American thing. The progress they have made since opening in 1940 as a barbeques restaurant has been remarkable, now having 27. 5 billion dollars in revenue each year and profiting 5. 5 billion of that. As successful as they are a big key point for them is to keep its focus on emerging markets along with using several other business strategies and not be satisfied with how far they have come to this point. Several strengths McDonald’s obtains are reasoning for direct success that they have.
One being they are the number one fast food restaurant chain worldwide. The company was also voted by Fortune Magazine as the best place to work at investing 1 billion dollars in training each year (Fieriness, 2014). They actually have a Hamburger University that their staff can graduate from if they pass the requirements (Fieriness, 2014). Another strength being they offer food according to their geographic location, for example in India there is a lamb burger available (Nagy, 2011).
One of the biggest things McDonald’s came out with was putting the nutritional facts on the packaging of their food in order to show people exactly the nutritional information and even compared It to its competitors on the same package whether or not it favored their products or not. With every strength there also comes a weakness which McDonald’s does its best to correct or improve on. One of the big weaknesses is that they fail to offer pizza which plenty of people enjoy the convenience of ordering a pizza.
The reasons they do not is because it would make for new equipment necessary and after doing a lot of research they found that they would not be able to compete with all of the other pizza establishments the same way they did with coffee and breakfast places. Two stores actually tried out making pizzas and had a potentially rends logo with the golden arches turned sideways to act like cursive G’s, but had no success (Siegel, 2015). Another weakness being their quality of some of their food which has been in question several times.
With one of their strengths being putting so much into training their employees it is seen as a weakness as well because the training is in depth and some believe it doesn’t need to be with the turnover rate of employees being so high in a fast food restaurant. Also being globally known as a restaurant that disrupts the eating habits Of the youth is a major weakness. Some opportunities they possess old be being the first FDA approved quick service restaurant that is known for trying to serve a customer in 90 seconds or less.
They have branched out and combined business with retailers such as supermarkets like Wall-Mart you will often find a McDonald’s inside, or at a gas station. They have spread the word on offering alternative menu items that go along with allergies like peanut or gluten free (Bryan, 2013). On top of all of that they see a lot of opportunity in the future internationally which is why they plan on much more expansion. Legitimate threats can be few and far between when being he top dog in your line of work but they are still around.
One also being a weakness of McDonald’s in being known as a fast food chain that disrupts the diet of the youth, in saying that eventually people may not want to eat the unhealthy food or let their children eat it. Many times McDonald’s has been sued by customers that had issues with their food or one time that the coffee was too hot and was spilt on her lap. Burger King came on a big rise and was the biggest potential threat considering it is a hamburger place as well but now has kind of fell off the map revenue wise.
A lot of times threats will come room the locals opening a Ma and Pa’s place that people want to stay loyal to the owners and take their business there. Obviously diversification and organization are an important factor when taking a company international in order to be successful. McDonald’s has its revenues split into four different segments in order to track sales and keep itself organized at the same time. The four segments are the United States, Europe, MEAN (Asia, Pacific, Middle East, Africa), and other countries such as Canada and Latin America. About 65% of McDonald’s sales are derived from international markets.
The United dates makes up 35%, Europe makes up 41%, MEAN 1 and the other countries 5%. They have maintained their focus on expanding within developed markets but also hitting the emerging markets hard as well. Over the last few years they have focused on the emerging markets that have not had any sign of a McDonald’s such as several of the African markets. At the same time in doing that they are keeping up with the larger markets near China and India having opened 2,000 new stores in the last two years within those markets. In doing so they have seen sales rise 8. % in the MEAN segments, therefore bringing in more of a profit. There is kind of a mixed picture on what is going on globally but McDonald’s still continues to expand. Europe has had an increase in sales which had helped hold up the weak production from the USA and Asia as of late. They do seek to make China and Russia who are two of their larger markets, more like the United States in terms of being a dominant franchise business model. After a tough year in China in 201 1 they practically doubled down on their business there and opened close to 300 new stores before 2013 and had a lot of success in doing so.
Going global began in 1971 when McDonald’s opened its first restaurant outside of the US in Tokyo, Japan. Not too long after that they opened another Store in Amsterdam. Both still having success as well as having several other locations nearby. One issue that came across wasn’t just an issue for McDonald’s but for everyone else with there being a weak global economy several stores began to see decreases in sales, performance, and profits especially those in Europe. Surprisingly though the best international store for McDonald’s is in France and is doing very well under its own way of operating.
They have learned to adapt to what the people want that is similar o their culture but at the same time keeping their world famous reputation of having the best burgers and fries. In France the big thing is the Immaculate, which is what it sounds like, they use a baguette as the bread considering the French enjoy them and actually voted for McDonald’s to make that happen (Colluding, 2013). In 2014 McDonald’s decided going to Vietnam was a good potential investment to open stores there. In doing so McDonald’s made Vietnam the 38th Asian country that have a McDonald’s.
Henry Unguent, a developmental licensee was chosen to run the store and help open it as ell through a rigorously long application process. Unguent is a native of Vietnam therefore making the selection to choose him a little easier, as well as his first job as a teenager was at a McDonald’s. Dave Hoffman, the president of McDonald’s Asia-Pacific said, “Henry’ Unguent is that ideal business partner who has an impressive business background and proven track record in driving new business ventures in Vietnam (Waiters, 2013).
As we grow our presence in the Asia region, we are looking for partners with a blend of strong business acumen and a unique understanding of our brand. ” And Unguent tests his requirements better than most people as well as being a native will help down the road adapting to the cultures likes and beliefs. Several problems from other countries have had to be faced by McDonald’s or are being faced now. Which comes with the territory of being a big fish in the fast food market, the biggest fish as a matter of fact.
They are dealing with some problems with local competitors in other countries. For instance in Japan, Moss Burger is taking revenue from McDonald’s, in China places like Kentucky Fried Chicken, Pizza Hut, and other local start-ups (Tests, 2011). The new American laces in China hurt McDonald’s because people want to see what other kind of stuff Americans have and therefore are willing to try them all out. Good’s is a Greek restaurant that is taking a chunk of McDonald’s customer’s eyes off of the golden arches they proudly flaunt.
Although McDonald’s is taking a large hit from some other overseas companies they are not the only one that is dealing with this problem, Coca-Cola faces the same problems and faces even larger losses in revenue because of it. McDonald’s is one of only a handful of brands that command instant recognition in virtually every country n the world. With having more than 30,000 restaurants in over 1 1 9 countries, serving approximately 70 million people every day. All businesses face challenges on a daily basis. One of the major challenges facing McDonald’s is managing stock.
Stock management involves creating a balance between meeting customers’ needs whilst at the same time minimizing waste. Waste is reduced by finding the closest accuracy In demand so that products do not have to be thrown away nearly as often or wasted. As well as accurate stock control of its raw materials. This is not an easy thing to do though. As customer tastes change then McDonald’s also needs to change and increase the range of new products it offers, which makes the challenge of limiting waste an even bigger one.
In the past McDonald’s had each individual restaurant manager order the inventory and was in charge for what needed to be in stock each week or however often orders were made. But that took up a lot of the managers time and especially overseas it started to get in the way of their managerial duties. So McDonald’s then introduced a specialist team that communicates with each restaurant manager on a regular basis to mind out about local events. This helped significantly take the managers time and put it back into focusing on the employees and assuring their duties were being fulfilled properly.
Stock management is the process of making sure there is enough stock at all times to meet customer demand whilst minimizing expensive waste. Holding too much stock carries costs, so McDonald’s runs a lean stock control to save money. Ongoing communication between the central Restaurant Supply Planning team and individual restaurants helps to manage the stock more effectively. A mixture of employees who previously worked in the saturates, together with specialist stock controllers, makes up the central team.
This team of 14 regional planners works with around 80 restaurants each and communicates With them on a regular basis via email and telephone. Any factors that could affect the number of customers visiting an individual restaurant need to be logged with the team. These are taken into account in calculating the forecasts. Supply Planners work with the new stock control system, Numismatics, to ensure enough raw materials, e. G. Beef, tomatoes, lettuce, etc. , leave the McDonald’s distribution centers. This ensures that restaurants can produce the meals required for the level of demand forecasted.
A forecast is an estimate of future sales Of finished products. Forecasts are calculated using; store-specific historic product mix data from the last two years, store-specific and national causal factors for example dates of events such as national promotions and school holidays information from store managers about factors that might affect demand, e. G. Road closures or local events and promotions. Supply Planners working for McDonald’s include a range of causal factors in the calculation of their recasts, so that based on past performance they can predict future demand for each restaurant.
For example, Big Mac sales increase during a ‘Buy One Get One Free’ (BOG) promotion. The planners use this data in the forecasts for all stores that took part in that promotion. Analyzing how weather affects demand for particular products, such as Muscularly and salads, can also be built into the model. The forecasts then become more accurate, decreasing costs and improving customer satisfaction. The local companies succeeding is something McDonald’s needs to try and stop or at least prevent some of he damage it’s doing to their company and their profits. “In order to overcome: They must expand to 2 other segments of the world economy.
The semi-global segment- markets where consumers display a mix of global and local preference. And the local-segment- market where consumers retain their local preferences” (Moratoriums, 2013). This would not be easy because these markets are either too small in terms of revenue potential or too costly in terms of the operating expenses required to tap them in. Also if McDonald’s is to try this it will only further dig their whole against the local competitors. Once you are already at the top you must continue to come up with smart ideas and new ways to want people to keep coming back especially once the next big thing comes along.
McDonald’s is doing a lot to keep their name on top. One of them being adding a delivery service where needed. In the US this seem extremely uncommon to have McDonald’s deliver although several people I’m sure would enjoy the idea of it. In many Asian and Middle Eastern cities there is a high demand for delivery even from the fanciest of restaurants, therefore in order to keep up with the cultural norms, McDonald’s has adapted into having a delivery’ since available. Another helpful thing they are doing is making the stores more attractive and making the guests feel more at home which will keep them coming back.
For example, in China the new motto is “less is more” where they have a softer color scheme and cushioned seats inside. Also 95% of the locations have extended their hours and several of the stores are 24/7 locations. They have adapted free Wi-If and are trying for flat screen En’s which some locations already have, along with that there is even a new channel being played on those TV’s called Mice, playing nothing but new things about McDonald’s. There are plans to go mobile as well to increase convenience.
With self- ordering kiosks in Europe as well as mobile ordering mobile payments, as well as other smart phone tie-ins (Redundancies, 2013). These are already being tested in US stores in Salt Lake City and Austin. One of the successors to this idea has been Chipolata, which is owned by McDonald’s, when people want to avoid waiting in the long line on their lunch break to get to popular Chipolata, they use the app and it tells them what time it will be ready and they just have to show up and pick it up. Reverse ideas, or at least that’s what call t is one of the better strategies or ideas I have seen while researching.
The idea is that obviously we bring our American culture with burgers and fries to all of these other countries and even adapt to what their cultures sees as being a norm, but now their idea is taking what they saw as a norm and bringing that back to the United States and letting people here try it out. Considering Americans are typically down to try new things and it being as convenient as being at a place we go almost every day makes the idea brilliant, not even stopping there they are taking ideas from country to entry not just the United States.
For example, in Australia they have chicken Incites which are very similar to popcorn chicken, those are being tried in the Detroit location here in the States. Another example being full sized wraps which are common in Europe are being tested in the Elicited Kingdom where they are not as popular. The main reason people believe McDonald’s has been so successful and have achieved all they have achieved coming a long way from being the small burger joint or even further back to the barbeques shack is that they are not afraid to face anyone with their ideas.
It is apparent that several of their ideas are derived from businesses that are already successful such as the MacAfee being from Cutbacks and Dunking Donuts. But McDonald’s is unafraid to create the same products their competition is known from and try to compete with them. Even with their new shakes and ice creams make Dairy Queen no longer to only place to go to get ice cream. In doing this at the same time they are becoming a one stop shop for families going to get a quick dinner, dessert, snack, or even breakfast. Being a franchise has helped McDonald’s in several ways from advertising, to saving money, to making money.
Being a franchise permits growth with capital investment by individual franchises. Along with the good chance of having rapid expansion in the future. In the business world there is a small window of opportunity that closes quickly and being a franchise badges multiple units to be opened at the same time, giving an advantage over the other companies that would have been a potential threat. Market dominance via having multiple locations increases a company’s competitive edge over similar businesses within the same line of work.
Being a franchise puts a business owner in charge and ensures that managers operate several efferent locations rather than having employees doing it. When opening a new store it demands a lot of time and effort, being a franchise makes the owners motivated by their ownership and the capital they have already invested. When having all of these several locations it makes for a better buying power. Making buying in bulk a great asset to the stores because you can save a lot Of money buying that way and that money can be put toward anything else such as advertising or marketing or even renovations in the future.
Especially in the United Stated having a recognizable name is a big deal. For example when Americans stop to get something to eat and they see a McDonald’s or a Iron’s burger shack, they are most of the time going to choose the McDonald’s because of the trust and familiarity with the company and food. The franchiser does well in owning because the name must be paid for by franchisee as well as several other fees and advertising or promoting costs to go along with it. You can change without improving, but you cannot improve without changing.
A motto I feel is constantly in the brilliant minds of McDonald’s top shelf employees. In conclusion, McDonald’s to me has some of he smarter people that are alive doing the things nobody really sees them do unless they fail. It would be unimaginably hard to picture the kind of in depth thought and planning it takes to move a company like McDonald’s not just across the United States but also to go international with it as well. The fact that they have done it and done it well shows the kind of people working for them and coming up with their ides.
With over 1. 7 million people employed by McDonald’s, several of them in charge of international controls which involve being diversified enough to succeed and planning out where they will et there goods from once they are overseas. All of that makes me have a different view on the company as well as knowing now they come from just being a small barbeques shack and then just a simple burger and fries joint to being probably the most recognize blew country worldwide is an astonishing accomplishment.
Change is a constant in today’s economy with all of the new technologies and ideas being brought to the table and it is something this company keeps up with very well with marketing and advertising strategies to blow other companies out of the water, after all just because they had all of Hess good ideas to make them successful doesn’t mean the same ideas will keep them successful, must be willing to do new stuff and they have done exactly that internationally and here in the ASSAI. Bryan, A (2013). McDonald’s gluten free menu.