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Business Strategies Of McDonalds

Info: 1684 words (7 pages) Essay
Published: 8th Sep 2021 in Marketing

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The main objective of a business strategy is to provide superior value, differentiation, and core competencies for a company that has clear missions, goals and objectives that are important and necessary to the strategic formulation of a company.

The mission is a quality definition of who the company is and what it expects to accomplish, further defined by goals and objectives.

Goals are directly linked with the mission and are general statements of desirable outcomes.

Objectives are goals or purpose with specific targets and time periods.

We will further discuss in detail of how these missions, goals and objectives are so important in the formulation of Business strategy.

Strategic management

The way in which employees are managed to maximize the potential of achieving business objectives is called Strategic Management. It has a very positive impact on a business and can significantly improve its growth only if Strategic management is effectively used. It is all about formulating strategies and the key to making it work for the business.

McDonalds

McDonald’s is the leading global foodservice retailer with more than 31,000 local restaurants serving more than 58 million people in 118 countries each day. More than 75% of McDonald’s restaurants worldwide are owned and operated by independent local men and women primarily selling the world some of its favorite foods – World Famous Fries, Hamburgers (Big Mac, Quarter Pounder, etc), Chicken McNuggets, Egg McMuffin, milkshakes, hot drinks, desserts and most recently also offer salads and fruits.

Their rich history began with our founder, Ray Kroc. The strong foundation that he built continues today with McDonald’s vision and the commitment of our talented executives to keep the shine on McDonald’s Arches for years to come.

The History of McDonalds

The McDonald’s restaurant chain of today began its humble beginnings in a renovated barbecue car-hop restaurant in San Bernardino, California by two brothers, Richard and Maurice McDonald. Dick and Mac left their Manchester, New Hampshire home and headed to California for work after graduating from high school. Mac and Dick borrowed $5000.00 and opened a barbecue drive-in close to a high school in 1940. They hired attractive carhops and offered a menu of 29 items. Business boomed. Families came for the low prices and teens came to check out the carhops. By 1947, the restaurant was losing business. Families were getting more concerned about their finances and the teens seemed to be more interested in hanging out than in purchasing food. Dick and Mac took notice of these changes in clientele and noticed hamburgers made up 80% of all food sales. They decided to close the restaurant and reorganize.

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The restaurant was reopened in mid December of 1948 as the first self-service, assembly line, and drive-in offering 15 cent hamburgers, 19 cent cheeseburgers, 20 cent malts and 10 cent fries. By 1952 the business was booming. The brothers had purchased 8 mixers for their milkshake production and ordered two more. This purchase caught the attention of the owner of the Multi-mixer, Ray Kroc and changed the history of McDonald’s.

Ray noticed that this hamburger stand continued purchasing from him and he decided to go check it out. Ray was very impressed with the McDonald brothers self service concept and their booming business that now included a few franchises. He made a proposal to expand their business across the country with himself supplying the Multi-mixers. The brothers were not interested in becoming so large but did agree to give him exclusive rights to the McDonald system.

Kroc opened his first franchise in Des Plaines, Chicago in 1955 and subsequently sold 18 more in the first year. He collected 1.9% of gross sales and turned in 0.5% of that to the McDonald brothers. He was barely breaking even in this arrangement, until he met Harry Sonnenborne, who encouraged him to lease or purchase the property for all future McDonald franchises. The operators would pay him either a monthly rent or percentage of their gross sales, whichever was greater. Kroc created a 75 page manual outlining the specifics of running a McDonald’s to ensure all restaurants had the same cleanliness standards, the same amount of meat in each hamburger, the specifics for cutting and preparing French fries. The McDonald brothers resisted these changes and many arguments ensued.

In 1960, Ray Kroc convinced Dick and Mac McDonald to sell the legal rights to him for 2.7 million dollars. At the time of this transaction, the chain had more than 200 restaurants. In 1990, after public outcry concerning cholesterol, McDonald’s switched from beef tallow to pure vegetable oil in their french-fries.

In 2006, McDonald’s began a design “Forever Young” in all their restaurants using the traditional yellow and red colors and adding olive and sage, using more brick and wood with less plastic.

With the vision of two brothers and the marketing strategy of one high school drop out, McDonald Corporation has grown to be the favorite fast food restaurant to millions of customers in more than 100 countries around the world.

Business Goals, Objectives and Mission

McDonalds S.M.A.R.T objectives:

  • Market share objectives – Market share can be achieved within a specified period of time if objectives are set accurately
  • Increasing profits – objective is to increase profits or percentage of sales for a certain period of time.
  • Survive – Current/present hard times the business is in.
  • Growth – Business objectives may state growth by 15% year on year for the next 5 years ahead.
  • Increasing brand awareness over a certain period of time.

Mission Statement

A mission statement is a brief and to point representation of a company or organizations purpose for existence. It is a formal document that states the objectives of a company or organization addressing concept like moral/ethical position of the company, public image, target market, etc.

McDonalds – Aims and Objectives

  • Having great concerns bout the organizations customers.
  • Being socially responsible for the company’s welfare.
  • Serving high standard and quality food with quick and outstanding service all along with great value for money.
  • Maintain a good and friendly environment.

“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 is known through out the world for their commitment to inclusion and diversity not only with their employees but with their franchises and suppliers.

Core Objectives of McDonalds

The core objective and mission of McDonalds is to be the world’s premier consumer product organization mainly focusing on convenient fast foods. They practice producing financial rewards to their investors hence providing opportunities for growth and enrichment for their employees, business partners and for the communities in which they operate. They strive for Honesty, Fairness and integrity in everything they do.

“McDonalds responsibility is to continually improve all aspects of the world in which they operate – environment, social, economic – creating a better tomorrow than today.”

Their main vision is put into action by a series of programs focusing on environmental stewardship, activities to benefit society and their commitment to building shareholder value by making McDonalds a truly sustainable company.

Values and Principles of McDonalds.

Core value is customer experience – McDonalds is alive because of their customers and they demonstrate their appreciation by providing them with high quality products and services in a clean and welcoming environment, with great value for their money.

Commitment to their people – the key to their continuous success is them providing opportunity, nurture talent, developing leaders and reward achievement. Through their experience they believe that a team of well trained individuals with diverse backgrounds and experiences, working together in an environment that fosters respect and drives high levels of engagement.

Believing in the McDonald’s system – their foundation is based on their business model depicted by the “three-legged stool” of owner/operators, suppliers and the employees and their balance of interest among the three group is key.

Operation of business ethically – At McDonalds, business is run to high standards of fairness, honesty and integrity, individually being accountable and collectively responsible.

Giving back to their communities – They help their customers build better communities, support Ronald McDonald House Charities, scope and resources to help make the world a better place.

Growing the business profitably – As McDonalds is a publicly traded company, they work continuously to provide sustained profitable growth for their shareholders.

Continuously striving to improve – Through constant evolution and innovation, McDonalds aims to anticipate and respond to changing customer, employee and system needs.

Stakeholder Analysis

It is a technique adopted by organizations, used to identify and assess the importance of key people, groups of people, or institutions that may significantly influence the success of their activities or projects. This technique can either be used alone or with team members involved.

 

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