Tuesday, December 13, 2011


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McDonalds INTRODUCTION McDonalds Corporation is the worlds leading food service organization. The corporation started out as a small drive-through in 148 by two brothers, Dick and Mac McDonald. Raymond Albert Kroc, a salesman, saw a great opportunity in this market and advised Dick and Mac to expand their operation and open new restaurants. In 161 Kroc bought out the McDonald brothers. By 167 McDonalds expanded its operations to countries outside the U.S.A. This unyielding expansion led the Corporation to open ,000 McDonalds restaurants in 110 countries in 14, producing $.4 bn in annual revenues. In addition, McDonalds opens a new restaurant every three hours. Also, McDonalds has twice the market share of its closest U.S. competitor, Burger King, representing 7% of total U.S. eating-out sales. Similarly, McDonalds serves about 1% of the worlds population on any given day through its ,000 restaurants internationally. Big Mac, the worlds most sold hamburger was developed by Jim Delligutti in 167 to feed construction workers. Big Mac is the biggest attraction and backbone of the corporation. Moreover, McDonalds maintains its competitive advantage by constantly creating new items to add onto its menu. This shows us that McDonalds practices an analyzer type of strategy, introducing new items and defending its existing ones. McDONALDS MISSION AND VISION We serve people with good quality food, fast and at low cost. McDonalds vision is to dominate the global food-service industry. Global dominance means setting the performance standard for customer satisfaction and increases market share and profitability through successfully implementing our convenience, value and execution strategies. THESIS STATEMENT To have a clear picture of McDonalds corporation we need to look at its Task Environment, which includes its .Customers .Competitors .Strategic Allies .Suppliers .Regulators We shall also explore McDonalds Workforce Diversity and its Total Quality Management. CUSTOMERS Customers are those who pay money to acquire an organizations goods or services. For many years McDonalds mostly targeted the young people, however this has changed in this decade; McDonalds has turned towards a more general market. By doing this McDonalds concentrates on the family, targeting a diverse market which includes consumers ranging from children to elderly people, using products such as the happy Meal for children and Egg McMuffin for the elderly. McDonalds also realized the changing world we live in and the need for healthier food, since there is an ever changing demographic group, who demand fast, top quality food that is low in calories. McDonalds responded to this opportunity and introduced a new and innovative product. This new product was a regular hamburger that tasted like the real thing but was made of plant material like Soya beans. This same product also targets another demographic group, vegetarians. McDonalds mostly uses psychographic segmentation targeting the working and middle classes. These are the people that are more susceptible to enter a fast food restaurant, since these are the people that lead a fast moving life and thus require a fast meal. In brief McDonalds customers are of all classes, but largely working and middle classes, and people of all ages. COMPETITORS A competitor is an organization that competes with other organizations for resources. In our findings, McDonalds has two types of competitors in the Lebanese market ..Indirect ..Direct Indirect Competitors Indirect refers to firms producing one or two products that compete with McDonalds products and therefore be a threat to the company. We have identified four indirect competitors Henry J. Beans, T.G.I. Friday, K. F. C. and Popeyes. Henry J. Beans offers hamburgers and fries on its menu, therefore competing with McDonalds for customers of these products. However, Henry J. Beans also known as Hanks is a more of a bar restaurant and therefore a hang out place, as a result charging more money for its products. Hanks targets middle to upper class customers, so where most of these customers overlap are in the middle class. T.G.I Friday is another indirect competitor reflecting the same characteristics as Henry J. Beans. Other indirect competitors are K. F. C. and Popeyes, both competing for the chicken nuggets and fries customers. In brief, Hanks and T.G.I. Fridays competes with McDonalds by offering hamburgers and fries, whereas K. F. C. and Popeyes compete with McDonalds by offering chicken nuggets and fries. Direct Competitors Direct competitors refers to firms producing the same products or services as McDonalds does. Here we found that McDonalds has three direct competitors Burger King, Wendys and Hardees. McDonalds closest rival is Burger King, which operates a total of 644 restaurants in 110 countries. Wendys is McDonalds second largest rival, which is also in the fast food business, where Wendys operates 6776 restaurants in countries. Hardees, McDonalds third largest rival is also in the fast food business and is the only direct competitor apart from Juicy Burger in the Lebanese market. Hardees operates 080 restaurants in 0 countries. As we have illustrated McDonalds faces stiff competition from three major competitors, Burger King, Wendys and Hardees. Suppliers Suppliers is an organization that provides resources for other organizations. McDonalds has practiced a backward vertical integration, by replacing most of its suppliers. It has done so for two reasons, 1) To reduce costs, and ) To ensure that its products are of top quality. These supplies include beef and milk to be used in its products, which it gets from its farms. Other suppliers include local grocery stores that supply McDonalds with fresh vegetables. Soft drinks are supplied exclusively by Coca-Cola, which is also its ally. McDonalds supplies also include raw material such as flour, sugar, yeast, etc.,. Strategic Allies A strategic ally is an organization working together with one or more other organizations is a joint venture or a similar arrangement. McDonalds has formed a strategic alliance with Walmart, Chevron, Amoco, Disney and Coca-Cola. Walmart, which is a large shopping mall chain in the U..S. and several neighboring countries, is allied with McDonalds, which offers great opportunities for both companies. McDonalds has restaurants in each Walmart, offering its customers conveniences and excellent fast food at a low cost ease of accessibility. McDonalds corporation describes it best in this scenario Imagine a busy shopping day at your local Walmart and having the ability to sit down with the kids and enjoy many of our McDonalds favorites, like Big Mac sandwiches, world famous fries and kids favorite Happy Meal. McDonalds understands your busy lifestyles and the demands on your time. Thats why we are making it easier for you to do more things in less time. McDonalds is engaged in an alliance with two petrol companies, Chevron and Amoco. This alliance represents the ultimate in convenience. At these locations, one finds a full-menu McDonalds restaurant with dining room service. Nothing can be more convenient, because one can fill up the car with gas and get a meal all in one stop. Another important alliance that McDonalds has is with Disney. Here McDonalds has the sole right to sell fast food in Disneys theme parks around the U..S. and other Disney operations in the world. Under the terms of the agreement, McDonalds will operate restaurants and Disney will promote its films through McDonalds. Regulators Regulators are groups or governmental agencies that can control and influence the organizations policies and practices. An example is Lebanon a few years ago when the U..S. government banned all U..S. citizens and organizations to come or operate in Lebanon. Another good example would be the embargo imposed on Iran where U..S. organizations were banned to operate in this country. Another group of regulators called interest groups can and have influenced McDonalds to treat its animals (cow and chickens) in a much more humane manner, which resulted in the restructuring of McDonalds farms throughout its operations around the world. The summary of the task environment which is by definition a specific organizations or groups that affect the organization, which includes competitors, suppliers, customers, strategic allies and regulators. Here we described the task environments importance to McDonalds, where McDonalds faces both opportunities and has threats in its environment. Workforce Diversity Diversity exists in a group or organization when its members differ from one another along one or more important dimensions such as age, gender, and ethnicity. Diversity is very important for McDonalds. Here millions of teens start out by working at McDonalds. Here some of the teenagers move on to get various jobs such as movie stars, skilled workers, famous athletes, management positions and other educated positions in society. At McDonalds two thirds of middle and upper management started out as crewmembers in a McDonalds restaurant. There are opportunities for everybody in McDonalds from teenagers to elderly workers, and from people just entering or reentering the job market. Moreover, McDonalds offers special jobs for people who have disabilities, such as people who are in wheel chairs and those who must use crutches permanently. Furthermore, McDonalds offers their workers flexible working hours. For example, hours for people seeking just a few hours of work per week and those who seek full time positions. The work force at McDonalds also have some say in their working hours, such as if they prefer the morning, mid-day, or evening shifts in the restaurant. So, McDonalds uses diversity to create a good atmosphere in their work places among workers and management. Here they offer work to all kinds of people without discrimination and the workers have flexible hours that provides customer satisfaction. Top Quality Management Quality is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs. For McDonalds, total quality management (TQM) involves that the employees are at work on time, are neatly dressed, and are clean. The employees must make sure that the customers constantly receive safe food, which implies that the employees must wash their hands often to remain clean. Moreover, the employees must follow certain Standard Operational Procedures, so the customers always receive exceptional quality and service. This includes the employees using plastic gloves when they prepare the food, that the meat and fries are properly fried, and that the vegetables are thoroughly washed when used in the food. Another TQM is that the employees rely on teamwork and high energy to get the job done, so that the customers do not have to wait long for their food. Furthermore, McDonalds management emphasizes that their restaurants should be clean. This involves that the restaurants are tidy, sparkling and spotlessly clean. As McDonalds illustrates the quality is that the employees delivers fast, accurate and friendly service with a smile. CONCLUSION In conclusion, we have explored a large corporation such as McDonalds and shown how its Task Environment, Workforce Diversity and Total Quality Management can have a profound effect on the organization. In order for such a corporation to remain a leader in its field, it must stay growth oriented and constantly have contingency plans to overcome turbulence. Another important factor is the type of strategy that it follows. McDonalds, Daimler Chrysler and Benz follow an analyzer type of strategy, constantly introducing new products while defending their existing products.

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