Huge Brand Equity of McDonalds - Essay Example

Introduction McDonalds is the world largest fast food company in the globe. Additionally, the organisation hasbeen successful in building up huge brand equity. It has become number one in terms of sales with over 31,000 restaurants across 120 countries. It has become among the top ten most powerful brands in the world. In regard to market share, when other brands such as Burgers King have been losing market share, McDonalds still experiences increase in its market share. Perhaps, the reason behind its success is attributed to continued innovative and management measures that has enabled it to improve day by day. For instance, McDonalds engages in a serious training program for its managers. The training program is referred to as Hamburger University where professionalism is the base of its success. Analysis Strengths The McDonalds plan to win encompasses a framework for its global business. Through its strategic focus of the elements of people, product, place, price and promotion, the company has been able to capture the largest number of customers in the fast food industry. This has been in line with combination of financial discipline that has made it possible for the organisation to develop and maintain competitive advantage. For there to be success in any business, Yuece (5) argued that there is a need to have innovative ideas that enable a company to develop the existing products and services including introducing new products for the customers. This goes in line with the continued market research especially on customers’ needs and preferences. With this in mind, McDonalds has been able to able to design online services where customers are able to order online. This creates efficiency and reduction of time wastage. Weaknesses However, the company has been experiencing bad image in relation to unhealthy food habits encouraged by the consumption of fast foods that have been linked to obesity and other bad eating habit complications. This has led to the company being involved in several lawsuits and other legal cases. For instance, many cases have been brought forth in relation to trade mark issue. In addition, due to increased competition, McDonalds has faced stiff competition from its competitors. This has been attributed to what McKean (4) termed as rationality of consumers. This is the situation where customers become rational in consumption depending with the variety of choices that go in line with their needs and preferences. Therefore, if McDonald’s competitors offer what some customers think best suits them, there are high chances that they will shift to that particular company. Matters pertaining environmental issues have been facing the company especially because the company uses polystyrene that contribute to ozone depletion. This has been criticised by many people. Opportunities As people continues being busy at work in the contemporary world, they lack enough time to go home to prepare meals. Therefore, most people opt for fast foods. In addition, most of these people like fast foods such that they become part of their meal plan in a day. With such facts, McDonalds takes that opportunity and provide the customers with a variety of such foods (Yuece 6). In relation to conservation, the company has resorted to research in green energies and packaging solutions as well as engaging in advertisements on the same that act as marketing strategies. Threats However, the company faces a threat of high competition from new brands. Although this appears not to be a serious threat to McDonalds, the new brands are growing day by day as they strengthen their brands and this might bring stiff completion to McDonalds in future. Code of Conduct for Board of Directors Apparently, the Board of Directors at McDonald’s Corporation has taken the responsibilities expected of them in relation to interest pertaining to the Corporation’s share holders and the general well being. As such, they have adopted a Code of Conduct in which they adhere to good faith, devotion, and avoidance of conflict of interest in the following manner: Acting in the best interest and making fulfillment in fiduciary obligation for the sake of all McDonald’s share holders; Acting in honesty, fairness and integrity; Conducting themselves in courteous, respective and professional manner; Complying with all rules and regulations with inclusion of McDonald’s policies and Company Related Person Policy; Being in a position to avoid situations that may culminate to actual or potential conflict of interest with regard to Company Relations Person Policy; Acting in a manner that enhances and maintains the reputation of McDonald’s Corporation; Sharing and making information available to fellow Directors as may be appropriate to the ensuring that proper conduct is upheld and maintained in the Corporation; Observing confidentiality of information that relates to Company’s affairs that is achieved during their service as Directors expect when authorized to disclose legally or otherwise; Not using confidentially acquired information for their own personal gain; Acting in good faith, with responsibility competence, and diligence to prevent their independence judgment from being subordinated; The failure to uphold this Code of Conduct would lead to automatic dismissal or displinary measures from the Corporation Governance Principles, and other related policies(Ferrell 30). Code of Conduct for Shareholders Apparently, the shareholders at McDonald’s have responsibility of ensuring that the Corporation provides the best services for their customers, suppliers and others who are directly beneficial to the Corporation. As such, the Code of Conduct must be in line with loyalty and utmost good faith as follows; Carry out their activities in a professional, responsible and ethical manner; Act in Company’s interest by defining and defending McDonald’s mission and values with regard to the Code of Ethics; Exercise the rights of voting particularly during Annual Shareholders’ Meeting in basis of being informed and thus except good ethics from other members of the Company; Organize McDonald’s as a source of wealth, and sustainable profit and attaining market competitive advantage while all these activities are carried in regard to good ethics; Responsible for appointing Directors and management team that meets the requirements in terms of preparation and experience to hold such positions at McDonald’s in a professional, ethical and responsible manner; Responsible for searching to come up with a fair balance between capital and work in a way that ensures that employees receive salaries as per their experience and performance, as well as, just competition for their overtime work. Taking responsibility of configuring the company as a medium and long term entity but not compromising its continuity through an interest that is short term based (Ferrell 29) The management McDonald’s success has been attributed to the foundation built on good management and professional ethics. This has led to millions of people around the globe to build trust in the company. Its professional integrity revolves around respect for employees and customers. Every employee is trained on delivering outstanding quality, value, service and cleanliness. The philosophy of high quality is practiced first by the top management downwards to other employees. For instance, the board of directors is mandated with the task of the oversight of the company in an honest, diligent, fair and ethical manner (McDonalds Para 2). The guiding principle has been that, good governance is indispensable in enabling the organization fulfilling company’s objectives. The board reviews governance principles once in a year in order to ensure continued integrity of the organisation. McDonalds has executive organisational departments that foster its operations. At the top are the chairman and the CEO and chief operating officer. With the top management in place, several departments ensure efficiency in the running or the company. These departments include corporate affairs, human resource, marketing, national and regional managers, finance and strategic planning (McDonalds Para 3). The average manager of McDonalds undergoes about 18 hours training. Hamburger University offers unique management training to its employees. The company has a continued educational assistance to its employees with programs that equip them with additional skills in their area of specialisation. The customer care employees are well equipped with adequate knowledge of dealing with customers. They understand the need for quality services to satisfy customers. Studies have documented that good customer service is necessary if an organisation has to attract and retain the already existing customers. With such deliberation, it is apparent that the success of McDonalds revolves around work culture which is highly dependent upon a fastidious line of management of different departments. The managers are trained to follow procedures and implement policies geared towards meeting the company’s goals. Conclusion It is apparent that McDonalds has been successful in the fast food industry. Strategic plans has played a key part in this success. The management is subjected to training that equips them with the necessary skills in their line of profession. The top management leads by example by following the required code of conduct. The rest of the employees emulate them with much emphasis put on ethics, professionalism and leadership. The whole management works as a team with clear procedures being followed to offer top results. With these concepts in place, McDonalds enjoys the majority of market share while maintaining competitive advantage over its competitors. Works cited: Ferrell, Linda et al. Business ethics: ethical decision making and cases: 2009 update. Mason, OH: South-Western Cengage Learning.2010. Print. McDonalds. What is the structure of McDonalds and how each department in the organisation interact? Web 24th March 2014. McKean, John. Managing customers through economic cycles. Chichester, West Sussex: John Wiley & Sons, 2010. Print. Yuece, Ilhan. SWOT Analysis of McDonald’s and Derivation of Appropriate Strategies. New York: GRIN Verlag, 2012. Print. Read More