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Report for McDonalds

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by

Quinn Boyce-Bacon

on 29 June 2014

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Transcript of Report for McDonalds

Report for McDonalds
Commercial and Non-Commercial Goals of McDonalds
McDonalds is a publicly held company which means it issues stocks in exchange for money. It must therefore make a profit for stock shareholders, so it's primary commercial goal is profit. They don't really have non-commercial goals as everything they do from the Ronald McDonald house to offering healthy salads is to improve their image which in return gives customers a positive impression and more willing to shop there.
Price & Non-Pricing Strategies of McDonalds
Its price strategy is to offer the cheap loose change menu but then reap larger profit-margins from more expensive items.
The items on the loose change menu are limited in my opinion, you are encouraged to up size just to fill yourself up, this giving them additional profits. Their Non-pricing strategy includes dominating the market by advertising and sponsoring programs like the Soccer World Cup and other big global events. This gives McDonalds a feel good factor, however at the same time leveraging this at store level with promotional items.
McDonald's also sponsor's a lot of community sports events with their player of the day program.
They changed the fast food market by advertising around children's Happy Meals, this creating pester power towards parents. Now other companies market to children to gain brand loyalty as well.
Summary of Local McDonalds
McDonalds works as a franchise, thus allowing local ownership. A franchise owner does not have ownership of the brand, the land or the buildings. This giving McDonalds control over presence and protection of the brand.
All processes are carefully monitored to insure a high consistent quality throughout all restaurants. This giving the restaurants average expectations to insure profitability.
e.g. Kitchen Video System measures time from the customers order to the complete delivery of the product. This also allows restaurants to share successes with other branches on improving productivity. Staffing is managed on a ratio basis of one staff member per thousand dollars e.g. sixty thousand dollars equals sixty staff. Productivity is measured by sales versus hours divided by average hourly rate. The key to higher productivity is retention of good experienced staff, this is done by a bonus system and continuous training. Restaurants are mystery shopped 2-3 times per month.
Changes in production and productivity at McDonalds
From 2010 to 2011 McDonalds had an increase in production by 4.6%. 2010 and 2011 were the mid point of the increasing staff with an extra 500 more than the previous years. The amount of extra burgers produced from 2010-2011 was over 5 million. That's over 6000 burgers per worker. Productivity is measured by sales versus hours divided by average hourly rate. The key to higher productivity is retention of good experienced staff, this is done by a bonus system and continuous training.
McDonalds Impacts on Society
McDonalds has mixed views from society, on one hand the concerns of littering, gathering of teenagers in cars, additional traffic. Health concerns and marketing to younger children are also very topical in society. McDonalds counter balance this with things like a separate healthy eating selection, Ronald McDonald House and sports events. McDonalds puts a lot of emphasis around clean and tidy gardens. McDonalds supports a wide range of New Zealand industry and in 2012 spent one hundred and eighty million dollars on New Zealand ingredients, this supporting a wide range of New Zealand companies. Only a very small amount of product is brought in from over seas.
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