Contemporary Topics in Business: McDonald's Company Analysis Report

This report provides a comprehensive analysis of McDonald's, examining its company background, including its founding in 1940 and global presence with over 37,855 outlets. It details the goods and services offered, such as hamburgers, cheeseburgers, and various other food items, catering to a broad consumer base. The report delves into the competitive environment, highlighting challenges like decreasing profits, declining growth rates, and the need for heavy research and marketing investments due to increased competition from companies like Pizza Hut and Domino's. It also explores McDonald's divisional organizational structure and its global culture that emphasizes learning, diversity, and ethical practices. Furthermore, the report discusses the autocratic leadership style within McDonald's, emphasizing centralized decision-making and control. The report concludes by referencing key sources used in the analysis, providing a solid foundation for understanding the business strategies and challenges faced by McDonald's.

MBA ASSIGNMENT

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Contents
Company Background...........................................................................................................................1
Goods or services produced...................................................................................................................1
Competitive environment......................................................................................................................1
Organisational structure and culture......................................................................................................2
Nature of the leadership within McDonalds..........................................................................................3
References.............................................................................................................................................4

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Company Background
McDonalds is one of the biggest fast food chain businesses in the world. This Company was
founded back in the year 1940 and it is headquartered in Chicago, United States (McDonalds,
2020). McDonalds serves in more than 100 nations where they deal with more than 69
million customers on the daily basis. In 2018, there were around 37,855 outlets. This
company has more than 210,000 employees approximately. They have generated revenue of
US$21.076 billion in the year 2019. The fast food industry is at growth in the United States
and all the parts of the world. There are different types of goods that were being used in the
firm. The Hamburger-focused business in the United States have market share that is more
than 30%. There are many small restaurants that are increasing in the United States which is
increasing the competition. This industry has also moved towards delivering food online
which McDonalds have not yet started.
Goods or services produced
McDonalds is also known for its Hamburgers, Cheeseburgers and French fries. They are also
offering chicken products, desserts, soft drinks, milkshakes, breakfast items and wraps. Apart
from this the company is offering fish, fruits, salads and smoothies (Qureshi and Hassan,
2013). The product is very large and aims to satisfy the taste buds of as many people as
possible. They are offering services in highly standard manner where they keep proper
attention about the cleanliness.
Competitive environment
The competition for McDonalds has increased in all over the world. With large amount of
options available with the consumers it is becoming difficult for the management of the
McDonalds to improve on the areas like sales growth and higher profitability. The
competitive environment has forced the companies to ensure that they are living up to the
expectation of the consumers so that the relationship with them does not go on the lower side.
The companies like Pizza Hut and Dominoes are giving tough competition in the market
(Hanratty, et al 2012). The competitive environment is also getting complex in terms of the
fact that competitors are making changes in their business strategy that too at much faster

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rate. Due to these there are several types of challenges that McDonalds have to face. These
include:
 Decreasing profits: It is due to competition that McDonalds have to reduce the prices
of their products. This has direct impact on the profits being generated by the firm
from the sales.
 Declining growth rate: It is also evident from the data that expanding or penetration in
different markets has slowed down due to the increasing competition. In the time
when the global economic condition is not so positive this does not have positive
impact on the business of McDonalds. In the time when the people are getting highly
concerned about the health concerns the chances that their product sale will decrease.
This will further have impact on the growth of the company (Nawaz, 2011).
 Heavy research: Both the type of research has become critical i.e. they need to do
market research on the regular basis so as to understand the market needs. After the
data is collected about the market, it is critical for the firms to make new products so
that they are able to satisfy the needs of as many customer segments as possible.
 Marketing investments: In the competitive environment that they are in they need to
ensure that they are doing marketing as much as possible. For this they will have to
invest in the areas like digital marketing and product development that will improve
the overall business of the firm (Howse, et al 2018). However the pricing of the
marketing is increasing day by day hence it will have impact on the overall business.
The competitors are also investing higher on the use of technology especially the data
technologies. This will have impact on the business of McDonalds for which
McDonalds will have to be ready with.
Organisational structure and culture
The organisational structure that has been adopted by McDonalds is divisional structure. The
divisions have been made within the firm on the basis of the operational requirements of the
company. Every division within McDonalds have specific set of operations and they have a
special role in developing strategic objectives. The major reason why such type of
organisational structure has been chosen is the fact that such type of organisational structure
supports organisational flexibility and provides autonomy which helps in fulfilling business
needs as well as different organisational aspects (Valax, 2012). Such type of organisational
structure of McDonalds have typical characteristics that includes global hierarchy, function

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based groups as well as performance-based divisions. This helps them in bring more control
in the business and at the same time ensure performance of the firm remains at the higher
side.
This company is operational at the multi-national levels hence it has become critical for the
management of the McDonalds to have organisational culture that respects all the global
cultures. The organisation culture of this company supports learning where every employee is
being supported in their growth process (Gupta and Bansal, 2015). Their organisational
culture also supports operational efficiency that helps in maximising the productivity. Their
organisational culture at the global level is tilted towards improving the service quality. The
typical features of the McDonald’s organisational culture include Individual learning,
diversity and inclusion, organisational learning and becoming people-centric. This is why
each and every decision that is made by the organisation reflects the people-centric approach.
For meeting the needs of the people in terms of service requirements their culture of learning
will help.
It is due to all this that the nature of the firm’s reputation is positive in front of the people.
This is also why people are often returning to their stores on the regular basis. It is also the
fact that they have placed ethics in each of their operation and it is a critical part of their
culture. The ethical standards are maintained in such a manner that they lead by example.
Apart from this they are also working towards improving their social responsibility initiates
in different functional areas so that their reputation can be improved and the same time they
are able to satisfy the needs of the community they are serving for (Crane, 2017). They are
also fulfilling their social responsibility by reducing the carbon footprints in their business
and improving their waste management plan.
Nature of the leadership within McDonalds
In order to understand the nature of the leadership, it is critical for the people to understand
the fact that their leadership style is autocratic. This type of leadership has helped them in
bringing more control in their business procedures. The board membership tries to make all
the decisions unilaterally. It is the leadership style that puts a higher amount pf pressure on
the board members, their management, and employees (Rodrigues, Nikhil and Jacob, 2016).
The management of the McDonalds is having higher control over the operations and they
ensure that everything is done under the ethical parameters. The nature of their clientele is

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complex as in different parts of the world they have different kinds of clientele and their
nature is decided by the culture from where they come from. The nature of the leadership in
terms of employees can be understood by the fact that company aims to develop leadership
with each of their members in order to ensure that they are able to make critical decisions as
per the requirement of company (Thakkar and Thatte, 2014). The nature of the leadership at
the company also suggests that they give priority to the value and rules and this is why they
have developed the corporate policies effectively and violation of it can have severe
circumstances.

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References
Crane, A., 2017. Rhetoric and reality in the greening of organisational culture. In Greening
the Boardroom (pp. 129-144). Routledge.
Gupta, N.K. and Bansal, V., 2015. Organisational Behaviour-Study of Mcdonald's and Apple
Inc. International Journal of Management, IT and Engineering, 5(12), pp.193-207.
Hanratty, B., Milton, B., Ashton, M. and Whitehead, M., 2012. ‘McDonalds and KFC, it's
never going to happen’: the challenges of working with food outlets to tackle the obesogenic
environment. Journal of Public Health, 34(4), pp.548-554.
Howse, E., Hankey, C., Allman-Farinelli, M., Bauman, A. and Freeman, B., 2018. ‘Buying
Salad Is a Lot More Expensive than Going to McDonalds’: Young Adults’ Views about What
Influences Their Food Choices. Nutrients, 10(8), p.996.
McDonalds, 2020. About Us. [Online] Available at:
https://www.mcdonalds.com/us/en-us/about-us.html. [Accessed on 21st March 2020]
Nawaz, A.S., 2011. Employee motivation: A study on some selected McDonalds in the
UK. African Journal of Business Management, 5(14), p.5541.
Qureshi, A. and Hassan, M., 2013. Impact of performance management on the organisational
performance: An analytical investigation of the business model of McDonalds. International
Journal of Academic Research in Economics and Management Sciences, 2(5), p.54.
Rodrigues, J., Nikhil, S. and Jacob, S., 2016. Promotional Strategies of McDonalds and
Market Effects. Journal of Management Research and Analysis, 3(1), pp.53-55.
Thakkar, K. and Thatte, M., 2014. Consumer perceptions of food franchise: A study of
McDonalds and KFC. International Journal of Scientific and Research Publications, 4(3),
pp.1-5.
Valax, M., 2012. Beyond McDonald's CSR in China: Corporation perspective and report
from case studies on a damaged employment reputation. Asian Business &
Management, 11(3), pp.347-366.

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