McDonald’s Case Study Essay

StrengthsLargest Food service business in the world, 34,000 local restaurants serving nearly 69 million people in 118 countries, a $40 Billion dollar brand worldwide, Universally recognized brand name with a large publicise budget Partners with other high value brands Dannon Yogurt, Kraft Cheese, Nestle Chocolate, Dasani Water, Newmans Own Salad Dressings, Heinz Ketchup, Minute Maid Juice The majority of the retail locations are possess by independent franchisees, The go with is able to grow while minimizing large capital expenditure Recession Proof Low price transportation items stand McDonalds to survive when the economy is low as there are few economic situations where most consumers cannot afford McDonalds. Massive buying power- 34,000 locations allows McDonalds to sway pricing on its core lineup items Highly trained management staff well versed in Customer service skills (hamburger University) Positive company social-image (Ronald McDonald House)Impressive core competenc ies in franchising and logisticsTarget market is children and teensWeaknessesFast Food is viewed by many as poor fictitious character and unhealthy, often associated with cheap and greasy, peculiarly the baby boomers who built the brand in the 50s and 60s less than 6% of the over 100 item entre menu is less than 200 calories more than half the entrees are high in sodiumLarge size of the business makes growth more difficult to passCommodity costs can quickly erode profit marginsLow differentiation with other similar fast food companies such as Burger King, Wendys High Employee turnover at the local levelMarket saturationNegative publicity, such as the movie Super-Size Me.OpportunitiesAdapting to fit the changing lifestyle of the largest universe of discourse sector by adding healthier food options Fast food will never be completely viewed as healthy but efforts in this command could aid in customer perception Parents would appreciate the convenience when selecting a family dinin g option Remodeling of older restaurantsChanging customer habits and new customer groupsAdding indemnity menu itemsEntry into new product categories (coffee)Provide optional allergen free food items, such as gluten free and peanut free. Sugar-free products for diabetics, and healthier beverage options. internet applications to order in advanceThreatsModern society views Fast food as unhealthyGovernment agencies are enforcing healthier menu regulations such as posting of calories Commodity food price fluctuations droughts and similar cost fluctuations cut into margin as it is hard to raise prices on most menu items Competition.regional or Local fast food restaurant chainsBeing a market leader forces McDonalds to shoulder more burden regarding look into and innovations, copycat competitors can quickly implement any success without incurring the cost of a failure.Competition and saturation in emerging marketsNeeds to be more environmentally friendly with packagingScandals/ Bad publ icity. Ex. Heroin happy mealsMinimum Wage risingEmployee health insurance issuesWhat alternative action should be considered?The company should diversify toward additional healthy offerings. Perception is reality, if a consumer perceives McDonalds as attempting to change to ahealthier option that is sufficient. No one fools themselves into accept anything purchased at a fast food restaurant will be the healthiest item, but it can assist in showing efforts are being made. A company can highlight their ongoing concern for their consumers well-being. McDonalds should focus on healthier options, such as briskly tossed, made to order salads, featuring quality healthy ingredients. Expanding their healthy food menu by adding a variety of healthier breads and beverages. Other healthier food items can be incorporated into the menu such as paninis, wraps, and healthy soups. Other changes would include, internet ordering, and home delivery.List all resources required for the selected action. Find vendors for the additional menu items and required packagingEquipment purchases, ex.Panini press, fresh salad chiller and displayTrain the staff to implement these changesTarget the advertising campaign towards a healthier image.Partner with local produce markets, to purchase vegatables,etc.What controls would be recommended to measure the selective action? Point of Sale reports showing restaurant activity per productCustomer surveyProfit and loss statementsMeet & appeal by managementComment boxesAdvertising & promotion of the new healthy menu.