Modern machines do not have the facility to

Modern technology strengthens their facilities.
Self-service kiosks are useful in McDonalds because it is quicker to order the
food in this way. They are effective for McDonalds instead having high volume
of customers standing in queue to order food at the tills. However, there are
drawbacks of this service such as touch screen issues, printing error or order
not completed due to the technical faults. Also, every customer may not able to
use these facilities. If the restaurant is busy and there are kiosks free,
customer may still wait for counter to order if they don’t know how to use
them. McDonalds cannot expect every customer to know how to order the food. In
addition to this, only card payments can be accepted in this kiosk. These
machines do not have the facility to pay cash. 

Building new restaurants is not the best solution to deal
with capacity as it requires a lot money to invest. The most important factor
is how the existing restaurants can cope with this situation and make sure
whenever customers come they still get the best experience.

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Firstly, having a home delivery service can help the
McDonalds to avoid the capacity problems at the restaurants which does not
require customers to dine-in. It can help the McDonalds to reduce the employees
in lobby area as less cleaning required. To do this, the organisation need to
be careful as the quality of the food need to be same and the food must be
delivered at the right temperature where the right equipment need to be used
during the delivery to keep the food warm. One of the key point to consider is,
McDonalds has ‘food for thoughts’ survey option for customer to give their
feedback on the food and service which allows them to get food at discounted
price using voucher in their next visit (Mcdfoodforthoughts.com, 2017). This
motivation is good for McDonalds as it encourages customers to visit again,
however this can represent a drawback for the organisation due to the capacity
of the restaurant. One of the effective decision to keep McDonalds and customer
happy is to have limitation on those vouchers. Terms and condition of voucher
could be ‘only applicable for home delivery’. Customer can still use the
voucher by placing home delivery order online and at the same time McDonalds
also reducing the volume of customers inside the restaurant without losing
them.

Secondly, developing an online application to order the
food from anywhere could help to reduce the number of customers dining inside
the restaurant. This application can help the customer to order their food at
any time and just collect it in short period of time instead waiting inside
restaurant. This idea will reduce the number of customers who are waiting for
the food. Fast food restaurants like pizza hut (www.pizzahut.co.uk) and dominos
(www.dominos.co.uk) good example of successful businesses where online
application is used to order the food online which allow the customers to
choose the method of collection or delivery.

In addition to this, McDonalds gets overflow of customers
at some point. When customer come to restaurant in large number of groups on a
busy day, firstly a member of staff could approach towards them and find out
are they going to dine-in or take away knowing the fact that the restaurant has
no space to sit down. As a fast-food restaurant staff members cannot ask the
other customers to leave who are already having food inside. There are a few
complaints (www.consumeraffairs.com) about customers asking for refunds for the
food they paid for as there is no space for them to sit. I would strongly
recommend advising the customer beforehand about how full they are. When this
happens, a loyal customer would not mind waiting to have happy family meal at
McDonalds.

Fast-food restaurants formed competition within the food
industry. An explanation suggests that “rivalry is especially destructive to
profitability if it gravitates solely to price because price competition
transfer profits directly from an industry to its customer.” (Michael E.
Porter, 2008, p.85). One of the major problem for McDonalds as a fast food
restaurant is represented by its competitors. Burger King is their main
competitor as they produce similar product range. Operators compete on prices,
strategic location, food quality, product consistency and presentation style.
For example: The East Gates McDonalds in Leicester is sitting in the middle of
their competitors around such the Burger King, Five Guys and the recently
opened Gourmet Burger.

There are chances for new entry as easy access to the
market due to the low start-up cost but they are limited because of the market
situation and regulations. The fast-food industries are combined with the
economies of scale, distribution channels and technological advances. For
instance, Gourmet Burger that is located next to East Gates McDonalds was
considered as a new major threat for them as they entered into the same market
producing substitute products. However, considering their customer loyalty and
their income, McDonalds has not seen a drop in their sales even though there
was a threat of new entry.  McDonalds
does not seem to be affected because of their affordable prices. Customers are
happy pay full set of family meals whilst Gourmet Burger is more in to fantasy
food with expensive price. Globally McDonalds are still in advantage as they
count with brand loyalty that makes it hard for new entrants to pose a threat.
One of the main reason behind their success is that the fact they are known as
‘family restaurant’ and their traditional methods of McDonalds by having
signature collection and happy meals. 

There are high chances of substitute products that
replace McDonalds which include instant food like sandwiches and pizza, dine-in
restaurants, deliveries and other meals supplied from convenient stores. One of
the reason for considering these substitutes is that customers become aware of
the health effects by the fast foods through social medias. Substitute
companies spend money on advertising their healthy products and meals which
tend to attract the customers. McDonalds could only cope if they change the
image that customers have and this can be done by making their meals healthier
as well as advertising to the market in appropriate ways. McDonalds is working hard
towards their ad to persuade parents that “Happy Meals are now healthier” by “showing
the quality of ingredients it uses and addressing myths and concerns about its
food” (Campaignlive.co.uk, 2017).

McDonalds has contributed a lot towards the community and
the environment since 1974. The annual contribution to the local areas within
the UK economy is £9.4 million and the number of jobs created were 539 (corporate.mcdonalds.com,
2017). Martin Brower (one of their main supplier) and McDonalds work together
as partners and they help to protect the planet. Martin Brower help McDonalds
by recycling their used cooking oil. This is considered as environment friendly
and the recycle turn in the biodiesel which used as fuel for delivery fleet
that saves over 7300 tonnes of CO2 each year (corporate.mcdonalds.com, 2017). One
of their distribution centre is set to be fossil fuel central neutral which
help them to carry the delivery product in environmentally-friendly way.

McDonalds engaged in strong position in the global
market. One of their strong strength is brand name and awareness. If someone
says McDonalds, the first thing that comes to mind is the ‘golden arches’. Its
known as their corporate logo which recognised by everyone across the world. If
someone sees golden ‘M’ from anywhere then it is obvious there is McDonalds
over there. Figure 1 at the bottom shows their historic logo development. Since
1961, their ‘Golden Arche’ has been there with enormous brand recognition.
McDonalds food quality and the happy meal service among their customers is one
of their strong point among their competitors and their food called as ‘Maccy’
by their loyal customers. Every time competitors enter the market they remain
same as sales wise for the fact they know as family restaurant among
communities. In addition to this, if a customer goes to Burger King their staff
does not involve in talking to children, whereby McDonalds get engaged with
children and they look after them by giving toys or happy meal balloons. Any
customer who comes to McDonalds as family with their children get treated very
friendly and that’s what a parent would want in good customer service.

Growth of the fast-food industry is one of their
opportunity among their competitors as it is growing wild. The lifestyle of
people these days leads them to change their eating habit of buying food from
fast-food restaurants. Few years back, it used to be a time where people have
time to cook at home but now it has changed and most of the people work to
balance their lifestyle. This does not allow them to have time to cook which
encourage the people to buy food from outside as its quicker. It is great opportunity
for McDonalds to get more revenue if they have wide range of products to
attract more target market.

To compete, McDonalds must expand their products because
their competitors are stronger and have new products gradually. They should
spend some more time in their Research and Development to create new products.
One of the effective decision they could make is to consider the diversity in
their society. These new products could be developed based on the local
communities which will gradually bring more customers when there are more
choices available for different community people. Other competitors tend to
have more vegetarian/vegan option while McDonalds focus more on cheese, beef or
chicken. Among its competitors, McDonalds hold 5th position for
producing vegetarian options (oh My Veggies, 2017). Burger King has more
vegetarian options (Bk.com, 2017) than McDonalds and they ranked as 3rd
position therefor it is necessary for McDonalds to have some organic products
in their menu. In addition to this to survive among their competitors, if they
listen to their customers and make sure they are satisfied during the visit by
providing a great food that is value for their money, they can easily stay in
customers hearts.

Listening to customers is one of the solid solution to
deal with them especially when the McDonalds’ focus on what they saying as
brand and business. Customers want great tasting food in modern contemporary
environment. They expect great value served by great people hospitality.
Providing a great customer service to customers will make the customers happy
and stop having issues with the company. Customers can get attracted easily by
providing excellent customer service by McDonalds employees. Few things for
staff members to consider while providing customer service are dress to
impress, greeting and help them to use new equipment within the restaurants.
Staff members working in the hospitality (lobby) area will be the first person
to see when a customer enters inside the restaurant, so a clean crisp and
wrinkle-free uniform is a must.

Having a friendly greeting to the customer at the
beginning and at the end will satisfy the customer as well as it can bring more
profit to the business. Giving a simple smile, be genuine and enthusiastic
towards customer will make them feel like no one is ignored. Having a quick
conversation will make the customer comfortable and this can help the
restaurant to reduce complaints as staff can satisfy the needs of the customers
in friendly a manner. Using new technology at McDonald’s saves customer
waiting. Therefore, helping the customers to use this new facility will help
them to order the food quicker and it would be ideally good to encourage the
restaurants to get involved with table service. 

To conclude, it is necessary for McDonalds to be aware
about their competitors offering similar products. Is it easy for other
organisation to entry your market if they see you are making a profit? Or can
someone force you to lower your prices? If the business does not know the
answer then what will happen is you are working hard and still struggling to
stay afloat. This is where Porters five forces is useful because it helps to
discover who has the most power in each situation. McDonalds is following customer’s
needs and keep improving their services day by day.

Looking at the PESTLE analysis, overall it
shows that there are significant opportunities for McDonalds to increase their growth.
Use of technology in efficient way with right strategies will help in their
productivity. Within the UK, McDonalds are helping local communities to improve
the ‘Lives of Children and Their Families’ – through support of Ronald
McDonalds House Charities and ‘Strengthening Communities’ – involvement in
education and physical activity. (Mcdonalds.com)

Last but not least, McDonalds are doing well with their
customer service in general. Since its first McDonalds, there are several
changes happened to their restaurants and they are focusing on rest of the
world. Their employee turnover is very high. However, they have good diversification
within the business which satisfies customers with different backgrounds. Overall,
If McDonalds has the right strategies, overcome its challenges and makes use of
advantages, they will conquest the market and hold first position within the
fast-food industry.

 

 

 

 

 

 

 

 

 

 

 

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