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Group Preliminary Report - The McDonald's

Extracts from this document...

Introduction

Group Preliminary Report - The McDonald's McDonald's Description McDonald's Restaurants (Hong Kong) Limited was established in 1975. The first McDonald's restaurant, which offered customers the very first American Big Mac Meal in Hong Kong, was located at Paterson Street, Causeway Bay. Today there are over 200 McDonald's restaurants in Hong Kong, and more than 10,000 McDonald's staff. In addition to the McDonald's restaurants, McDonald's also opened McCafe and Grab'n Go Sandwiches outlets in Hong Kong, in a bid to meet the needs of different customers. SWOT Analysis Internal Factors Strengths Weaknesses Management Experienced professionals to manage the company Important decision requires a long time to make and be delivered to the outlets Offerings Large variety of food provided, new food regularly offered, provide relatively low price food, provide venue for birthday party which most of the competitors do not provide Not healthy, oily, use of GM-food which people are not willing to eat, Marketing a lot of outlets give convenience to customers large market share towards children segment Lack of concern of middle-aged , vegetarian, elderly segment Personnel Most of employees are part-time and hence more flexible, managers are young and develop good communication with front-line workers Too low wages makes employees feel dissatisfied Finance Wages of workers are relatively low and the cost is well controlled Slowed revenue and income growth Manufacturing Advanced machinery, division of labour and mass production helps to minimize the cost - R&D Invite customers to try new products and ask them to give opinions Lack of products that suits the taste of Hong Kong people The research conducted is not opened enough External Factors Opportunities Threats Social/Consumer Active in charity events, makes the reputation of the company better Society awareness of health is increasing. Competitive Distinctive brand in the market Strong competitors. E.g. KFC, Hardees Competitors can simply copy the idea of the product the company Technological Advanced technology in genetic modified food lowered the cost of purchasing raw materials - Economic Economic downturn makes people prefer to consume products in reasonable price. ...read more.

Middle

> Children segment - McDonald's paid much effort on the children segment. This is because children nowadays are little emperors and empresses in a family. They have great influence on deciding where to have their meals. McDonald's offers Happy Meal which targets this segment. In a Happy Meal there is a small toy which attracts many children to buy this meal. Apart from the Happy Meal, children can have birthday party at McDonald. In the party, children will receive McDonald's Gift Pack and play wonderful games. > Youth segment - McDonald's food is meat based and mainly tasty. It offers a number of different sauces for french fries and Chicken McNuggets. Youths like fresh feeling. Providing different sauces to them gives them a different feeling even to the same french fries. Also, youths are in growing stage and they have to intake a large amount of food. McDonald's provides extra value meals which satisfies their consumption needs. In addition, there is an option of supersize the meal by adding $2 only. Many youths are attracted by the meals because the meals can fill up their stomach. > Elderly segment - In every McDonald's restaurant there is a free tea/coffee refill service and newspaper borrowing service. Many elderly likes to have their breakfast in McDonald's because they can enjoy reading newspaper and having tea in the comfortable environment. Point of Difference: In order to differentiate among the competitive industry, McDonald's makes its service, product and image special and unique. > Service - McDonald's promises a quality service. Many campaigns such as the "59 Seconds" ensure its customers a fast and punctual service. In addition, the McDonald's numerous outlets provide convenience for customers, which other fast food shops cannot achieve. Moreover, McDonald's provides services for organizing birthday party, which other fast food shop does not. > Product - McDonald's is famous for its burgers. It is the leader in the burger field. ...read more.

Conclusion

Over 200 outlets are distributed in different districts of Hong Kong. In addition, most of the outlets locate in high population density area, for instance big shopping malls. McDonald's number of outlets is much larger than its competitors, KFC or Hardees. This provides much convenience to customers. Meanwhile, more customers are exposed to McDonald's. This in turn increases sales of McDonald's. Besides, it offers delivery service which also attracts more customers to buy McDonald's food. This service targets to customers who are unable to get to the McDonald's restaurants. Recommendations: 1) Offering of vegetarian food - The food offered by McDonald's now is mainly meat based. Its food does not cover vegetarians. Therefore, there is a new market segment for McDonald's, the vegetarians. This new market segments not only attracts more customers, but also gives a healthy image. It is because vegetarian food is generally healthier than meat food. If this is to be done, the major difficulty to overcome is to buy new machinery to make the vegetarian food. 2) Development of new tastes - Other than burgers, McDonald's can try to offer new kind of product. For example, McDonald's can offer spaghetti. This is because the image of McDonald's food is burger only. Offering new product can change its image to a restaurant that offers a diversity of food. Also, offering new product can give customers a fresh feeling. This in turn attracts new customers and maintains customer loyalty. Besides, McDonald's can try to offer burgers that ingredients can be customized which can also attract new customers. 3) Tickets for recording purchases - Now, there is no relationship between customers and McDonald's. It is suggested that McDonald's can try to offer tickets recording how many times the customer have purchased meals in McDonald's. After a certain amount of credits or scores, customers can get a free meal or a free burger. In this way, customers feel them as a member of McDonald's since if they purchase more they can get more benefit from it. Customer loyalty thus is established. ...read more.

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