Table of Contents
Service Concept of McDonald's
Assessment of Operations Implemented
Appendix 1: Evaluation of internal factors
Appendix 2: McDonalds Data flow diagram
Appendix 3: Cause and Effect Diagram
Appendix 4: Process Flow Chart of McDonalds
McDonald's is the world's leading chain of hamburger fast food restaurant and the prominent global foodservice retailer. Headquartered in the United States, the company was founded in 1954 by businessman Ray Kroc. McDonald's serves more than 65 million customers daily with over 35,000 local restaurants in 119 countries (Mcdonalds, 2017). The corporation employs more than 2 million employees worldwide. It is worth noting that a McDonald's restaurant is operated by either an affiliate, franchise, or the company itself. About 15 percent of McDonald's restaurants are owned and operated by the corporation directly (Schaarschmidt, 2016). Most of its revenue comes from the payments, fees and rent paid by the franchisees, as well as transactions made in the company-operated cafeterias. The essential products that are sold in McDonald's include cheeseburgers, hamburgers, French fries, chicken products, desserts, soft drinks and breakfast items. With an aim to minimize obesity trends and criticism, the company often change its menu.
In the UK, most of McDonald's restaurants operate on the franchise basis. The organizational management and strategic focus have enabled McDonald's to compete effectively in an already competitive industry. The company focuses on providing tremendous customer service and best operations facilitated by the employees. Along with advertising companies that leave the brand reputation in the customer's mind, McDonald's continue not only to penetrate the market but also widen their market segment. This report is mainly aimed to discuss the service concept of McDonald's and examine how the subsequent operations of the company contribute to the functioning of the service concept. Besides, the report will discuss how both the concept and the delivery system might be improved.
Service Concept of McDonald's
The service concept is the insight and expectations of the service itself in the thoughts of the employers, investors, stakeholders, employer and customers (Hill and Jones, 2012). As indicated in the figure below, the concept involves an open transformation process of transforming inputs to anticipated outputs through the suitable application resources. More precisely, services are cost-effective activities that lead to the place, time, psychological or form utility. A meal in a fast food restaurant not only saves time but also it offers a psychological help (Lee and Sozen, 2016). Developing the service concept can be considered as the ultimate step for a corporation in generating an all-inclusive service model.
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Figure 1: Service Design Model
McDonald's makes use of a restricted menu, division of labour, a homogenous product, assembly-line strategy, task groping to enable specialised skills, all applied to the practical principle that is shielded from the customer. Product quality and customer satisfaction are the basis that enables McDonald's to create the exceptional fast food service. Since McDonald's was established, the service concept has been based on the first-class quality, value, and cleanness, which has become an essential service direction of the company's marketing operations (Thornton et al., 2016). Most importantly, the service concept is facilitated by the employees who reveal positive attitudes and commitment aimed to customer satisfaction. In this case, McDonald's restaurants concentrate on attracting and employing the best and at the same time offer the finest place to work.
Most of the food restaurants in the UK continue to evaluate the internal, as well as external business opportunities and hence, develop strategies that lead to a major market share. This increases competition in food chain industry. As Kroc and Anderson (2016) assert, McDonald's appreciates that the industry is competitive and has tasked its operations to correspond with customer preferences continually. The brand's quality is globally prevalent as McDonald's maintains the uppermost-level quality centred on the reasonable and affordable prices (Singla, 2012). For the food service, the company offers appropriate and effective food delivery service. In terms of quality, McDonald's has made a series of limited menu to keep the brilliance and unique taste of the product.
The company embraces strict sanitary principles to keep a clean kitchen and dining environment. McDonald's aims to offer distinctive service quality and high value to its customers as it is broadly recognized that the service quality is a major aspect in defining the accomplishment of a company (Schaarschmidt, 2016). The company has a belief that it is more convincing in marketing the brand by using the service concept along with the service operation. According to Hanks and Wansink (2013), the continuous change across the globe calls for an appropriate service operation in any business corporation that is in line with the changing customer preferences.
Every fast food restaurant is operating whether as a corporation or private business is purposed at generating a new upsurge in service operations; all aimed towards implementing and supporting the brand quality (Brown et al., 2013). As one of the leading and the most prosperous fast food restaurant in the world, McDonald's has numerous service operations (Appendix 4). At the moment, McDonald's is adopting the service operations aimed to generate outstanding experiences for its customers by product, place, price, promotion and people.
The product is the physical product or service provided by the company to the customers. It encompasses both the tangible and the non-tangible aspects such as appearances, assurance or packaging. McDonald's offers products in the same packages in diverse countries, and the consistency of these products attract many loyal customers (Singla, 2012). In the UK, the company has studied the behaviour of customers and provide an entirely different menu as compared to other countries. As such, McDonald's has been able to constantly innovate its products based on the changing tastes and preferences of its customers. The company introduce new products with a reputed brand, high-quality and outstanding customer-related features (Mcdonalds, 2017).
It is worth mentioning that McDonald's has made a series of the strict menu to maintain the distinctive freshness and taste of its product. During manufacturing, the product undergoes many quality checks to make sure it achieves the high-quality aspect (Appendix 2). For example, the hamburgers have to go through multiple examination catalogues, and the stock life of certain foods should not exceed 40 days (Singla, 2012). In addition, there are strict standards that must be adhered while the products are being created. The products that do not meet the appropriate criteria are eliminated before being delivered to customers.
The place majorly involves the distribution networks. The company must ensure that the product is at the right place, at the appropriate time and in the suitable amount. In the UK, almost 60 percent of McDonald's restaurants are situated within areas that are easily accessible by the customers (Schaarschmidt, 2016). The company offers valuable places to meet the preferences and needs of customers and enhance pleasure and happiness. Besides, McDonald's has standards aimed to generate suitable hygienic setting and exceptional service for its customers. The company has also established internet facilities within outlets along with exciting games and music systems (Mcdonalds, 2017). This is meant to attract young customers and improve the service level. Additionally, there are specific devoted areas for children where they can play while their parents are enjoying other services in McDonald's restaurant.
Pricing of products is a significant factor that determines the customer base and which generates revenue. As Hill and Jones (2012) point out, the price must take into consideration the proper demand-supply equation. McDonald's aims to generate appropriate revenue by keeping the prices of products reasonable and affordable. This has been the critical concentration since the company was established in the early 1950s. McDonald's has specific value pricing and strategies for creating the products to increase overall revenue. In particular, the company has its complete supply chain system and production bases of raw materials, which enable it to maintain low prices. For now, the company also considers the prices of its competitors and the possible means to attract more customers.
McDonald's has implemented various promotional activities to communicate the product to its target customers effectively. Due to diverse places and customers, the promotional activities are different, encompassing direct marketing, personal selling, sales promotion and advertising. The appropriate message has to be communicated to the target customers through the right media. Different promotion and marketing tools are used by McDonald's to communicate to the right audience, mostly through televisions, posters, billboards and bus terminuses (Thornton et al., 2016).
As the most popular fast food restaurant across the globe, McDonald's values its customers and its workers. The company believes that a highly qualified and satisfied employee can serve customers aptly. In this case, McDonald's has a wide-ranging hiring and training system to provide resources for employees; thus enabling them to interact with customers effectively (Teets, 2012). The company also inspire the workers to identify anything that may be unpleasant to customers and avoid the potential complaints.
Assessment of Operations Implemented
McDonald's operates discrete policy and guidelines of operations. It indeed focuses on various issues such as health, protection of the employee and the environment. All these aspects are recognised and controlled in the UK through licensing of restaurants. Fast food has been widely regarded as the unhealthy food that may lead to serious complications for adults and children (Appendix 1). This challenge may provide the opportunity for other food chains that offer a healthier menu to take advantage of the market share (Figure 2). Besides, the companies in the fast food industry are not exempted from problems and disputes. In particular, McDonald's has experienced difficulty in cases where the economy is affected by inflation and changes in exchange rates (Fowler and Bridges, 2012). Thus, clients face an appraisal impasse through their distinct budgets, as regards to their expenses in fast food restaurants.
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Figure 2: SWOT analysis of McDonald's
- Quote paper
- Joe Wessh (Author), 2019, The Service Concept of McDonald's, Munich, GRIN Verlag, https://www.grin.com/document/493809