McDonald's Cuegis for Section C

McDonald’s McDonalds corporation is the world's most recognised and largest provider of foodservice serving millions of customers daily around the world and operates in almost 37000 restaurants in more than 120 countries. It was initiated in 1940 with a restaurant opened by brothers Richard and Maurice in California. After since its incorporation in 1955, McDonalds has sold more than 100 billion hamburgers. Franchises around the world. Ray Kroc joined as a franchise agent in 1955, they partnered. Ray Kroc bought McDonald’s for 2.7 mil in 1961. Current CEO is Stephen James Easterbrook. (2015present)

• a firm’s organisational culture defines their traditions, habits and values that influence their workers’ behaviour

• uses organisational culture to attract customers and qualified employees

• their organisational culture emphasises HR development and efficiency

• organisational culture supports business growth and success in the international fast food market

People centricity • prioritises employees needs and development and supporting people

• encourages employees to engage management to help improve processes and procedures

Individual learning

• organisational culture highlights importance of lifelong learning

• company offers training and development opportunities through Hamburger university (internships, global mobility, leadership development programs)

• motivates employees to keep them learning

Organisational learning

• firm uses individuals learning to develop organisational knowledge to improve business’s heights of performance

• carries out meetings that encourage employee feedback and knowledge sharing

Diversity and Inclusion • wide range of diverse employees

• firm has strict rules about uniform/ punctuality

• all premises are cleaned before and after opening and closing time

• working environment is free from harassment and unlawful discrimination- under their diversity policy

• mcdonald’s corporate value has ‘people’ under one of their pillars- provide training to make employees fell valuable, enhances positive image of company and enhance communication skills, time management, team skills etc

• CSR

• they sponsor many neighbourhood beautification projects

• ethical animal treatment

Globalisation: Positive impacts • as economy is rapidly booming in asian countries, it has positively affected McDonald’s business

• can lead to increased employment rate in asian countries

• due to technological advancements, McDonalds is performing better

• low energy consumption of machinery and increased operational efficiency with Echelon’s LonWorks technology

• technology enables franchises to create easy operating working environment, facilitate preventive maintenance and provide new services at the same time

• reduced maintenance costs due to technology

• sociological factor of: increased health consciousness, high demand for high population growth, cultural norms and career attitudes

• targets middle class segment and captures niche market

• made use of same logos and interior design to build brand image

• helps decrease financial risks

• less competition because of good brand

Technological concept: • Drive thru

• Phone order/delivery 24/7

• free wifi connection at branches

• online networking (taking cues from Facebook)

Negative impacts of globalisation: • increased competitiveness in market- can offer special discounts etc, increased promotion

• in india, 20% population in vegetarian, removing beef products

• might face problems in attracting customers

• hence, modification of menu required to tailor to needs of consumers

• adapting to local culture

• increase in sales revenue

• increase in awareness

• religious law of operating in islamic countries : not consuming pork, healthy hygienic food for customers

• food inflation crisis in china- increase in prices can damage fast food industry

• health consciousness: increased rate of obesity

• globalisation promotes innovation and efficiency

• beef ban, greatly changed menu items, so did competitors

• costs high due to changes in menu in every country

Innovation • constant updations in menu to be in sync with dietary needs of consumers

• innovations to provide menu options that suit virtually every culinary preference

• voluntarily labelling nutrition facts on meals, proves its authenticity

• children’s menu options- happy meal, first entrance into market

• being green: unbleached paper napkins used from recycle material ‘One meal, one napkin’ ‘McReycle’

• Events: Fifa 2010 sponsorship, singapore youth olympic games 2010

• McCafe

• aloo tikki burger for 20 rupees, launching of street food customer for indian customers, revolutionised food industry

Ethics • consumer packaging made from renewable materials

• recycling used cooking oil

• creation of environmentally friendly biodiesel

• providing educational materials in their restaurant and working with teachers in school

• CSR: Ronald McDonald house charities (ill children houses who are receiving treatment from nearby hospitals programs)

• accused of wage theft, poverty-level-pay and mistreatment of pregnant workers in Brazil, resulting in protests

• negative impact on environment due to hundreds of factories around the world

• continued use of paper and plastic based cutlery, abusing environment by cutting down trees etc

• selling unhealthy ingredients

• CSR: investment in eye care hospital

• However, employees compare of wage theft, bad working conditions, poor management, leads to negative advertising and PR

• Ethical issues with food: giving cows steroid to make more beef

Motivation • makes uses of financial encouragement, non financial encouragements and social policy

• they follow performance related pay philosophy to encourage employees

Marketing strategy • ATL: billboards, tv advertisements

• highly focuses on internal marketing

• slogan ‘im loving it’

• short names of products so that people remember it- big mac

• Sales promotion: distribution of free coupons, functions events, twitter contests

• Public relations

• Direct marketing: telephone marketing, email, websites

• Personal selling: customer feedback, face to face communication

• celebrity endorsements
 Change: • Healthy breakfast

• Renovating restaurants to make it more modern and progressive (can attract younger generation)

Culture: • omit pork and beef in menu in India

Strategy: The company deals with 3 strategic issues.

1. How to deal with the growing competition

2. How to deal with financial issues such as high franchisee fees in contrast with geographical expansion goals

3. How to deal with the worldwide economic crisis

• They use aggressive marketing strategies

• Financial issues are dealt with the spreading of risk through globalisation.