McDonald's Case Study Georgia Elwin 12FT

Intro

McDonald's is a part of the Food Service and Catering sector and is an example of a tertiary producer. This means that they are part of the third stage of production which involves preparing and serving food to consumers.

Level of Operation and structure of ownership

The McDonald's franchise is a multinational company that operates all over the world. In fact, McDonald's runs an ever growing number of 34, 480 restaurants in 119 different countries. Qualities of a multinational company are reflected through McDonald's including their high volume of produce, and earning a massive profit of over 20 Billion dollars a year. In fact, McDonald's serves over 50 million people every day worldwide. The restaurants are open for long hours, most commonly around 16 hours (6am-10:30pm) while there are still a number of stores that are open 24 hours. McDonald's success comes down the their consistency of their products and quality standards. That is to say that you could buy a burger from Sydney, Australia and one in Ohio, US and it would still taste the same. However, because of being such a well known company, McDonald's does receive a large negative response from social media. It is known to be unhealthy and to have had a massive affect on world wide obesity from its lack of nutrition and massive popularity. Another negative to being a multinational company is that it is near impossible to sell unique products as it costs INSERT AMOUNT HERE. To launch a product, it must be certain that it will gain a positive response and result in profit.

Mechanisation and computerisation

McDonald's has a high level of mechanisation and is also constantly changing and developing. They use touch-screen registers and automated menu boards. This helps to improve productivity in the workplace as well as service times. There has also been the recent introduction of the Kiosks (pictured below) which allow the customers to serve themselves at their own pace while seeing images of the products available. The majority of McDonald's restaurants also have available a drive-thru which involves the customer to order, pay, and receive their food all without leaving their vehicle. This is done through the use of headsets which allow crew members to communicate with each other and the customer quickly and easily. McDonald's also has in use a SMART CLOCK which is used by the crew to clock onto each shift and allows the manager to monitor breaks and shifts. Recently introduced, although without much success, was mobile ordering, allowing customers to order and/or pay from their phones. This launch was not very popular which may be put down to the minimal advertising but, in retrospect, it was a good concept used to adapt to the growing use of mobile devices. On the McDonald's website, which is constantly updated with information on nutrition and food details, it features games and apps suitable for children called "Little Wins" and "Emlings". 'Little Wins' is an AFL based game made to "celebrate the little wins in footy" and creates a link to McDonald's support of AFL. Emlings is an app aimed towards children aged from 4 to 8 and induces creativity and cognitive learning. This is McDonald's way of adapting to the developing technological era as well as providing a learning based game for children. To conclude it is evident that the level of computerisation and mechanisation at McDonald's is high and is continuously evolving.

McDonald's Kiosk

Major Products and Activities

McDonald's is famous for their burgers which have remained a constant since the beginning of establishment. Burgers such as the Big Mac, Quarter Pounder, and the Cheeseburger are examples of the most popular choices at McDonald's and, while keeping these available, McDonald's is able to keep evolving and changing without losing popularity. It is a fast food restaurant which brings in consumers that desire a fast, easy and cheap meal that people know will taste good, no matter what store they go to.

In 1981, McDonald's opened its first Ronald McDonald House at the Royal Alexandra Children's Hospital, Camperdown NSW. The Ronald McDonald House Charities (Or RMHC) is a charity that started out by raising money so that families with children in hospital have a place to stay near them. This organisation has grown since then, now providing a learning program that helps the children to catch up on their education, as well as a Family Retreats program (offering holidays for affected families), Cord Blood Banks, and Family Rooms.

Over the last 30 years RMHC has helped more than 100,000 families, with the 14 houses alone providing more than 85,000 families with a home-away-from-home while their child undergoes treatment for serious illness at a nearby hospital. -McDonald's Website https://mcdonalds.com.au/ronald-mcdonald-house-charities

A way that McDonald's raises funds for the RMHC is by holding an annual McHappy Day which brings in the community and consumers. The day involves crew members dressing up and volunteers doing face painting, crafts and other activities for gold coin donation. Also on the day there is a promotion where 2 dollars from every Big Mac is donated. McDonald's is also an active supporter of sports organisations across the country such as:

  • Little Athletics in New South Wales, Queensland, Victoria, Tasmania and Western Australia. This includes awards and commendations that reward the athletes with vouchers to McDonald's
  • Basketball Vistoria's junior development program. Includes series of one day round robin games in order to introduce primary school students into basketball.
  • Swimming Queensland. This includes sponsorship and support for programs for children to compete and have fun.
  • South Australian Football League junior development program. This includes coaching clinics for kids and the goal is to increase participation and encourage kids into a more active lifestyle.

Research and Development

McDonald's, as a company, make a point to react to consumer demand which is done by researching trends. All upcoming promotions have been a response to consumers such as:

Table Service- Table Service is a new introduction that is a step towards creating a more "restaurant" atmosphere at McDonald's. It gives customers the option to have a seat while their meal is prepared and is then taken to their seat.

Trial Restaurants- Trial Restaurants are used to gauge a direct response from consumers. Trials are performed at a number of diifferent restaurants, depending on what product is to be released. For example, West Gosford McDonald's is being used to trial the Drive-Thru Gourmet Burgers as well as CYT Breakfast and Burger Bar. Popularity will determine to what extent these promotions will be used in other stores. Thornleigh is the location for Head Office and the restaurant in this area is the main trial restaurant.

McDelivery- McDelivery began because of the rise in trends and needs for delivery. Consumers have busier lifestyles and so, to accommodate this, McDonald's has introduced a delivery system that is being trialled in select Sydney stores.

Advertising- Advertising is a great tool that is used to gain consumer interest and aids in the launch of new products. The use of slogans helps to spark interest, for example "How very un-McDonald's" was a slogan used to launch the CYT range which reinforced the idea that the promotion was different, new and exciting.

Environment- McDonald's has realised that they are a major contributor to the deterioration of the environment and have responded to this in various ways. Some of they ways that they try to help the environment include their participation in Clean Up Australia Day, the use of rainwater in irrigation and toilet flushing and much more.

Feedback- Feedback is collected from customers and are taken into consideration. Feedback is powerful and can result in major changes in the company.

Consumer Influences

There have been a variety of actions taken that have been influenced by consumers varying from simply new products to big changes that have influenced McDonald's image as a fast food restaurant completely. In recent years McDonald's has introduced a 'healthier options' menu including a variety of wraps and salads. This may have been in response to the reputation of having a major impact on the rise in obesity.

As a response to consumer demand, McDonald's has introduced this year All Day Breakfast, allowing customers to purchase breakfast favourites such as the Bacon & Egg, Hotcakes and Hash browns. Prices stay the same throughout the day and customers no longer suffer the annoyance of arriving in the store at 10:35am and being refused breakfast products.

The Create Your Taste (CYT) was a brand new innovation introduced recently which allows customers to not only have burgers made with new, gourmet ingredients that are cooked fresh to order, but to also create their own burger. This opens McDonald's up to new customers looking for higher quality and also creates a more restaurant feel. CYT has also brought the introduction of the Self Serve Kiosks. As previously mentioned, the kiosks are an interactive touch screen which allow customers to serve themselves at their own pace which benefits a range of customers such as those who find it difficult to interact with strangers. This may be because of a disability such as a speech impediment or deafness. Also, being able to see the range of products available lead to an increase in sales due to impulsive bays which greatly benefits McDonald's.

McDonald's is extremely adaptable as they change menu items and pricings based on the time of year. For example, during summer the company promotes $1 frozen cokes and also the new choc top for $2. In the winter or colder months, they would push advertising on coffees and other winter based products. This is a response to consumer influence as they adapt to what the consumer needs/wants and when they need/want it. In order to satisfy consumers who are unable to afford McDonald's full priced products, the company has introduced the loose change menu; a menu that consists of products priced $3 and under, ranging from frozen cokes to small burgers.

Introduced in 1993 with it first opening in Melbourrne, Victoria, McCafe has been a very popular with their barista made coffees and have widen the range of customers through the introduction of this product. Also, due to the fact that coffees are consistently popular, it has generated a large profit to the company.

Quality Assurance

In order to maintain a product that abides by food safety standards and is consistently the same everywhere you go, McDonald's has in place a number of set procedures that are followed to the last detail. McDonald's follow the QSC&V motto which stands for Quality, Service, Cleanliness and Value. These qualities are key focus points and are practiced through the use of a variety of methods including:

  • Procedures- McDonald's restaurants follow strict procedures that are carried out 24/7. For every action there is a procedure that is followed by every crew person. All meats and fries have their own cooking time and own preparation steps from opening the bagged product to putting it on the grill/ in the fryer, to serving it to the customer. There are also set procedures for simple preparation of desserts as well as ones outlining how to properly collect orders.
  • Waste- When a product is unsaleable, that may be because it is out of date, has been contaminated or perhaps has been brought back by a customer, that product must be recorded and wasted. This is done to make sure that customers receive only quality products and to make sure that sales are recorded properly. First In First Out (FIFO) is a procedures used throughout the restaurant which describes the proper rotation for products. For example, if you had cartons of milk that had been stocked at different times, you would need to use the oldest ones first, or 'the first in'. This is put in place to avoid needless waste. Also, a timer system is put in place to make sure that any product that has been held for longer than allowed is wasted. Every single product has its own timer allocated and states the date that it must be thrown out. For example, for a McCafe product such as a cinnamon scroll, once it has been pulled from the freezer it can be held in the ambient display cabinet for no longer than 2 days. A timer is printed and put on the display (facing towards crew) which is then wasted if it is not sold within this time.
  • Training- McDonald's uses shoulder-to-shoulder training, meaning that each trainee has an experienced crew trainer to guide them. Training usually takes two weeks and consists of interactive training modules, found on Metime (McDonald's crew site), that are the same ??ACROSS AUSTRALIA??, as well as on-the-floor training that is supervised by the trainer. SOC's (Station Observation Checklist) are also completed on crew consistently, both on new and experienced crew. These checklists include a list of areas that crew must be marked 'competent' or 'not yet competent' on as well as general feedback. These help to make sure crew are confident and competent in all necessary areas and, if they are not, that extra training is available.
  • Food Quality-Twice a day, quality checks are completed on the cooked product, once before open and once during crossover from breakfast to regular menu. These quality checks involve checking of oil temps as well as cooking times for grilled and fried meats. First a run of each product is cooked for the set time. As soon as the product is taken off the grill/ out of the fryer, the inner temperature is tested and recorded. Each product has a temperature zone that it must be between and, if it is not within this zone, the product will not be sold until the problem is fixed and the temperature is tested to be within the zone. To ensure that it is measured accurately, a full run (how much you would cook normally) is put down. Any grills or fryers that were not tested, for whatever reason, are not permitted to be used for the day. All these food procedures, as well as much more, is all based around the HACCP (Hazard Analysis and Critical Control Point) approach puts in place procedures accounting from transportation all the way to service.
  • SOR's and BSV's- SOR stands for Short Observation Review and consists of the Head Office Consultant for the store coming to do a short review on cleanliness, procedures and quality. The Review takes place over one day part (Open, Day, Close) and does a full check on these areas and must occur at least once a month. A BSV (Brands Standard Visit) is similar to an SOR except more intense. This visit take place over a full day, with the Head Office Consultant coming down to do a more in-depth check of the restaurant. These take place once every year and must be passed.
  • Cleaning/ Cleaning Lists- There are also extensive procedures for cleaning that are followed consistently. An example of one of these procedures is the two-cloth method which involves using two separate cloths for cleaning tables and chairs. To avoid the exchange of grease between customer areas and back areas, two separate mops are used for the two areas as well as separate cloths, both of which are colour coded. Cleaning Lists are also used and completed daily. They contain detail cleaning tasks that are marked off and checked by the supervising manager.

Economy

Employment at McDonald's consists of a majority teenage students, aged around 14-19 and because of this, there are policies that are put in place to ensure that work does not affect their education. Some of these policies include:

  • 10 Hour Gap- This is for all employees and makes sure that there is a minimum 10 hours between each shift. This ensures that employees are not overworked and are able to get enough sleep between shifts
  • 12am school night- Students or anyone attending school do not receive shifts that require them to work past 12am on a school night
  • Maximum Shifts and Hours/ week- This requires that no one receives more than 5 shifts a week and that the hours worked per week do not exceed 38 hours. Of course, this does not mean that all employees receive 5 shifts a week and work 38 hours. All employees have flexible hours, meaning they can choose to not work for an extended amount of time (within reason) or request minimal shifts without penalties or any questions asked. This is particularly good for students completing HSC or if struggling to balance work and school.

McDonald's also creates great employment opportunities where crew have the ability to work their way up the chain, possibly becoming a manager or even working in head office. This is done by offering trainee-ships that result in qualifications such as a cert III in Retail Operations that can then lead to management and other positions.

McDonald's stands by the EEO policy which stands for Equal Employment Opportunity. This means that factors such as gender, ethnicity, sexual orientation etc. can not impact on workplace decisions. This has resulted in a more diverse atmosphere in McDonald's restaurants.

Bibliography

[Accessed-throughout entire assignment] https://mcdonalds.com.au/

[Accessed- 29 November 2016] https://www.rmhc.org.au/about-us/about-us

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