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McDonald’s Essay

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McDonalds is a corporation that has great success because of good strategy and planning. In the next five years, McDonalds needs to keep up with the changes of the consumer and social trends that bring an impact to the bottom line. As noticed, recently McDonalds has changed its image to appeal to a greater group of customers. A plan that the corporation can integrate is to visualize the future. This not only includes a financial visualization, but actual changes done to restaurants, menus, staff and everything that attracts the consumer in.

With the same visualization for the future, McDonalds has to see what customers they are trying to bring in. Whether it is children, young adults or a more mature crowd, profiling the customers will help see what it is that the people want. Their mission to appeal to more people will be seen as the changes are made throughout the corporation. When the changes are made the success will be seen in their revenues and profits.

Another strategy to use would be to market all the consumers of all ages. Commercials on TV and billboards that attract children can also be used to attract the parents and grandparents.

Once they are in the restaurant the menu should be fit to meet the needs of all of them. Incorporating menus that are more organic or more selections for those who are vegetarians can also bring in good profits and a more faithful customer base. For McDonalds, as for any corporation, their focus should be in making consumers happy. Listening to customer’s suggestions or complaints can bring in more revenue to each restaurant individually and to the corporation as a whole. Financial Plan as Support McDonald’s overall strategic plan is called Plan to Win.

Their focus is not so much on being the biggest fast-food restaurant chain; rather it is more focused on being the best fast-food restaurant chain. McDonald’s “strategic alignment behind this plan has created better McDonald’s experiences through the execution of multiple initiatives surrounding the five factors of exceptional customer experiences – people, products, place, price and promotion” (McDonald’s, 2008, 25). McDonald’s also incorporates geographical strategic plans. In the U. S. , McDonald’s strategic plan continues to focus on breakfast, chicken, beverages and convenience.

These are the core areas in the United States. McDonald’s has launched the Southern Style Chicken Biscuit for breakfast and the Southern Style Chicken Sandwich for lunch and dinner. In the beverage business, McDonald’s starting introducing new hot specialty coffee offerings on a market-by-market basis. In Europe, McDonald’s uses a tiered menu approach. This menu features premium selections, classic menu, and everyday affordable offerings. They also “complement these with new products and limited-time food promotions” (McDonald’s, 26).

In the Asia-Pacific, Middle East, and Africa markets, McDonald’s strategic plan is focused around convenience, breakfast, core menu extensions and value. With McDonald’s overall strategic plan and its geographical strategic plan, the company should start to see more positive financial results. McDonald’s incorporates several organizational strategies. Some of the organizational strategies consist of better restaurant operations, placing the customer first, menu variety and beverage choice, convenience and day part expansion, and ongoing restaurant reinvestment.

McDonald’s plans to “continue to drive success in 2008 and beyond by leveraging key consumer insights and our global experience, while relying on our strengths in developing, testing and implementing initiatives surrounding our global business drivers of convenience, branded affordability, daypart expansion and menu variety” (McDonald’s, 2008, 25). One of the ways McDonald’s can obtain a positive net income is to maximize efficiency in its restaurant operations while at the same time placing the customer first. With strategic focus on menu variety and beverage choice,

McDonald’s is hoping for increased sales and guest counts. With their convenience and day part expansion initiative, McDonald’s is hoping to increase efficiency in its drive-thru pick up window, and the company is staying open later for those late-nighters who want a quick bite to eat. McDonald’s also has locally owned and operated restaurants which “are at the core of their competitive advantage and makes them not just a global brand but a locally relevant one” (McDonald’s, 27). They are in the process of remodeling and upgrading its franchises.

The company is also opening up McCafe’s “with the expectation that the gourmet coffee shop would move it closer to its goal of doubling sales at existing U. S. restaurants over the next decade” (Peter & Donnelly, Jr. , 2007, 253). A couple other organizational strategies are branded affordability, and the development of their employees starting with recruitment and training and leading all the up to leadership and management. McDonald’s strategic plan is influencing their marketing efforts by building better brand transparency. They want their image to be recognized globally. They are enhancing the customer’s experience.

Across their markets, they are making is easier for customers to enjoy a great McDonald’s experience. They are introducing drive-thru to the increasingly mobile populations in China and Russia, while in the U. S. and Canada, greater drive-thru efficiency and double drive-thru lanes enable them to serve even more customers quickly” (McDonald’s, 2008, 13). In Germany, McDonald’s has a reimaging program that includes adding about 100 McCafes. They are also installing new kitchen operating systems so that they can continue to deliver high food quality. McDonald’s has already renovated about 10,000 restaurants worldwide.

They want their restaurants to be an expression of their brand. The company is also delivering greater value to the customer with new menu selections. “By serving a locally relevant balance of new products, premium salads and sandwiches, classic menu favorites and everyday affordable offerings around the world, they create value for customers and satisfy their demand for choice and variety” (McDonald’s, 15). Types of marketing mix that McDonald’s use to achieve their marketing goals are longer operating hours, everyday value meals, and optimizing efficiency in the drive-thru.

McDonald’s also uses marketing campaigns. In 2007, McDonald’s used the Shrek movie to give children a choice between milk, fruit, or vegetables as part of their Happy Meal. In addition to their commitment with children, McDonald’s is building their brand image “with innovated marketing transporting ideas across borders and using I’m lovin’ it to deepen their connection with customers who love their food and the unique McDonald’s experience” (McDonald’s, 2008, 17). In the 2008 Olympics held in Beijing, McDonalds offered the Beijing Burger, Carmel and Banana Sundae, and Rice Sticks.

They featured nine Olympic and Paralympics athletes on their packaging. In Australia, McDonald’s held a marketing campaign where the people could decide what name to give its new hamburger. The name that won was Backyard Burger. With marketing campaigns like these, McDonald’s is trying to create a better brand image. Other organizational and marketing strategies are “creating stronger bonds of trust by being accessible and maintaining an open dialogue with customers and key stakeholders” (McDonald’s, 2008, 27).

The company is reinvesting approximately $1. billion into their restaurants primarily to reimage existing restaurants and build new ones. McDonald’s is also moving towards a more heavily franchised, less capital-intensive business model. Although in some countries, such as China, this is not permissible due to governmental laws. With McDonald’s growing global brand image and its emphasis on the five factors of exceptional customer service, this should help them increase sales and net income. With the initiative of remodeling and upgrading existing franchises, this will give the customer a more pleasant and friendly place to dine out at.

With McDonald’s marketing campaign for the 2008 Olympics, they were an integral part of the games and this only enhanced McDonald’s brand image in a positive way. With the recruitment and training initiatives for current employees or future prospects, this will allow McDonald’s to achieve less of an already high turnover ratio. Risks There are many risk associated with McDonalds initiatives and these risk have a financial impact. McDonalds wants to have quality products and be able to sell its products at competitive prices. Quality products start with quality materials and ingredients, which increases the cost of producing such product.

Increased cost means increased risk for the restaurant chain. As food cost rise the restaurant has to depend on increased sales to make up for food cost. When the cost of producing a product increases, the profit margin decreases, therefore, the difference must be made up in increased sales. There is also risk involved with altering an established product. The public may not respond to the new product as predicted. Financially, if sales decrease, revenue will decrease and the extra money spent on producing the new product will be lost.

McDonalds may also lose customers that dislike their new products. Consistency is important in the fast food business, when people are used to food tasting a certain way they expect it to be the same every time they make a purchase. The financial impacts of some decisions are unpredictable and may take years to be realized. Risks are inherent in any investment and they must be assessed properly in order to determine if the risk is worth the reward. Conclusion Through many years of great strategic and financial planning McDonald’s has become one of the most successful food chains in the world.

With McDonald’s growing global brand image and its emphasis on exceptional customer service; sales and net income will keep on increasing. McDonald’s keeps up with the changes of the consumer and social trends to satisfy consumers of all ages; using TV commercials and billboards, McDonald’s marketing attract children, parents and grandparents. Upgrading McDonald’s existing franchises; the customer continues to enjoy a pleasant and friendly place for years to come; and with the changes made and managing risks in a very successful way, with quality product consistency; the revenues and profit will keep on coming.

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