Communication Plan for McDonalds Corporation - Essay Example

?Corporate Communications: Communication Plan – McDonald’s Corporation “The art of communication is the language of leadership” James Humes Introduction: As the corporate organizations prepare to go global by expanding their outreach and transitioning beyond geographical boundaries, there is a rapid and simultaneous change in the field of corporate communications. Lack of communication has resulted in numerous high-profile corporate scandals that rocked the business world including companies like Toyota, WorldCom, Enron, Wal-Mart and the likes. With critical issues such as stakeholder engagement, climate change, and current global issues affecting the corporate landscape, and the rise of media pressures, effective corporate communication has become all the more inevitable (Cornelissen, 2011: p. xv). Organizations today need to focus on developing and implementing a comprehensive corporate communications plan in order to address and resolve the challenges posed by the highly dynamic external environment and the cope with the media pressures in this new corporate environment. McDonald’s Corporation: McDonald’s Corporation is a global multinational fast food restaurant chain touted to be the world's largest chain of fast food restaurants headquartered in Oak Brook, Illinois United States. As of 2013 the company boasts of over 34000 restaurants in more than 119 countries worldwide including Asia Pacific, Latin America, North America, Europe, the Middle East, as well as Africa (McDonald’s, 2013a) serving over 69 million customers daily (McDonald’s Corporate Report, 2012). Values, mission & vision: The brand's mission is “to be our customers' favorite place and way to eat and drink”. In order to achieve this objective it follows its global strategy 'Plan to Win' which is centered on ensuring an exceptional experience for their customers (McDonald’s 2013b). Its vision is “to be the world's best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile” (McDonald’s, 2013c). Corporate Communication Plan – McDonald’s Corporation McDonald’s has recently faced severe criticism from the mass media, as well as from the general public, for various reasons including - its aggressive marketing strategies which mainly targeted children and minority population selling them unhealthy food with low nutritional value; increased dissatisfaction among the workers for low pay; increased complaints from the customers for rude behavior by their employees; growing dissatisfaction among the franchisees for increased pressure to deliver etc., among others. Such events have resulted in a chain of negative repercussions for the organization and in the absence of a proper strategy, might lead to disastrous consequences in the long run affecting their profitability and credibility. Effective corporate communication strategy is one of the best alternatives available at the disposal of the management to address the situations currently faced by McDonald’s. There has been an increased interest in corporate communications management among researchers, practitioners as well as the managers in the recent years. Effective management of corporate communications through an elaborate and strategically developed plan is largely and unanimously perceived as an ideal way of dealing with the highly complex and dynamic external corporate environment (Goodman, 2000). The strategy in context: In order to help the management deal with the growing internal and external pressures, an elaborate corporate communications plan has been developed, explained as follows: Objective: The objective of this corporate communication plan is to assess and identify the various problems faced by the company recently and analyze the same through SWOT analysis as well as Stakeholder Analysis. On the basis of the results derived therefrom, devise a communication strategy to enable the company to overcome and/or address the problems faced by them. Current problems faced by the company: Increased employee dissatisfaction due to low wages, nation-wide strikes (The Huffington Post, 2013) Increased customer dissatisfaction (NBC News, 2013) Increased dissatisfaction among the franchisees (Chicago Business, 2013; InvestorPlace, 2013) Increased criticism from various groups regarding its unhealthy meals and lack of nutritional content (CTV News, 2013) Stakeholder Analysis: The internal and external stakeholders of McDonald’s include: These stakeholders can be further categorized according to their relative basis of three key attributes i.e. power, legitimacy, and urgency and its relative impact on the organization as a whole. High Power Low Power refers to the level and extent of influence exerted by the stakeholders on the organization in a manner which compels the management to change or alter its strategies. It refers to the approaches adopted by the stakeholders to ensure that their demands / claims are met and addressed by the organization. The employees can be categorized as high power in the current scenario, given the nationwide strikes organized by them in masses with an intention to exert pressure on the organization to grant their demands. Legitimacy refers to the relevance of the rightfulness of the claims made by the stakeholders. The nutrition and health activists, parents concerned about the dietary habits of their children, and other similar community groups who have a genuine concern about the meals advertised aggressively by the brand targeting vulnerable children (via the Happy Meals menu) can be considered as fairly legitimate. Urgency refers to the need for immediate or prompt action on the part of the management. Given the current situation the customers, employees, health activists and community groups can be classified as holding high level of power, legitimacy of claims as well as urgency of needs to be addressed, by the organization. It is highly imperative for the organization to ensure that the needs and concerns of all its key stakeholders i.e., customers, employees, franchisees, and other community groups be addressed and resolved promptly in order to prevent any loss of / damage to its reputation and credibility in the industry. SWOT Analysis: Strengths: Strong brand name: McDonald’s is the world’s largest fast food chains and hence enjoys strong market credibility due to its widely established brand name. As of 2013 the company boasts of over 34000 restaurants in more than 119 countries worldwide including Asia Pacific, Latin America, North America, Europe, the Middle East, as well as Africa (McDonald’s, 2013a) serving over 69 million customers daily (McDonald’s Corporate Report, 2012). Large customer base and market share: McDonald’s is one of the world’s most reputed and recognized brands and has been consistently reporting stable revenues and growth. According to the results announced for the first quarter on March 31, 2013 the company has reportedly managed post higher earnings and revenues for the first quarter and an increase its market share despite the growing competition (Wall Street Journal, 2013a). Culturally competent – locally adapted food items: McDonald’s operates over 34000 restaurants and franchisees in more than 119 countries across the globe including Asia Pacific, Latin America, North America, Europe, the Middle East, as well as Africa (McDonald’s, 2013a). One of the key reasons behind its unprecedented success is its “Think Global Act Local” marketing strategy whereby the company offers food items designed to suit the local tastes and preferences, thus displaying its cultural competence and high awareness of cultural diversity and needs. The brand puts special emphasis on buying local ingredients and boasts of catering to the needs and demands of its customers, keeping in mind their local tastes and preferences. The company’s ‘We Buy Local’ ad campaign bears testimony to the fact that the company is dedicated in supporting the local farmers by buying local ingredients for its menu (McDonald’s Australia, 2013). Furthermore, the executive chef at McDonald's - Dan Coudreaut, has an impressive resume with a top of his class graduation from the Culinary Institute of America. He has an extensive work experience including serving as the Executive Sous Chef at Dallas' Cafe Pacific and Chef de Cuisine at the Four Seasons among various others (McDonald’s, 2013d). Nutritional food items: The company is committed to providing customer centric services with an aim to keep them happy and offer them an enjoyable eating experience at all its centers. In accordance with the changing demands of its customers the company has adapted its menu to include more nutritional choices to its menu including addition of more seasonal fruits and vegetables options such as blueberries and cucumbers during peak seasons and new breakfast choices including an egg-white breakfast sandwich among others. The company also altered its Happy Meals directed at young children. The new Happy Meal now includes Apple slices and a kid-size fry. Also fat-free chocolate milk is now added as a beverage choice. The company has also changed its marketing strategy and is now increasingly focused on generating enthusiasm among the children with regard to healthy eating (McDonald's, 2012e). McDonald’s university: McDonald's Hamburger University which was founded in the year 1961 comprising of a class of merely 15 students in its first batch today boasts of over 5000 students per year. The University provides extensive training and is known for honing the skills of its recruits offering best talent and the most committed people with a strong sense of providing quality service, cleanliness and value to the world. Its achievements include an exclusive college credit recommendation from the American Council on Education and have been consistently recognized for its excellence in training the students enrolled in their courses (McDonald’s, 2013f). Weaknesses: Negative image: The company is often accused of spreading obesity due to its unhealthy menu and for targeting one of the most vulnerable segments of the market i.e. children. High employee turnover: McDonald’s is known to have a high employee turnover, most of which is attributed to low wages and extremely demanding job requirements (Wall Street Journal, 2013b). Increased employee dissatisfaction: The employees at McDonald’s in New Zealand as well as New York City have been demanding higher wages and were recently on strike to protest against the low wages (Newswire, 2013; Chicago Business, 2013). Opportunities: Growth of global fast food industry: There has been a significant growth in the global fast food industry over the years particularly so in the developing nations. The Chinese fast food industry for instance, is reported to be the fifth largest in the world and seems to be growing at a rapid pace (International Business Times, 2013). Locally adapted and low cost menu: McDonald’s offers innovative food items which are specially designed to suit the local markets. With the growth of the global fast food industry this poses an excellent opportunity for the franchisees to cater to a wide range of customers and capture greater market share. High rates of unemployment among overeducated college graduates There is a high rate of unemployment among college graduates in the U.S. (The Wall Street Journal, 2013) with several young graduates finding it increasingly difficult to find suitable jobs in their respective fields of study. McDonald’s offers a good opportunity for unemployed college graduates, thus helping to reduce the overall unemployment rates in the country. Threats: Increased competition: As the fast food industry grows there is an increased risk of growing competition. Fear of lawsuits and public health risks: McDonald’s has consistently faced several lawsuits for various reasons from serving unhealthy food items to children and adults alike to serving culturally banned food items to religious minorities. In the absence of effective steps the company is likely to face such lawsuits costing millions of dollars and resulting in fall in revenues. The company faced a severe law suit filed by an Australian woman who sued the company for its failure to properly secure the lid of hot coffee resulting in second degree burns (ABC News, 2013). Fear of negative publicity through social media: The rise in social media has further increased the risk of negative publicity for businesses as customers can easily post their negative experiences on social networking and micro blogging sites resulting in damage to the company’s image. Trends towards healthy eating: The recent trend and emphasis on nutritious diets could prove to be fatal to the company’s business. Communication Strategy: "Regardless of the changes in technology, the market for well-crafted messages will always have an audience." Steve Burnett, The Burnett Group Crisis communication: McDonald’s is currently facing severe setbacks with regard to persistent assaults on the company's image by health and nutrition activists, parents and other stakeholders concerned about the health of the target consumers, mostly children. Concurrently, there are nationwide strikes by dissatisfied workers; growing dissatisfaction among the consumers regarding the rude attitudes of the workers; and dissatisfaction among the franchisees who are pressured by the management to improve and enhance their services despite being on strained budgets. The rapid technological developments and the rise of social media have resulted in more power in the hands of the consumers leading to increasing exposure of organizations to crises. In the absence of an effective crisis management strategy the company is likely to suffer loss of reputation among its stakeholders (Stephens & Malone, 2009). Organizations constantly find themselves under tremendous pressure more than ever before highlighting the need for filling up the information void. According to Martinelli and Briggs (1998) organizational crisis can be perceived as opportunities to demonstrate the commitment and values endorsed by organizations to the stakeholders at large. In order to deal with such crises and fill the communication void McDonald’s can set up a third party information site such as blogs which include interactive surveys aimed at understanding consumer response. The blog must also include freedom to all its consumers to report and express their personal experiences and feelings regarding the services, menu, concerns about health etc., thus enabling the management to track the tastes and preferences of its customers. Anti-corporate pro-justice groups pose a significant threat to the reputation and credibility of an organization. McDonald’s is not immune to such threats and hence must make special efforts to ensure that that any concern raised by such groups are effectively addressed and communicated to the consumers through blogs and other third-party social media tools. The company must hire special task force who act as crisis communicators and are entrusted with the responsibility of alerting the management regarding any impending crisis. Furthermore it must also ensure that the messages communicated by the company reaches the intended / target market segments. According to Gonzalez-Herrero and Smith (2008) prior to setting up third-party social media channels for communicating its messages to the consumers it is imperative for organizations to ensure that the audiences are familiar and comfortable with relying on such sources for information / clarification in times of a crisis. This can be ascertained through exclusive surveys and tracking the comments and/ opinions of customers on popular blogs. Employee Relations: McDonald’s has a history of low employee retention rates in the industry. In the face of growing dissatisfaction among the employees as is apparent from the nationwide strikes, it is imperative for the company to take proactive measures to address and resolve the challenges faced through employee relations. Inadequate compensations and incentives are undeniably the key contributing factors resulting in organizational decline. The lack of will, efforts or consideration on the part of the management in acknowledging the hard work put in by the employees results in increased dissatisfaction among them which often translates into non-cooperation, negative propaganda, and at times coercion. Research indicates that there is a direct correlation between employee satisfaction and increased organizational performance (Ostroff, 1992; Peterson and Luthans, 2006; Ryan, Schmitt, and Johnson, 1996). Hence factors such as high employee turnover or worker strikes due to dissatisfaction with the organizational work environment are highly likely to affect the organizational productivity and performance in the long run. McDonald's is currently facing serious opposition from its employees due to low wages resulting in nation-wide strikes. In order to address and effectively resolve the ongoing conflict it must adopt a participative approach whereby the employees are encouraged to share and communicate their grievances with the management and are offered an opportunity to have a say in the management decision making. Furthermore it would be advisable to adopt an approach whereby the employees are perceived and treated as partners rather than subordinates or mere workers in the enterprise. This would ensure high level of commitment and improve productivity, and reduce or eliminate the probability of such crisis in the future. Reputation Management: External stakeholders such as environmentalists, and in this case, health and nutrition experts, parents, and others concerned have historically grabbed headlines by drawing attention of the public to corporate misdeeds and the unethical means of conducting their business, damaging the reputation of such companies in the process. Reputation management in case of McDonald’s is hence of crucial significance since the organization has been globally attacked for promoting obesity among children by serving unhealthy food. The recent efforts made by the company to be socially responsible have met with disastrous consequences. For instance in the case of The company's outlet at Detroit which offers 'halal food' to cater to its Islamic consumers was sued for being inconsistent in serving 'halal food' (CNBC, 2013). Recently the obesity lawsuit against the organization was revised by lawyers accusing it the fast food giant for misleading its customers regarding the dietary composition and nutritional statistics of its food items (CNN, 2013). Such claims and lawsuits filed against the company is likely to cause irreparable damage to the reputation of the organization. The reputation of an organization is largely dependent on its interactions with its various stakeholders. Hence any negative publicity of an organization in the popular media is likely to cause considerable damage to the organization's reputation. Reputation management helps organizations in repairing the damage caused through application of strategies involving deliberate actions by its leaders or spokespersons implemented with an intention to improve, repair, protect or enhance the reputation of the organization in question in the eyes of the public (Elsbach, 2006; Fombrun and Rindova, 2000). In order to counter the various accusations levied against it by the external forces resulting in damage to the company’s reputation, McDonald’s must adopt a defensive impression management strategy in order to recover its lost brand image and revive itself in the eyes of the consumers. Defensive impression management is typically applied by organizations in cases or situations whereby an organization expects to encounter a predicament in the future. The predicament in this case refers to any unfortunate event or characteristic trait likely to be attached to the company. Defensive impression management helps organizations in managing their reputation and creating a favorable impression by avoiding and eliminating the negative traits associated with it (Mecke, 2007). References: Cornelissen, J. (2011). Corporate communication: A guide to theory and practice. London, UK: SAGE Publication. Elsbach, K. D. and Kramer, R. M. (1996). 'Members' responses to organizational identity threats: Encountering and countering the Business Week rankings'. Administrative Science Quarterly, 41 (3): 442-76. Fombrun, C. J. (1996). Reputation: Realizing Value from the Corporate Image. Boston: Harvard Business School Press. Goodman, M. B., & Hirsch, P. B. (2010). Corporate communication: Strategic adaptation for global practice. New York, NY: Peter Lang Publication. Gonzales-Herrero, A., & Smith, S. (2008). Crisis communications management on the web: How internet-based technologies are changing the way public relations professionals handle business crises. 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Sorry, College Grads, I Probably Won't Hire You [Online] Available at: [Accessed: 1 June, 2013] Read More