Technology as an Emerging Trend in MacDonald Organization - Essay Example

MacDonald’s Organization Organizations today cannot help but conform to the changing business environment. This environment calls for adopting proper standards and adhering to the emerging trends that constantly arise in businesses. One trend that is common in businesses today is technology. Technology is the ability of the organization to use electronic means in production of goods and services and as means of communication within and outside the business (Cooke, 2003 pp 88-89) Technology is changing everyday. This paper seeks to explain technology as an emerging trend in MacDonald organization and the changes that the company expects to have in this area in the next ten years (Leidner, Robin 1993. p 112) Discussion McDonald’s is the largest organization in Australia with 780 branches across the country. It employs more than 85,000 people who are working in the restaurant and the management offices of this organization. This organization serves more than one million people on daily basis. They have been able to attract such number of customers because of their quality services and the kind of respect they show to customers and employees. The company has been able to maintain its market share because of their effective strategies they used when dealing with competitors for instances the company has adopted five porters’ forces and other effective marketing strategies. Besides, the company is keen in adopting the latest technology so that they can offer their services effectively to customers (Krishnan and Parasuraman. 2009 pp. 79). McDonald’s have been truly innovative in the concept of fast food industry across the world, through their rapid expansion and global franchising strategies. The human resources manager has been keen in implementing the strategies such as the Porter’s five forces, and analyzing their current situations by use of SWOT analysis and PESTLE analysis. The company has conducted a SWOT analysis so as to analysis their strengths, weaknesses, opportunities and threats which the organization is facing or might face in future. The management of this company has used these models to identify the major weakness and threats which they face in the market. The major threats facing the organization are the competitors in the market. In addition to this, they use PESTLE analysis to analyze the environmental factors. Finally, the MacDonald’s organization has used five porters’ forces as a strategy of responding to new entrance in to the market and other potential competitors (Schlosser, 2001. pp 70-75). Five Porters’ Forces Bargaining power of buyers The power of buyers in this market is very high because there are so many competing organizations that are offering the same products and services. MacDonald has used this as their strength of maintaining customers and improving their relationship in the market. The bargaining power of buyers is very important as it determined where the buyers will buy their products. The management of MacDonald Company has continued to improve the nature of their products in terms of packaging and branding. Furthermore, they state the details of ingredient they used on their food on the packets of those products. These have attracted customers to use the products and services of MacDonald’s. It is very expensive for customers to leave the company to other competitors because the company has been producing products which satisfy their needs effectively. Besides, the organization has been emphasizing the customers’ satisfaction as their first priority. This can be evidenced in the movie called “Super Size Me.” This movie has a big impact to many customers since it has changed their preference and their brand preferences in many forms. The movie shows an ordinary consumer who was trying to leave the company to other competitors but it was not possible because she knew that she will not get the same services in other organizations. The movie has also featured what could happen if the customers are not satisfied with the services they receive in the company (http://www.smo.dk/mcd-assignment/porters-five-forces-analysis/). Bargaining power of suppliers The bargaining powers of suppliers are high in fast food industry because they are very few in the market. For example the MacDonald depends on two heavy suppliers of soft drinks i.e. Coca Cola and Pepsi. They are powerful in the market because they are the only suppliers in the market with the capacity to match the needs of the fast food industry. MacDonald had realize the importance of these major suppliers and wanted in all means to associate with them. MacDonald has entered strategic alliance with these companies (suppliers) so that their dependence can become mutual. These supplying companies has there own programs of delivering other soft drink supplies for example they can deliver cups, refrigerators and the soft drink machines to their major customers in the market, this help to brand their soft drinks. This strategy has discouraged customers who may be thinking of moving because they have to put resources in changing all this things. Besides, the MacDonald wants to have these companies as part of their own branding (http://www.smo.dk/mcd-assignment/porters-five-forces-analysis/). Risk of threat of new entrants The new entrance in to this industry of fast food in Australia has not found it easy for them because the big companies like the MacDonald has been taking advantage of their large economies of scales to offer a relatively lower prices, making it difficult for small organizations which are new in the market to sell their own products because they cannot afford to offer their products at that prices. The second strategy which the MacDonald has been using to deal with the new entrances is establishing new branches in the strategic points which are convenient to customers. The company has being focusing in having its shops located in the right real-estate positions. The management has ensured that all shops which were misplaced were relocated. Thirdly, the Company has focused so much on product differentiation so that they can be identified by the customers. This has made the MacDonald Company to be ranked as the 8th in Business Weeks Scoreboard over global brands. This has helped the company to creating a positive image on the mind of customers as well as customers’ loyalty. Lastly, the MacDonald has benefited a lot from the existence of the regulation governing the operation of fast food shop. These regulations are procedural and expensive making the new entrance not to enter the market (Author Government Data Publications 2008. pp 14) Threat of substitute products Since the market is a multi billion dollar industry, it has attracted many competitors in to the market. All the fast food organizations offering the same products make the customers to be price sensitive. For this reason, any small increase in prices will make these companies to loose customers. MacDonald has been able to take advantage of this since they are capable of offering lower prices because of their large economies of scales. They also use other strategies of producing unique products from that of competitors. Finally, the company has been able to overcome this problem of consumers shifting to substitutes products. This is because they are in position to sell both the products and their own experiences. This has been of great advantage to the company since they have positive image in the market (Hill, et. al., 2007 pp. 103) Rivalry among established firms There is high competition in this market because it is a multi billion dollar industry. MacDonald has been frequently carrying out market research to establish the main needs of the customers. The company has established a department of Research and Development in the region so as to carry out research on both the market and the customers. MacDonald has carried out massive advertisement so as to catch the attention of the customers in the market. Trends in technology Technology plays a very important role in MacDonald’s plans of winning more customers in the market as well as cutting down high operational cost which are used in the company. In addition to this the company has used this technology in offering products and services in an efficient manner in the market. Technology is one of the emerging trends that organizations are slowly beginning to adopt so that they can achieve success in their businesses. MacDonald Company has not been left behind. However, there are other new technology changes which might be a threat to MacDonald Company in future. This technological advancement threatens the future of the MacDonald Company. Many companies are running out of the market when they fail to adopt the latest technology. Some of the new technological advancement which affects the MacDonald Company includes the use of wireless networking. Though the company has recently adopted this technology, it has not utilized it effectively. The reason for this is because they have to train their employees on how to this system. This system by nature has a high degree of impact of the trend on the whole organization or at least a strategic business unit/division within the MacDonald’s organization. This is because they assist the company to incorporate its performances so that it can be used for the basis of making decision within the company (Erickson, 2009. p 98) Other emerging trends in technology which will affect the company competitiveness are the emergence of PlayStation 2 video games consoles which can be used by customers who have rented rooms. This is very important because the customers get entertained and therefore enjoy their time within the premises of the company. In ten years to come there will no physical customers placing the orders instead they will be using the internet terminals to make orders (Dave, 2000 pp. 40). These are very important as it will help the customers to place there orders in the restaurants even when they are within the restaurant. Flat screen televisions and music videos should be used within the restaurants so that it can entertain the customers when they are taking the food. This is a very important strategy which target young people who love music. Incase the company fails to adopt this technological advancement they will loose a large market share as this segment are the one been targeted by fast food industries in Australia. The big emerging trend in the market which might endanger the position of the MacDonald organization in the market is the e-learning and CD-ROM training tools. This is the latest tools which will help to reduce the problems of the system downtime and also reduce the number of calls made to the helpdesk. Other important future technologies comprise of the BT Openzone WiFi hotspots. The company will need to adopt this technology so that they can used to attract the customers especially traveling business people. Summary The MacDonald’s organization needs to adopt all these technological advancement so that they can offer quality services to the target market. Furthermore, they will improve their marketing skills and strategies as they will position there products effectively in the market. The human resource manager should make a plan of training his employees and motivating them to learn how to use these new technological devices (Varkkey, 2010. pp 47-48). Bibliography Author Government Data Publications. 2008. Government Contracts Directory. Government Data Publications pp 14-16 Cooke, W N 2003, Multinational companies and global human resource strategies, Greenwood Publishing Group. Pp 86-91 Dave, C. 2000. Internet Marketing. Pearson Education. Pp 39-42 Erickson, J. 2009. Database Technologies: Concepts, Methodologies, Tools, and Applications. Idea Group Inc (IGI).pp 96-99 Hill, CWL; Jones, GR; Galvin, P; and Haidar, A. (2007) Strategic Management: An Integrated Approach. 2nd Australasia edition. John Wiley & Sons Australia, Ltd., Milton, Qld. Pp101-104 Krishnan, R. and Parasuraman, A. 2009. Marketing Research, 2009 Ed. Wiley India Pvt. Ltd. Pp 78-80 Leidner, Robin 1993, Fast food, fast talk: service work and the routinization of everyday life, University of California Press, California. Pp 112-114 Porters’ five forces analysis. Retrieved on 16th Feb, 2010 from: Schlosser, E. 2001 Fast food nation: McDonald’s contribution to quality food production, Houghton Mifflin Harcourt Press, pp. 67-83 Varkkey, D. 2010. Human Resource Management, 11/e. Pearson Education. Pp 46-49 Read More