McDonalds Marketing Performance - Assignment Example

Marketing report of McDonalds Company McDonald’s Corporation is the largest fast food retail chain in the world. It is the largest franchise in the world operating in every continent (Sato 56). Revenues for the company are generated from sales, rent and royalties from its franchises operated all over the world. The business began as restaurant began by brothers in California and rose to become the first restaurant to establish a modern fast food restaurant. The company specializes in the sale of burgers, fries, chicken products and soft drinks. McDonalds marketing performance The strategic decisions of a company are based on the analysis of both the internal and external factors that affect the company. McDonalds has various strengths that have enabled it remain at the apex of fast food restaurants. Not withstanding the weaknesses that help to keep it in check and be driven to be the best in the industry. The company operates in a competitive industry and it is therefore important that the company to analyze its competitors and also its own environment to be able to be successful. McDonalds is a company that operates the largest food chain in the world. The positive aspects of the company have enabled it have competitive advantage as compared to the other industry players in terms of market leadership, resources and image (Mathis and Jackson, 359). The company’s product value is the most important of its resource because customers have a certain expectation when it comes to the service and products that McDonalds offers. Investing in new products that customers require and satisfy their tastes and preferences is important to the company. An effective marketing strategy is one that reaches the target audience (Sato 89). For McDonald their target audience is kids. The kids soon grow up and become adults and the demographics show that the older citizens are the majority and this has prompted the company to change its marketing strategy because of sales drop. Customer service A customer service is important for any organization. It is a good and effective customer care that establishes strong customer relationships. McDonalds Company is committed to providing the best in customer care services. It provides training to their workers on how to handle their customer complaints. The company’s Hamburger University a first in the industry provides training to ensure consistent high quality food and the same methods of preparation. The company has three strategic priorities which are Providing exceptional customer service To be an efficient producer To provide value meal combinations To achieve exceptional service the company encourages creativity in their outlets and franchises where they add their personal touch to their service and ensure that the restaurants provide quick services. Code of practice and social commitment The company established its first global environmental commitment in 1989 and to that effect established the first green restaurant in Sweden in 2000. The company packages its food in renewable packaging and this helps in reinforcing the company commitment to the environment. The company has the best diversity policy as it employs people from all races and diverse backgrounds and has been successful in integrating them. The company is committed to providing healthy snacks. The company employs chefs who create culinary menus that fit everyone. In India for example most of the population is vegetarian and so keep away from meat because of religious convictions and the company has managed to operate a successful franchise from here Grant, 392. The company has been successful in eliminating the trans fatty acids in their foods oils. The company employs ethical advertising to children who are vulnerable to unhealthy marketing practices. It helps the world children’s day by the annual fundraiser it carries and the monies raised help children’s charities for health initiatives and education The company’s mission and vision The vision of the company is to be the best quick service restaurant experience by offering outstanding quality service that satisfies the customer. Management comment and vision The company CEO, Jim Skinner said that the company has changed its strategy which focused on opening new restaurants a day and compromised service. Which is not what McDonalds is about? Positioning strategy The company as of now is the market leader in the fast foods industry. It is the world’s largest fast food retailer in the world operating in over 120 countries. McDonalds SWOT analysis Strength Brand McDonalds Company has built a brand for itself that has come to be recognized the world over and this has enabled the company to build a strong network of restaurants operating all over the world (Hartung, 39). A strong brand translates into customer loyalty which helps to enhance the company’s market position. Strong global position McDonalds Company has managed to establish itself as a strong market leader internationally. This position in the market has enabled the company have a bigger market in comparison with its competitors. The company therefore benefits from the economies of scale and reduces its risk profile. Diversified business McDonalds is not only a retail fast food operator but also has investments in real estate. The company purchases property where their restaurants operate in. this investments ensure that the company generates revenue. Weaknesses Worker training The company spends a lot of money in training its workers which does not pay off because of the high staff turnover. Healthy alternatives The company specializes in fast foods which are generally considered to be unhealthy forms of meals. The lifestyle change in many people as they become more aware of their health has caused a shift to healthy food alternatives. Opportunities Healthy alternatives Fast food industry has the opportunity in making healthy snacks for their customers. Making low calorie burgers and fries and incorporating salads in the menus is an opportunity in the market. New markets The company is yet to penetrate in the African, Asian and South American market. These continents will provide the company with market and this will lead to increased revenues. The opportunity of setting up restaurant in these continents is indeed very lucrative. Threats Health concerns The company just like any other fast food industry company has been linked to obesity in many people. The foods that are rich in sugars and have high calories have been blamed for this worrying phenomenon in children especially. Health experts have started campaigns against such foods and this will lead to a decline in the sales of fast foods. Saturation of the food industry This prospect will dampen the move to add more outlets for the company. This may lead to price competition which reduces the ability of the company to make revenue. Business model The company has adopted two models in its business operations Product consistency. Developing a consistent product in terms of quality in all its outlets. Franchising. The company ensures that the franchises adhere to the standards of the company by training and monitoring them. How McDonalds spends its time and money The company spends all their time and money building new restaurants Company activities in the past year The company in the past one year has developed healthy menus for their clients. It has added salads to their menus and has also incorporated vegetarian diets. Short term objectives of McDonald Company To develop healthy snacks for their clients. To open more green restaurants. Long term objectives of McDonalds Company Completely remove frying and adopt other cooking methods that are healthy and tasty and incorporate vegetarian diets in the menus. Rear organic animals to be used in their restaurants. These objectives are consistent with the needs of the business because the industry is shifting towards healthy snacks because of the health risks posed by obesity (Grant 77). Obesity in children is on the rise and the fast foods have been blamed for providing diets that are rich in sugars and calories that are the main contributors of obesity. Healthy eating habits are being encouraged in children as well as adults and now some people are becoming vegetarians. Key performance indicators These are quantifiable measurements that reflect the critical success factors of an organization. The short term performance indicators for McDonald Company are increase in sales and the long terms performance indicators are high profits (Dyck and Neubert, 261) The shorter and longer term objectives are ethical because now the company will not be making profits at the expense of their customers’ health. Fast foods are also called junk because they contribute nothing to that health of a person but high levels of cholesterol whish is responsible for heart diseases and other problems. Moving to healthy food alternatives is not only beneficial to the customers but to the company as well. The company has the resources and financial capability to deliver on these objectives. This is because when the company decided to become a franchise it was able to because it allocated the resources necessary to make this possible because it knew by franchising the revenues of the company would increase and it would have a bigger market. Investing in healthy foods is now the way the industry is moving and the company will have to allocate resources to this effect. Risk management analysis It is identifying and prioritizing the uncertainty in the objectives of a company followed by the application of resources to reduce the impact of negative events. For the McDonald Company the risks may come from project failure where the healthy menus are not well received by the target market. The uncertainty in the financial markets may be a risk because the economic conditions differ from country to country and McDonalds is a multi national company and this makes them vulnerable to the economic conditions in different countries. The case in point being the global financial crisis where some countries were hard hit while other were not even hit. Health conscious product challenge The beef burger can be replaced by chicken which is considered to be a healthy form of meat because it is white meat. Organic chicken provide a healthy alternative to beef and so will still have the same appeal to meat lovers. They are not as expensive to rear as cattle The organic chicken will also provide eggs which can be used for the breakfast menu. Capitalizing on the chicken burger as an alternative to the beef burger The marketing strategy used will be sampling where customers will be sampling this new menu. This will create the publicity that needed to their customers. Ethical promotions The promotions are ethical because with samples the customers are able to provide feedback to the company on their thoughts of the product and the company will be able make improvements tat will be beneficial to the customers. The weakness of the product is that it faces competition from the turkey and other fowl meats that are available. Also fowl diseases are common and spread quickly and this may affect the customer confidence in the quality of the meat. The fast food industry is very sensitive and therefore requires high standards from the farms to the preparation (Sato, 243). Contingencies to safeguard the product To safeguard against competition is to have an aggressive marketing strategy which counters the competition effectively. To ensure that the products are of the highest standards the company needs to rear the animals themselves to prevent contamination and ensure good quality products. Threats in the market The existence of close substitutes that not only provide competition but erode the confidence that customers may have on the new product. This is because if the product is not well received the consumers have a substitute that they can buy to get the same satisfaction as whet is being sold. Contingencies that guard against market threats Having a product that is well balanced and provides health benefits to the consumers and at the same time is tasty. Good quality products have a way of attracting and retaining its customers. In marketing the company name is vital and so capitalizing on the brand McDonald will be beneficial for the product to do well in the market. References Dyck, B.and Neubert, M. Management: current practices and new directions. London: Cengage learning. Grant, R.M. Contemporary strategy analysis and cases: text and cases. New York: Wiley and sons. 2010. Hartung, A. Create market place disruption: how to stay ahead of competition. London: FT press. 2009. Mathis, R.L.and Jackson, J.H. Human resource management. London: Cengage learning. 2007. Sato, H. Management of health risks from environment and food. New York: Springer. 2009. . Read More