McDonalds Case Study

McDonald’s

“McDonald’s Corporation is the world's largest chain of hamburger fast food restaurants, serving around 64 million customers daily in 119 countries. McDonald’s primarily sells hamburgers, chicken, French fries, breakfasts and soft drinks.” (McDonald’s, 2011). “Headquartered in the United States, the company began in 1940 as a barbecue restaurant operated by the eponymous Richard and Maurice McDonald; in 1948 they reorganized their business as a hamburger stand using production line principles.” (McDonald’s, 2011)

McDonald’s restaurant is operated by a franchisee, an affiliate, or the corporation itself. The corporation's revenues come from the rent, royalties and fees paid by the franchisees, In addition to sales. (McDonald’s, 2011). “McDonald’s revenues grew 27 percent over the three years ending in 2007 to $22.8 billion, and 9 percent growth in operating income to $3.9 billion.” (McDonald’s, 2011).

The mission of McDonald’s is to provide the customer fast food and beverages with friendly services. "McDonald’s vision is to be the world's best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile." (McDonald’s Mission Statement, 2006)

Some of the problems and challenges facing the company are increased competition, poor management, bad marketing, and lack of response to the changes in the needs of customers. In these days customers want to change fast-food restaurants to a healthier one. That increases costs, because companies will have to change their operation and ingredients in order to satisfy their customers. (Marketing Plan for McDonald’s, 2010).

Internal factors that would affect of the success of McDonald’s are production methods, technical knowledge, skill levels of employee’s promotion, and provision of healthy food. If production methods are not clean, healthy and free of contaminants, customers could become sick, which will lead to shutdown until health inspections have been passed. If employees and management are not knowledgeable of the technologies used, the cost of fixing errors could raise financial goals and lower production goals. The skill levels of employees need to fit the company’s expectations by the bare minimum or the training could become costly. (Marketing Plan for McDonald’s, 2010).

“In recent years McDonald’s has faced pressure on its profit levels. High profile concerns about the quality of its food and its business practices dented the profile of the company.” (External Influences and the Stakeholder Model: McDonald’s, 2011). “McDonald’s is a powerful company that consumers have come to know and trust and they have the power to change as tastes change. This keeps their competitive advantage alive.” (Choo. K, 2008).

McDonald's