The Competitive Pressures Facing McDonald Effectively - Case Study Example

Engagement Exercise Name Name of Tutor Institution Date Business details Business name: McDonald UK Nature of Business: Fast Food Restaurant Managers Name: Douglas Peter Date of consultation: 6th March, 2016 Competitive advantage Based on my engagement with the manager I was able to ascertain that McDonald have very precise set of competitive advantages that they strive to achieve at all times. McDonalds tries to be cost leaders and provide their customers with food at considerable prices which cannot in any way be matched by their competitors in the industry. To ensure that they achieve this, the store is made efficient and the everyday operations are kept very low. By doing so, McDonald stores tend to be superior to the other fast food joints in the area since they are able to offer low prices than all the other fast food companies. McDonald also has another competitive advantage which is the speedy delivery of food to the customers. To achieve this competitive advantage, the process of cooking food is made simple for all the employees working at McDonald. The process is also made in a way that is easier to learn and execute and characterized with a low failure rate and this in the long learn ensures quick production as well as delivery of the customer’s order. There is a competitive advantage that McDonald is not utilizing fully and it relates to not running a delivery service in the UK. Rival businesses should respond competitively by offering a delivery services for their food items. By doing so, they are likely to get a greater number of customers and mostly those who do not have the time to go to the food stores personally since they may be held up in offices and in homes and may be willing to enjoy fast food at the comfort of their homes and offices. Value An aspect that the customer at McDonald values most relates to the fast in the fast food. This means that the main customers at the food retail are enticed by the speed at which they can get what they want at the store. Though this aspect is limited by the great number of customers lining up in the stores, the employees at McDonald always tries to make the experience and the ordering of the food as quick as possible to meet the needs of the various customers. This is based on the fact that some of them may have little or no time left and thus in a hurry to get somewhere. Thus a minimal delay would not be good for them since they seem to be always in a hurry. McDonald values their customers and thus their constant search and investigation to new and advanced way in which they can appeal to the frequent customers who visits their stores for almost four to five times in one week and this is based on the fact that these frequent customers tend to account for a considerable amount of revenues generated by the company. Though the customer may not complain, McDonald always strives to cater for the customer needs and the manner in which they are changing over time and thus the need to be at par with them or slightly ahead of them at all times. To add to the value of their customer McDonald adopted a speedy and customer cooking technology. The technology seems to improve the taste of the burgers; speeds up the preparations and at the same time reduce the amount that is wasted in the long run. A major way of increasing the value of customers is by trying to be loyal and retain them for a longer period of time and this can be done by creating a lasting and personalized experience for the customers. A great number of customers mainly leave as a result of the experiences they get as customers. McDonald need to keep on continuously improving their customer experience since it seems to be an essential driver of customer loyalty and thus they should make proper use of a customer feedback platform and address the various issues raised by the customers. McDonald can increase the value of the customer by rewarding and at the same time recognizing the customers for the already ongoing business. This entails the use of the loyalty program but at the same time it would be essential to note that there are companies who spend substantial amount of money but fail to change the loyalty of their customers. Thus, McDonald need to be convinced that the loyalty program that they implement is delivering the net customer value improvements. Costs McDonald minimizes costs by itself by making use of a lean stock control that is aimed at saving money. The system in place ensures that there is constant communication between the individual restaurant and the central restaurant supply planning team so as to manage stock in an efficient and effective manner. Through such activities enough raw materials leave the distribution centers and this ensures that each restaurant can meet and produce meals in relation to the already forecasted level of demand. This ensures that there is a minimal or no additional cost since storage of stock means additional expenses for the restaurant. Another way that McDonald is minimizing cost by itself is through the use of self-checkout systems to allow customers to make orders and pay for the orders without interacting with a human. This in a way will cut costs for McDonald since they do away with the cashiers due to the rising labor costs and the class for higher minimum wages. Further efficiencies that could be made at McDonald to increase their revenues and reduce their costs in engaging in product augmentation. Through these McDonald can add additional products and services to their products line, for instance, food on demand and home delivery and they can allocate some of their staff these duties since it will go a long way in offering convenience to the customers. They can also enhance the quality of their products by making more use of fresh ingredients. At the same time McDonald need to allow the customers to customize the menus and also to standardize them this will connect and attract customers in geographically diverse areas. McDonald can also achieve further efficiencies through the differentiation of the services. McDonald should focus more on a service differentiation strategy and this will play an essential role in placing the restaurant at a superior position in the minds of their consumers. This implies that all McDonald staff should be trained to offer superior services from when the customer enters the restraint to the point when he exits. This can be done by being jovial and pleasant to the customers. Feedback from manager Based on the feedback I received from the manager, he clarified and asserted that I understood the competitive pressures that are facing McDonald effectively. he further clarified that McDonald has a large number of competitors who offers similar products and they offers the most fierce completion and thus the need of McDonald to offer better and improved services to the customers in a bid to retain the already existing ones and attract new ones. He also asserted that some of the recommendations made were realistic while some of them were not. For instance, he promised that as a company they would research further and if applicable engage in product augmentation. He acknowledge that by engaging by product augmentation they would be addressing and meeting the needs another group of customers who they may not be serving currently and the restaurant may have an opportunity to reach to the new group and increase their sales and profits in the coming years. Read More