McDonald’s is the leading global food service retailer with 1.8 million employees who serve 69 million people in 118 countries each day; from more than 34,000 local restaurants, 80% of which are franchised. ("Getting to know," 2013)
I. Establish a sense of urgency
McDonalds is facing a financial crisis The Dollar Menu is no longer producing the desired outcomes; providing a drawn for customers and profits for the franchise. The Dollar Menu itself had little opportunity to generate profits directly (6 cents per burger), but the indirect sales of higher profit generating items by customers once they were enticed into the store by the Dollar Menu was the means of generating profits. (Ransom, 2009) Inflation, recession, and several other issues that lead to increasing costs of preparing the food items and maintaining franchise locations caused the failure of the Dollar Menu and the resulting financial crisis. (Thompson, 2013) Falling profits and increasing dissatisfaction from franchise owners drove the urgency level up for the management team. The management team then clearly communicated the issues and were responsive enough to ensure that the crisis to be seen as a reality by all of the employees. (Patton, 2013) The change from an unprofitable, unsustainable Dollar Menu to the profitable Dollar and Up Menu was necessary to ensure the continued success of McDonalds franchise owners, corporate McDonalds, and most importantly the employees of McDonalds. ("McDonalds mission and," 2013)
While no obvious signs of eliminating excesses, actually there are reports that cooperate perks have increased, or changing the mechanisms that performance is judged by can be found, the management team did communicate with customers (franchise owners)...
... middle of paper ...
...
Thompson, D. (2013, Oct 22). Why McDonald’s killed the dollar menu—in 1 chart. Retrieved from : http://www.theatlantic.com/business/archive/2013/10/why-mcdonalds-killed-the-dollar-menu-in-1-chart/280778/
Wong, V. (2013, Oct 23). McDonald’s new 'dollar menu' goes up to $5. Retrieved from http://www.businessweek.com/articles/2013-10-23/mcdonald-s-new-dollar-menu-goes-up-to-5
Munarriz, R. (2013, Oct 24). $2 is the new $1 on mcdonald's value menu. Retrieved from http://www.dailyfinance.com/2013/10/23/mcdonalds-revamps-dollar-menu/
McDonald’s reports october comparable sales share. (2013, Nov 08). Retrieved from http://news.mcdonalds.com/Corporate/Press-Releases/Financial-Release?xmlreleaseid=123039
McDonald’s continues to invest for future growth. (2013, Nov 14). Retrieved from http://news.mcdonalds.com/Corporate/Press-Releases/Financial-Release?xmlreleaseid=123040
As you may know In-N-Out’s menu consists of the double-double (two patties with two slices of cheese), the classic cheeseburger and the basic hamburger. As well as many varieties of soft drinks for you to choose from. Don’t forget about their milkshakes made with real ice-cream that come in chocolate, vanilla, and strawberry. Their french fries are made with vegetable oil and are free from cholesterol. In-N-Out also has a not so secretly secret menu such as their protein style burgers which in fact is just a burger except instead of buns they are replaced by hand-leafed lettuce ( In-N-Out.Com). The animal style that was brought in 1961 is a burger with tomatoes, lettuce, pickles, mustard cooked beef patties, grilled onions and some of their spread with a little more extra (In-N-Out.Com). Animal fries are a common favorite to many people which is like the Animal Style Burger just with 2 slices of melted cheese, some grilled onions and the spread topped with it too. Other items such as The Flying Dutchman is just 2 patties and 2 slices of cheese (BadMouth.Com). Back in the early days the hamburgers were 25 cents, the French fries were sold for 15 cents and cold drinks were 10 cents. Today their prices have increased slightly. “In-N-Out that’s what a hamburger is all about.”
From just one restaurant in San Bernadino, California, run by two brothers, McDonald’s has grown to become the best known and most popular fast food restaurant chain in the world.
A world without the Big Mac, Happy Meals, Chicken McNuggets, and the phrase “I’m lovin’ it,” is almost inconceivable. People around the globe have become accustomed to the high gleaming golden arches that make up the famous emblem for McDonald’s. McDonald’s has grasped the concept that culture flows from power. In this case, the American culture flows through the veins of this fast-food giant and the more that is supplied, the greater the demand. It is no secret that McDonald’s has become one of the world’s largest fast-food retailers. It has become a well known icon that has played a huge part in globalization, with chains located in many different countries… transforming the meaning of fast-food all around the world.
McDonald’s currently operates in 121 countries in the world. McDonald’s is also America’s fourth largest retailer, and McDonald’s surpassed Sears as the world’s largest leader of retail estate. McDonald’s spends about $600 million on advertising each year. About 96% of American consumers have eaten at McDonald’s. It has been open for about 64 year and has sold over 300 billion burgers.
During the current recession, most businesses have gone under. While McDonalds did not fall, it was not spared from the economic downturn. Investors were scared and not used to the company turning in weak financial figures. Previously, the company has been known to overturn a profit even in a bad economy (Domanska 2). In this article it states how southern Europe was where the profits started to decrease. “U.S. sales dropped 0.1 percent compared to a 4.4 increase growth last year. In addition, Europ...
Fast food chains use value pricing. This type of pricing is how much the customer thinks an item on the menu is worth. Basically what this means is customers see price as a primary indicator of a product’s value. Value pricing happens when a company increases a product’s benefits while either maintaining or decreasing the price. A great example of value pricing in McDonald’s is the ability to “super-size” drinks and fries. The value of the drink or fries is increased because a customer can get substantially more of the item for a fraction more of the
McDonald's current customer environment is people on the go or people who don't want to spend a lot while going out and need something quick and good to eat. It is best stated in McDonald's mission statement that they want to be the world's best quick service restaurant experience. As stated before, McDonald's has restaurants in 121 countries and has extensive global experience in customer service and satisfaction. McDonald's is excellent at researching an international area before building restaurant there. For example, in India McDonald's realized that the majority of the population was Hindu and vegetarian, they therefore, did not even bother to put beef or any other red meat on the menu.
It depends on what type of food you get ranging from a burger, a chicken sandwich, or whatever else their menu’s have offer. As said before, Mcdonald’s is cheaper in the grand scheme of things, but really they tend to be generally the same in price. For example, a Big Mac at Mcdonald’s is $3.99 and a Whopper at Burger King is $3.49. Both restaurants have a dollar menu with different kinds of food to offer. From ice cream to burgers, they both have it. But, in the last few years Mcdonald’s has taken a few things off the dollar menu and risen the prices. While Burger King has more things on the dollar menu, that are actually a dollar! According to a survey done by Burger King, the average price of the items on their menu is $4.50. Ah, the drinks, something that most people need with their meals. The prices between soft drinks of Burger King and Mcdonald’s are actually different. At
Product is fairly similar to competitors – the McDonalds menu is quite similar to many of its competitors such as Burger King and Wendy’s. This forces McDonald 's to have to lower its prices in order to continue to be competitive.
McDonalds provide high quality products, such as burgers, fries, drinks, muffins, etc, which are safe and reliable that it does what it is supposed to do, but not only does the quality of the products matter, the good value for money affects the business. E.g. buy one extra value meal and get one free with a food voucher that represents the offer only. They ensure that a high standard of the product is carried out at all times and they try to compete very competitively with other fast food businesses with their good value for money. Also a customer would know if the product is good value for money by checking in another food outlet like KFC for their services and products.
McDonald's also focuses on the perception of value within it line of products and therefore takes care to price its menu items accordingly. Different products are priced differently depending on which target audience those items appeal to most. An extensive value menu is an essential part of any fast-food menu in recent years. The prices and products within the value menu can prove to be areas that will make or break a fast-food companies' year depending on the competitions value menus.
In today’s market, McDonalds faces numerous challenges such as fierce competition, a more health conscious customer, and the continual need for improved customer satisfaction and menu. McDonalds needs to go through some changes in order to remain ahead in the fast-food industry.
A franchisee, an affiliate, or the corporation operates a McDonald’s restaurant. Thus, McDonald's Corporation revenues come from the rent, royalties, and fees paid by the franchisees or sales in company-operated restaurants. According to Yahoo Finance report, McDonald's Corporation had annual revenues of $27.5 billion, and profits of $5.5 billion (McDonald’s 2014). McDonald’s primarily sells hamburgers, cheeseburgers, chicken snacks, french fries, breakfast items, soft drinks, milkshakes, and desserts. In response to changing consumer tastes, the company has expanded its menu to include salads, fish, wraps, smoothies, and fruit. Their food caters to all age groups, and they have a special menu known as “happy meal” that is targeting children.
“McDonald 's is the leading global foodservice retailer with more than 35,000 local restaurants serving nearly 70 million people in more than 100 countries each day” (About McDonald’s 2014).
McDonalds uniform menu offerings can be mass produced; therefore helps to lower production costs. Additionally, the company bargaining power with its suppliers lowers its input costs and boost margins and even more importantly, McDonald 's offers a very large advertising budget which gives the company a significant competitive advantage over its competitors. Much of McDonald 's sales occur outside the United States and thus, with McDonald 's tapping extensively into global expansion therefore the company’s international operations will continue to strive and