it would cause a risk to their health. This can affect McDonalds sales as lack of customers will result in a drop of McDonald’s customers.
Behaviour & Demand
Another social factor that is affecting McDonalds is changes in customers behaviour and demands. For occasional and other reasons such as outings, customers have preferred to eat in fast food restaurants. The demands for fast food restaurants have incresed and so have the amount of fast food restaurants in the Uk and around the world.
Customers expect to be given the best in everything e.g. the food quality, the service they receive and the environemnt in which they eat. If McDonalds fail to provide all these benefits to customers then they may loose out on a lot of customers as well as a lot of profit. As the lifestyle of most people is getting extremely busy and everything is changing so rapidly, customers expect to be receiving products in the most suitable or the easiest way. McDonalds have this comfort for customers, in some McDonald’s restaurants they have provided a drive thru area from which customers can order and collect their food in less time. This meets needs of customers as instead of waiting in queues they are able to get food quicker, this availability for customers would attract them more to McDonalds.
Population growth
Population is increasing rapidly. More and more people are changing ways in which they react towards fast food restaurants. As well as adults kids are also becoming more demanding. As the population is growing and changing, people do prefer taking good care of their health. They do this by having meals that are healthy and those that would benefit them by giving them a healthy lifestyle. McDonalds has kept up with change in the population’s tastes by introducing salads and healthy breakfast meals.
McDonald’s restaurants are located around the world. McDonalds must ensure that they produce products by taking into consideration the increase of the country and the people. As population is growing McDonalds must target each product to specific target groups and so must produce more of the products that are liked by the customers.
Places such as India, Pakistan and Bangladesh should be given more attention. These countries have a high rate of population increase. Therefore McDonalds must be sure to attract consumer awareness in these countries. They must open more McDonald’s restaurants so that they could satisfy and meet needs of all the people in every country.
McDonald’s has invested more then 7 billion rupees in India since it entered the market in 1996. India has a population of over 1 billion, therefore McDonalds has to increase the number of restaurants in India.
Technological Development Technological impact on products
Communication
How Technological is affecting McDonalds and its objectives
Technological Development
This is the most important factor which McDonalds needs to take into consideration. McDonalds has to introduce the appropriate technology equipment that is required by the business. They need to have appropriate computer systems in which they can record the information of all their products. This will help them when customers are placing the order. Also by having the appropriate equipment, less misunderstanding and mistakes will occur. In order for McDonalds to develop their technology they will have to undertake a research. The research will show them which new equipment has been introduced in the market and how that can prove to be of use to them.
McDonalds will also have to see what new equipment their competitor businesses e.g. burger king has got hold of. They will have to compete and be in the lead with all the new appropriate technology apparatus.
The new technology developments which McDonalds has made In order to satisfy its customers is that the company is introducing wireless networking, play station 2 video games console, internal terminals, flat screen televisions and music videos into its restaurants. By having all these technological developments McDonalds are sure that people would choose McDonalds over any other restaurant.
Technological impact on products
McDonalds have said that after introducing a new system and the salads and other healthier products, it expects its sales to rise 27%. McDonalds have introduced a new computerised ordering system; these are touch screen ordering systems which enable customers to make ordering easier.
By introducing these McDonalds will be able to meet needs of customers and will make ordering easier for customers. Fewer mistakes will be made whilst ordering as misinterpretations will not occur.
Communication
Communication is also vital in McDonalds. McDonalds has to communicate with its customers, suppliers and other stakeholders by using the appropriate means of communication. Communication can only be effectively done if the right communication methods are used. Technology is also needed in order to have good communication. McDonalds has to have the right ordering system, staff that can appropriately use the computer system, and facilities for people that have certain disabilities, these all come under having the right technological communication methods.
McDonalds needs to keep in touch with all their stakeholders. In order for this process to be carried put they need the right communication methods. They will need to have a computer to e-mail, a fax machine, telephone. Communication can also be through promoting the products. For this they will need to advertise their products and services on radios, television, billboards and also their on McDonalds website. ()
Market Research
When doing market research on products it is beneficial for companies to look at the size of the market, the market and the specific products are aimed to attract and what are the spending patterns of the customers.
Other factors in market research which are also important are product testing, looking at key competitors e.g. what prices they sell, where they are located, how they attract their customers and how their sales have been changing recently, price, distribution and promotional material.
The main types of market research are:
Quantitative
- Quantitative research deals with numbers, logic and the objectives, e.g. surveys questionnaires
Qualitative
- Qualitative research deals in words, images and the subjective, Qualitative research is research in more depth or detail e.g. interviews or observational techniques.
Primary research
- Focus Groups
- Customer questionnaires
- Direct- Mail surveys
- Web-Mail surveys
- Customer Interviews
Secondary Research
- Using government published statistics
- Using existing market research information
- Using sales figures from competitors
- Using the internet or web sites to get information
Marketing Mix
Marketing Activities are those activities associated with identifying the personal needs and wants of a target market of customers, and then going about satisfying those customers better then the competitors. This involves doing market research on customers, analysing their needs and then making strategic decisions about product design, pricing, promotion and distribution.
The marketing mix is a term used to identify the four main P’s
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Product-targeting the marketing and making the product appropriate to the market segment
All products go through a Product Life Cycle demonstrated below
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Price– the price of the product
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Promotion- point of sale promotion, advertising, sponsorships.
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Place-Distribution of product
McDonalds and the Marketing Strategy
The marketing mix is all about satisfying needs of customers and bringing to them the best products introduced in the market. By using the marketing mix McDonalds determine what products customers tend to like more, what price they are willing to pay, where consumers are more likely to see the products advertised e.g. newspapers, magazines or television and which restaurants have the highest sales figure which could include factors such as more parking facilities, close to local transport, more people in the area where the restaurant is located.
Product
One of the aims of McDonalds is to create a standardised set of products that taste the same weather in the U.K, U.S.A or any other country. Adapting to the needs of different people in different countries is required for many reasons including satisfying consumers and producing products as per consumers taste. There are many situations when McDonalds adapted the product because of religious laws and customs in a country, for e.g. in India instead of selling chicken McNuggets they sell Vegebale McNuggets. These innovations are necessary in a country where Hindus do not eat beef and Muslims do not eat pork. There are also examples of how McDonalds adapted the original menu to meet customers needs and wants in different countries e.g. in Thailand McDonalds introduced the Samurai Pork Burger with sweet sauce. This is an example of how McDonalds has adapted to their consumers taste in international environments. By doing this they have also met one of their objectives which is to meet needs of customers.
Irrespective of all these changes, the structure of McDonald’s menu remains the same, main course burgers/fries and a drink. The main course may differ for different customers, customers may choose from a range of different burgers. However McDonald’s chips are always present in a meal and consumed worldwide by all McDonalds customers, irrespective of their religious or any other beliefs. McDonald’s chips are the product that is sold the most in every country.
In order for McDonalds to satisfy customers they have a quality assurance team. The quality assurance team is responsible for monitoring the quality of the McDonalds product, both in the restaurant and in the all the stages of production. This involves a continuous round of visits and inspections. The quality controls continue when the food arrives at a restaurant. Delivery of the products cannot be accepted until a quality and safety check is completed. The staffs also receive training in food safety and hygiene.
Price
McDonald’s products pricing depends on the target customers for that particular product. McDonalds has to price the products in a way that they meet with all the target customers’ socio-economic group. They have realised that success for the business can be inherited by being able to adapt to a specific environment. The table below illustrates the Big Mac prices from around the world. From table below it can be clearly seen that McDonalds comes up with a different pricing strategy for every country. McDonalds therefore does take in consideration the people of the country and how much they can afford to buy a McDonalds meal. The highest pricing of the McDonalds Big Mac is in the U.K.
The pricing decisions in McDonalds are made using 6 main points:
- Selecting the price objectives
- Determining demand
- Estimating costs
- Analysing competitors costs, price and offers
- Selecting a price method , and
- Selecting a final piece
McDonald’s overall pricing decision is to increase market share. This is also one of the objectives which I have mentioned in the first part of this coursework. In each country McDonalds looks at the demand for their products as a measurement for setting the price of the product.
Promotion
McDonalds promotes its products and services by using these strategies:
- Advertising
- Public relations and Publicity
- Sponsorships
Advertising
McDonalds has a wide range of advertising campaigns in different countries. For example, in the U.K they use the England Footballer Alan Shearer to promote their hamburgers. The main point with advertising is that they are trying to convey an image to their audiences.
Public Relations and Publicity
McDonalds does adopt a global strategy. In 1997, McDonald announced a global alliance with Walt Disney which allowed them to share exclusive marketing rights for everything, from films to food. This had led to McDonalds producing toys in their happy Meals for films such as ‘Toy story’ and ‘Tarzan’.
Similarly another global public relations process they have used is ‘The Millennium Dreamers Global Children’s recognition programme. With this programme, young people from all over the world have an opportunity to express their hopes, dreams and plans for the future. ()
Sponsorships
McDonalds enhanced their brand name with the Olympics game and the World cup. They paid an estimated 20 million pounds for the right to use the official logo for the event. These events allows advertisers to produce an international campaign, with an estimated 2 billion people watching the world cup, McDonalds message is easily conveyed.
Place
McDonalds currently have over 25,000 restaurants in 116 countries across the world. McDonalds realises the potential for growth and expansion and plans to benefit from all the methods of promotion. They believe that the more they will promote their products and services the better feedback they will receive for customers. For example, in the U.K McDonalds used to add 200-300 restaurants every year. However McDonalds could’ve built more restaurants when there wasn’t much competition.
McDonalds Products and the Marketing Strategy
The two products in McDonalds which I will be basing the marketing strategy on are Big Mac and McFlurry
BIG MAC
The Big Mac was introduced worldwide in 1968.It was introduced by a man called Jim Delligetti who was one of McDonalds first franchisee.
Product- McDonald concentrates on five main ingredients that they use in their products. The five ingredients are beef, chicken, potatoes, bread and milk. The Big Mac also consists of some of the ingredients mentioned. The Big Mac is McDonalds most poplar product, it is sold in nearly every country that has a franchise of McDonalds.
The Big Mac has 560 calories, 47 grams of carbohydrates, and 25 grams of proteins and is suitable for all ages although children mostly prefer buying a happy meal as the Big Mac is quite big in size.
With the introductory of the Big Mac, McDonalds have achieved one of their objectives which is to increase sales and compete to be the best amongst other competitors. When McDonalds introduced the Big Mac, McDonald’s sales rose at a very high level, before at one time their sales level was decreasing as they were having complaints about their products, so a bad publicity but with Big Mac being introduced McDonalds sales level raised again. At this time McDonalds were making more profit then other competitor businesses e.g. Burger King. Burger king also to increase their sales level made a competing product called the ‘Big King. The Big King was similar in appearance and also in taste to the Big Mac with the same ingredients.
Price- In the year 1968 when Big Mac was first introduced, the price of the Big Mac was only around 28 pence.
Even now all McDonald’s products are sold at a very good price. McDonalds have a meal deal offer e.g. buying a Big Mac or any other burgers with French fries and a drink of the customers own choice. The minimum cost of this would be around £1.99 or less which is very cheap. The prices of the products require all its target audiences to buy them. The price of the Big Mac is very reasonable which is suitable for all socio-economic groups. McDonalds recently has made the Big Mac smaller in size as they want to provide customers with healthy food although the price of the product hasn’t changed.
Promotion- McDonalds promote their products by using different promotional techniques. They use newspapers, magazines, billboards and the most recent promotional technique that they have used is the radio. The objective that they have is to attract more and more consumers so that their sales increase.
McDonald’s recruited hip-hop artists to make a song with the Big Mac which they got paid for. By using this promotional technique it would create more consumer awareness therefore more people would buy food products from McDonalds.
Another promotion technique that McDonalds have used is to sponsor a programme on MTV. This will also create more consumer awareness and so increase sales. This can also meet needs of customers as new products will be introduced therefore customers will know the newly launched products in McDonalds.
McDonalds have also used another very unusual form of promotion. They have used a new way to contact with young adult through their cell phones. As part of a promotional strategy cell phone users can send a text message code from which they will receive an electric coupon good for a free McDonalds McFlurry. Once the electric coupon has been sent back to their phone they can then simply visit their local McDonalds restaurant to purchase their McFlurry.
They will be promoting the coupon by advertising on buses and billboards in California.
Place- The Big Mac is sold in all the McDonalds restaurants and in every country. The product ingredients are well packaged and tested before being sent to the McDonald’s restaurants. The actual product is made whilst customers are waiting for their order, this meets the objectives of meeting customer needs as food is served hot to customers therefore customers are more satisfied with the products as well as the service being provided.
McFlurry
The McFlurry is another of McDonalds products with the same Mc added to it. McFlurry was introduced recently and is now a well recognised product.
Product- McFlurry is one of McDonalds newly launched products. It is a vanilla
flavoured ice cream presented in a cup and usually containing a separate spoon with
it. McFlurry can be eaten plane with just the ordinary vanilla flavour or with other toppings. This is one of the most unique ice creams ever introduced as the other toppings that can be added to this are small chunks of different chocolates. The flavours available are McFlurry dairy milk, McFlurry smarties, McFlurry Crunchie, McFlurry m&m and many more.
The objective which they have definitely achieved with the creation of McFlurry is to introduce new products and promote them so that they are successful and well recognised. McFlurry is also one of the most renowned products of McDonalds. It has made a lot of profit for McDonalds in just a very short time.
Price- In the UK the price of the McFlurry is only 99 pence. This is a very reasonable price as buying an ice-cream which is a very good size and also having your own choice of toppings is very rarely made. The price of the McFlurry also reflects on the success it has been making because as it is affordable, customers prefer buying that from other ice cream parlours, the two benefits are that customers are paying less and are eating something that will be fully satisfactory to them.
Promotion- to gain customer attraction and to make products familiar, McDonald uses promotional techniques which have also been used on McFlurry. McFlurry has been promoted by many promotional strategies. A promotional method that they have used that is most likely to be aimed at children is a McFlurry toy, this toy enables children to make their own McFlurry, using a small McFlurry machine with ingredients and toppings included.
By introducing this toy, adults as well as children are more aware of the ice-cream. Children therefore may also be willing to buy it, this will increase sales for McDonalds and McFlurry will be more popular as not only adults but children will also want to buy it.
Another promotional method that McDonalds used for McFlurry was to give a buy one get one free McFlurry every Fridays.
This method of promotion makes customers want to buy the product as it’s not very expensive either. The objective which this promotional strategy aims to achieve is meeting needs of customers and making satisfying them with the products. It also increases sales of McFlurry, for e.g. if a customer with family was buying other food products from McDonalds and they saw the offer ‘buy one get one free’, they would then definitely be drawn towards it.
McDonalds have also used another very unusual form of promotion. They have used a new way to contact with young adult through their cell phones. As part of a promotional strategy cell phone users can send a text message code from which they will receive an electric coupon good for a free McDonalds McFlurry. Once the electric coupon has been sent back to their phone they can then simply visit their local McDonalds restaurant to purchase their McFlurry.
They will be promoting the coupon by advertising on buses and billboards in California.
Place- The McFlurry as well as the Big Mac is sold in all the McDonalds restaurants. The McFlurry is also made on the spot for customers; the ingredients are mainly UHT milk and sugar. As McFlurry is an ice-cream so for it to be made in some other place and then being distributed to McDonalds is not possible, it has to be made whilst the customers are waiting.
An enterprise is another name given to a business. The enterprise skills are the skills that are needed in a business.
The following are some of the enterprise skills that a business may need to have for it to be successful:
‘
Leadership
Leadership skills are needed to lead a business, to make the business successful in every possible way. Leadership skills are needed in McDonalds to motivate their staff and to achieve their main aims and objectives. McDonald’s mission statement as previously mentioned is to provide the best service and quality of food to customers and to be the UK’s number one fast food restaurant. McDonalds have used this skill to become one of the most well-known companies in the world. McDonalds has suffered a lot of bad publicity and a high amount of loss of profit in the last few years but they still continue to be one of the most well-known companies, this is only because they have the skill to lead their business and be environmentally friendly.
How this has contributed towards meeting the objectives
By McDonalds having the potential to ‘be their own boss’ with having the leadership skills, they have met the objective of meeting needs of all their stakeholders. Leadership skills will also include being highly motivated and full of enthusiasm, McDonalds has all these qualities therefore the customers and other stakeholders are happy with McDonalds.
The other objective that also contributes towards this is growth and expansion. As McDonalds have the power to be the most well known companies in the world they are continuing to grow and expand worldwide. Their leadership skill is contributing towards them growing and expanding, they have to continue to lead their business and to remain in the number one position of the fast food restaurants.
Innovative skills
Innovative skills are needed to introduce new products and to be successful. McDonalds have very good innovative skills, they have introduced many products and services that have been a major success e.g. the Big Mac, McFlurry, a range of Salads and the Delhi Sandwiches. The only way McDonalds know which new products to introduce is by responding to demands of customers and creating what they want and what they like. As well as products McDonalds has also introduced many services. To make the McDonalds restaurants a comfortable and homely place, McDonalds have provided customers with a lot of space with chairs and tables so that they can enjoy their meal. They also have access to toilets for all customers including those that have some sort of disability. This meets with the innovation skill as its meeting demands of customers.
How this has contributed towards meeting the objectives
By making new products McDonalds have met with the objective of introducing new products and increasing sales. McDonalds have used the innovation skills to interpret the demands of customers and the society. They have introduced new technology as a form of innovation to make lifestyle easier for their customers. The objective this meets with is meeting needs of customers.
Risk-taking
Risk-taking skill is a skill which not every business has. By taking risks a business is introducing new products not knowing what the reactions of potential customers will be like. McDonalds has taken risks by introducing new products and then investing money in advertisement to promote the product. If the product doesn’t do well then it will be discontinued but McDonalds will loose a high amount of profit as they have invested money to advertise that product. Therefore a business needs to be confident and positive when taking risks. McDonalds know what kind of food products will be liked and not liked by people and so they establish those products.
How this has contributed towards meeting the objectives
Risk-taking skill has contributed to McDonald’s sales to be increased as they are introducing new products. This skill has also contributed towards growth and expansion. This is because when McDonalds open a branch in a certain area or location they are not really sure weather the location would be the most appropriate or not. Therefore this is also involved in risk-taking.
Communication
McDonalds is successful because they have a good communication process. The employees in the business have to communicate effectively with all the other stakeholders such as the suppliers and customers. Communication can only be effective if all the stakeholders listen to decisions and opinions passed on by each other. All the stakeholders must be involved in all the decision makings of the business hence to make them feel as a part of the business.
McDonalds is also communicating with their customers and competitors by advertising the businesses products and services. This is an effective way of communicating as it allows the business to show customers and other stakeholders what new products they have introduced and how they are using that product to expose their business. Communicating with competitors is also beneficial for the business. If for example, Burger King introduces a product that has an affect on the sales and profit of McDonalds, then McDonalds via using other methods of communication such as sales promotion and advertisement will also have to promote their products. This will improve their reputation as well as increase the overall profit.
Communication in McDonalds is also vital from one department to another. The human resources department needs to communicate with the finance department to make the report of recruitment and show details of new staff and salaries. Subsequently the sales department needs to communicate with the production department for the following; Volume of sales, details of an order and customer complaints of the products.
How this has contributed towards meeting the objectives
By having effective communication and communicating with all the stakeholders, McDonalds have met their objective of meeting needs of all their stakeholders therefore also increasing their sales. If communication is good then customers will also be more attracted and happy with the business. Customers will enjoy the service and also the products. McDonalds needs to be sure that they also communicate with customers appropriately. Their main priority should always be their customers. Communicating with customers appropriately will also mean increasing sales.
Self-confidence
In order to work in a highly self confident environment, the manger of McDonalds must ensure that each and every stakeholder in the business is happy. All the stakeholders should have job satisfaction in order for them to carry on with any given task. If the stakeholders are happy they will also have a high self esteem therefore their ability to perform and produce products will be better. Managers can give employee perks and benefits to ensure that they remain happy and highly confident. By receiving the following benefits such as free meal allowances, paid holidays and employees discount cards the employees are more motivated and also morale. By having self-confident staff the business can also increase their potential in taking risks and tackling difficult issues. With this McDonalds are increasing their skills and abilities.
How this has contributed towards meeting the objectives
By being self-confident McDonalds has taken the risk to grow and expand in many countries. They have therefore met the objective of growing as a business and also increasing consumer awareness. They have also introduced new products; this is another significant objective that has been met. With introducing new products they have made McDonalds more recognised and appreciated by people. This has therefore also increased their profit.
Identifying and exploiting marketing opportunities
Identifying the product, price, place and promotion is vital for all businesses. McDonalds also have to follow the marketing strategy in order to implement how they will be selling each of their products. They have to keep in mind the target audience of the specific product, the socio-economic group that would most likely buy the products and the location where the business needs to be introduced.
McDonalds have to undertake primary and secondary research in order to develop their ideas and analyse information that would be useful to them. It needs to identify the size of its market and whether it is growing or declining. It helps McDonald's to provide products that can compete effectively. In McDonalds market research looks at external factors like economic, legal, technological and social changes and assesses how these might affect the market. It also looks at psychological factors for buying, such as image, enjoyment and other additional that McDonald's food can give a customer. Branding helps to establish this image and underline these benefits. Market research also identifies the different types of customer and their needs. McDonald's can then use this information to make decisions, such as location or menu changes.
How this has contributed towards meeting the objectives
By undertaking market research, McDonalds has examined what the demands of their customers are. McDonalds have to do market research in order for their customer satisfaction. By doing market research McDonalds has met with the objective of meeting needs of customer and other stakeholders. Market research will show McDonalds exactly what area needs to be given the most importance. This will also help for the businesses sales to increase.
Ability to create and make decisions
McDonalds has to be prepared to make tactical, strategic, proactive and reactive decisions. Tactical decisions are those that are based on short-term factors for example, McDonalds might have to reduce the price of a product if the product is not selling, this reduction will be for only a short period of time. On the other hand strategic decisions have a long term implication. Proactive decisions will need to be taken by McDonalds in advance when they are planning to introduce new products. Consequently reactive decisions will need to be taken after the product in McDonalds has been introduced.
Most of the decisions made in McDonalds is by the senior management. However all the employees and lower management are asked if they agree or disagree with a certain decision. Therefore when coming to a final decision all the employees and stakeholders would’ve had a certain view on it. This shows that McDonalds does listen and interpret the decisions made by the all the businesses stakeholders.
How this has contributed towards meeting the objectives
By taking into consideration the stakeholders role in decision making, McDonalds has increased its employee’s willingness to wok for the company and also as a team. They have met the objective of being the best employee to all their employers. Like every other business McDonalds has had problems and arguments over decisions, however they have overcome these by negotiating with each other.
Team skills are needed for each and every business. The team skills determine the businesses success. Team skills are needed when communicating with one another in the workforce. These skills also reflect on how the staffs get along with each other. People in a team help, complement and support each other and have clear objectives. A group of individuals is a team when they share goals and objectives, are proud to be working as a team, interact with each other and are interdependent.
The team skills that have contributed in making McDonalds successful are:
- Good Communication
- Co-operation and teamwork
- Motivation and Hard work
- Training and Development
- Commitment
Good Communication
The communication skills are needed to be able to work as a good team. The employees have to be polite. Friendly and help each other when in need. They must have the potential to retain customers by speaking to them in an effective and sensible manner. When communicating with customers and other members of the team, it’s the responsibility of the employee to speak in a mature and understanding way, this will make the other person more comfortable talking to them and will also encourage good team work. In McDonalds all employees should understand their responsibilities as a team. Communication skills in McDonalds are also needed when taking orders, the person taking the order then passes onto another person who can prepare for the order asked. This also shows very good communication therefore good teamwork. If McDonalds continue to have teamwork like this then they can meet their objective of increasing sales and growing and expanding. By having good communication in the workforce, McDonalds can also build a good relationship with customers and other stakeholders. Another objective that McDonalds can achieve by having good communication is meeting needs of customers and stakeholders. If the they work as a team and co-operate with each other and listen to opinions passed by each person than McDonalds can also achieve this objective.
Co-operation and Teamwork
Co-operation and teamwork is needed in all areas of the business. Co-operating would include helping each other, sending messages from one person to another, mixing up with all types of people and enjoying working as a team. The teamwork will be relevant for all the individuals working in McDonalds. They will have to work together with different people for different tasks therefore it is relevant that they have good relationship and co-operation with each and every member of staff. The employees may also need to attend seminars or conferences .At the seminars or conferences they should also be confident working with the people and taking part in discussions. The employee should feel proud of their business and the teamwork that they have. By co-operating with one another and having good teamwork, they can achieve their aim which is to be the UK’s best fast food restaurant. By having good co-operation and teamwork skills, this will also not affect the businesses reputation as there wont be rumours about McDonalds recruiting employees that are not well disciplined and cannot work as a team. The objective that they are likely to achieve by having good co-operation and teamwork is gain increasing sales and growth and expansion.
Motivation and Hard work
All employees when working as a team should have a high motivation and confidence level. The team will only be successful if all the employees encourage each other and handle the given tasks with full commitment and enthusiasm. As well as the employee the managers and other members of the staff must also be motivated and encourage all the employees to apply the best of everything that they can to their work and the team they work in. motivation and hard work will eventually lead McDonalds to building a trustworthy and good relationship and so having very good team skills in every individual that has been a part of the business. The objectives which can be achieved with being motivated and working hard is customers needs will be fulfilled, the business will be able to introduce more new products and so the sales will increase.
Training and Development
Team skills are needed for training and development purposes. When a new candidate is recruited they will receive training in the workforce, this will include handling tasks, offering customer service and most important of all working in a team. The candidate will learn to work alongside other members of staff and contribute to the learning. Similar to all the other members of staff they will also have to enjoy the work and be approachable so that other employees can get along with them. The objective then can be achieved with having team skills in training and development is meeting needs of stakeholders as the new individual will have the ability to work in a team therefore will also be good at offering good customer service and also increase in sales as the business will be having new individuals that are also as trained and motivated as the rest.
Commitment
Working in a team is all about knowing how to co-operate with individuals and having good communication skills, it is also about having the commitment to show the best in everything to the business and to other employees that are new or don’t have much experience. Working together with each other will also include being committed and dedicated to the business. Being committed will also include showing responsibility of your own tasks and duties and helping the other employees if they are having difficulties interpreting a situation or task. McDonalds has always been looking for individuals that are not only committed to work but also to other individuals, this will also help with building teamwork. The objective that can be achieved with having this commitment is the increase in sales and growth and expansion.
The marketing, enterprise and teamwork all work together to achieve the aim and objectives of McDonalds. All three I believe are successful in meeting the objectives.
The marketing area mainly concentrates on the product and how it can create awareness. This area also makes customers aware of the new products that are being introduced in the market. The marketing area also shows how customer’s can be segmented into different target markets according to their age, gender and ethnicity, for example, kids like going to McDonalds as they like the happy meal, as well as that they get a free toy with the happy meal, this also encourages children more to buy from McDonalds, whereas adults prefer going to McDonalds because the products are reasonably cheap and affordable. The marketing activities are mainly concerned with only the customers, what they like and how they want their service to be provided to them. On the other hand the enterprise skills mostly focus on the business and how they can work together to satisfy their stakeholders.
The enterprise skills include what skills the business has, how they use it and which stakeholders would benefit most from them. The enterprise skills also give more attention to the workforce, the employees are the most important to achieving the objectives, and therefore the enterprise skills mainly rely upon the employees to fulfil them and achieve all the objectives of the business.
The last one is teamwork, this is equally as important as the other two. Teamwork is needed to fulfil the demands of the environment and the customers. Good teamwork would lead to success of the business. I assume that McDonalds has good teamwork therefore it has become one of the most well-liked fast food restaurants in the world. The teamwork shows more contribution to how the workforce can benefit from having good team skills this also meets the objectives of the business as good teamwork will definitely attract more customers therefore the sales of the business will also increase.
The aim and all the objectives that I have mentioned at the start of this coursework I feel have been met by McDonalds.
McDonalds aim is to be the UK’s number one fast food restaurant. This aim has been met as McDonalds logo is one of the most recognised logos in the world. Adults as well as children when seeing it can recognise that this is the McDonalds sign. McDonalds has customers from all ages, gender and ethnicity visiting them regularly. This shows that McDonalds has spread its name across the whole of Europe and in many other countries.
The main and most important objective that I believe they have achieved is to increase sales. In the past few years McDonalds has suffered from a lot of bad publicity although this has not had a very major affect on their sales. Their sales have still been much higher then their competitors. In the UK the main competitors are burger king and subway. McDonalds has been making the highest amount of profit from both these businesses in the past few months.
Factors that have contributed to achieving this objective are:
McDonalds Logo
The McDonalds logo is so popular that if doing a quiz a question comes up asking what the McDonalds logo is then at lest 98% of the answers will be right. This is how common this logo is. Even people that don’t like McDonalds and those people that cannot eat from there because of their religious beliefs know what the McDonalds logo looks like.
This logo has contributed to the success of the business as when shown on advertisements it is the first thing that appears on the screen therefore people watching the advertisements are likely to know that the advertisement is associated with McDonalds
Competition
By competing with all their competitors especially Burger King, McDonalds has achieved the objective to increase their sales. Competition in McDonald’s success plays a very big role. Due to having competitor businesses McDonalds has created more consumer awareness for specific products. They have used many promotional methods to make their products well known then those of their competitor businesses. This shows that by having competition McDonalds sales have also increased.
Financial Planning
Planning their financial resources has helped McDonalds to maintain their cash flow. By having a certain budget for a month or a year McDonalds has managed their financial resources which have also resulted in their sales to increase. Financial planning has also helped McDonalds to retain employees by paying them the right mount of salary. As McDonald’s employees are motivated with the money they are also more committed to their work, therefore the sales of the business have increased.
Stakeholders
The stakeholders especially the customers have helped the sales of the business to rise. The customers are the main stakeholders that need to be kept happy. They should be the first priority of every business. McDonalds also has the potential to keep all their customers happy. Customers of McDonalds benefit from having the right food products at the right time. Customer’s complaints are taken into consideration hence this has resulted McDonalds sales to increase.
McDonald’s employees have also contributed a lot in order to make the business successful. Employees need to handle the business, keep the business clean and communicate effectively with their customers. In order for McDonalds to have met with the objective of increasing sales, they have to have hardworking and committed employees that would be eager to follow all the rules and regulations. The employees must be willing to provide customers with good customer service. By employees satisfying their customers McDonalds are also increasing sales.
The suppliers can also affect the sales in a business. McDonalds needs to keep all their suppliers happy. With having suppliers that are happy with the business, McDonalds will be able to provide the right amount of food products to all their customers. For a business like McDonalds where food ingredients sre supplied every day, the problem that can arise is that if the suppliers are not kept morale then they are most likely to avoid doing their job properly. This can have an affect on McDonalds sales as they would decrease.
Teamwork
Teamwork has also contributed a lot towards McDonalds increasing the sales. Effective teamwork is needed in every business. All employees making decisions and agreeing upon one decision is vital is vital for all McDonalds. By having a good, co-operative team the sales are also affected. McDonald’s sales have increased.
McDonalds has also achieved another objective which is to constantly introduce new products. Approximately they introduce a new product every 5 months. The recent product that they have introduced is the Deli Sandwiches. These sandwiches have been much appreciated by customers and have also affected the sales of the company.
After introducing new products such as spicy chicken sandwiches and the salads, McDonalds has seen a 6% increase in sales to £2.7 billion. This has helped McDonalds to once again boost its sales and to also be recognised for introducing more products that are liked by customers. ()
Factors that have contributed to achieving this objective are:
Communication, risk- taking and innovation skills
Communication with competitive businesses and other McDonald’s restaurants has resulted in McDonalds introducing new products. In order to introduce new products they have to communicate with all the other restaurants. If one product is introduced in one of the McDonalds restaurants then the same has to be in the others.
By taking risks McDonalds has achieved their objective of introducing new products. To introduce new products McDonalds should have the potential to take risks and be ahead of competition.
Innovation also means to make and create new things. McDonalds does have this skill as they have introduced many new products which have enhanced and satisfied customers. These products have also met with the needs of their customers as they have been extremely well liked and popular.
Marketing Planning
By planning ahead and thinking of a specific products price, distribution place, promotional method and target audience, McDonalds has been successful in introducing new products. Marketing planning for McDonalds is extremely important. The products target audience and the products
By introducing new products McDonalds has also met needs of their customers as well as other stakeholders. This objective has also been met as customers enjoy the experience of receiving good customer service at McDonalds. They have also met with customers complaints. This is an example of a product that was introduced by McDonalds but was terminated due to its association with dental problems. The product that McDonalds used to sell was Apple Pie with Ice-cream. This product was reported to the McDonalds head office and so was discontinued as customers thought it was not suitable to sell a product that had a combination of hot and cold. This shows that McDonalds is meeting stakeholder’s needs. (www.bbc.co.uk/news)
McDonalds have also met needs of there customers by giving the customers the ability to contact them. On the McDonalds website they give information of their business such as e-mail address, postal address, and telephone number. All these are useful for the customers if they are in need of contacting McDonalds. Having the right equipment and facilities in the restaurant has also benefited the customers. McDonalds has to consider that they have a majority of target audiences. People that have certain disabilities need to be given more priority. All McDonald’s restaurants have made a separate toilet for people that are disabled. They have also got space at the sides of all the tables so that customers can fit wheelchairs or any other disability equipment. For development purposes McDonalds need to constantly make more arrangements for people that are disabled.
Factors that have contributed to achieving this objective are:
Good reputation
McDonalds has maintained a very good reputation. Although there has been a time when McDonald’s products have not been appreciated by customers, this has not affected McDonald’s reputation. McDonald’s good reputation is due to good communication, excellent teamwork and a productive environment.
This had contributed to the success of the business because it has shown the customers that how a team can work well with each other and achieve all the aims and objectives. Also customers feel more comfortable eating from a place that offers excellence in quality and in their workforce.
McDonalds have also achieved the objective of being the best employer to all employees in the business. Employers in McDonald’s all treat their employees with respect and provide them with all the necessities which they are in need of. Employers are willing to help all their employees as this is a part of their job role. They should ensure that the employees are working in a safe, secure and clean environment. Consequently the employees must also be willing to help at all times. McDonald’s employees and employers love their job because they know how to interact with people and handle certain situations. This has therefore added to the success of this objective.
Factors that have contributed to achieving this objective are:
Training and development
With giving all the employees training McDonalds has increased their employee’s motivation and also self-confidence. Self-confidence is the most important and is needed in each and every employee. By the employees being trained they have a better understanding of their job therefore they are more morale.
Positive attitude towards employees
The employers should all be mature and understanding towards their employees. They have to respect and also treat the employees the way they want the employees to treat them. If the employers show good behaviour then the employees will also follow this. In McDonalds all the employees and employers have are friendly and have good relationships. Therefore the objective of being the best employer to all employees has been met by McDonalds.
Employee benefits
The best way to motivate the staff is to give employee benefits. McDonalds employees to give benefits to their employers. They know that if the employees are receiving benefits then they will also enjoy there work and will be more committed towards their job. Subsequently this objective has been met by the employers all providing their employees with the full requirements.
They have also achieved the objective of gaining and maintaining a particular share of the market. McDonalds are one of the most well known and liked businesses. McDonalds has received a lot of awards such as in 2006 they were awarded as being the business of the year. This has contributed a lot towards McDonald’s success. With this recognition McDonald’s customers are increasing every day and they have also maintained a position in the food market.
To be able to achieve this objective McDonalds had to have leadership and self-confidence. By having these two main skills McDonalds has now gained the highest amount of market share. McDonalds has more then 20,000 restaurants worldwide and they are still opening new restaurants and increasing consumer awareness around the world.
Factors that have contributed to achieving this objective are:
Stakeholders
For McDonalds to maintain a share of the market, the stakeholders have had the most contribution. Stakeholders such as customers, employees, suppliers, local community and competitors are the ones because of whom McDonalds has gained the most recognition and popularity. McDonalds has become one of the most distinguished businesses.
Competitors
If McDonalds didn’t have competitor businesses such as burger king and subway then they wouldn’t have the willingness and potential to have the highest amount of market share. By having these businesses McDonalds has become more competitive in order to always be on the first position.
The last and final objective that McDonalds has definitely met is growing and expanding worldwide. McDonalds has a chain of restaurants in nearly every country. The restaurants all sell the same products and provide customers with the same service. The structure of the McDonalds restaurants is also the same. McDonalds has met with this objective as they have opened new restaurants in places that McDonalds is not quite known e.g. Pakistan and India.
Factors that have contributed to achieving this objective are:
Choice of location
The first thing that every business has to consider is the location. Mostly all McDonald’s restaurants in the UK are located near to local customers, tube stations and bus stands. This is a major advantage for them as more customers tend to visit the restaurants and so buy products from them. Most McDonald’s restaurants are located inside shopping centres; this is also a big advantage for them as regular customers would tend to buy from McDonalds.
This has also contributed to the success of McDonalds as the location of restaurants is extremely important. If a restaurant is located in a deserted and quite place then customers will be less as customers will not know about that particular branch.
Competitors
For McDonalds to meet with the objective of growing and expanding, McDonalds have to compete with their competitors. When expanding the competitors are the main stakeholders that would have an impact, therefore they must be given the most attention.
Enterprise skills such as leadership
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To fulfil this objective it is important for all the managers in all the McDonalds restaurants to have the leadership skill. By being the ‘leader’ they will also influence the employees, the employees will follow their steps therefore they will also learn the basics of being a leader. This factor has played a role in McDonalds for meeting with the objective of growing and expanding. McDonald’s restaurants are located in nearly every country; this is because they have the willingness and competitiveness to be the leader in every way.
In this coursework, I believe that the External environmental factors, Marketing activities, enterprise skills and teamwork all have equally contributed to meeting the aims and objectives of the business. They have all played a part in different ways to achieving the objectives of McDonalds.
In external environment the competitors are mostly considered. The actions of competitors such as Burger King will affect the ability of McDonalds to make a profit. Burger King will continuously seek to gain an advantage over McDonalds by introducing new products and services and by seeking to provide better value for money.
The external environmental factors have shown how the environment reacts towards the business internally and externally and how this has helped them to meet their objectives. The criticisms and rumours that have been passed have helped McDonalds to recognise its weaknesses and therefore given the ability to overcome them. The external environmental factors also show how the business has been benefiting from considering the PEST factors.
The marketing activities Identify what factors will affect people's willingness to buy. As the economy and social change, so do buying patterns, McDonald's need to identify whether the number of target customers are growing or shrinking and whether their buying habits will change in the future. Market research considers everything that affects buying decisions. These buying decisions can often be affected by wider factors than just the product itself. Psychological factors are important, e.g. what image does the product give or how the consumer feels when purchasing it. These additional psychological factors are significantly important to the customer. Through marketing, McDonald's establishes a prominent in the minds of customers.
The marketing activities have shown in depth the stages of a product development and how it can contribute to increasing sales of the business. On the other hand the enterprise skills have shown the skills the business has and how they have contributed to the success of the businesses objectives. The enterprise skills also have shown how McDonalds have introduced new products in the market and how they have related to the objectives of the business.
Finally teamwork has revealed how all the workforce works together to achieve the aims and objectives and the skills and motivation that is required to be able to meet the aim and all the objectives of McDonalds.
By working as a team the McDonalds staff will gain knowledge and will be able to develop their skills. This will also help them to learn leadership skills, communication and effective customer service, responsibility and time management.
Challenges McDonalds has faced
One of the objectives of McDonalds is to increase their sales. This objective has been affected the most. Over the pat few years McDonalds has suffered from a high amount of profit loss. In the year 2006 McDonalds had to close down 25 branches as they were suffering from a poor profit. The closure was listed in McDonald’s annual accounts, which showed that poor British sales were dragging down McDonalds European figures. In the accounts the firm said that the UK customers were experiencing a highly competitive informal eating out market and low consumer confidence levels. However to overcome this problem McDonalds has researched consumer behaviour and also opened new restaurants in the right location. Since then McDonalds profit has been improving.
Another McDonald’s objective which has been affected is to maintain a particular share of the market. McDonalds has been blamed for producing food that is unhealthy. There have been complaints made by customers that because of McDonalds they have become obese as the meals contain a lot of carbohydrate, fat and salt. In 2003 McDonalds share price divided and they made a loss of £222 million pounds. This was a very high amount especially for a franchise that has been serving customers and meeting their needs for a long time. McDonalds then decided to once again become the UK’s number one restaurant. They did this by introducing healthy food such as salads, fruits, yoghurts, breakfast meals and the Delhi Veg. By introducing all these new products McDonalds has gained back their market share place. At the moment they have gained the highest amount of market share then their competitors.
McDonalds has also faced some significant financial, organization and cultural challenges in recent years, this has affected their objective of increasing sales. They were some brutal facts about McDonalds which were being oppressed. The company was said to be opening and building new restaurants but not enhancing or even maintaining profitability. However to overcome this problem McDonalds senior management has decided not to set short-term targets. They will be thinking of strengthening the Mcdonalds brand rather then meeting the short-term targets. McDonalds is setting more realistic long-term growth targets. This will help them to manage their profit margin.
