Term paper on McDonald’s

Executive Summary

McDonald’s  is a “Centralized, International company”, which competes in the fast food industry supplying hamburgers, french fries and other consumable items using standardization, heavy expansion and branding as the driving force.  McDonald’s operates in over 121 countries and has over 30,000 restaurants worldwide.

McDonald’s utilized an intense, rapid expansion into foreign countries through three primary methods, franchising, company owned restaurants, and joint ventures.  With the majority of international restaurants stemming from franchising agreements, McDonald’s management relied on this method to aid in the acceptance of a new style of eating into unfamiliar markets.  With minimal risk and maximum gains, franchising continues to contribute heavily to McDonald’s international success⁵.

With a centralized, international structure, McDonald’s keeps a tight grasp on operations, cost and quality.  With an ethnocentric management strategy, McDonald’s relies on domestic based logic and attitudes and transfers them to their international outlets and restaurants.

In order to control its overseas operation, McDonald’s uses a combination of two approaches.  The majority of control would fall under the rules approach, meaning that control lies with headquarters creating procedures and policies for the subsidiaries to follow.  However, there is also a little of the cultural approach that has surfaced and is being utilized judging by the adaptation that has occurred in some of the overseas restaurants.  This has occurred even with the tight internalized norms that are constantly presented and enforced by headquarters.

Introduction

McDonalds Corporation is the world’s number 1 fast food chain, Richard and Maurice McDonald started this business with a restaurant in San Bernardino California in 1940. Now a days McDonalds serving more then 56 million customers every day.

There are more then 30,000 restaurants operated by McDonalds worldwide in which more then 80% are operated as franchise and less then 20% are owned by company.

McDonald’s main selling products are hamburgers, cheeseburgers, double cheeseburgers, big Mac burgers, quarter pond burgers, tasty burgers, flit-o-fish burgers, salad and fruits.

Company profile

McDonalds is the words largest fast food corporation, serving more then 57 million people in 119 countries daily with more then 31,000 restaurants world wide in which 6,899 are owned by company and 20,499 are operated as franchise and 3,960 are operated by affiliates.

McDonalds employing more then 1.5 million people worldwide, only in UK Company owned restaurant employed 43,492 in 2004 in which hourly paid employers are 2,292. 2,291 restaurant management and office staff nearly 500. and nearly 25,000 people employed in franchises.

In 2003 McDonalds owned donates pizza, McDonalds owned a majority of stake in chipotle Mexican grill until October 2006, in 2007 McDonalds sold Boston market to sun capital partners.

Andrew j. McKenna is the chairman of McDonalds Corporation since April 2004, aprill Harrell Perrine president blur cross and blue shield of Florida, Jim Dalton vice president Dalton agency, Ryan Schwartz treasurer Zurich insurances,inc. bill van zante secretary McDonalds.

“The corporation revenues come from the rent, royalties and fees paid by franchises, McDonald revenues grew 27% over 3 years ending in 2007 22.8 billion and 9% growth in operating income to 3.9 billion”.

Company Background:

History of Mc. Donalds

‘I m Loving it’ a tagline known to every segment of the market, let it be kids, youngsters or elderly people. McDonalds is a global foodservice industry, which began its operations in the 1940’s. The concept of McDonalds was introduced by brother Dick and Maurice McDonald, by opening a ‘hamburger stall’ in San Bernardino, California. They introduced an idea of selling their food cheaper than competitors by saving on the car hops and persuading customers instead to go to a counter to order their food. This concept helped in faster turnaround of the customers. This innovation proved successful and popular among the customers.  McDonalds became pioneer in their industry by adopting the ‘Fordist’ approach to the production of hot food.  They focused on burger cooking as a production line rather than a kitchen task.  The staff of McDonalds was committed to one task at a time.  When Mr. Ray Kroc came across McDonalds brothers burger, he had never seen so many people served so quickly than those at the McDonald’s store. He was quite impressed by the speed of service that they used in catering their customers.  Kroc suggested that the McDonalds brothers to open more outlets of their stall, but they refused as they were quite busy with their own store and were not in a position to open any store further.  Kroc volunteered to run a new outlet himself, by paying them royalty for using their concept of business.  The McDonald’s brother agreed for the same and a new McDonalds retail outlet was opened, which was a franchisee by nature.

Kroc was a person with aggressive and risk taking attitude.  He realized that small things were often valued more by customers than some of other things.  He introduced a concept of Cleanliness in his store.  He termed cleanliness not only a symbol of hygiene but it also showed its customers that the business cared about details.  He started growing his business and started giving franchisee to other people.  With the help of Ted Turner, Kroc visioned that the key success of McDonald’s expansion rests on offering franchises.

The major domestic growth of McDonald’s in USA began in 1960’s, as there was a demand of cheap takeaway food.  Through the franchisee concept, McDonald’s made a move toward worldwide success.

Today the Company operates in more than 117 countries worldwide, serving more than 50 million customers per day.  The company’s retail outlets are either owned by the company or by franchisees.  The company focuses on delivering high quality and value to its customers through its services, product range and constant quality check of its products

McDonalds SWOT Analysis

Strengths

McDonalds is the number 1 fast food chain in the world McDonalds succeed to its competitors like burger king because of its strategy “just in time”.mcdonlds achieved his goals both domestic and international markets. According to fortune magazine 2005 McDonalds as “best place to work for minorities”.

McDonalds offers its products according to geography mean to say it offers lamb burger in India and Middle East countries provide separate entrance for couples and single woman and offers chicken and ham burgers in European countries more then 80% of McDonald’s business is operated by independent mean to say in airports along with highways parks and in big cities.

McDonalds serves only famous brand to processed items such as Kraft chasse, dannan yogurt, Heinz ketchup. they have major visible locations worldwide mean nestle chocolate, Newman’s own salad dressings etc.

McDonald is the first in fast food chain which provide nutrition information printed on all packaging.

Weaknesses

McDonalds failed to offer pizza because it is less able to compete with pizza fast food chains.

Quality issues are also noticed in some franchise.

They are spending more money on training as more employee turn over in McDonald.

Globally it is noticed that McDonald disrupts the local eating habit especially in younger generation.

Opportunities

McDonald offers healthy products with nutrition information printed on all packaging are a great opportunity.

McDonalds is the first FDA approved quick service restaurant (QSR) offers low fat and low calorie ham burgers, McDonalds is using the marketing strategy “just in time” serving a customer in 90 seconds.

They are offering formic restaurant setting. Still planning for more international expansion.

Offers optional allergen free food items such as peanut and gluten free.

Combine business with retailers (supermarkets)

Threat

They have been noticed by NGO worldwide that they are disrupting the local eating habit in young generation.

Many times they have been sewed because of their unhealthy foods.

Are noticed to create a global economy.

Downturn or recession in economy also affecting the McDonalds sales.

Competitors pressure in major location like high streets.

Burger king corporation, yun brand Inc, wends international Inc, jack in the box Inc, are the competitors for McDonalds.

McDonalds and Consumer Protection

Making existing and potential customers knowledgeable about products/services, consumer awareness creates more informed buying decisions. Consumers cannot purchase products and services if they do not know they exist. That being said, I believe McDonalds does uphold the basic rights of consumers. Currently, McDonalds displays nutrition facts on all of there food items. That was not always the case. Prior to the movie super size me, and the ensuing lawsuits, McDonalds would offer consumers the option to upgrade their already unhealthy meals to a even larger potion known as super size. This ignored consumer rights because the establishment did not warn customers that they would be consuming nearly half of there daily calories just by having fries. Appropriately, McDonalds no longer tries to gear people towards the unhealthy option of super size and displays nutrition information on all of its products. Therefore it is fitting to state that the major rights of consumers have not always been upheld at McDonalds, but they are taking steps in the right directions. At present, they are making phenomenal strides toward a healthier menu. McDonald’s started giving customers the option of choosing apple slices and milk as part of the Happy Meal package. They also began packaging 100-calorie versions of Oreos, Wheat Thins and other healthy treats. Also McDonalds is currently working on removing trans fats from their food. More and more McDonalds is taking gradual steps to making the American consumer more responsible for what they put in their own mouths. Soon, it is very likely that people will no longer be able to blame corporations like McDonalds for obesity because there will be healthy options and people will be informed.
Moreover, Some believe that large food corporations, like McDonalds, should claim responsibility for obesity in the United States. The arguments for and against the proposition that the food and restaurant industries should be held liable for the rise of obesity in the United States are as follows. In his opinion dismissing the original lawsuit, the judge said that legal consequences should not attach to the consumption of hamburgers and other fast-food fare unless consumers are unaware of the dangers of eating such food. However, Sweet said plaintiffs argue that McDonald’s products have been so altered that “their unhealthy attributes are now outside the ken of the average reasonable consumer.” For instance, Sweet called Chicken McNuggets a “McFrankenstein creation of various elements not utilized by the home cook.” Also people argue that the flashy advertising and fun cartoon characters have a addicting effect on Americas youth. Creations such as the “happy-meal” and Ronald McDonald make people nostalgic for McDonalds because they remember it from their youth. Alternatively, some people argue that food corporations are not responsible for obesity in the united states. For example, if a business provides adequate information about its food products, even it is obvious. Then they have fulfilled there ethical obligation. Also when you provided information consumers are less likely to seek restitution through litigation. Another reason they are not responsible is because fast-food companies have been modifying their marketing, to improve the availability of nutritional information, and add healthier options to the menu.
In Terms of McDonald a relevance consumer protection agencies include the FDA, the food and drug administration, as well as the FTC, the federal trade commission, All case concerning consumer protection are general mediated or handled through them on some level.
Obesity has become an epidemic and an important public health concern. Because the problem is multidimensional, the solution will require an interdisciplinary approach involving the cooperation of the food industry with other stakeholders, such as the government, academia, and health care providers. The consumer is an important player in the solution to obesity because the consumer can make healthy lifestyle choices at the individual level. The food industry is committed to providing the consumer with healthy food options and reliable nutrition information. Obesity is a multifaceted health issue that involves biological, behavioral, and environmental sources. Energy imbalance sits at the core of the obesity problem, because weight gain results from consuming more calories than one expends. In America, a changing environment has increased food choices and changed eating habits. Many Americans are sedentary: more than “one-half of US adults do not meet recommended levels of moderate physical activity”, and “one-fourth engage in no leisure time physical activity”. Therefore it is not just the responsibility of the food industry to provided healthy choices, but the tandem of the healthy options and a self-commitment to living a healthy life that will make America less obese. The government plays an important role too. close harmony between the food industry and other important stakeholders within the obesity epidemic, such as the government, academia, and health care providers is imperative. The government can help educate consumers to make healthier choices through food labeling, physical activity endorsement, and the support of community-based programs. The food industry should cooperate with the government to guarantee the production and availability of low-calorie, nutritious foods. This can be achieved by providing incentives to industry and also stimulating media participation in the prevention of obesity. The government should develop and support new food technology and improve communication across responsible parties and consumers. Scientists also have a unique insight to provide scientific data influencing the decisions of industry and consumers. Research scientists can work together with the food industry to generate nutritious foods and to promote reliable, science-based nutrition information. Academic institutions also play a key role in educating health care professionals, who will educate their patients and our consumers. The medical community is uniquely positioned and trusted by consumers, because consumers look for nutritional advice from knowledgeable and trustworthy professionals. Health care providers can encourage consumers to make individual lifestyle changes that will improve their health. The health care professional, in assuming such a role, can transform their interaction on this topic from clinical resolution to thoughtful prevention, thus helping consumers develop and reinforce strategies for eating and physical activity that reduce overall individual health care  risk.
Lastly, McDonald’s Stakeholder are its consumers. In the past McDonalds has turned a blind eye to the issue of obesity in America, but is now making tremendous ground. McDonald’s has a bright future because they make a consistent effort to keep up with health         trends  in America. In conclusion, food corporations such as McDonalds play a big role in the size of American people. However, they are not the only factor. The only way to have a healthy society is for all the components of society to come together and do there part.

The Effect of Changing Tastes on McDonalds

There are around 40 Million American are considered obese. We live in a world, where everything is almost instant. We can go to a drive up window and receive a fast, hot meal in less than 3 minutes. Everything is about fast. That is the Mc Donald’s golden years. But sometimes, going too fast is not good for us. Customers now substitute healthy food for a quick cheap meal, a healthy diet, included with healthy habits, can change our life. These changes are great for our world, but it is hurting the Mc Donald’s profits.

Consumer tastes and preferences are changing and the [fast-food] industry need to be able to adapt to them. There is a huge opportunity to develop new products that appeal to the health conscious customer. To be more specific, they need to develop new products that appeal to young, health conscious women. Because consumer tastes are changing there is an opportunity to develop new healthier product lines that appeal to the new tastes           of         consumers            that      satisfied           their     tastes.

McDonalds Brand

Much like a smile, the “Golden Arches” can be understood in any language. The McDonalds brand is the most well-known, internationally embraced fast food empire. McDonalds operates over 31,000 franchises throughout the world, with the United States leading the way with a whopping 13,381outlets as of May 2009 . McDonalds has the fast food market cornered, offering an increasing variety of food of beverages, marketed to people of all ages to eat at any time of the day. However, being a corporate giant has its issues. McDonalds has faced a lot of criticism for its high-fat, high-sugar, potentially addictive menu. While the corporation is not likely to outright admit responsible for its actions, McDonalds has seen some changes to address some of the issues. Despite the flaws in the public elements of the brand, McDonalds has established an almost recession-proof          economic         base.

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Some of the benefits of the McDonalds brand are pretty obvious. The golden arches and the mascot Ronald McDonald have some the best recognition worldwide. This stems from the benefit of having global operations and the availability of culturally diverse foods that are provided based on the location of the restaurant . McDonalds also utilizes installations in prime locations such as theme parks, airports, superstores and even in hospitals. The business is ranked number one in Fortune Magazine’s 2008 list of most admired food service companies . McDonalds is also associated with cheap prices, good tasting food and fast service. McDonalds also maintains a strong community oriented vibe with its Ronald McDonald Houses which provide charitable services to families with sick children requiring extended hospital stays (www.rmhc.org). McDonalds also sponsors major Olympic athletes, which has the dual propose of supporting athletics while still getting their name out.
The McDonalds Corporation’s strong internal workings also serve as benefits. In 2005, Fortune Magazine listed McDonald’s as the “Best Place to Work for Minorities.” McDonalds also invests more than $1 billion annually in training its staff, and every year more than 250,000 employees graduate from McDonald’s specialized training facility called Hamburger University . McDonalds also offers scholarships and opportunities to earn college credits for their employees who are still in school . Internally McDonalds also has high standards for food safety regulations. While this might not be more to avoid lawsuits than to take care of their customers, McDonalds claims to go above and beyond national regulation to bring its customers a clean and health dining experience.
The weaknesses of McDonalds include competitors and nutrition concerns. McDonalds failed attempt at pizza limited their ability to compete with fast food pizza franchise. Price competition with the competitors is also resulting in lower revenue for McDonalds. McDonalds also lacks variation in seasonal products that they offer. Another weakness, which has actually stemmed from McDonalds large size, is a lack of personal touch or connections. McDonalds has a very high turnover rate which in the end elevates the cost of training staff. There are also concerns that franchised operations negatively affect the food quality. McDonalds has also had a lack of innovation.
The McDonalds brand’s biggest weakness is seen in recent health debates. McDonalds has failed to make their food healthier. While minimal efforts have been made, McDonalds still cannot compete with subway or other more natural and fresh fast food options. It seems as though McDonald’s has almost become the symbol for the unhealthy eating habits of Americans, along with the widespread obesity epidemic plaguing the United States over recent years. Their reputation has suffered from the media with movies such “Supersize Me.” Many customers complain about the plethora of unhealthy food options offered by McDonalds. Many people no longer prefer low cost over quality, shifting popularity away from McDonald’s and towards other fast food providers.
The opportunities for McDonalds are pretty standard. There is a demand for more organic food options as well as improvement in the quality of current menu options. There is room to introduce more beverage options for the McCafe drink menu. They could also become the first in quick services restaurants to provide optional allergen free food items, such as gluten free and peanut free choices. There is an opportunity to adapt to the needs of the individual societies it serves and adopt an innovative product line. They can also shift to using ‘green’ energy and packaging which will work to show an effort to fulfill their  social   responsibility.
There is also an opportunity to expand business to newly developing parts of the world along with the possibility of opening more joint ventures with different retailers . Right now McDonalds has an industrial feel with Formica restaurant setting there is an opportunity to provide more upscale restaurant settings, like the one they have in New York City on Broadway, to appeal to a more upscale target market.

McDonalds is going to be susceptible to those threats that impact most all businesses. There is always a threat in weather which could impact shipments, crops produced or even ability to operate stores. In the food industry, contamination is always a fear. McDonalds is especially prone to the negative effects of meat contamination scares such as e-coli. Competitors are a major threat and with McDonald’s status of a highly admired company, competitors such as Burger King and Wendy’s are introducing comparable products at a fast rate. The struggling economy is affecting customer’s ability to eat out regularly and when they do it is at more mid-level restaurants.
A major threat that is hitting the McDonalds brand especially hard is the raising trend of eating healthy and having a balanced meal including five servings of fruits and vegetables a day. McDonalds has faced lawsuits recently claiming that they are creating “cradle to grave” marketing, entice children as young as one year old with special meals, toys and playgrounds then children grow up eating McDonalds which continues into adulthood.  They have also been sued multiple times for having “unhealthy” food, allegedly with addictive additives, contributing to the obesity epidemic in America.
McDonalds is a strong company that has been around a long time and is ingrained into the memories of many people. They have indisputably strong brand recognition and loyalty. However, it may be time for McDonalds to undergo a makeover, especially in the areas of quality and their link to health concerns. It is pretty clear that McDonalds isn’t going bankrupt anytime soon. McDonalds has the ability to do good things for the world if they exchange some of their money saving ways more socially responsible practices.

McDonald’s Advertising Slogans

• Lets eat out! (1960-1965)
• Look for the Golden Arches! (1965-1967)
• The closest thing to home (1966-1969)
• McDonald’s is your kind of place (1967-1971)
• You deserve a break today (1971-1975)
• Enjoy the best food at McDonald’s (1973, concurrent with 1971 slogan)
• We do it all for you (also known as You, you’re the one) (1975-1979)
• Nobody can do it like McDonald’s can (1979-1980)
• You deserve a break today (1980-1983)
• Nobody makes your day like McDonald’s can (1980-1983)
• We cook it all for you at McDonald’s (1982, concurrent with 1980 slogans)
• McDonald’s and you (1983-1984)
• It’s a good time for the great taste of McDonald’s (1984-1988)
• It’s Mac Tonight (1985, Mac Tonight advertising)
• McDonald’s is your place to be (1986)
• Good time, great taste (1988-1990)
• There’s nothing quite like a McDonald’s (1988-1990)
• You Deserve A Break Today (1989-1990, concurrent with 1988 slogan)
• Food, folks and fun (1990-1991)
• McDonald’s Today (1991-1992)
• What you want is what you get (1992-1995)
• Do you believe in magic? (1993-1997, Happy Meal advertising)
• Have you had your break today? (1995-1997)
• My McDonald’s (1997)
• Did somebody say McDonald’s? (1997-2000)
• We love to see you smile (2000-2003)
• Put A Smile On (2000-2003)
• Smile (2002-2003)
• I’m lovin’ it (2003-present)
• It’s what I eat and what I do (2005, combined with 2003 slogan to make It’s what I eat and what I do…I’m lovin’ it)
• What we’re made of (2008-present)

Customer Service at McDonalds

McDonalds believe that good customer service is the responsibility of everybody in the company. Every employee has a part to play in providing with a service with best practise found  anywhere  in the trade.

Products

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.

McDonalds also play a role especially into the goods being safe to use and being very reliable with provided instructions. This will benefit the customer’s safety and hoping to be very reliable during the customer’s use because its helps the business to increase it sales by keeping the existing customers and       attracting         new     ones.

The products of McDonalds are safely packaged when it is required for the product, in order the customer does not have any problems or and negative feedbacks to McDonalds. E.g. hot coffee cups have plastic lids on top so it does not spill or burn on the customer. Also, McDonalds ensure to offer nutritional guide of the product clearly state what the product      contains.
Staff

However, not only the high quality standards of food affects the business, the staff who are presently providing the service are entitled to establishes him or her self with their tone (the sound of the voice), manner (the level of maturity), language and body language well enough to satisfy the customer and to make them appreciated of feeling more welcomed and values them as a proper customer. E.g. if a customer was about to speak the staff operating the till would say ‘hello, may I take your order please,’ and when their products are given ‘Thank you and please come again.’

Also, the staffs are to wear the correct McDonald’s uniform, so they will be easily noticed by customers, if they need help by the staff wearing black trousers and top with a McDonalds logo     on        thet-shirt.

Premises

All premises in McDonalds are cared for very much and are cleaned before opening times and after closing times. These are well sign posted with safety signs so to ensure the customer does not endanger him or her self in any way. Also these premises are quite spacious which customers can easily work through for their own needs. Some McDonalds have two floors but the one I visited on Broad St has one floor, but it is quite spread out which contains tables and chairs on the side of the walls, so the customer can easily walk through. High chairs, baby changing area and disabled toilet, normal separate toilets     for       men     and      women.

Deliver

McDonalds do not deliver their goods as it is not recommended as a customer service in the business, but if a customer were to have a disability, their goods would have been delivered by a member of staff on their own free will.

After   sales    care

This basically consists on the employee asking the customer if he or she is satisfied, both with the company’s goods and the service that it provides. Minor complaints are solved by staff on duty that apologise for the problem, provide the help or assistance required to check the customer is satisfied. E.g. the drink was flat, which the customer complained, so the staff had to give the customer another drink. If the problem is more serious, then it is referred to the manager immediately, so the problem is solved efficiently. Also if the product is quite cold, the matter will be resolved by a simple exchange for the same product without            any      hesitations.

Payment
McDonalds do accept cash and cheques as a payment method but they do not take credit cards although there are ATM machines available outside most stores so the money can be obtained from the credit card easily.

Communicating with customers

Customers intend to communicate with staff about a whole lot of issues relating to goods and services on offer, such as pricing, availability, contracts and after-sales service. Customers with different disabilities will have different needs. If in doubt, staff may find it hard to communicate during the customer’s order so the staff find will out from the customers individually of what method of communication suits them best. In addition to the telephone and text can benefit a range of customers. E.g. a customer is unable to talk and hear but is able to read, which the member of staff exchange written notes, in order to satisfy the customer by taking in his or her order.

There are ranges of systems to enhance communication for people with hearing impairments. Some are relatively simple, such as induction loops, which is used at the counters. In situations where it is not reasonable to install an induction loop or other type of voice enhancement system, staffs communicates in other ways, such as exchanging written notes with customers with hearing impairments. The layout of a formal letter may include the manager’s address or name if known, the customer’s address and to terminate the letter with yours sincerely or yours faithfully. Also the grammar and punctuation is very important because sometimes it may mislead the person.
Staffs are encouraged to look straight at customers and not cover the mouth when they are speaking to them. Allowing extra time, and repeating back to the customer to check accuracy and understanding, can benefit customers with learning difficulties and with speech impairments.
Also McDonalds’s staff are in uniform, which may include blue top, jeans or trousers and a cap with a the company’s logo on each item so the customer can easily recognise of who to go for ordering and help during their presence in McDonalds.
When the customer is in need of help staff would communicate to guide them through the food outlet but the customer may not be able to speak good English which the staff may intend to speak the language like urdu, so this is a form of verbal communication in another language.

PESTEL ANALYSE

Political

Currently governments of certain groups in United States and Europe are tending to control the business of fast food because of health reasons (2005).

Governments are also applying restriction for issuing license for franchises.

There should be good relationships with government in giving tax and employments in international markets.

McDonald is also pressurized by china because they are disrupting the culture.

Economical

Working in an international market McDonalds must face international rules of business like about tax because each company has different rules for tax and for McDonalds franchise it must pay some percentage of its revenue to McDonald’s hade office in United Kingdom.

Local markets cannot maintain the supply of materials that’s the reason McDonald import beef and potato to fulfill its demand.

In international markets the economies of the country also affect the sales of the products because if the economy is not stable and people of the country have not much income it will effect the business.

Social

In developing countries the lifestyle of people changing very fast like Malaysia because of their developing economy more people of the country are financially able to eat fast food.

In Middle East countries urban young generation wants new technology in their lives like wireless internet, credit card payment and other attractions like music.

Technolgical

Advertisement is the most powerful toll of McDonalds to create a demand of its products and especially McDonalds works hard to create the demand of its product in the minds of young generation.

Recently McDonalds implemented new technology to increase the speed of proceeding of its products such as a Big Mac takes 60 seconds to process in three stages

Environment

As a worlds largest fast food chain obviously the consumption of “beef, potato, chicken” is more then any other food chains that’s the reason they had been critics and McDonalds is also disrupting the culture and McDonalds is trying to cover these issues especially in china.

Legal

McDonalds cares its reputation in fast food market they follow 20 working hours for student employees in UK as according to the rule in UK and also internationally they respect all the polices which are applied for fast food chains.

Questionary:

1. Discudd how McDonald’s Strategic commitment to training has contributed to its position as a leading global foodservice retailer.

Answer: Human resource management plays an important role in the success of a company. Most of the companies are very keen to pay attention towards their employees. Mainly HRM (Human Resource Management) is all about managing people at work. The most important part of human resource management is Training and Development. It plays a key role in every organisation though few people disagree about the importance of training and development in the success of organisation. Appointing the right person at right time at right place needs more care and attention on the part of personal manager. A clear set of goals and well defined path should be needed for good training. Training changes attitudes, knowledge and skills of employees and also the way they work. It is reflection of the fact that companies are keen about training and development to gain competitive advantages. Most of the companies clearly understand that if workers are smarter and better trained they can achieve their goals easily. In any organisation the central factor of Training and development is the human resources or the human capital. Human capital is viewed as the driving the force for the success of the organisation because of their skills, competencies, knowledge and experience .

2.  Examine Ray Kroc’s training philosophy.How has McDonald’s  gained from  this training philosophy?

Answer:

 Ray Kroc training philosophy

“If I had a brick for every time I’ve repeated the phrase Quality, Service, Cleanliness and Value, I think I’d probably be able to bridge the Atlantic Ocean with them.” —Ray Kroc

How do you create a restaurant empire and become an overnight success at the age of As Ray Kroc said, “I was an overnight success all right, but 30 years is a long, long night.”

OriginsIn 1917, 15-year-old Ray Kroc lied about his age to join the Red Cross as an ambulance driver, but the war ended before his training finished. He then worked as a piano player, a paper cup salesman and a multi-mixer salesman.

In 1954 he was surprised by a huge order for 8 multi-mixers from a restaurant in San Bernardino, California. There he found a small but successful restaurant run by brothers Dick and Mac McDonald, and was stunned by the effectiveness of their operation.  They produced a limited menu, concentrating on just a few items—burgers, fries and beverages—which allowed them to focus on quality at every step.

Kroc pitched his vision of creating McDonald’s restaurants all over the U.S. to the brothers. In 1955 he founded the McDonald’s Corporation, and 5 years later bought the exclusive rights to the McDonald’s name. By 1958, McDonald’s had sold its 100 millionth hamburger.

Unique PhilosophyRay Kroc wanted to build a restaurant system that would be famous for food of consistently high quality and uniform methods of preparation. He wanted to serve burgers, buns, fries and beverages that tasted just the same in Alaska as they did in Alabama.

To achieve this, he chose a unique path: persuading both franchisees and suppliers to buy into his vision, working not for McDonald’s, but for themselves, together with McDonald’s.  He promoted the slogan, “In business for yourself, but not by yourself.” His philosophy was based on the simple principle of a 3-legged stool: one leg was McDonald’s, the second, the franchisees, and the third, McDonald’s suppliers. The stool was only as strong as the 3 legs.

Rewarding InnovationRay Kroc believed in the entrepreneurial spirit, and rewarded his franchisees for individual creativity. Many of McDonald’s most famous menu items—like the Big Mac, Filet-O-Fish and the Egg McMuffin— were created by franchisees. At the same time, the McDonald’s operating system insisted franchisees follow the core McDonald’s principles of quality, service, cleanliness and value.

The Roots of QualityMcDonald’s passion for quality meant that every single ingredient was tested, tasted and perfected to fit the operating system. As restaurants boomed, the massive volume of orders caught the attention of suppliers, who began taking McDonald’s standards as seriously as McDonald’s did. As other quick service restaurants began to follow, McDonald’s high standards rippled through the meat, produce and dairy industries. Again, Ray Kroc was looking for a partnership—this time with McDonald’s suppliers—and he managed to create the most integrated, efficient and innovative supply system in the food service industry. These supplier relationships have flourished over the decades: in fact, many McDonald’s suppliers operating today first started business with a handshake from Ray Kroc.

McDonald’s is a career for a very small number of people for most it is a way to save money for school, buy your first car, help with the finances at home or to just learn job skills and work ethic. you will be employed with McDonald’s until you find a better job, the management knows this. it is there job as management to make this the best job you can get for as long as possible. this is why McDonald’s has a retention manager who’s job it is to put policies in place to improve employee morale and retention.

3.Describe the orientation training at McDonald’s .What purpose does it serve?

Answer:

At McDonald’s, we’ve got a great reputation for the quality of our training and development courses. In fact, a lot of our most successful Managers started their careers as Crew members. You can do it too, and the best part is you get to earn while you learn!

starting out

Starting work can be a scary thought, but don’t worry, at McDonald’s we understand what it’s like to be the new kid on the block. You’ll get all the support and training you need to make a go of it. And the good news is that the training you get as a Crew Member will help you in all areas of your life, not to mention your impressing future employers, whatever long term career you have in mind.

So what kind of training are we talking about

Communication: interacting with colleagues, the management team and our customers.

Practical skills: delivering exceptional customer service, handling money, using equipment and product quality control to name just a few.

Time management skills: organising yourself so you’re always prepared for the rush and of course the importance of always being punctual

Team skills: learning to work along other Crew Members and contributing to the team.

4.What criteria are used to evaluate training effectiveness at McDonald’s?

This report reviews the current methods on evaluating training programs by BreadTalk, with an aim of improving its evaluation methods. Through a search of literature and an analysis of current methods, the report summarises the latest thinking on evaluating training programs and provides insights on how BreadTalk can improve the quality and management of its evaluations. A comparison with an overseas company, McDonald’s, was also done to provide suggestions for improvement for BreadTalk’s evaluation methods.
There are three key objectives of the report: first, to identify models, frameworks, methodologies, and approaches as well as their uses and feasibility in evaluating training programs; second, to summarize how the quality and effectiveness of these evaluations are assessed in theory and in reality, and mainly, what cutting-edge methods and approaches other organisations use to maintain the quality and effectiveness of their evaluations; and, third, to outline some common practices of corporate evaluation units.
Latest models. The review found that the reigning framework for evaluating training programs – and the subsequent models, methods and approaches – is one outlined more than forty years ago by Donald Kirkpatrick. His framework evaluates training programs in terms of four levels – reaction, learning, behavior, and results. Subsequently, Jack Philip’s five level Return On Investment (ROI) model became the conventional model for evaluating training. Basically it is similar to Kirkpatrick’s framework, with an additional level, the calculation of ROI. Other models analysed include the CIRO model and a few others. Critiques of the models are also mentioned.
Quality and effectiveness.

 Recommendation

In order for the international division of McDonald’s to continue the impressive success that it has achieved in the past, two major areas of concern must be addressed.  The increasing level of saturation in most of the major markets around the world and the struggle over autonomy between corporate and the franchises must be addressed with extreme urgency and by allocating the resources necessary.

As mentioned earlier, competition in the fast food industry is becoming incredibly saturated.  When McDonald’s first began expanding into international markets, their main focus was altering eating habits.  This was primarily because there was an absence of major competitors overseas.  However, over the last decade, the international market is beginning to mirror that of the heavily saturated United States market.  Profits are shrinking, same store sales are down, and the overall market growth has slowed tremendously.  This has prompted McDonald’s to continue to cut costs by announcing the closing of 175 under performing outlets in 10 countries.  As the international markets become more competitive and saturated, McDonald’s must continue to analyze and make adjustments accordingly.

Although saturation is a growing issue overseas, it was noted earlier that foreign operations are now more than ever, a major element of the McDonald’s Corporation business.  As a result there is a constant battle over autonomy.  The franchises, especially the experienced outlets with over a decade of success, want more autonomy to adapt to local tastes and preferences.  The franchises feel that as the market becomes more competitive, it will be vital for alterations and adaptations to occur faster and easier than they ever have in the past.  However, McDonald’s corporate is on the opposite side of the issue and is not budging.  Corporate feels that control must be at an all time high because of the importance of the international division and the fact that if it fails, the whole company could suffer as a result.  Corporate has tightened the reigns consistently the last few years and will continue to do so to stay afloat by turning the losses into gains.

Conclusion:

‘You can change without improving, but you cannot improve without changing!’

In today’s fast growing and highly competitive environment everyone wants to stay ahead and always remain connected to the whole world. The last two decades have seen many inventions that are really path breaking and changed our lifestyles in more than one or another way. This is possible only because of the changes and innovation in the organization.

Companies across a range of industries are confronting fundamental change. The advent of 3G technology poses life-and-death challenges for operators of mobile phone networks. The development of digital photography does the same for makers of cameras and roll film. The Internet continues to ask testing questions of retailers and financial services firms, while low-cost airlines threaten the survival of established carriers.

Change today is prevalent in every sector in the world. Today change is happening at an ever faster rate majorly because of the increase in globalization and technological changes that are taking place. Today, all the organization are trying to work on the changing pace of technology, technological changes have not only affected the organizations but also the lives of individuals as they have a global reach, the medium of information that is available today has increased considerable. The firms today are downsizing themselves and societies and institutions are becoming decentralized.

Change management has become one of the major components which helps in managing the work, strategy, organization, people and culture of the organization. Change is important so as to keep an organization more competitive to face the changing demographics and technological trends and increasing globalization.

References

• http://www.oxbridgegraduates.com/essays/employees-performance-and-mcdonalds-restaurant.php
• http://www.mcdonalds.com/us/en/our_story/our_history/the_ray_kroc_story/
• Dess, G., Lumpkin, G. & Eisner, A. (2008). Strategic Management (4e). Boston:McGraw-Hill Irwin.
  Siehoyono, L. (2005). The McDonald’s Case: Strategies for Growth.
  McDonald’s History. (2007). Available on www.mcdonalds.com. Accessed on September 17th, 2008.
• Bhattachrya, Sengupta (2006), Managing change in organizations
• Burnes Bernard (2004), Managing change, a Strategic Approach to organizational
• www.mcdonalds.com

Article written by : Asad Saimon