Business Customer Service of McDonalds - Case Study Example

Business Customer Service Name Class Unit Business customer service 1 McDonalds customers McDonalds is a fast food retail chain with presence globally. The company operates in its outlets through franchises or its ownership offering a wide variety of menu. McDonalds targets different groups of customers based on their taste and preferences. McDonalds does not depend on a single group of customers. The largest group visiting McDonalds is made up of young people aged between 18 to 25 years. It can be estimated that this age group accounts for 45% of the McDonalds customers. Most of the customers in this age group are students who in most cases work part-time. McDonald works hard to ensure that they maintain the needs of this age group which have been giving them a competitive edge. This group consists of low to middle income earners who want to have a busy lifestyle (Lutz, 2015). The second groups of costumers are those aged between 26 to 30 years. This group is the second largest and can be estimated to be at 33% of the company customers. This age group is made up of fresh graduates who are in their first job and a small percentage of the business people. The group is characterized of couples, those courting and young families with and without kids. This group is composed of individuals who have a busy life schedule. Their main need is to access their services in a fast and efficient manner. The group can only be retained through fast and efficient services (McDonalds, 2014). The next group of customers is aged between 36 to 40 years. The group is estimated to account for 16% of the customers that visits McDonalds. This is a group that is more informed on healthy eating and is most likely to avoid any unhealthy menu. This group is thus more concerned in dishes that can keep them fit and healthy. This is why the group is less as compared to others at McDonalds. The last group is those aged over 40 years. The frequency of this group at McDonalds is estimated to be at 6%. This is due to fact that this group is more health conscious. The group mostly visit McDonalds for tea or coffee. This group is more concerned on any menu they think is unhealthy. There are also children who visit with their parents as well as children below the age of 18 years. McDonalds have been discouraged from making advertisements which targets young children. The company have been targeting kids through coming up with their menu and giving them toys. This is a strategy that have been criticised by many health organisations (Lutz, 2015). McDonald’s menu favours all genders. The number of male and female customers is almost equal at the restaurants. Most of the customers who visit McDonalds have secondary education. This is the largest group as it consists of 49% of the customers. This group have low income and McDonald is able to offer affordable food for them. There is also a large group of consumers who visits McDonalds with university education. The group is estimated to be most a third of the customers. This is the category with a busy schedule. The group is made up of students at universities, professionals and business people. Those with primary level of education are mostly teenagers and foreigners. They are regular customers and can make up to 25% of the customers (McDonalds, 2014). McDonalds thus targets all groups of consumers by offering them menu and services that suits their needs. Each group of consumers is equally important for the fast food chain and are treated fairly. The size of the groups varies depending on the country of operation. Business customer service 2 McDonalds services and recommendations McDonalds have high quality service to their customers. Customer service has been the key to success for McDonalds. They are keen to monitor and act on the customer feedback always. Customer service is tailored on the customer needs. Acting on customer feedback makes it possible to tune business to meet customer needs. Listening and managing customer complaints are an important part of customer service. When the company is seen not to act on the customer complaints, it can easily loose them. Despite this, it is important to know that majority of customers do not give feedback (Karp, 2014). It has been proved that almost half of the customers who encounter a problem fail to make a complaint. Despite the success in customer care, McDonalds can work to enhance the services they provide to customers. The fact that McDonalds serves a wide range of customers implies that it must have tailored services. The company has done this through coming up with a menu that suits all. The menu has been made healthier. The company should ensure that they improve on their kids menu to avoid healthy concerns. Their mode of advertising should also not target kids as it may lead to unhealthy eating. Criticism that has been directed at the company is a major issue which can damage customer satisfaction. Most of the customers become offended when they learn that the company is engaging in unethical food campaigns. This is an area that McDonalds have to act on to ensure that they enhance customer satisfaction. Another issue lies on streamlining of the company menu. The company should work in ensuring that they streamline their menu. The customer care employees should ensure that they cater for customers beginning at the first point of contact (Karp, 2014). This is through being welcoming and assisting customers at all times. This is an initiative that recognizes that customers matters. McDonalds should also ensure that their products and new customer experiences are matched with human resource perfoamcne. This is by ensuring that they invest in employees and tools that can help them deliver. The company should also work in ensuring that they rebuild their jobs reputation. The company should make sure that their jobs are the most desirable in the market place. This is a way that ensures that employees are motivated in their work (Lutz, 2015). Fast service and cleanliness are not the only services that customers need. The way in which employees perform and interact with customers is of vital importance. The company should work in ensuring that their drive thru services is enhanced. Customers hate being in drive thru for long. This will enable the customers to achieve satisfaction in drive thru services. Employee training is an area that is difficult for McDonalds. Due to use of franchises, it becomes hard to monitor employee training. Most of employees who work at McDonalds are part-time. This further complicates employees training. McDonalds should invest more in employee training to ensure that they are able to deliver high quality services (Karp, 2014). Having trained employees benefit the company through customer satisfaction and retention. McDonalds can ensure that franchises are offering high quality services by rewarding the well performing franchises and penalising poor performers. Transparency in customer service is very vital (Karp, 2014). Customers have great emphasis on sustainability use of local sourcing and ensuring that ingredients are natural. This is a major challenge that McDonalds is facing as they work to satisfy their customers. McDonalds should work in ensuring that they are transparent to their customers on the ingredients used in their menu as well as other sustainability practices. For McDonalds to have a menu that will appease customers, it will take time. But carrying out manageable and measurable improvements on their menu is needed in order to meet customer expectations (Lutz, 2015). Customisation offered by McDonalds in their menu is a vital service provision for modern consumers. Create your taste self service kiosks operated by McDonalds faces a major problem due to time taken. For new users, it can take a very long time. The average time for the customised menu is estimated at 10 minutes. McDonalds should ensure that the menu upgrades are carried out in a way that they do not complicate the process and affect customer service. In order to fully satisfy the customers, McDonalds should ensure that they continue offering healthy menu. The company must strive to offer healthy alternatives and also ensure that customers are allowed to make choice on the options. McDonalds have to return their focus on the fundamentals. They have to re-evaluate their speed of service, convenience, cleanliness and staff customers’ relations (Karp, 2014). This will be a fresh start for McDonalds in providing excellent customer service. The company investment in technology in customer service is very important. The company have established a database that is able to capture the customer complaints irrespective of the channel they complain through. Through the technology, McDonalds is able to respond to customer needs in a timely manner. The company should be able to utilise internet fully since most of the complaints are channelled through it (Karp, 2014). McDonalds should ensure that they keep their focus on customers as they are the source of business. Through providing the above services to the customers, McDonalds will be able to enjoy satisfied customers (Lutz, 2015). McDonald’s environmental analysis McDonalds have been thriving for a long time in the fast food industry. The company was able to win among the most admired companies worldwide. The company is affected by both internal and external environments. The core competency for McDonald’s internal environment is global standardization which has led to high efficiency. McDonalds have also been very committed to diversity. The company has employees from different countries, nationalities and race. Their international operations are run by the local communities. The company uses processes and policies that cater for the employees’ diversity (Wilk, 2006). This has led to great openness towards diversity which has enabled the company to create trust and dependability. Employee satisfaction is also another area that McDonalds have excelled on. This is a result of provision of a good internal environment. The company have great communication resources. The company internal communication has led to great communication between franchises. This has enabled McDonalds to create standardisation in their restaurants irrespective of their locations. The company have well established communication technology. This enables the employees to communicate at ease (Datamonitor Plc.). McDonalds have very strong public relations (PR). The way in which a company handles their public relations have a great impact in organisation perfoamcne (Hayes, Hendrix, & Kumar, 2013). McDonalds uses PR as a central issue. When the PR is seen as a major issue in an organisation, it is integrated in the organisation hierarchy. McDonalds have their PR integrated into the management. This has helped in creating an organisation that has homogenous communication. Due to the large size of McDonalds, the organisation has a great and informative PR. The organisations have been blamed on enhancing obesity in the population. In order to manage this issue, the organisation has their great focus on creation of a strong PR (Hayes, Hendrix, & Kumar, 2013). The company have been very responsive to changes in the external environment. The company external environment is composed of competitors, political, social environment, community perceptions and environment. The main competitors are Burger King, Taco Bell, Pizza hut, Wendy and Arby’s. Despite the stiff competition in the fast food market, McDonalds are still the leaders. The company have always been keen in observing their competitors and coming up with ways in which they can have a competitive edge (Datamonitor Plc.). The society awareness on unhealthy eating and side effects associated with fast food has been a major opposition. There has been a lot of activism against fast food in their major markets. The introduction of healthy alternatives to fast food has been a major pressure on McDonalds. Despite this, McDonalds have high brand value. The company have a global reputation. McDonalds have changed the eating habits globally in their areas of operations. The company growth despite the challenges is also phenomenal. This is seen especially from the market outside America. Despite the success, McDonald’s reputation has been at stake due to society perceptions on their menu (Datamonitor Plc.). The organisation reputation has also been affected by their low paying jobs. This have led to the society having perceptions that the company offers low paid jobs which one requires little experience. The reputation has also been affected by the fact that society has been associating McDonalds with obesity. The company have been working hard to improve their reputation. This has been through extensive community social responsibility. There has also been creation of policies by governments which affects the fast food industry. These are policies based on environmental protection, consumer health and market regulations. Carrying out a SWOT analysis gives a clear picture of both internal and external environment that is faced by MacDonalds. SWOT analysis looks at the Strengths, Weakness, Opportunities and Threats (Datamonitor Plc.). The main strength lies on McDonald’s ability to provide a diversified menu. The company have a strong brand name that has enabled them to gain a large market share. McDonalds have also a great food safety record. The company was the first restaurant to give their consumers nutritional information. The company have great customer services. Food is served as fast as possible while maintaining quality (Wilk, 2006). Their record in corporate social responsibility has helped in creating a close relationship with community. McDonalds have a strong corporate culture. The company have weakness in several areas. There is high turnover due to employee training. The company have also been facing a stiff competition in the fast food market. Their pizza was not able to capture the market as expected. McDonalds have been highly criticised due to their adverts which targets young children. This has led to negative consumers’ perception. The company have been lagging in innovations as compared to the competitors (Datamonitor Plc.). McDonalds have the capability to benefit from several opportunities. Due to the rising concern on fast food and their implications on health, introduction of more items on healthy menu is a great opportunity. The company should embark in ensuring that their menu has a lot of low calorie alternatives. The company can also engage in allergen free food in their menu. This includes provision of food which is gluten free and peanut free. The company can also engage more in green energy use. This will help in attaining a great corporate social responsibility. The threats to MacDonalds are several. The volatile economy has great impacts on the company operations. This is due to fact that McDonald’s revenue is diversified. The fluctuations in exchange rates are a major issue in standardising its food prices. Another issue is the rise of fast food chain that is offering food at lower prices. There are strict policies on environment and population health (Wilk, 2006). Criticism is a main threat as parents sees the company to be taking advantage of their kids. This can lead to negative image and loss of market. Company reputation and brand image should be protected always. The company have been sued severally due to unhealthy menu. Scandals in the fast food industry such as horse meat scandal are also a major threat. McDonalds Accounting McDonalds have been experiencing slow growth due to negative perceptions, arising issues competition among other threats (Wilk, 2006). The company was among the pioneers companies in internationalization. This has helped the company to minimize their internal threats. Most of McDonald’s revenue comes from external market where they operate as franchises or joint ventures with local partners. The company expanded after they exhausted their home markets. The company has been pursuing external opportunities across all markets (Hill, 2014). McDonalds finance department is seen as the heart of the company. The finance department of McDonalds have tasks in financial reporting and management accounting. This ensures that McDonald’s financial position is at its best for now and in future. The company collects royalty and rent from the franchises and keeps the profit. By 2013, McDonalds had 35, 429 restaurants operating in 119 countries. Among these restaurants, 28,691 were operated under franchises and the company operated 6,738 restaurants. This indicates that the company must have a strong financial department to cater for all restaurants (McDonalds, 2014). McDonalds had a growth of 1% in system wide sales in 2013. The company was also able to have a growth of 2% in operating income. The company suffered declining sales in US market. This was attributed to high competition and strong criticism. In Europe the company had no sales growth. The low consumer confidence affected the company sales in a great way. The company responded through use of rebuilding the brand. The company operating margin was at 31.2% and the revenues grew by 2% (McDonalds, 2014). In 2014, the company reported decline in their global sales by 0.9%. This has been the worst year for the company. There was a negative growth in major segments. The company faced a decline in their consolidated revenues which went down by 7%. The company had financial goals for three years 2014-16. In the plans, the company planned to return between $18 billion to $20 billion to the shareholders. McDonalds have reduced their capital budget for 2015 to be $2 billion which is the lowest for the first time. The year had been a challenging for McDonalds. The company had their revenue decline due to poor performing geographical areas as well as unplanned events. Due to rise in competition, pressure from activists and organic and natural food growth, slowing the company growth has been the main option. The company have slowed their growth and re-evaluated their menu (Wilk, 2006). The establishment of 24/7 restaurants have been the one of the main areas that the hotel have focused on. The company recorded a sharp decline in sales and earnings. There have been changing customer taste and stiff competition in the market. The company have resorted to coming up with new concepts that can help them to recover. The custom menu kiosks and streamlined menu have been some of the initiatives expected to help McDonalds recover. The company have been using videos to show consumers how they make their food in a bid to change their perceptions. By December 2014, the company revenue fell by 7% to $6.6 billion. The company earnings dropped to $1.1 billion from $1.4 billion (McDonalds, 2014). The company net income has been shrinking since 2011 from $5.6 to $5.8 while their revenues in most cases have remained flat. The higher effective tax rates, low perfoamcne in US market and unusual events such as horse meat scandal have been major contributor to the decline. The global comparable sales decrease was at 3.3% which was associated with negative guest growth in areas associated with issues such as horse meat scandal (Wilk, 2006). The company had diluted earnings decrease of 28% per share. Currently, the growth for McDonalds is expected to slow. McDonalds have been trading below their average. The company have been able to deliver 16.7% annual increase of EPS over the last decade. The company estimates that their revenues will grow though at a slower pace than the previous decade (McDonalds, 2014). McDonald’s quarterly income Month and year Quarterly income (US$) Sept 30 2012 1.445B Dec 30th 2012 1.396B March 31st 2013 1.270B June 30th 2013 1.396B Sep 30th 2013 1.522B Dec 31st 2013 1.397B March 31st 2014 1.205B June 30th 2014 1.387B Sept 30th 2014 1.068B Dec 31st 2014 1.098B Table, 1. (Datamonitor Plc.). References Datamonitor Plc. (n.d.), McDonald's Corporation SWOT Analysis. (Business Source Complete.) Cleveland: Datamonitor Plc. Hayes, D. C., Hendrix, J. A., & Kumar, P. D. 2013. Public relations cases. Boston, MA: Wadsworth/Cengage Learning. Hill, C. W. L. 2014, International business: Competing in the global marketplace. New York, NY: McGraw Hill Education. Karp, J. E. 2014. The Power of Service: Service Through The Eyes Of Customers. Cork: Book Baby. Lutz, A. 2015, “McDonald's Is Overhauling Customer Service”, Business Insider, Retrieved 5th January 2015 from, http://www.businessinsider.com/mcdonalds-overhauling-customer- service-2015-1 McDonalds, 2014, “McDonald's Reports Third Quarter 2014 Results”, McDonalds Press Release, Retrieved 5th January 2015from, http://news.mcdonalds.com/Corporate/Press- Releases/Financial-Release?xmlreleaseid=123057 McDonalds, 2014, “Who is your target market / audience?” Retrieved 5th January 2015 from, http://www.mcdonalds.co.uk/ukhome/whatmakesmcdonalds/questions/running-the-business/business-strategy/who-is-your-target-market-audience.html Wilk, R. R. 2006, Fast food/slow food: The cultural economy of the global food system. Lanham, MD: Altamira Press. Read More