Discuss about the Introduction of New Product in Mcdonald Australia Holdings.
McDonald is one of the popular brands globally. The company offers its customers fast food that meets their personal need. It has branches all over the world and its headquarters are located in Australia. According to (The Economist Newspaper 2016), “McDonald’s restaurants stand amid American capitalism’s biggest success stories of private organizations. In the year of 1948, they started with just one burger stall. Their prominence on quick service and a consistent menu has helped it to create to more than 35,000 shops around the world. It worked hard to survive through an unsteady period in the early 2000s. Later, the firm’s share price increased from $12 in 2003 to more than $100 at the end of 2011.”
The Economist Newspaper (2016) further, explains “McDonald’s has lost its sizzle. Worldwide sales have been dilapidated since at least last July. When the company declaired its yearly results on January 23rd, analysts think it will disclose its first full-year fall in like-for-like revenues since 2002.” Due to high competition for its competitors such as Burger king, there is a need to improve services offered by the company and if possible, develop some new products that comprehend competitive products offered by the competitors of the company. This market research shows McDonalds dedication to continuously satisfy their customers by sustaining available products and possibly introducing new product in the market known as “Make your burger”.
According to (McDonalds 2016), “McDonald’s is the world’s foremost global food & beverage service vendor with over 36,000 locations in over hundred countries. More than 80% of McDonald’s restaurants around the world are owned and operated by autonomous local business men and women.” The success story of McDonald has been supplemented by its supply and franchises known as the “System”.
Their “system” has enabled them to Identify, evaluate, implement and scales their customer needs and come up with products that satisfy their customer’s preference. According to (McDonald 2016), “the goal of this company is to become a contemporary, progressive burger company that can deliver an up to date customer experience.”
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Strenghts · Expanded income streams · Brand status combined with market management · Food menus modified to meet local preference · Hugemarketing budget · Effective restaurant management |
Weakness · Variable menus in diverse countries · Negative Reviews · Critic of being a cheap place to buy fast food · Low quality services and food · Product are sold based on price rather than merchandisedifferentiation |
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Opportunities · Develop public image · Develop McCafé network distinctly from the outdated McDonald’s restaurants · Develop improved McDelivery services · Develop ‘Make your particular burger’ service · Target middle class in countries such as China |
Threats · Increasing competition · Political authorizations · The unstable U.S. dollar and Euro exchange rate could affect the company revenue negatively. · New implemented work regulations and food safety policies. · Constant negative publicity · Diminishing need for fast food |
Table 1: Findings of the SWOT table
(Source: Shen and Xiao 2014)
Strengths
As mentioned by, (strategic management insight 2013 – 2016) “Sales of McDonald from its restaurants were US$16.488 billion or 64.9% of its total revenues. In 2015, their revenue from their franchise stores was US$8.925 billion which was 35.1% of the company’s total revenue.” The net income generated from various locations boosts the company’s total revenue.
Brand status combined with market management
The market management comprehends with the brand management. McDonald has a good reputation of providing fast food to customers globally. Its marketing team and management team are working in hand with the production team to ensure that they offer their customers consistent services regarding the quality of their products.
Food menus modified to meet local preference
Another strength of McDonald restaurants is the fact that their marketing team is thorough to get details regarding preference of the local customer. This gives them the advantage of only manufacturing products that are on demand thus, ensuring fast sales of products produced.
Huge marketing budget
McDonalds holding have invested their time to market its Brand name which enables individuals to give it the first priority whenever they think of purchasing fast food. This is another advantage they have over their competitors.
Effective restaurant management
McDonald restaurants are well managed in terms of fast services and top notch technology. The embrace of use of debit cards and credit cards for payments is one of the best technological practice embraced in McDonald’s restaurants that makes it easier and safer to purchase fast food
Variable menus in diverse countries
McDonald menus are not consistent in different cities/ locations. This always affects customer’s preference when one travels or visit a different McDonald store.
Negative reviews
Negative reviews from customers who have had bad experience with the quality of food produced by McDonalds holding affects the brand name. There is a need for the quality assurance team to work with the production team to ensure food produced meets the taste and preference of customers to avoid future negative reviews.
Critic of being a cheap place to buy fast food
McDonalds holding is known to offer cheap fast food. This makes it a favorite joint sport for the middle-class family (Gao 2013). This SWOT analysis recommends that the company should introduce the “Make your burger” to comprehend this critics.
Low quality food service
According to (The economist Newspaper Limited 2016), “Sales in China fell piercingly after it was discovered in July 2015, that their suppliers were using expired and contaminated chicken and beef. More in recent times, numerous Japanese consumers have complained that bits of plastic and even a tooth were found in their food.”
Product are sold based on price rather than merchandise differentiation
Products sold for customers are sold on a competitive market price rather than competitive quality products.
Opportunities
Develop public image
Given that the company has the best advertisement skills compared to its competitors, McDonalds has a great opportunity to redevelop on its public image by improving the quality of food and services they offer their customers (Ghobadian and O’Regan 2014).
Develop McCafé network distinctly from the outdated McDonald’s restaurants
By expanding McCafé networks from separate traditional McDonald’s the company stands out to have a chance of equipping the new McCafé with the latest food processing technological advancements which are more likely to deliver high-quality products to its customers.
Develop improved McDelivery services
The company should embrace McDelivery to customers’ homes and offices services. This is an additional marketing service that will attract buyers who prefer telecommuting to purchasing food and beverages from McDonald stores.
Develop ‘Make your particular burger’ service
McDonalds holding should introduce “Make your bugger services to customers”. This will invite more buyers to come up with their creative preferences to order food that best suits their taste.
Target middle class in countries such as China
China has the biggest population worldwide. McDonalds is popular to offer cheap services to its customers. The company should take advantage of this opportunity to offer their services to the growing population of China middle class to get a significant number of sales of their products.
Increasing competition
Several companies offering similar services as McDonalds have been developed and they are doing well in the market (Crawford 2015). This is a possible threats that if customers are not satisfied with the quality of food and beverages they purchase from this company, they might change their preferences to get similar services elsewhere such as in Burger King.
Political authorizations
According to (The Economist Newspaper Limited 2016), “some Russian outlets were momentarily closed by food inspectors, when America and other countries of Europe raised their voices against Russia over its armed involvement in Ukraine. Some politicians demanded that the brand must be eliminated from Russia forever (Gayle and Luo 2015).”
The unstable U.S. dollar and Euro exchange rate could affect the company revenue negatively.
The exchange rate for the euro versus U.S dollar has a significant effect on the Gross Income potential of sales achieved with McDonald company holdings (Xu 2014). The euro has dropped tremendously in Europe which is affecting the overall income generated from sales of McDonald products in Europe.
New implemented work regulations and food safety policies.
McDonalds Company works in hand with their clients to meet the government food and safety regulations. According to (McDonald’s food safety 2010-2016) “Partnership with suppliers is a serious part of McDonald’s advance to adapt existing wealth and establishing new technologies that keep on guaranteeing food superiority and safety.”
This is another threat that is haunting McDonald retail performance (Paul and Roy 2014). However, it can be eliminated by constantly improving the quality of food and beverages produced and marketing of new products that meet customer’s preferences.
Diminishing need for fast food
Fast food is considered to have serious health hazards that affect the human body. The increased debates to diminish fast food is a possible threat to McDonalds Company Ltd.
From the findings illustrated above, we conclude that McDonalds is has been doing well as a fast food service provider. The targeted market for this company is the middle class. The company should focus on countries that have a significant number of the middle class and offer their distinct services in regions that have potential markets. The possible new product that the company should offer its clients is the “Make your burger” service. This gives its customers the advantage of creating their bugger using their most preferred respites offered by the company. This fact will generally attract more customers.
The customer value to be embraced by customers while introducing this service to the market is to ensure that all recipes to “Make your burger” are top notch regarding taste and preference of the buyer. The company should also ensure that they offer their customers fresh products that have not expired to avoid negative feedback from customers as experienced in China.
The new product suits the SWOT analysis by boosting the strengths of the company to offer unique service compared to its competitors. It complements the weakness of the company from the bad reputation of offering customers low-quality food to offering them food and beverages that meet their best preferences. Nevertheless, it creates an opportunity to the company to attract more customers who are interested in making their own buggers using the recipes that the companies offer. It also eliminate possible threats of creating burgers hat have excessive fats by allowing buyers to create their own burgers regarding fat content and calories that they believe suits their health effectively.
Reference
Crawford, A., 2015. McDonald’s: A Case Study in Glocalization. Journal of Global Business Issues, 9(1), p.11.
Doria D, 2002., Management 222, (P.L. 1-17)
Gao, Z., 2013. Revisiting the Golden Arches in China The Chinese Discourse on McDonald’s between 1978 and 2012. Journal of Macromarketing, 33(4), pp.288-305.
Gayle, P.G. and Luo, Z., 2015. Choosing between Orderâ€Âofâ€ÂEntry Assumptions in Empirical Entry Models: Evidence from Competition between Burger King and McDonald’s Restaurant Outlets. The Journal of Industrial Economics, 63(1), pp.129-151.
Ghobadian, A. and O’Regan, N., 2014. A case study and interview with Jill McDonald CEO and President of McDonald’s Northern Europe Division.Journal of Strategy and Management, 7(1), pp.87-100.
McDonald’s Corporation, 2008. Marketing at McDonald’s (P.L. 1-6)
McDonald’s report, 2009. Executive Summary (P.L. 1-33)
McDonald’s, (2010-2016),. Company Profile, (Online) Retrieved from:https://www.aboutmcdonalds.com/content/mcd/investors/company-overview/company-overview-segment-information.html Retrieved on 30th July 2016.
McDonald’s, (2010-2016). Food Safety (Online), Retrieved from: https://www.mcdonalds.ca/ca/en/food/making_informed_choices/food_safety.html Retrieved on: 30th July 2016
Paul, R. and Roy, S.K., 2014. Case Study 11: Marketing of Services: The McDonald’s Way. In Marketing Cases from Emerging Markets (pp. 99-112). Springer Berlin Heidelberg.
Shen, Q. and Xiao, P., 2014. McDonald’s and KFC in China: Competitors or Companions?. Marketing Science, 33(2), pp.287-307.
Strategic Management Insight, (2013-2016), Mcdonald’s Swot AnalysiS 2016 (Online) Retrieved from: https://www.strategicmanagementinsight.com/swot-analyses/mcdonalds-swot-analysis.html Retrieved on: 30thJuly 2016.
The Economist Newspaper Limited, (2016),. The Economist Explains: Why Mcdonald’s Sales Are Falling (Online) Retrieved from: https://www.economist.com/blogs/economist-explains/2015/01/economist-explains-7 Retrieved on: 30th July 2016.
Xu, Y., (2014). Understanding CSR from the perspective of Chinese diners: the case of McDonald’s. International Journal of Contemporary Hospitality Management, 26(6), pp.1002-1020.
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