McDonalds

+36,000 stores in over 120 countries and is highly successful. Uses franchises in order to rapidly
expand globally.
We need some negatives!!!!! This essay cannot solely be positive towards the company:
‘Not many candidates were able to reach the top mark. Most ended up with 2 marks (for Criterion
C) due to unbalanced responses. When the answer did not provide counter arguments, it was
judged as unjustified/unbalanced. The substantiation/evaluation was lacking in many responses.
Many candidates just praised, chosen Organisation throughout. No critical thinking was
employed. A balanced response was the one that provided two relevant and real arguments for
and two against.’ (2016 Examiner’s Report).

Change
McDonalds regularly changes its strategy to keep up with the market demand and to remain
competitive in this large market. Over the last year, it has made many changes, for example,
making major changes to its menu. Adding and removing various dishes all around the world.
They also plan to add more dishes for breakfast and begin serving healthy’ breakfast, every day
of the month! In addition, the change to the retail stores around 2012 increased profits by around
5% in the first quarter of the year, as a more positive brand image of being more ‘modern’
occurred, and less cheap.
This is a market-oriented approach - through extensive market research, they have adapted to
meet the needs of consumers (breakfast menus, healthier food etc.)

In countries like Singapore and Australia McDonald's has introduced “Gourmet McDonald’s”. This
allows customers to customise the dish, with multiple select option. The food is brought to the
table instead of waiting for it, this creates a USP for Mcdonald's as they can provide healthier food
to the customer without making large changes to the menu.

Negative:
● Bloated menus, leading to too much choice and slower customer service
○ McWraps take 60 seconds to make compared to 10 seconds for a burger
○ They later cut items such as the Deluxe Quarter Pounder, as it had fewer sales,
and the growing of the menu by +40% from 2007 was worrisome.
● Employees must be re-trained to properly make the new products, as well as obtaining
new equipment, which costs time and money.
● The new products sometimes also do not sell well (McWrap or Deluxe Quarter Pounder),
and so some changes are simply not worth it.

Culture
Before they decided to enter the market in India, they had decided to omit beef and pork from the
menu to aid in preventing the Indian citizens from being offended. Research shows that in 2003,
of 100 meals that people ate in a month, only three were eaten out. They introduced a 20 rupees
(20p) burger called Mc Aloo Tikki, a burger with a cutlet made of mashed potatoes, peas and
flavoured with Indian spices. "It's something you would find on Indian streets; it was essentially
the McDonald's version of street food. The price and the taste together, the value we introduced,
was a hit. It revolutionised the industry in India," he says. Now eating out has gone up to 9-10
times per 100 meals and McDonald's in India has more than 320 million customers a year.
The entire menu has been customised after extensive market research. Now over 70% of the
menu has been changed to vegetarian to cater to customers. Even competitors such as burger
king and subway have followed by dropping beef and pork. They have greatly changed the way
they ‘plan, make decisions and implement strategies because of the country they are entering.
● Advertising with specific consumer profiling traits - religion, customs, etc. (‘McArabia’)

Negative:
● Could be a loss of culture to countries involved e.g. ‘Americanization’.
● In addition, the culture of fast food is highly unhealthy, and which could be detrimental to
worldwide health.
● Effectively finding out the culture of a market takes quite a lot time and/or money,
especially if they went with primary research.
○ http://www.telegraph.co.uk/news/2016/04/14/japanese-mcdonalds-ad-criticised-
for-korean-bowing/ - risk of hurting brand image by misunderstanding the culture.

Ethics
In ethics, Corporate Social Responsibility (CSR) comes into play, which every business must do
as part of its social responsibility:
● In India specifically, to remain ethical, McDonald's has begun investing in an eye care
hospital, to create an image that is socially responsible, thus making it stand out from its
competitors.
● It has also provided ‘fresh beef’ and local products which is advertised in the UK,
promoting CSR.
● Likewise, the focus on equality in the workforce (25% women/minorities in leadership).
● Ronald McDonald’s Houses also help sick children and their families recover and give vital
facilities to aid their situation.
● Before they decided to enter the market in India, they had decided to omit beef and pork
from the menu to aid in preventing the Indian citizens from being offended

However, there are ethical issues with McDonalds as well:

● People have been fighting for their working rights due to cases such as wage theft, poor
management and bad working conditions.
● Ethical issues with the food also come in. There have been cases where McDonalds have
given the cows steroids to make more beef.
All of these worsen the image of McDonald, potentially leading consumers to believe it is an
‘economy’ product rather than a ‘bargain’ product on the product positioning map. In addition, the
positives above all lead to high costs for McDonalds, especially with fresh beef (JIT production,
very awkward to deal with).
 Globalisation
McDonald’s is a prime example of globalisation. Originating in USA, and slowly expanding into
markets and regions where the concept of fast food was not yet discovered. It targeted the middle-
class segment since it saw a niche, and kept the same interior design, service, and quality of food
throughout the world, generating its amazing band image. These things allowed seamless
globalisation to take place! Making it one of the largest MNC running today.
According to forbes Mcdonald's is the world's 9th most recognisable brand.

Negative:
● franchising is very effective at global growth, however there is a loss of control towards
the franchisees, and there is less profits to be made for McDonald’s using franchising.
● In addition, there is a risk that laws may be put in place (e.g. ‘fat tax’) or trends against
unhealthy food could damage the brand globally.
● Loss of culture and smaller businesses unable to compete

Innovation
Innovation is key to remaining competitive.
● Nearly all the dishes in the menu of McDonalds have been innovated and designed
completely by them! Many trends have begun just by McDonalds. These trends aid in
creating the brand image of McDonalds, which highly compliment the sales.

● However, making new products requires a significant amount of time and money to be
involved in the business’ research and development. There is no guarantee that the new,
innovative product will be profitable.

Strategy
The company deals with 3 strategic issues.
1. How to deal with the growing competition
2. How to deal with financial issues such as high franchisee fees in contrast with geographical
expansion goals
3. How to deal with the worldwide economic crisis
They deal with competition by using aggressive marketing strategies. You will never go a day
without noticing a sign that leads you to McDonalds or viewing an ad about it.
Financial issues are dealt with the spreading of risk through globalisation. There are so many
franchises that if one goes into loss, there are hundreds of others ready to cover up the loss and
make a remarkable profit.
The worldwide economic crisis is something that affects every business; therefore, it is not much
of a problem for McDonalds as it is already established. It can prove to be advantageous as
competition is killed off and it is very difficult for new competition to arise. As this affects every
business, even the competitors deal with the same struggle, evening out the ‘battlefield’
Starbucks

Change
Due to the continuous changing external and internal factors, change should be managed within
businesses if they are to move forward and remain competitive. These factors come from various
backgrounds. Those include the population change, culture change, objectives, change etc. The
importance of these factors determines whether the change should take place or not. Sometimes,
changes are made, However, not all changes favour the businesses, but also give negative
impacts on the business as the changes made do not always guarantee for the business profit.
Hence, the businesses should be aware of the surrounding changes in the external environment
and need to adapt to the new situation quickly not to be left behind in the business world.

Starbucks made a lot of changes when entering the indian market, such cost of beverages is
much cheaper in starbuck in india in compared to other countries.

Culture
Although Starbucks is a franchise and must follow a core menu set by the franchiser, it also must
adjust its products to the country it is in and its culture. The products it sells must appeal to the
market and their local culture. Since there are many people living in Malaysia who are Muslims,
for Starbucks to maximise sales it would have to convert into selling Halal products to allow them
to attract a wider target audience. By selling Halal products, Starbucks may be one of the few
large franchise chains that provide Halal products, allowing them to stand out from competitors.
This may increase customer loyalty and sales as consumers repeat their purchases from
Starbucks.
The price of Starbucks products would also be influenced by the cultures in the differing countries.
Germany is considered an MEDC that is developed and relatively economically stable, compared
to parts of Malaysia which may still be developing. Due to Germany's consistent high quality of
life, many people drink coffee and dine at cafes as it has become a lifestyle and social norm.
Coffee is seen as a staple in Western culture, and most people in Germany grab a coffee on the
way to work. This allows Starbucks to set the prices of its products relatively high as there is a
high demand for coffee products. Malaysia on the other hand, has many competing local drinks
such as Bubble Tea or Teh Tarik therefore there is a lesser demand for coffee drinks as it is also
more commonly seen in Western cultures. Starbucks would be able to break even if they used
competitive pricing and priced products at slightly lower than competitors to increase sales.
However, Malaysia is becoming more modern and attracts tourists therefore Starbucks may still
survive if their products match competitor's prices, especially since Starbucks is a well-known and
established brand.

Ethics
Starbucks uses cocoa beans obtained only from workers who are paid at least the minimum wage
and are not children. They promote this on all their products to maintain a socially responsible
brand image.

Globalisation
Starbucks targeted the niche in the market which allowed it to easily globalise and spread its risks.
There are downsides with globalisation as well, such as different economic situations in different
countries, making decision tougher.

India does not allow FDI (foreign direct investments) so they did a 50:50 joint venture with Tata
to enter the Indian market. So, its Tata Starbucks Limited.

Innovation
Innovation is an organisation’s process for introducing new ideas, workflows, methodologies,
services or products due to the sophisticated market demand. It includes researching on possible
beneficial product and developing the modern, reasonable, efficient products to gain the
competitive advantage over the businesses rivals, contributing the key element in providing
aggressive top-line growth. For example, innovation has created new leading industry such as
Smartphones. However, sometimes it can turn the business into the great loss. The causes of
loss can be from internal or external. From internal, the factors may range from poor time
management to poor creativities of the developers. For external, the factors may range from
government policies to cultural background depending on the location. So, innovation is the
important strategy for the business success.

Strategy
Starbucks has a history of effective marketing strategies. Since McDonalds and Dunkin Donuts
entered the coffee industry, there has been an increased competition between them. Starbucks
has found more success advertising on a local level rather than to the nation. The Company
advertises a lot through print mediums, as Starbucks’ target market tends to be educated people
who do more reading than the average person

Apple

Change
orientation. That applies throughout their company, around the world with no exceptions.
Practically since its inception back on April 1, 1976, Apple has repeatedly captured the world's
attention thanks in large part to its rebellious underdog attitude and continuous efforts to reset
expectations of what's possible from consumer electronics.

Culture
They want every person who joins their team, every customer visiting their stores or calling for
support to feel welcome. They believe in equality for everyone, regardless of race, age, gender,
gender identity, ethnicity, religion, or sexual orientation. That applies throughout their company,
around the world with no exceptions. They want every person who joins their team, every
customer visiting their stores or calling for support to feel welcome. They believe in equality for
everyone, regardless of race, age, gender, gender identity, ethnicity, religion, or sexual

Ethics
Around the globe, Apple employees are united in bringing equality, human rights, and respect for
the environment to the deepest layers of our supply chain. They demand that suppliers always
treat workers fairly and ethically.

Most Apple’s senior managers are ‘white’ (82%) and therefore the workforce has been trying to
change this through an employee vote. However, Apple believes their culture is sufficiently
diverse and therefore promoted against the cost. As a result, 95% of the workforce voted against
making any changes to the recruitment of senior managers.

Foxconn (Apples) old supplier had such poor working conditions that they lead people to suicide.
Although this was not directly Apple acting inethically, its brand image was damaged due to the
close relationship between the two companies. Foxconn will now automate factories, making
60000 employees redundant, with very little redundancy pay.

http://panmore.com/apple-inc-organizational-culture-features-implications

Globalisation
As of July 2013, Apple owns 417 retail stores in 13 countries and an online store available in 38
countries with global sales of $16 billion dollars in revenue in 2011. As a multi-national
corporation, Apple Inc has realized the significance of globalization by spreading all over the
world.

Attempting to expand to India but struggling, fell short by 70% of their expected sales due to the
high price of their phone compared to the disposable income of customers. Expected to grow in
the next few years as 4G develops in India.

Innovation
Apple has always been different as they have had a different perspective of the world, they aspire
to do more things and to have the opportunity to create the best products on earth, products that
change lives and help shape the future.
What is Apple’s fundamental soul? The company’s motto, “Think Different,” provides a hint. Apple
maintains an introspective, self-contained operating style that can confound competitors and
shaking up entire industries.

Strategy
- Apple Brand Personality
- Customer Experience
- Apple Brand Architecture
- Apple Halo Effect
- Corporate Market
- Apple Watch
- Original Mac Marketing Strategy