McDonalds Data Analysis, Coursework Example

McDonalds showed positive current ratios for the last two years, although on the first year used in this study. Gross profit margins for both McDonalds and the fast food industry are around the same, averaging at around thirty five per cent ( 35%); Where net profit margins are looking better for McDonalds in the over-all years. According to the data gathered from Hoovers (n.d.), McDonalds ranks among the top in the industry, breaking the industry median in all its positive financial aspects. Although, McDonalds, through the years from the data gathered, has been declining in sales. Rising from a revenue $22,786.6M in 2007 to $23,522.4M, although falling to $22,744.7M last 2009, which was significantly less than the base year. Despite this, McDonald’s is still doing better in revenue as compared to other fast food restaurants.

Strategies which McDonalds is using to dominate the fast-food industry is mainly offering people consistent great service which respect their customer’s values (Williams, 2006). McDonalds does not only give quality food and service, they provide a place with an ambience which make people want to stay longer. A placement of a play area for children implies that McDonalds does want their customers to stay longer, even after they have finished eating. Party areas encourage large groups, and value meals encourage consumption of more than one of their products. Also, by selling to children a toy with every meal, additionally a toy to collect, it encourages repeat customers and a good customer-brand relationship. By targeting young children this way, McDonalds is conditioning children from the very beginning to fall in love with the brand and be comfortable with it. This is so that when the children are older and have kids of their own, they will bring them to McDonalds, which is reminiscent of their childhood. McDonalds is excellent in terms of marketing, this has given them their well-known name.

Management and operations of McDonalds is very well organized and has kept McDonalds’ doors open for decades and decades to come. Management of McDonalds is mostly commended for its great customer service. It follows management policies, and has strict rules each branch follows, no matter where it is across the globe (Kaushik, 2009). The branches are well kept and well organized. It is supervised by head branches to ensure that quality is met every time. McDonalds also encourages customer feed-back, and requires its employees to greet customers with full respect. Also, McDonalds keeps its promise as a fast-food restaurant, continuing to serve its customers promptly and hassle free. The drive-through feature of most-branches adhere to this fast-food claim, and employees are well trained to be able to give customers full satisfaction in the delivery, presentation, quality of taste and consistency of their products offered.

The company’s production and operations have been running for decades and have stayed the same, giving customers good quality food and service. Food is still delivered promptly and has kept its general look. Even though McDonalds has come up with new products throughout the years, it still keeps the original food offered when it first opened. Production of new food usually follows a fad, or starts because of a certain season. Although, it still retains its name in selling burgers and fries, the products which gave McDonalds its humble beginning.

The organizational culture of McDonalds values its great customer orientation. The whole system of the company is very much customer-centered, which is why McDonalds has a number of regular customers (“Human Resources Management”, 2010). It is also under the strict management of a higher power, or a mother company. The branches of McDonald’s gets regular supervision from these mother companies to ensure that service is on the spot and there are no issues concerning customer service, hygiene and the like. This keeps the quality of the company intact. McDonald’s employees also focus on its quality of food (Kaushik, 2009). Ensuring that the food is consistent from the day before, or decades before, and they make sure it stays that way. Consistence lies in presentation as well as taste, this gives customers a feeling that they are well-connected with the products McDonalds offers and most of the time, these repeat customers have their “usuals”. McDonalds’ customer value is also backed up by good training for employees. A McDonalds’ employee is not just simply hired; he or she has to go through training to make sure he or she is equipped for the work place to give customers the McDonalds experience they come back for.

McDonalds does share its concerns for the community as well as the environment. The company part-takes in a number of charities, donating a percentage of each product sold to a designated charity. They also face environmental concerns, such as conserving water, and using recycled products. The quality of the food McDonalds serves promises its customers that it follows all health and legal implementations, and they do not violate any health codes. McDonalds does not only advertise for its products, most of the time you see commercials or signs advertising the charities you can contribute to by buying food from McDonalds. Although, there was a severe social issue on McDonalds in the aspect of health and obesity concerns (Schuler, & Jackson, 2007); it was believed that McDonalds is a high contributor to the growing number of children who suffer from obesity. This has also lead to many lawsuits filed against McDonalds on the topic. However, I believe that McDonalds, when consumed not in excess would not cause too much health problems.

McDonalds is in a good place when it comes to its competitors, according to Hoovers (n.d.) is the number one ranked fast food chain in the world. It generates high revenues every year, reaching over $22,000M. The numerous franchises as well as the great brand recognition accounts for such great marketing strategies by the brand. It places McDonalds well at the top of the fast-food industry. McDonalds climbed its way to the top with its wide-spread franchising as well as producing good products which are consistent (Hoovers, n.d.). According to the data gathered from Hoovers (n.d.), McDonalds is in a great place as compared to its main competitors. It breaks the industry median in revenues every year and remains at the top. Although revenues may have declined in the past year, McDonalds still leads the way in the fast-food industry covering more locations than any other fast-food chains, giving the company a higher advantage because of its strategic placements.

Strengths of McDonalds include that it is the number one ranked fast-food chain in the globe, it gains the highest of revenues in the industry and is a household name known to mostly everyone on the globe. Brand values and recognition draws customers in and keeps them coming back. The consistency of products and services as well as their quality is ensured and kept on track by operations managements (“Human Resources Management”, 2010). Weaknesses of McDonalds include some lawsuits which were filed due to health issues, this has somewhat damaged the name of McDonalds. Along with this, some product failures contribute to McDonalds failing in meeting their goals in revenues, coming out with products which do not sell as much. Even so, the brand is still a strong one, and the strengths of the company still outweigh its weaknesses. This is the reason why McDonalds is still running after decades of opening. Although revenues of McDonalds have decreased, it still has remained in the top, and will probably stay there in years to come.

McDonalds is doing better than average as compared to its competitors, although not as well as it used to in previous years. The company brags of its billion burgers sold world-wide, although with threats such as consumers opting to save money on every aspect of living, as well as epidemics such as A(H1N1), people are avoiding food which can harm them from their budget to their health. Although growth opportunities are still open for McDonalds, doors in the hot and cold beverage industry are still open for the brand.

A threat of new entrants for McDonalds is low. Although, with the booming of the coffee house industry, a company considered as a new entrant would be Starbucks. Starbucks does offer different goods and services as compared to McDonalds, and is totally a different experience. Starbucks is the number one specialty coffee retailer across the globe (Hoovers, n.d.). It does target the mostly the same market as McDonalds, although it not so much of a family company. Starbucks offers ambience, hygiene and customer values as well, and it also provides a different experience. It targets teenagers, in groups or alone studying, as well as those on-the-go urban customers who want great tasting coffee in a few minutes. Starbucks just started as a simple coffee house, yet there was a boom in demand for coffee house chains which gave Starbucks a lift. Now, it sits there on top with McDonalds.

References

Mcdonalds corporation. (2010). Company Profile, Retrieved from www.datamonitor.com

Hoovers . (n.d.). Retrieved from http://0-premium.hoovers.com.oasis.lib.tamuk.edu/

Human resources management at McDonald’s. (2009, July 1). Retrieved from http://ivythesis.typepad.com/term_paper_topics/2009/07/human-resource-management-at-mcdonalds.html

Kaushik, P. (2009, August 25). Human resource management strategies and goals. Retrieved from http://www.brighthub.com/office/project-management/articles/26610.aspx

Schuler, R.S., & Jackson, S.E. (2007). Strategic human resource management. Malden: Blackwell Publishing.

Williams, G. (2006, January). Behind the arches. Retrieved from http://findarticles.com/p/articles/mi_m0DTI/is_1_34/ai_n15980697/