McDonalds Introduction

McDonalds is a worldwide franchise restaurant,

Serving nearly 68 million customers per day in 119 countries.
Thus, it also recognized by the golden arches.
McDonalds provides fast foods such as burgers, French fries, and so on.
They serve the world some of the favorite foods such as World Famous Fries, Big
Mac, Quarter Pounder, Chicken McNuggets and Egg McMuffin.

History of McDonalds
In year 1940, McDonalds Bar-B-Que opens in San Bernardino, California, by
Dick and Mac McDonald.
After a three-months shut down for alterations, McDonalds has reopens as a selfservice drive-in restaurant,
In year 1955, the first McDonalds restaurant has opened in Des Plaines, Illinois,
and they got $316.12 of sales in the first day and the McDonald's Corporation was
created.
McDonalds start to promote Hamburger University and indoor seating restaurant
in year 1960s, and they started to go internationally in year 1967.
The first McDonalds restaurant in UK was open at October of 1974, which was
the 3000th McDonalds restaurant in the world. The location of the first UK
McDonald is Woolwich, south east London.
According to the Wikipedia Report of McDonalds in year 2012, McDonalds has
getting more and more outlets, on the end of year 2012, there are over 34000
McDonalds restaurant in 119 countries.
And UK has approximately 1200 McDonalds outlets.
As per the Daily news paper on 04th of January 2013, McDonalds is the 4th
Most Valuable Global Brand in the world.

Ofcom- Independent regulator & competition authority for the UK communications

industries
Cateora- Philip Cateora Author of International Marketing

McDonalds Great Britain The Turnaround Summary

McDonalds US - An active growth cycle.
Sales in Great Britain did not show a similar movement. Sales in 1,235 outlets had
been sluggish (slow-moving) for years.
Reasons for drop:

New chains such as Yo! Sushi and Nandos Chicken restaurants.

Operators such as US based subway restaurants.
Starbucks
Scare over mad cow disease
Concerns about rising obesity.

Lackluster (uninspiring) performance in Great Britain affected European

operations too.
European market is the second largest market after America, responsible for
30%of profits.
In 2005, European sales fell 0.7% while US sales grew 4.7%

Question 1
Identify the problems confronting McDonalds, U.K. and list them from the most to the
least critical. For each problem identified, explain your reasoning.

1. Negative Images & Impressions from Media,

Documentary, Press and others
The most critical problem that McDonalds U.K. faces is the impact of negative
news and documentaries that exploit the lack of health in their menu.
With the rise of vegetarianism and green or raw diets, the demands of the
nutritional balance of foods are very high.
Therefore, McDonalds are no longer satisfied those customers, as consumers are
be influenced by the media, documentary and presses.
The bestselling book Fast Food Nation, which revealed about the mad cow
disease that fears consumer from purchasing McDonalds. Nevertheless, the beef
or patties in McDonalds can come from up to 100 difference cows.
Ofcom- Independent regulator & competition authority for the UK communications
industries
Cateora- Philip Cateora Author of International Marketing

 Hit film Super Size Me was a significant strike against McDonalds as it gives
compelling data against the food they provide.
A documentary, McLibel has also recounts and reopened McDonalds old
wounds, and it affects the image of McDonalds.

2. Health Issue
British government aims to reduce childhood obesity. They had the policy to
prohibit various television channels to play any junk food advertising before
9.00 pm, and to reduce the opportunities for children to watch these
advertisements, which McDonalds is one of them.
According to the British experts, cola, soft drinks, candies, French fries, potato
chips, hamburgers and many other high sugar or high-oil food, salty snacks, are
the main culprit to cause young people overweight and obese.
According to the British government radio, television, and communication sector
Ofcom statistics, it has showed that 70% of UK school-age children watch TV
between 6 pm to 9 pm, which more and more people obese because of eating too
much snacks and lack of exercise.
The WHO warned that the obesity has serious effected the global health and
economic development.
Moreover, not only about health conscious, the food that serves in McDonalds is
lacking its quality and standards, which is also a disadvantage for McDonalds.

3. Layout, Design
It is observe that Starbucks has made McDonalds outlets look sterile and out of
date. There are many McDonalds customer had been attracted by the Starbucks
outlets.
According to Clifford Burrows, the GM of Starbucks U.K., they take
McDonalds as a competitor, and as a result, many consumers will choose
Starbuck instead of McDonald.
The McDonalds restaurant design of yellow, white, and red color with plastic
furniture has made people feel boring and dry. Due to the trends, consumers need
something different and new that can refresh them.

4. Service Standard Decreases

. Service standard is also one of the most important roles in every restaurant.
Ofcom- Independent regulator & competition authority for the UK communications
industries
Cateora- Philip Cateora Author of International Marketing

 But, McDonalds is facing problem on services that provided by the staffs and
employees.
According to Cateora(2009), it had stated that the performances on the services in
McDonalds UK has been slipping. In order to keep customers come back, it is
important to provide good services. Customers will not only just walks away and
never come back again.
They will start mouth-to-mouth complaining to their friends and family, so that
they will not go dine in McDonalds because of the bad services provided

5. Competition
The fast food industry has becoming an increasingly competitive sector.
Although McDonalds is the clear leader of the fast food industry in terms of
revenues generated and restaurants established, but they still faces competition
from other fast food chains, such as Burger King Corporation, Wendys
International, Carls Junior, Yo! Sushi, Jack in the Box Inc, and much more.
Other new chains that come into the market such as Nandos Chicken, have
outpaced McDonalds as well.
Operators such as U.S.-based Subway Restaurants are pulling in their customers
with fresh salads and sandwiches on focaccia bread.
Therefore, there is a need to maintain the standards and quality in every sector of
the restaurant, so that consumers will not change their targets by visiting other
outlets, and be more loyal to McDonalds.

Question 2:
Some problems you identified in question1 may require a quick fix in the short run,
while others may require a major shift in company strategy. Assuming that you cannot
focus on all the problems at once, suggest the order in which the issue should be
addressed and suggest an approach to solving each problem.

1. Quality of Food
The most important issues that most of the consumers face is their menu,
McDonalds used to be a very famous and delicious fast food restaurant, where
their food is good in standard and quality.
According to the case study, most of the problems that occur are about food. For
example, their bread taste like cotton or wool, and the beef patty is lacking its
texture compare to the past.
Ofcom- Independent regulator & competition authority for the UK communications
industries
Cateora- Philip Cateora Author of International Marketing

 Therefore, it is a need to improve the quality of their food, get back into their
basics, and gain back their old customers.
McDonalds can also add in more options on their menu, so that customers can
have more choices. For example, McDonalds breakfast is one of the good
starts, to provide more choices to fulfill consumer needs and wants.
According to the case study, it has also mentioned that McDonalds has actually
selling health food such as salads and fruits. However, the quality is still lacking,
because McDonalds is still a franchise fast food restaurant.
As health food is one of the big things in the industry nowadays, it is important
for McDonalds to address the health value of their menu, and continue to add
more light options. They can add in more choices and options for their salads and
their dressings, salads without meat are encouraged, to attract more vegetarians.
Moreover, McDonalds can also try to add in organic foods into their menu, which
will lead to a great boost on their business.

2. Services
According to the case study, McDonalds services have been slipping; it has
become inefficient and inconsistent, so as their cleanliness.
According to the case study, customers are outspoken and they criticize.
Therefore, as the service in McDonalds is bad, customers will start criticizing the
bad services provided in McDonalds, which lastly affects the business to
decrease. It is important to develop the services of their staffs and employees.
Therefore, providing training for new and existing employees on how to treat
customers is an excellent step to take.
Moreover, accepting the responsibility when there are customer service problems,
and following through on disciplinary actions in order to prove both the customer
and employee that McDonalds do take their customer services in a serious
manner.
Maintaining the cleanliness is also very important as guests can dine in
McDonalds in a more clean and comfortable environment.
By doing so, it will not only get back customers satisfactions, they will start
mouth-to-mouth praising McDonalds services and makes them come and dine.

3. Design/Layout
Ofcom- Independent regulator & competition authority for the UK communications
industries
Cateora- Philip Cateora Author of International Marketing

 As mentioned above, Starbucks has made McDonalds outlets look sterile and out
of date. As comparison, the design in Starbucks is modern and trendy, while
McDonalds still remain the old trend- yellow, white, and red color with plastic
furniture.
It has showed that the design and layout in McDonalds has becoming boring, dry
and out to date. Therefore, it is a need to improve the designs in McDonalds, by
making them into a more classy and trendy so that it can attract customers to sit
and dine in McDonalds.
However, McDonalds is trying to get into the trend by redecorate and refurbish
their outlets in UK. Therefore, it is very important for McDonalds to keep the
faith by putting trendy designs in the restaurant and in the same time remain their
trademark such as the big yellow M, or the McDonalds clown.
Not just the restaurant layout, the costumes and the uniforms is also one of the
tools to make the restaurant more trendy and modern.
As a fact, if the restaurant design is modern and trendy but the service crews
uniform is odd and out of fashion, it will pull down the images of the restaurant as
well.
Moreover, service staffs not only dress in a more fashion look, but also with the
requirement that related with the restaurant.
It is not to show that they look trendy and good, but to show how the way they
dress as professionals, which is part of the service that can pull attentions, as
consumers need something difference and new that can refresh them.

4. Culture
McDonalds is a franchise company that locates in worldwide; therefore, it is hard
to keep the same procedure in every country, because different countries have
their different cultures.
It is impossible to fix each McDonalds outlets into the same culture. Therefore, it
is recommend that McDonalds can actually recruit menu, designs or even
services that suits with the cultures in the respective location.
By doing so, it can attract customers attention because McDonalds is getting
closer to their culture not only on design but their menu selections.

Conclusion
As conclusion, although McDonalds has become so successful as compare with
the pass until now. However, due to the expansions and developments in the food
Ofcom- Independent regulator & competition authority for the UK communications
industries
Cateora- Philip Cateora Author of International Marketing

and beverage industry, McDonalds has facing a lot of problems and threats that
affects their business as well as their revenue and profit.
Things such as the increases of competitors, the negative publicities upon
McDonalds, the quality of food and service, customer changes in tastes and
more. All these are their greatest disadvantages that definitely affects McDonalds
image and therefore it turns down their business.
As when all these threats are getting increase, McDonalds is facing a huge
decrease in revenue, and they then start to put actions on it, to pull back the
business. However, because of the bad images that has already created and
customers perception on McDonalds has changed to unhealthy food, they find
hard to turn their way back to what they used to be.
Due to the problems that occurred, McDonalds has trying their best to improve
and maintain their standard in menu, services, and environment, to gain back
customers attention.
They add up extra selections on the menu such as McDonalds breakfast, and
giving out fresh and healthy foods such as salads and fruits.
Moreover, McDonalds also promotes special offers on their menu such as a larger
burger. They also changed their layout and designs in their restaurants and provide
extra service such as free Wi-Fi services, to give customers fresher and better
environment to dine.
Although they give out many ideas and strategies to get back their customers, they
still need to put more efforts on it, to show customers that they are improving.
However, McDonalds is still many peoples favorite food, and they will be more
successful if they really put efforts for improvement.

Ofcom- Independent regulator & competition authority for the UK communications

industries
Cateora- Philip Cateora Author of International Marketing