BUSINESS AND MANAGEMENT
McDonald’s Corporation
McDonald Corporation in the course of its operation has faced strategic challenges for a long time. The company has gone through various analysis and scrutiny of the operational activities of the company to identify and fix the problem. However, this paper will look in depth into the challenges that McDonald’s faced as well as analyze them in depth (Wei & Yuanyuan, 2013). To begin with, the company major blow was the consecutive death of two of its CEO, which took place in 2004 and 2005 with the death of Jim Cantalupo and Charlie Bell respectively. McDonalds faced economic devastation of 2008/2009 as well as inefficiencies in operation around the same period (Hill & Rabig, 2012). Despite the serious challenges that the company faced, still McDonalds stand the better position in food industry in the world. This greatest achievement was accomplished by the new management under the CEO by the name Jim Skinner (Coulter, 2013).
Strategic Issues
The unfortunate death of two competent, experienced and passionate CEOs, the ineffective execution of strategic policies, programs and decisions, poor marketing plans, frequent fluctuations in customer taste and preference are some of the strategic issues that McDonalds faced (Coulter, 2013). In order to conquer the market and reinstate its position as the world’s best fast food company, various activities, such as decision making, execution of policies and procedures in operation among other issues, including hiring a qualified experienced CEO needed to be modeled (Wei & Yuanyuan, 2013).
Analysis & Evaluation
In this segment, the paper will scrutinize the history of McDonald as a company, the paper will also discuss the seven principles that McDonald has adopted regarding customer-centric strategy for future endeavors and how the principles can be applied by other entrepreneurs to better their operations (Hill & Rabig, 2012).
The History of McDonald and Changes made during the turning period:
The history of McDonalds is dates back to 1940 when it was first established. The multi-mixer salesman by the name Ray Kroc paid a McDonald a visit with the offer to sell more multi-mixer in the year 1954. That was the time Ray Kroc released that McDonald was focused on being a nationwide franchising agent with specialties in hamburgers as main fast food offered. On April 15th, another branch was opened in Illinois des plains and later on by the year 1965 the franchise expanded and spread to over seven hundred in number across the united stated (Wei & Yuanyuan, 2013).
The first public stock offer was announced on McDonald’s tenth anniversary with the one share valued at $ 22.5. The first restaurant that was opened out of the United States was established in 1967 Canada and then later in Puerto Rico. By the end of 1977, it had opened four thousand and ninety-nine restaurants worldwide. 5000th McDonald’s restaurant was opened Japan in Kawakawa in 1978. Ray Kroc passed away on 14th January 1984, leaving the franchise to plan its future endeavors without the founder. In the year 2003, McDonald’s management launched its long-term plan aimed at conquering the entire fast food market by executing several initiatives including the initiative that focused on the 4ps that is, price, product, promotion, and place (Tony, 2004). McDonalds CEO Jim Cantaloupe passed on due to heart attack paving way to Chalie bell who later on died of cancer hence his vice chair Jim Skinner became the CEO making several adjustments and improving the performance of the company.
Premier salads, as well as, Mcgriddles were incorporated in the same year as the national menu in all restaurants in the first global campaign that the corporation held. “I ‘m lovin it” campaign that was held in 28 was the historical moment when McDonalds introduced its unique brand in packaging. McDonald expanded to international level covering one hundred and nineteen countries worldwide. The current focus is not just satisfying customers, but the strategic plan focuses on “being better, not just bigger” by improving the quality of services in the restaurants through use of experienced personnel as well as provide value to shareholders at large (Coulter, 2013). In order to attain stability in operation, the company adopted modern technology such as software on the point of sale to aid in placing orders to avoid queuing, utilization of economies of scale, the fact that it has several restaurants, online order placing forum was adopted, as well as labor saving equipment. Several campaigns have boosted the sales as the management has invested in promoting McDonalds services and products. Adjustments in menu have also seen increased customer satisfaction and this has increased the profitability of the corporation. The fact that McDonalds faced several challenges; it is still the leading fast food restaurant worldwide (Hill & Rabig, 2012).
McDonalds customer based principles that has helped to boost the business are explained below;
Resourcefulness and innovation: McDonald persistently focused on innovation and creativity in providing the best services and products. Featuring a variety of product options such as packaging, value, product delivery, food taste, and right price, variety of products as well as wholesome product and premium has enabled McDonald to stay relevant in the food industry (Tony, 2004).
Provision of efficient customer care services: in order for any business to succeed, they must understand the requirements and desires of their clients or customer’s hence customer-oriented tactics must be employed. McDonald understood this fact and took it upon them to adjust the menu to fit their customer preference and demands perfectly (Carter et al., 2004).
Expanding its market base: McDonald realized that the market is wide hence apart from opening businesses in various regions in the United States, it realized the need to expand internationally hence became a franchising corporation and conquers the market.The growth is steady and more restaurants are being opened around the world (Wei & Yuanyuan, 2013).
People and processes: having the right people and relevant resources has been one of McDonald’s goals hence customer satisfaction has been achieved. Satisfied employees are the one capable of satisfying customers and McDonalds has achieved this belief due to methods they employ in operation (Coulter, 2013).
Market leadership: the adoption of 5p that is people, price, place, promotion, and product has enabled the company to continue leading the market as the top franchiser in fast food worldwide (Tony, 2004).
Goal oriented: McDonald has focused on achieving its goal of leading and staying in the market. This has entailed the adoption of several strategies focusing on the needs of their customers in order to retain them. Changes in operation and flexibility in adoption to technology has enabled the company to stay relevant (Carter et al., 2004).
Maximum competence and productivity: continuous improvement in operation, redesigning operational structures has enabled the company to operate efficiently hence attaining customer satisfaction (Wei & Yuanyuan, 2013).
Conclusion
The seven principles and the adjustments that McDonald as a corporation has made over time to achieve its success today is a good lesson other businesses can learn from. Despite the fact that McDonalds faced challenges such as loss of its founders and competent and experienced leaders, the company goal of conquering the market was not affected. Hence by having the right people, right attitude, and hard work, any business can prosper regardless the challenges it may face both internally or externally.
References
Tony, R. (2004). Working for McDonald's in Europe: The Unequal Struggle
Wei, H & Yuanyuan, X. (2013). Comparative Study of McDonald's and Kentucky Fried Chicken (KFC) Development in China. SAVONIA Press
Carter, L., Ulrich, D., & Goldsmith, M. (2004). Best Practices in Leadership Development and Organization Change: How the Best Companies Ensure Meaningful Change and Sustainable Leadership. Hoboken: Wiley.
Pearce II, J.A.,& Robinson, R.B. (2014(14th Edition)). Strategic Management: Competing for Domestic and International planning. New York: McGraw-Hill Irwin.
(n.d.) Retrieved from http://business-reporter.co.uk/2015/05/05/mcdonalds-ceo-promises-more-customer-centric-approach/
Hill, L. W., & Rabig, J. (2012). The business of Black power: Community development, capitalism, and corporate responsibility in postwar America. Rochester, NY: University of Rochester Press.
Coulter, M. (2013). Strategic Management in Action (6 ed.). New Jersey, USA: Pearson Education, Inc.
(n.d.) Retrieved from http://www.aboutmcdonalds.com/content/mcd/our_company/mcdonalds-history.html
