McDonalds has become the largest food service company in the world. The annual sales have made a tremendous growth by 23 billion dollars in the US. It has provided the biggest employment opportunity in the United States. And now the McDonald’s company is expanding spontaneously throughout the world. Presently McDonald’s and its franchises operate more than 28,700 restaurants worldwide in 120 countries and territories and still increasing. McDonald’s got an unbeaten record of serving food to over 68 million people daily.
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The actual owner of the McDonald’s company occupies only an option of 15-20 % share. Whereas, the rest are run by franchises of the McDonald’s company. The revenue of the company gains a profit of nearly $ 400,000 – $ 700,000 from a single franchise every year. McDonald’s is the only best known brands worldwide, it continually aims to build its brand image by satisfying the customers. Branding always helps to develop personality an organization, product or service. The brand image shows how customers view the organization. An organization could earn brand image if they are providing consistent customer satisfaction. Marketing involves identifying customer’s needs and requirements and making their needs in a better way than competitors. To create a loyal customer, a company should also be loyal towards customers.
HISTORY OF McDonald’s
In the year 1940’s two brothers named Richard and Maurice McDonald have started the restaurant named ‘Speedee’ in California for the very first time. It replaced its name from ‘Speedee’ to ‘McDonald’s’ on May 4th, 1961 for US trademark. McDonald’s received a wide popularity as soon it launched the “Drive in restaurant services”. McDonald’s expanded into many international markets with its fast food chain restaurant.
McDonald has changed the nature of food service industry and food processing industry also. McDonald’s compete in the field of fast food chains by increasing the supply, lower cost production and launching innovative products. It concentrated with innovative and sophisticated food distribution and packaging systems when the traditional food processors were unable to supply food items sufficiently that McDonald’s demanded. They always had the consistency of devoting more attention than anyone else in this field of service and training. McDonald’s started its fast food chain with tiny suppliers and grew to a huge brand name with the suppliers displaying great loyalty.
STRATEGY OF McDonald’s
McDonald’s has always adapted to the customer’s tastes lifestyle, language and perception. McDonald’s was globally known for its hamburgers, beef and pork burgers earlier. But when McDonald’s realized that the company should be responsive to different countries people sensitivities, McDonald’s launched up products like chicken, lamb, and fish burgers which could be suitable for different parts of the world.
Even when McDonald’s gets to know the increase in population of vegetarians through a survey, the company brought up a new trend of vegetarian items like “McVeggie” burger. This customer segment helped McDonald’s to increase its sales to a large extend.
SEGMENTATTION, TARGETING AND POSITIONING
McDonald’s basically implements its strategies in main three categories. It divides segmentation strategies according to the age of the customers. The main target segments are children, youth and the young urban family.
To attract children McDonald’s has launched a Happy Meal package in which toys ranging from hot wheels to various other characters of Walt Disney are provided. In several outlets of McDonald’s it provides interesting facilities like ‘Play Place’ where children could also play various games like air hockey, arcade games etc. This strategy made a success and a fun place to eat. It also helped to attract young urban families in the restaurant who wants to spend quality time while their children have fun at the outlets.
McDonald’s has advertised itself as a place for the whole family to enjoy. Presently it provides its products in affordable price which ensures any segment customers to eat without compromising on price, quality of food, service and hygiene. This atmosphere ensured McDonald’s to maintain a positive relationship with the customers.
McDonald’s MARKETING MIX (5P’s)
Every company has to work on the following (5 P’s) to make their product successful. The (5 P’s) used by McDonald’s are as follows –
Product – Those type of physical products or services offered to the consumer are included in their category. Products may be tangible and non tangible in nature. Taking the case of India, McDonald’s have done a study on the Indian consumer behavior and produced a result in providing a totally a new menu as compared to its international offering. It removed ham, beef and mutton burger from the menu. As India is the only country where McDonald’s serve vegetarian menu. McDonald’s keeps on providing new and innovative products, keeping in mind the changing preferences and tastes of its customers.
Place – It is very much important that the product is provided to the customers at the right place, right time and distribution channels. In the USA most of the McDonald’s outlet is within a 3 minute drive. McDonald’s dedication towards satisfying its customers by providing various facilities made its customers to increase more than 20% each year.
Price – McDonald’s has made various strategies to attract more customers towards it by providing its products with affordable price, taking in mind the appropriate demand-supply equation. McDonald’s has launched various packages such as combo meal, happy meal, family meal to increase overall sales volume and also to attract middle and lower class consumers.
Promotion – various promotion strategies were used by McDonald’s to attract customers. The main objectives of advertising its products, is to spread a positive impression to the public.
Famous marketing campaign of McDonald’s
“You Deserve a break today, so get up and get away- to McDonald’s”
“Food, Folks and Fun”
“I’m loving it”
People – McDonald’s understands very well that the value of its employees and its customers. It knows the fact that a happy employee could only serve well and result in a happy customer. McDonald’s has always valued the importance of internal and external marketing which includes motivation, training and hiring efficient employees. So that, they could serve the customers well and provide the service up to the customers’ expectations. McDonald’s has classified the important people from the top as follows :-
Front line employees
Middle level managers
Front line managers
“I’m loving it” is the best punch line of McDonald’s which shows that the employees are loving their work and they love to serve the customers.
4.3 PLC IN McDonald’s
The requirements and demand of customers keeps on changing over time to time. Thus, the product offering has to be changed accordingly.
McDonald’s has continuously introduced new products and removed old products which were at the decline stage of their Product Life Cycle. The introduction is timed in a such way that when the new product should not affect the maturity or growth stage. Thus, the secret lies in getting profits with different products in the different stages of the PLC.
The ‘French Fries’ have been an important part of the McDonald’s menu worldwide. But now it was in the declining stage and not generating a proper return. At that point of time a new product was launched namely ‘Shake Shake Fries’ and once again it helped to raise the potential revenue of McDonald’s products.
HUMAN RESOURCE MANAGEMENT CONCEPT OF McDonald’s
“The total knowledge, skills, creative abilities, talents and aptitudes of an organization’s workforce, as well as the value, attitudes and beliefs of the individuals involved” is called Human resources. Bratton, J. And Gold, J. (2000) An organization gets competitive advantages by using its employees effectively to improve the skills of labors and to provide a clear view of the organization objectives to be achieved within a particular period to the employers. Human resource management is aimed to recruit efficient, skilled and committed people. Managing and rewarding their performance and developing their skills.
The employers of McDonald’s fall into three groups –
Corporate staff and
Usually a local McDonald’s restaurant employees up to 50 to 65 people, company staff members work either at the corporate head quarts or at one of 40 regional offices. A large majority is part-time workers; their wages are low although their hourly wages are slightly higher than crew member’s wages. There is one restaurant manager per McDonald’s restaurant. According to a company survey, approximately 12% of all teens are currently employed in the USA works for McDonald’s.
Staffing means management of employees in an organization. It includes the activities such as selection, recruitment, hiring, training, development and deployment of employees. Staffing is the main process which ensures that the right people are recruited at the right time. The staffing professionals are responsible for staffing procedures, inventory of personnel, projection of vacancies, preparation of job descriptions and preparation of applicant’s specification. Staffing is crucial part of a human resource management department and the decision made during this process affects the whole organization structure and organization strategy.
5.2 RECRUITMENT OF EMPLOYEES IN McDonald’s
Recruitment is one of the most difficult, time consuming, challenging and costly processes. McDonald’s recruit through two types of methods which are –
Internal and External recruitment- Internal recruitment method is designed to take advantage of existing employees. The internal recruitment process is inexpensive compared to external hiring. The external recruitment method is designed to hire employees from outside the organization. It could be advertised through newspaper, internet and other sources. McDonald is always in search of talented applicants and the company focused on the skills of the applicant.
5.3 TRAINING TO EMPLOYEES OF McDonald’s
McDonald’s provides highly structured training to the employees. Primary workers are first taken through the basic crew training system. The program consists of on the job training and is largely vocational. Each stage of development helps the crew level to get new training program with the skills becoming more complex and generalized.
Training begins immediately after joining the company. Each restaurant has its own video player and training room. Step by step manuals and video tapes teach every detail of the operations and functions in the restaurant in McDonald’s. Trainers use a series of checklists as new crew members move through the restaurant.
Once a crew trainer has been promoted to swing manager and when he/she perform successfully. They are eligible for the Management Development Program. Training provides technical and functional management skills for employees at each level of their carrier. The Basic Management Course teaches leadership, time planning and crew recognition.
Once a front crew member has progressed to the position of assistant manager, he/she is eligible to attend Hamburger University also. More than 2500 managers and potential franchises take part in the Advanced Operations Course.
5.4 TRAINING AND DEVELOPMENT
McDonald’s knows very well how to increase the quality, customer satisfaction, productivity and innovation. The culture of McDonald has helped the organization to increase its market share and profitability. Training and development also helps in getting a step ahead in competition with other fast food industries and McDonald’s always keeps on making efforts to improve job skills and quality management.
5.5 EDUCATION TO YOUTH
McDonald’s is committed to the education of young employees in the organization. Especially for school age employees McDonald’s provides various education facilities which the employee to take away equally with the career at McDonald’s.
STRATEGIC HUMAN RESOURCE MANAGEMENT
Kaplan and Hurd (2002) define that “strategic HRM is a collection of tasks and processes shared jointly by line managers and human resources to solve business issues based on people.”Every organization exists in the market to provide some kind of purpose, goal and objective. Physical, financial and human is the three resources for the organization. The most challenging and the most difficult task of organizing is to value human resources unlike. Human Resource Management is an organizational function that deals with the human aspects of the organization. The objective and goal of human resource management is to help in achieving objective of the organization.
The major task involved in Human Resource Management are strategic planning, training, developing, marketing, creating and innovating, problem sensing, managing and controlling. Human resource development plays an active role to select the right candidate for the right job at the right time and helps the company achieve its objectives effectively.
Human Resource Management plays the most effective role in achieving the business strategy and its internal working problem. Human resource management faces various external factors from outside the organization such as political, cultural and economic forces. Human resource management also directly deals with the business strategy and organization structure communication.
Human resource development management shows the several responsibilities towards the organization from designing the organization strategy with the organizational structure and resource. Human resource development is responsible for planning the basic strategic alignment of the company’s goal and organization utility of resources.
There are various accepts related to the stakeholder value management such as value based management, which is based on how to organize the company functions to create maximum profit. This accepts helps to understand the impact of stakeholder interest in the development of management in this organization.
McDonald has always focused on main key areas of its operations which are effective, calculability and preventabilty. Also machines play an important role because the machine can perform in a consistent and better way and also helps in getting the uniform quality and services to provide customer satisfaction. The aim of this accepts is to provide corporate strategy, decision process, performance management system, corporation communication and reward process.
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Human resource planning relates to a variety of other functions such as recruiting, selection, motivation, empowerment, compensation, utilization services, training, development, promotion and retirement. The basic and foremost function of human resource management is to manage and utilize the human resource effectively. Human Management planning can be divided into main two parts named as strategic intent and human resource integration.
Professor ‘Dulewicz’ in 1989 defined performance appraisal as “A basic human tendency to make judgments about the task done by someone. Thus, about work and then the individual who performs the task”
There are various factors which affect the performance appraisal system in McDonald’s which are as follows:
Motivation- It should be analyzed that the employee is self motivated to achieve the company’s goal and shows positive work attitude to other employees too.
Communication- This factor checks the employee’s communication skills. It is necessary for any organization to know whether an employee understands the information clearly or not.
Performance- It should also be judged whether an employee could undergo work pressure and even to know how the employee reacts in the opposition.
Customer satisfaction – This factor describes the extend up to which the employees should take initiatives to understand the customer needs and wants, also to keep its customers satisfied.
Human Resource Department always takes the initiative to manage the workforce diversity. It deals with maintaining a good equilibrium of market demand with the organizational capacity of production. One of the most the challenging tasks posed by the Human resource department is to plan and organize the organization for future market to achieve short term and long term goals.
Planning itself is a challenging task it needs to study consumer behavior very deeply. Even at the time of recession Human Resource Development has to implement various strategies to maintain employee strength. When most of the companies at the time of recession tried to reduce their resources and cost and also many companies removed a lot of employees to slow down of the business. McDonald’s was the only fast food based company which was doing very good financial increase in sales. The human resource department plays a significant role in making the stability in the company’s growth and to achieve business objectives within the decided period of time.
These factors helped McDonald’s to maintain good financial stability in sales even in the period of recession. Human resource development plays a significant role in achieving business goal and objectives.
The finding from this study it is important to understand that review of the literature discussing experience with results based management strongly suggest that experience has not diverged significantly from that of many other organizations. Overall this study identifies a significant number of areas where greater progress could have been made. There should be a focus on customer demonstrating availability, attentiveness and reliable to external internal customers, building trusting and constructive relationship with them. Listen to their needs and seeking their feedback. Share to succeed employees being available, attentive and reliable with peers and colleagues. Encouraging and contributing to the sharing of information, knowledge and best practices. McDonald’s has always adapted to the customer’s tastes lifestyle, language and perception.
McDonald’s was globally known for its hamburgers, beef and pork burgers earlier. But when McDonald’s realized that the company should be responsive to different countries people sensitivities, McDonald’s launched up products like chicken, lamb, and fish burgers which could be suitable for different parts of the world. An organization gets competitive advantages by using its employees effectively to improve the skills of labors and to provide a clear view of the organization objectives to be achieved within a particular period to the employers. Human resource management is aimed to recruit efficient, skilled and committed people. Managing and rewarding their performance and developing their skills. Every organization exists in the market to provide some kind of purpose, goal and objective. Physical, financial and human is the three resources for the organization. The most challenging and the most difficult task of organizing is to value human resources unlike. Human Resource Management is an organizational function that deals with the human aspects of the organization. The objective and goal of human resource management is to help in achieving objective of the organization.
The major task involved in Human Resource Management are strategic planning, training, developing, marketing, creating and innovating, problem sensing, managing and controlling. Human resource development plays an active role to select the right candidate for the right job at the right time and helps the company achieve its objectives effectively. Human Resource Management plays the most effective role in achieving the business strategy and its internal working problem. Human resource management faces various external factors from outside the organization such as political, cultural and economic forces. Human resource management also directly deals with the business strategy and organization structure communication.
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