McDonalds Case

Case study chap1
Youre Fired! The Apprentice and Donald Trump Youre fired! Two words that no one wants to hear. But those two words are heard at the end of the hit new show, The Apprentice. The Apprentice stars CEO-extraordinaire, Donald Trump. The show is a success, and is based on the premise that sixteen contestants compete for a position in Trumps organization as his Apprentice, for an annual salary of $250,000. Each week the contestants work in teams to compete against each other through business issues based around marketing, sales, finance, etc. The winning team receives a reward from The Donald, while the losing team sees one of their team members fired by Mr. Trump. Trump put his reputation and assets on the line for the show, and some critics thought the show would portray Trump as a publicity-seeker and encourage contestants to succeed at all costs. Critics also thought the show might demoralize many of Trumps current employees, causing them to lose respect and trust for the companys leaders. Trumps response; I dont worry about them. I pay them a lot of money. Trump has proven naysayers wrong, and has accomplished something one may not be able to put a value on---an hour-long prime-time commercial for Trump himself and the Trump organization. And, other companies are paying upwards of a million dollars just to advertise on the show. Is Donald Trump a genius? Has he been successful by doing things outside of the box? Once again it appears so. And both the Trump Organization and Trump are winning. Questions: 1. What management roles does Donald Trump demonstrate in 1) leading his company; and 2) relationships to employees. Cite examples. Answer Students responses will be unique but should address the following principles. Planning encompasses defining an organization's goals, establishing an overall strategy for achieving those goals, and developing comprehensive plans to integrate and coordinate. So he needs to create strategies that will address each challenge, including having a vision of how to take advantage of the real estate and luxury markets. Organizingdetermining what tasks are to be done, who is to do them, how the tasks are
to be grouped, who reports to whom, and where decisions are to be made. He has chosen to hire high-quality people, and has assigned them to the positions they are best suited for. Leading involves motivating employees, directing the activities of others, selecting the most effective communication channel, or resolving conflicts among members. He has worked to intentionally create a work environment that removes barriers for employees and promotes enthusiasm. Controllingensures that things are going as they should, a manager must monitor performance. Actual performance must be compared with the previously set goals.
2. How does Donald Trump use technical, human, and conceptual skills to encourage his organization to be innovative and creative? Discuss. Answer Technical Skills a) Trump exhibits technical skills in order to encourage his organization to be innovative and creative by staying on top of current real estate trends so that his organization can identify lucrative prospects for development. b) Trump also exhibits technical skills in financial decisions, marketing decisions. Human Skills a) Trump uses human skills to encourage his organization to be innovative and creative by being very straightforward, rewarding failure and encouraging risk taking. Conceptual Skills a) Trump uses conceptual skills to encourage his organization to be innovative and creative by thinking strategically at all times and always looking for gaps in existing marketplaces for a strategic advantage.
3. Do you believe Trumps risk-taking emphasis would work in other organizations? If yes, what type of organization? If no, why not? Answer--Trumps risk-taking emphasis would work in organizations that are volatile, such as brokerages. It would also work in companies pursuing an innovation strategy, such as a dot-
com company. However, in other types of organizations which are more stable or more mature, it may not work. In those kinds of organizations, the culture is often based on being risk averse, and the focus is on maintaining the status quo. Employees in those types of organizations are less likely to thrive under a leader such as Trump, as they themselves will have developed risk averse ways of conducting their business.
Case study chap3

For more than the past decade, the McDonalds corporation was the leader in pioneering what they thought customers wanted---larger and larger portions. While their menu had remained relatively stable, McDonalds management was always looking for ways to improve sales, and fend off strong competition from the likes of Wendys and Burger King. The one thing that McDonalds did to boost sales was the addition of the Super-sized Meal. Nearly one in ten customers took advantage of the companys offer to super-size their meal (add an extra large soda and an extra large French-fry order) for just 39 cents. But since this expanded offering hit stores, McDonalds has come under fire. Public pressure was mounting, to the point that individuals sued McDonalds for causing their physical ailments brought about from obesity. Criticism reached its height in early 2004, when the effects of eating McDonalds food was the subject of an award-winning documentary. At the end of the month long experiment of eating only McDonalds food, the producer had gained 24 pounds and his health had deteriorated. In March 2004, McDonalds announced they would eliminate all super-sized offerings. Additionally, McDonalds now offers salads and is attempting to promote itself as being more health conscious. McDonalds action was largely driven by the reality that its sales had plummeted, as had its stock price. Their announcement of the elimination of the super-sized option and the addition of healthier substitutes is being viewed as a move that is entirely responsive to the changing market environment---something that Burger King and Wendys are watching very closely. Questions:
1. Explain how the environment has affected McDonalds plans to discontinue offering super-sized meals. Answer The environment has been flooded with healthy products and a great deal of research on the things individuals can do to improve their health. Moreover, obesity rates are increasing in this country. McDonalds was clearly operating against the prevailing trends in society that were urging individuals to eat more healthily, and therefore the environment strongly influenced them to discontinue offering super-sized meals.
2. Describe how McDonalds can use the decision to stop selling super-sized meals as a competitive advantage. Answer McDonalds can use the decision to stop selling super-sized meals as a competitive advantage by seeing it as a differentiation quality---they can position themselves as the only fast food company who really cares about individuals health----so much so that they changed their menu to encourage more healthy eating habits.
3. How would you classify this action by McDonalds---a growth strategy, a stability strategy, or a retrenchment strategy? Defend your choice. Answer Students will probably have differing opinions on this. This action by
McDonalds could be viewed as combination of a retrenchment strategy (its retrenching from a market of super-size; although, they are not closing locations or actually shrinking) and a growth strategy (its trying to grow its market by attracting health oriented people; although, its not acquiring other companies or locations). Some may argue that its a stability strategy---that McDonalds is trying to keep their existing market share and is simply shuffling things around product-wise in order to maintain stability.
4. Do you believe McDonalds was socially responsive in their actions to discontinue supersizing? Why or why not? Answer Students may answer that yes, they were acting in the best interest of their customers by trying not to contribute to the obesity problem the US is facing. Other students, however, may say that McDonalds simply had profits in mind, and was forced
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to discontinue super-sizing in the interest of making money.

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Case study chap1

Case study chap3

to discontinue super-sizing in the interest of making money.

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