Introduction and Background
Company description
Company profile
In the year 19540, McDonald’s was founded by Maurice McDonald and Richard in San Bernardino, California, United States (Mcdonalds.com 2018). This can be considered as the popular fast food manufacturing organization in the current business industry. The company McDonald’s has established its popularity in the market by providing good quality of products at the reasonable prices. The company serves the customers through its 30,000 restaurants in near about 100 countries (Mcdonalds.com 2018). It has introduced diversified products in the fast food industry, which has helped the company to increase its brand value. After the year 1990, the company named McDonald’s has established its growing plans in the market. In the year 2003, the company adopted new leadership strategy for bringing the organizational development. The product named Hamburger is the bestselling product of the company. If the business revenue of the company named McDonald’s is being analysed, it will be identified that in the year 2017, the business revenue of the company was 22.82 billion US dollar. However, in the year 2013, the business revenue of the company was 28.11 billion US dollar (Mcdonalds.com 2018). After analysing the financial report of the company, it has been identified that with in last three years the company has faced the financial challenges. However, in the year 2018, it has been identified that the business revenue has increased 0.1% (Mcdonalds.com 2018).
Describe Porter’s five forces of the company
|
Situation |
Analysis |
|
Existing rivalry |
In the UK business industry, there are various fast food selling organizations, which have established its strong brand image in the market (Dey 2016). In the fast food selling industry, Starbucks, Yum Brands, Subway and Barger king has created tough competition for McDonald’s. Not only the market popularity but also these organizations have introduced same types of product in the market. This indicates that the company is facing tough competition from the existing organizations. |
|
Bargaining power of the customer |
As UK market has brought the large scale of opportunities for the organizations, therefore, the availability of food selling organization is high (McDonald et al. 2016) As its result, the customer gets various options before purchasing any products from the market. Therefore, this can be said that bargaining power of the customers is high. |
|
Bargaining power of the supplier |
On the other hand, with the increasing rate of organizations in the market, the number of the supplier has also, which maintains the supply of raw material in the organisation (Duke 2017). Therefore, this can be said that bargaining power of the supplier is moderate. This can be considered as the positive influence on the organizational development. |
|
New entrants |
With the developing economy, the new small organizations have got the chance to enter the UK food industry (McLean 2018). Therefore this has increased the competition for McDonald’s in the market. |
|
Substitute products in the market |
The new entrants have introduced similar products in the market in lower ranges, as its result, McDonald’s has faced various challenges. |
Conduct PESTLE analysis
|
Situation |
Analysis |
|
Political |
The political situation in the UK is not in the peaceful situation. After the vole of Brexit, the government of UK has decided to cut all the business elation with European countries (Irani and Sharif 2018). This has impacted on the customer base of McDonald’s in the international market. On the other hand, it has also influenced the business revenue of the company. |
|
Economic |
If the GDP rate of UK has been analysed, it will be identified that it is gradually increasing. From the report of January 2018 this can be said that the British economy has grown 0.1 percent compared to the previous year (Martin et al. 2016). Therefore this can be said that UK Economy is in the favourable situation for McDonald’s as it increases the rate of employment. |
|
Social |
People of UK are brand fascinated, and standard of living of them is high. Therefore, this can be said that the company named McDonald’s always faces the pressure for maintaining its popularity in the market (Burns et al. 2016). On the other hand, this can be said that this living standard impacts on the labour wages. Hence, this has been identified that social situation of UK business industry is not in favourable condition for McDonald’s. |
|
Technological |
Various software and hardware have been developed in the industry (Andreou et al. 2018). By using the modern technology, McDonald’s has developed strong promotional strategy and product delivery system, which has helped the organization to grab a large number of customers’ attention. |
|
Legal |
The government of UK has introduced various strict international rules and regulations, which have created challenges for the company in order to expand its business (Andreou et al. 2018). |
|
Environmental |
The Environmental protection act 1986, has various changes in the waste management and carbon emission in the business industry (Burns et al. 2016). As its impact, the company named McDonald has brought changes in its packaging. |
Critical discussion the business issue of the company
Major issues within the industry of the company
In this study, it has been identified that the UK fast food manufacturing industry is dealing with the issues regarding large numbers of products in the market in order to run with the competitors, the food product developers are generation modern ideas in the industry (Kelly, 2016). As its result, none of the products is able to attract the customers for a long period. On the other hand, it has been identified that start-up companies are developing same types of products in the market (Ziv et al. 2018). This has increased the competition. If the rules and regulations in the UK food industry are being analysed, it will be identified that there are numerous rules and regulations, which have created various challenges for the food selling organizations. Food Safety Act 1990 and Food standards Act 1999, has created pressure on the organizations for maintaining food hygiene in the food selling industry (Watson et al. 2018). In the fast food industry, it is the biggest issue that is affecting the food industry in the UK is Brexit. It has been mentioned that near about 10% vegetables and foods come from the European countries. After the Brexit incident, supply chain gets hampered (Kelly, 2016).
Situation Analysis
What is the company’s business issue?
In the current scenario, it has been identified that the company named McDonald’s has started losing its market share from the UK fast food industry (MacDonald, 2017). It has also been identified that due to increase number of competitors in the market the sales revenue of the company has also decreased. With the increasing competition in the market, the business organizations have brought various changes in the management system; however, due to huge corporate standards, the company is not being able to bring the necessary changes in its management. As its result, it has become very difficult for McDonalds’s to manage the situation (McDonald et al. 2017). The company has also faced the issues regarding its confusing price menu. This has been identified that McDonald’s has the confusing menu because it features its menu in the dollar. On the other hand, the items are premium offerings, which are very expensive for a large number of customers. The company is not providing good quality of products in appropriate ranges. Therefore, this can be said that it has created various challenges for the company. Within last few years, the company has added near about 100 items in its menu. This has created the complexity in its menu. This has become so confusing for the customers to understand (Mcdonalds.com 2018). Not only the customers are suffering but also this has blogged the workers, which has decreased their performance speed.
Examine the company business issues from different perspectives
If the issues of Starbucks are being analysed it will be identified that the company is running is the huge financial loss. It has been identified that mist of the shareholders has refused to invest in this organization for its decreasing financial revenue (Starbucks.co.uk 2018). On the other hand, it has been identified that the company is losing its availability of customers in its stores. This has impacted on its popularity as well as sales revenue. The study has also mentioned that Starbucks traffic was flat in the current quarter (Starbucks.co.uk 2018). In the case of Burger King, this has been identified that the company is dealing with the identity crisis (Burgerking.co.uk 2018). This has been identified that the popularity of brand image of the company has decreased. Therefore, this has become very difficult for the organization in order to survive in the market (Burgerking.co.uk 2018). With the increasing competition in the market, it has become very difficult for the company to run with the competition. After analysing the issues of the other popular organization in the market, this can be said that issues of McDonald’s can be solved easily. As the company is dealing with its pricing and market share related issues, therefore, this can be said that if the company focuses on developing strong management in the workplace, it will be beneficial for the company.
Existing Rivalry
Argue by discussing your opinion on your company business issue critically by
After analysing the entire business issues, it has been identified that although the company is dealing with the issues regarding the menu and decreasing market share in the organization will focus on bringing the changes in its organization. The CEO can take the wise step in the case of dealing with the issue chain; it will be more beneficial. If the company focuses on national brand campaigning, this will help the organization to get back its brand image in the international market. On the other hand, if core menu items will be introduced, this will be helping in reducing the menu confusion. In order to deal with the financial crisis, the company can focus on bringing the changes in its financial structure. By developing the strong relationship with the franchises, this will be helping to deal with the situation.
As stated by Ansari and Riasi (2014), marketing is an essential element in business development. By developing campaigns in the international business industry, the business organization gets the chance to establish its strong brand image. By supporting this Gensler et al. (2015) said, the campaign is the smart business strategy which helps to grab the attention of large scale of customers at a time. On the other hand, Wansink and Love (2014) opined that due to large menu list, employees are being failed to serve the customer within the expected time, this impacts on organizational impression. As the market share of the products has decreased, therefore, this can be said that if the organization focuses on satisfying the stakeholders by providing rewards, this will influence them to invest in the organization.
The executive officer of McDonald’s named Steve Easterbrook has said that “While our second quarter results were disappointing, we see early signs of momentum. Looking ahead to the third quarter, we expect positive global comparable sales… ” (Mcdonalds.com 2018). In order to deal with the situation, the company has introduced the campaign named “I’m loving it”, which is introduced by partner and Heye (Campaignlive.co.uk 2018). This has helped the company to increase its popularity in the market. Executive vice-president of McDonald’s named Larry Light, and global chief marketing officer at McDonald’s, created the tagline ‘I’m lovin’ it’ , which had become major part in the language and added that the campaign, “the attitude and all of our integrated marketing” , which have helped the company named McDonald’s dramatically (Campaignlive.co.uk 2018).
Bargaining Power of Customers and Suppliers
Reflection on the contemporary business issue
How the contemporary business issues have given me the opportunities?
In the above study, I have identified that the company named McDonald’s is dealing with the contemporary issues regarding the chain management, decreasing share in the market and menu confusion. In the current business scenario, the company has also loosed its popularity in the market. Therefore, this can be said that it has brought tough situation for the company. On the other hand, this has also been identified that most of the food selling organizations are dealing with the same types of issues. This can be said that it is the current business scenario, this has brought opportunities for me. In this situation, when the Economy of UK is developing in the fastest way, this can bring advantages for me to develop my business. In this situation, if I will be able to develop my own fast food selling business, I will be able to grab the attention of the customers. On the other hand, after analysing the issues, I have learned that which types of issues can occur. With the issues, I have also get the knowledge about the causes of the issues. In this study, I have also learned about the recommendations.
The importance of marketing has become clear to me. Depending on the marketing strategy, I will be able to, develop the proper marketing strategy, which will be helping me in the case of increasing my brand value. He re I have also identified that McDonald’s is dealing with the issues regarding the issues regarding its menu confusion. The company has introduced a large number of dishes in its menu. Therefore this has become so difficult for customers to decide. On the other hand, I have also identified that the company was not providing the god quality of products in the reasonable range. As its result, most of the customers were not being able to experience the products. Due to an excessive rate of products, it has become very difficult for the employees to provide good service to the customers. Therefore, this can be said that if will focus on selecting my menu properly by introducing reasonable product ranges, this will be easy for me to attract a large number of customers. This will also be helping in the case of providing efficient customer service in the organization.
Considering the business issues in different perspective allowed me to find the new ways of approaching
New Entrants and Substitute Products
After identifying the contemporary issues of Starbucks and burger king, I have analysed that the marketing and customer relation is very important part of a business organization. If the organization provides good quality of products in the reasonable ranges, the customers will be attracted towards the organization. On the other hand, I have also analysed that by increasing the menu, the complication in the organization increases. After analysing the issues, I have understood that if the internal management is strong enough to accept the changes, it will help to increase the productivity of the organization. I have also analysed that by if the internal management structure will be less complex, this can also help to adopt the changes easily.
Articulating/revising/re-evaluating my opinion gave me the opportunity to examine/explore/become an independent learner
After analysing the study, I have begun to analyse my knowledge about the issues which can be occurred in an organization. I have also got the knowledge to analyse the important element, which is required for business development. After analysing the business issues, I have learned that marketing is an essential part of business development. As the company named McDonald’s has introduced the strong marketing strategy for grabbing the attention of the customers, therefore this can be said that if my organization faces such kind of issues, I will be able to develop an effective marketing strategy for developing my organization. It has helped me to develop new ideas in the management so that my employees will be efficient to maintain the relationship with the customers.
It helped me to expand my professional knowledge/gain a sense of ownership of my professional development
In this study, I have learned about the contemporary issues in fast food manufacturing industry in the UK. Through this study, I have also analysed the importance of marketing in the case of developing strong brand value. I have got the knowledge from my previous experiences that depending on the preferences of the customers, the pricing strategy needed to be developed in the organization. This has helped me to develop my personality so that I will be able to take the challenges. On the other hand, I have also analysed that shareholders are very important in an organization. Therefore, I have learned to satisfy my shareholders and convince them in investing more in my organization. Through this process I have understood that, if I want to maintain the popularity of my organization, I need to focus on customer satisfaction. For increasing the customer satisfaction, I have learned to develop new facility in the organization, which will influence the business revenue of my organization indirectly.
Political, Economic, Social, Technological, Legal and Environmental Analysis
Reference list and Bibliography
Andreou, A.P., Trimboli, M., Al?Kaisy, A., Murphy, M., Palmisani, S., Fenech, C., Smith, T. and Lambru, G., 2018. A prospective real?world analysis of OnabotulinumtoxinA in chronic migraine post?NICE UK technology appraisal. European journal of neurology.
Ansari, A. and Riasi, A., 2016. An investigation of factors affecting brand advertising success and effectiveness. International Business Research, 9(4), p.20.
Burgerking.co.uk 2018. Available from www.burgerking.co.uk/ Accessed on 11 May 2018
Burns, C., Jordan, A., Gravey, V., Berny, N., Bulmer, S., Carter, N., Cowell, R., Dutton, J., Moore, B., Oberthür, S. and Owens, S., 2016. The EU Referendum and the UK Environment: An Expert Review. How has EU membership affected the UK and what might change in the event of a vote to Remain or Leave.
Campaignlive.co.uk 2018. Available from https ://www.campaignlive.co.uk/article/im-lovin-it-hit-mcdonalds-aims-new-markets/210812?src_site=brandrepublic Accessed on 11 May 2018
Dey, K., 2016. The fast food industry in the UK. Analysis of McDonalds with PESTEL, VRIN and Porter’s Five Forces.
Duke, D., 2017. Porter’s Five Forces and the Coffee Industry. Management Teaching Review, p.2379298117726765.
Gensler, S., Völckner, F., Egger, M., Fischbach, K. and Schoder, D., 2015. Listen to your customers: Insights into brand image using online consumer-generated product reviews. International Journal of Electronic Commerce, 20(1), pp.112-141.
Irani, Z. and Sharif, A.M., 2018. Food security across the enterprise: a puzzle, problem or mess for a circular economy?. Journal of Enterprise Information Management, 31(1), pp.2-9.
Kelly, B., 2016. The Impact of Brexit on Food and Drink Regulations. World Food Regulation Review, 26(3), p.28.
Kelly, K.M., Ellington, L., Schoenberg, N., Jackson, T., Dickinson, S., Porter, K., Leventhal, H. and Andrykowski, M., 2015. Genetic counseling content: How does it impact health behavior?. Journal of behavioral medicine, 38(5), pp.766-776.
MacDonald, S., 2017. The Impact of Brexit on International Cultural Relations in the European Union.
Martin, R., Pike, A., Tyler, P. and Gardiner, B., 2016. Spatially rebalancing the UK economy: Towards a new policy model?. Regional Studies, 50(2), pp.342-357.
McDonald, M., Bridger, A.J., Wearing, S. and Ponting, J., 2017. Consumer spaces as political spaces: A critical review of social, environmental, and psychogeographical research. Social and Personality Psychology Compass, 11(7).
McDonald, N.E., Curran-Sills, G. and Thomas, R.E., 2016. Outcomes and characteristics of non-immobilised, spine-injured trauma patients: a systematic review of prehospital selective immobilisation protocols. Emerg Med J, 33(10), pp.732-740.
Mcdonalds.com 2018. Available from https://www.mcdonalds.com/gb/en-gb.htm Accessed on 11 May 2018
McLean, M., 2018. Understanding your economy: Using analysis to guide local strategic planning. Routledge.
Pena-Fernandez, A., Del Águila, C., Fenoy, S., Magnet, A., Khan, B., Gould, F., Lobo-Bedmar, M.C. and Izquierdo, F., 2016. Detection of new emerging pathogens microsporidia in recreational areas in Leicester, UK: potential risks for human health. Toxicology Letters.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
Starbucks.co.uk 2018. Available from https://www.starbucks.co.uk/ Accessed on 11 May 2018
Wansink, B. and Love, K., 2014. Slim by design: Menu strategies for promoting high-margin, healthy foods. International Journal of Hospitality Management, 42, pp.137-143.
Watson, D., Yap, S., Pandi, S., Husband, J. and Tekelas, F., 2018. Implications of Food Safety Cultural Compliance in the Food Manufacturing Sector. Acta Scientific Microbiology, 1(4).
Ziv, G., Watson, E., Young, D., Howard, D.C., Larcom, S.T. and Tanentzap, A.J., 2018. The potential impact of Brexit on the energy, water and food nexus in the UK: A fuzzy cognitive mapping approach. Applied Energy, 210, pp.487-498
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
