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McDonald's organization

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Instructor

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McDonald's

Introduction to McDonald’s organization

McDonald's is a multinational corporation and a fast-food industry leader. They have

cracked the international fast-food market thanks to savvy management and a focus on expansion

abroad. This case discusses McDonald's phenomenal success, the Company's global food

industry best practices, international growth trends and problems, and other lessons learnt from

the Company's international expansion. (Manko, B. A. (2022) Overall, the case studies how

McDonald's generates brand and consumer loyalty. McDonald's foreign growth, difficulties, and

solutions are the subject of this case study.

Many underrepresented groups in the United States and elsewhere have found job and

advancement possibilities through the McDonald's system. Leaders at McDonald's view their

employees as the Company's most significant asset as it competes with fast food chains across

the globe. They put money into their workers' professional development and happiness on the job

because it is the right thing to do and because their Company's success hinges on their ability to

consistently provide customers with exceptional value. Its dedication to opportunity extends to

providing for the further education of its staff members.

Global organization

Fast food giant McDonald's is a prime illustration of globalization because it has

successfully established a uniform brand identity around the globe. McDonald's is the largest

restaurant chain in the world, with locations in over 100 countries and serving about 70 million

customers daily. The worldwide expansion of McDonald's has had a profound effect on

economies and societies all around the world. The McDonald's Corporation operates globally

with a strict organizational structure. Businesses that operate on a global scale typically have
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more than one office in different locations, necessitating virtual project teams and project

managers to coordinate the Company's various operations. (Naciti, V. (2019 This aspect of the

Company's structure emphasizes corporate control in terms of management control and the

overall direction of the restaurant chain. With this organizational setup, the CEO of McDonald's

can oversee and lead operations across the board. Restaurant managers and employees, both at

wholly-owned sites and those of franchisees and licensees receive strategic directives and

guidelines from the CEO via the corporate structure. Top-down corporate management is made

more accessible by the organizational structure adopted here. This aspect of corporate structure is

common amongst global businesses and directly affects McDonald's operations management.

Factors that led to the expansion of McDonald's organization globally

McDonald's company expansion is primarily supported by its market penetration

strategy, an aggressive growth tactic. Increasing revenue in the food service area is a primary

focus of the Company's market penetration strategy. The restaurant business uses various

methods, such as franchising, licensing, joint ventures, and partnerships, to implement this

aggressive expansion strategy. McDonald's low costs and competitive prices are part of the

Company's generic cost leadership strategy, which supports market penetration as an intensive

growth strategy.

McDonald's uses product development as one of its aggressive expansion techniques. The

European Union and North America are two of the Company's target markets for newly

developed food and beverage items. (Kavyasri, S. J., & Vaijayanthi, P. (2022). While

McDonald's primary growth strategy is market penetration, this strategy's emphasis on intensity

does play a supporting role. The Company's application of product development results in a low

rate of new product releases, such as new burgers or versions of existing menu items. This
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aggressive expansion plan is associated with McDonald's generic competitive strategy for cost

leadership. When releasing a new line of food products, the Company can entice customers to

buy by offering discounted pricing during the initial launch period.

McDonald's uses diversification as a light strategy when expanding its business. The

Company has adopted this technique for rapid expansion; however, it has been used only on a

limited scale and is limited to the food processing industry.

The Company has adopted a diversification strategy to expand into non-restaurant

markets and drive revenue growth.

What is the marketing strategy, competitors, and competitive advantage

McDonald's uses various promotional methods, which can be broken down into four

groups based on their relative importance to the Company: advertising (the most important),

sales promotions, public relations, and direct marketing. McDonald's primary method of

advertising is television commercials. Advertisements for the Corporation can be seen on

television, radio, in newspapers, and the Internet. However, the Company uses sales campaigns

to entice more diners to its eateries. To increase sales of certain items and sets of items,

McDonald's, for instance, distributes coupons for discounts and freebies.

Furthermore, the Company's PR efforts reinforce the fast-food brand and spread positive

sentiment among target consumers. McDonald's Global Best of Green environmental program

and the Ronald McDonald House Charities are initiatives that help local communities while

promoting the Company's image. (Akpan, I. J., Udoh, E. A. P., & Adebisi, B. (2022). The

Company occasionally engages in direct marketing, mainly when catering to large corporations,

municipal governments or hosting large public gatherings. McDonald's Corporation strongly

emphasizes advertising in this area of its marketing mix. In the United States, McDonald's faces
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competition from various establishments, including other fast-food chains, cafes, and even

traditional fish and chip shops. McDonald's main rivals are fast food chains like KFC, Subway,

Taco Bell, Wendy's, and Burger King.

The following are why McDonald's is so successful in the marketplace: McDonald's

significant competitive edge is its low prices. The Corporation uses economies of scale

extensively to get a competitive advantage in the marketplace. McDonald's is well-known for its

speedy service without sacrificing the quality that has made it synonymous with "fast food."

McDonald's has a significant competitive edge because its food is liked by people worldwide.

Because it uses the same ingredients in the exact quantities and applies similar cooking methods

worldwide, Big Macs taste nearly identical in every country. The reliability of the flavor has a

favorable impact on customer retention.

McDonald's employs various methods and tactics to combat its rivals. For instance, the

restaurant's strong brand is a valuable asset. McDonald's is a household name and a global icon.

Everybody on the planet subconsciously understands this. It also employs a cost leadership

approach to provide food and drink to clients at rates that rivals find hard to match. The service's

rapid food delivery can gain a competitive advantage.

Globalization, customization, and measures for local preferences and conditions

Economics is at the heart of what globalization is all about. The myriad forms of growth

that have led to globalization can be summarized in a single word: connectivity. To put it

economically, it allows goods and services to move freely between countries by integrating their

trades, markets, and investments with few restrictions.

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Branding encompasses all contact points between a product or service and its consumers.

The brand is one aspect of marketing that lends itself to standardization and allows applying

those rules to other areas, such as advertising. (Raisa, R., & Tasnim, N. (2020)

Through globalization, McDonald's went from being a regional fast-food chain in the

United States to a worldwide phenomenon. The fast-food chain McDonald's currently has

locations in virtually every nation. Foods like hamburgers and French fries, which are uniquely

American, have a profound impact on and affect the cultures of visitors worldwide. Foreign

cuisines, musical styles, and artistic expressions are more readily available. For instance, even if

you do not live in the United States, you can still get McDonald's to deliver you some burgers

and fries because the fast-food chain has locations worldwide. For instance, adjustments to the

many technical systems for video devices are examples of more constant demand and predictable

shifts in the long run for consumer items. Products made in factories are rarely affected by

regional or national cultural norms. A product's brand is any distinctive name, logo, term, or

symbol that a company uses to set its wares apart from its rivals.

The ethical considerations for the global organization.

McDonald's earns customers' and staff's daily confidence by consistently providing high

standards of food safety, customer service, cleanliness, and value for money (QSC&V). We

continue to earn this respect by being honest, trustworthy, and dependable. Everyone working at

McDonald's has a responsibility to steer clear of anything that could compromise the Company's

integrity, such as financial or personal entanglements. They keep an eye out for anything that

could lead to a conflict of interest or the appearance of a dispute to protect the Company's image

for fairness and honesty. If you utilize your position at McDonald's for personal advantage or if
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you have a personal relationship or financial interest that potentially conflict with your

commitment to behave in the best interest of McDonald's, you have a "conflict of interest."

When employees have any business dealings with Relatives or close personal

acquaintances, a conflict of interest may occur. They must notify their supervisor and the Global

Compliance Office of potential conflicts of interest. They also exercise extreme caution when

disclosing information to family or friends who may be employed by or have commercial

interests in a rival company.

Post-COVID-19 challenges and opportunities for McDonald's organization

McDonald's Corp. reported a larger-than-expected loss in international same-store sales

due to the pandemic, which kept consumers away from most of its locations for most of the year.

Due to the global spread of the COVID-19 outbreak, all of the restaurant's locations were

shuttered. However, the drive-through and delivery services remained in operation.

McDonald's was in a great position to draw from its earlier digital breakthroughs to

create a user experience well-suited to the epidemic's constraints. After the covid 19 crisis,

McDonald's responded by developing a mobile app, buying a customization technology

company called Dynamic Yield, introducing Mobile Order and Pay, and installing self-order

kiosks in restaurants. These changes have improved the customer experience at McDonald's

restaurants by giving customers more options for making secure payments and customizing their

orders.

Conclusion

McDonald's international must fix two major problems if it wants to keep up its

exceptional growth record. There is an urgent need to allocate the required resources to confront

the rising levels of competition in the world's most important marketplaces and the power
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struggle between corporations and their franchisees. Changing people's eating habits was

McDonald's top priority when it entered other markets. Large-scale competitors were almost

nonexistent in foreign markets, which was a significant factor. Over the past decade, however,

the worldwide market has begun to resemble the saturated U.S. market. Market growth has

slowed considerably, and profits and same-store sales are declining. Because of this, McDonald's

has announced that 175 underperforming restaurants across ten countries will be shutting down.

McDonald's needs to constantly assess the state of its global marketplaces and make adjustments

as necessary in order to stay competitive. Even though there is a growing problem with

saturation in foreign markets, it was said previously that McDonald's Corporation's international

operations now account for a sizable portion of the Company's overall revenue. Therefore, there

is always a struggle for independence.

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Reference

Akpan, I. J., Udoh, E. A. P., & Adebisi, B. (2022). Small business awareness and adoption of
state-of-the-art technologies in emerging and developing markets, and lessons from the COVID-
19 pandemic. Journal of Small Business & Entrepreneurship, 34(2), 123-140.
Kavyasri, S. J., & Vaijayanthi, P. (2022). Mcdonald's Entry into India. Issue 2 Int'l JL Mgmt. &
Human., 5, 1346.
Manko, B. A. (2022). Analyzing an Unconventional Success Story Chick-fil-A Fast Food
Restaurants in the USA. Management, 26(1), 118-143.
Naciti, V. (2019). Corporate governance and board of directors: The effect of a board
composition on firm sustainability performance. Journal of Cleaner Production, 237, 117727.
Raisa, R., & Tasnim, N. (2020). McDonaldization of Asia: Impacts of Globalization on the Asian
Culture. Available at SSRN 3702432.