McDonald's and the McCafe Coffee Initiative - Essay Example

McDonald’s and the McCafé Coffee Initiative McDonald’s and the McCafé Coffee Initiative McDonald’s has built a huge in fast food industry. It is the number one food selling company. It has approximately 31,000 restaurants selling food in 120 countries (Sgro, 2004). Part 1 Ralph Sgro is the owner and operator of Burlington market. He has worked for McDonald’s for over thirty years. He was initially a front line manager before he rose through the ranks to become a senior field service manager.

Other players are Ray Kroc, who founded McDonald’s system in 1955 and Dave Thomas who was the founder of Wendy’s International, Inc (Sgro, 2004). Part 2 McDonald’s is a type of restaurant that deals in fast food products. It is a Canadian foodservice industry that specializes in businesses that cook, transport and serve prepared foods that are popularly known as fast food. It deals in quality products like chicken, burgers, French fries, coffee, sandwiches, desserts, salads among others (Sgro, 2004).

Part 3 The company is facing stiff competitions from other companies like Wendy’s International, Inc that provide similar goods and services. It is common to see McDonald’s outlet shop between other food restaurants at a busy corner. In addition, customers have been complaining of poor services provided by the company. This resulted into a poor reputation for the company. The end result has been a decline in total volume of products sold by the company (Sgro, 2004). Part 4 The Canadian coffee industry experienced an explosive growth of around 15%.

As a result, several restaurants and food stores such as Wendy’s International, Inc were set up to meet the market demand. Such companies had to compete with McDonald’s for the available market. As a result, it was hard to create customer loyalty because of higher competition and availability of various players owning coffee retail shops (Sgro, 2004). Part 5 Competition, poor reputation and decline in sales volume are the real problems facing McDonald’s because. They have contributed greatly to decline of the company’s profits (Sgro, 2004).

Part 6 The Canadian food industry operates in an environment of hard work, mutual respect and competition. The players normally fight for high traffic locations because of large numbers of customers. The players also work hard and respect one another in order to maintain the reputation of their organizations (Sgro, 2004). Part 7 Alliances, mergers and acquisitions characterize the industry. It is believed that a company cannot single handedly succeed in the highly completive market. As a result, franchising activities have increased rapidly in the industry leading to a growth of commercial restaurant commercial restaurant.

It is believed alliances increases market opportunity and survival of the players. The process has resulted to a decline of independently owned restaurants by over 10 per cent (Sgro, 2004). Part 8 McDonald’s plans to increase its promotion strategies, product innovation, give discounts and build alliances and acquisition with other companies like Disney in order to improve its stakes in the market. In addition, the company has engaged in charitable activities like Ronald McDonald Children’s Charities in order to build its reputation (Morris & Steiman, 2013).

Part 9 Through product innovation, the company should produce goods that its competitors’ do not manufacture in order to outshine them. The company should also establish several branches in other countries in order to expand her market. Lastly the company should produce quality products at an affordable price so that it can maintain and win over more customers (Morris & Steiman, 2013). Part 10 The only problem with the recommendations is that the company might not have enough personnel to aid in establishing branches in other countries.

Lastly, by producing cheap goods, the company may endanger its reputation and decrease its profits (Morris & Steiman, 2013). Conclusion McDonalds has transformed itself severally since its inception. It has dominated the US market. It would soon establish itself in the whole world. In the event that overcomes its challenges and satisfies its customers, it will conquer the whole world (Morris & Steiman, 2013). References Thurston, R. W., Morris, J., & Steiman, S. (2013). Coffee: A comprehensive guide to the bean, the beverage, and the industry.

New York, NY: McGraw-Hill Sgro, L. (2004). McDonald’s and the McCafé Coffee Initiative. Richard Ivey School of Business: The University of Western Ontario.