McDonald’s Corporation – A Case Study
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McDonald’s Corporation is the primary competitor of Burgermania – a growing fast food corporation with restaurants in fifty cities in the United States and Canada. However, Burgermania has recently been suffering from the pains of a growing corporation. This case study will be concentrating specifically on McDonald’s Corporation. This case study can provide suggestions as to how the corporation can improve its productivity at the same time decrease its costs.
The main objective of this case study is to provide Burgermania solutions on its existing state as a growing corporation which is to answer how McDonald’s Corporation, its leading competitor, maintains cost efficiency whilst sustaining rapid growth.
McDonald’s Corporation is the world’s leading company in the fast food industry. It has over 31,800 flagship restaurants serving nearly 50 million people each day in more than 119 countries worldwide. Recently in 2003, the corporation has dramatically altered the course of its business by refocusing on the disciplines of operations excellence and marketing leadership which are said to be the characteristics of customer satisfaction. This shift in their business operations was the first step towards creating sustainable, profitable growth at McDonald’s. The corporation’s key efforts in increasing productivity and decreasing costs will be discussed in the succeeding sections of the case study.
Putting People First
McDonald’s serves about 50 million people each day. It has been integrated in their management to prioritize customer satisfaction. They are intent in improving the experience of each and every one of these 50 million people that they serve everyday. It must be noted that customer satisfaction has always been the key in the success of any service-related industry such as fast food as exceptional service have the power to differentiate one corporation from another. One of the corporation’s efforts in speeding up their service is through automated beverage dispensers which drop and fill the right-size drink cups as orders are keyed into the register. This innovation has simplified their operations, sped up their service, as well as satisfied their customers in the provision of quick service. Also, the corporation is aimed at pleasing their customers through treating them equally without regards to their status or whatever discrimination that can be made upon. Aside from the corporation’s quick service and its universal friendliness to the customers, the corporation has also approximately 2,800 employees who provide a wide variety of support functions to the thousands of McDonald’s restaurants around the world through a network of divisional, regional and local-country offices.
In terms of their treatment towards their employees, the corporation also has this initiative of satisfying their employees through a benefits program that is designed to attract, energize, reward and retain talented and potential people who will be able to produce superior business results and enhance the corporation’s leadership position in the fast food industry. McDonald’s has realized that satisfied employees will become motivated in their work; hence, there will be maximization of productivity as their employees bring be able to satisfy their customers in giving them exceptional service.
Having the Right Products at the Right Prices
As McDonald’s Corporation has noted, “Consumer taste preferences are changing and we are responding by providing a variety of taste and price options.” McDonald’s has constantly sought for ways to be able to provide special menus that feature items at a great value. Fast food chains are usually targeting the masses – common people; thus they make sure that their prices remain at a range that is affordable in order to maintain their competitive advantage against other fast food restaurants.
Making Places Showplaces
Another effort for McDonald’s to increase their productivity is to keep their restaurants fresh and contemporary as styles, colors, decors and technology change. The corporation is constantly renovating, rebuilding and relocating some of their restaurants to keep up with the environmental and technological changes. For example, in Hong Kong, they have a re-imaged interior which adds a touch of sophistication and individualization. In fact, McDonald’s Corporation also has expanded their operations to the coffee crowd as they have developed their McCafe – a coffee concept inside some of their restaurants wherein the customers can enjoy premium and specialty coffees, pastries and muffins in a coffeehouse atmosphere at the same time.
Promoting the Brand
As the global marketplace has evolved and communications more enhanced, customers have become more sophisticated. In response to this change, McDonald’ Corporation is taking advantage of this through their global “I’m loving it” strategy. This strategy is more than the corporation’s marketing campaign. They say that it is actually an attitude – about music, entertainment, sports and fashion and how these interact with their customers and the McDonald’s experience. Nevertheless, it is also about the corporation’s employees and motivating them to work for the brand. In addition to promoting their brand, the corporation also stands ready to help the community and continue to take leadership positions on issues important to consumers like the environment and healthy active lifestyles.
To sum up, McDonald’s key efforts in increasing productivity and increasing costs include: (1) putting people first; (2) having the right products at the right prices; (3) making places showplaces; and (4) promoting their brand. It must be noted that McDonald’s has taken advantage of their increasing economies of scale which are primarily created by their sales growth. Hence, the true power of the cycle of success at McDonald’s Corporation has been attributed to the fact that as there is increasing economies of scale, their levels of profitability increase as well.