Assessing Technological Impact on McDonald's Business: A Report

This report provides a comprehensive analysis of McDonald's, examining its external business environment through a PESTLE analysis, assessing its competitive landscape, and evaluating customer behavior and decision-making processes. The internal business environment is explored by identifying strengths and weaknesses, and suggesting improvements. Furthermore, the report delves into McDonald's marketing strategy, customer service experience, and the impact of technological advancements on its global business performance. It also highlights the challenges faced by multinational corporations in markets such as Azerbaijan, and offers recommendations for future strategies. The report concludes with an overview of the company's strengths, such as its strong brand image and diversified income, and weaknesses, including unhealthy food perceptions and employee turnover, providing insights into how McDonald's can leverage its strengths and mitigate its weaknesses to enhance its business operations.

BUSINESS PLAN
SOLUTION REPORT

TABLE OF CONTENTS
1. INTRODUCTION.......................................................................................................................3
2. ANALYSIS ON ELEMENTS OF EXTERNAL BUSINESS ENVIRONMENT OF
COMPANY......................................................................................................................................4
PESTLE analysis of McDonald’s...............................................................................................4
Competition, direct and indirect competitors, strengths and weaknesses in comparison to
Woodpecker restaurant, expectation of new entrants and existing barriers................................5
Analysis of customers, their behaviour, needs and also decision making process for choosing
a restaurant, their expectations and the way they become excited in a restaurant......................6
3. EXPLANATION ON ELEMENTS OF INTERNAL BUSINESS ENVIRONMENT OF
COMPANY......................................................................................................................................7
Suggestions to improve weaknesses and the way to exploit strengths.......................................8
Business strategies:.....................................................................................................................8
Suggestion for appropriate organisational structure according to business operation of
McDonald's:..............................................................................................................................11
Comment on commitment for competence in McDonald's.......................................................13
Comment on management style................................................................................................14
4. MARKETING STRATEGY......................................................................................................15
Marketing mix...........................................................................................................................16
5. Customer service experience.................................................................................................19
6. ANALYSIS OF SUGGESTED SOLUTION AND RECOMMENDATIONS.........................20
REFERENCES..............................................................................................................................23

TOPIC
To assess the impact of technological advancements on business performance in
globalised world: A study on McDonald's restaurant
1. INTRODUCTION
In this report, discussion will be given on McDonald's restaurant which is a multinational
corporation having its franchises worldwide. The organisation is operating in fast food chain
where a variety of food products is offered to customers of business market. This company is
known for the largest fast food restaurant in global world (Duggal and Alexander, 2018). Firstly,
with the establishment of company, their main motive was just to provide effective hamburgers
in market of America. Company has millions of employees worldwide and therefore it is known
for having effective human resource management. It has many sound financial strategies for
doing effective business operations in worldwide market.
According to its financial reports, for achieving success, company is moving fast with the
innovative technologies for operating effective business operations. With the continuous
innovation, restaurant is creating new ways to serve the best possible services to customers of
business market. McDonald's also has effective customer relationship management strategies for
building potential relationship with customers.
They have effective strategies for customer relationship management such as happy
hours, combo meals, birthday treats, etc. For its point of sale, company is using NewPOS system
which helps them in managing the supply chain, staff’s productivity and speeding up customer
services in organisation. Other software by which company is able to run its large supply chain is
by NP6 Features. This is the touch screen software which mainly uses pictures of meals on
screens so that customers will recognise menu easily (Selvaraj and Harnett, 2018). Main concern
for McDonald's in doing business operation is regarding changing consumer taste and to adopt
regular new technology of market which require huge cost to invest. In Azerbaijan, main
problems which multinational companies are facing is with bureaucracy by customers in the
marketplace and also impact of technological advancement on business performance in
globalised world.
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2. ANALYSIS ON ELEMENTS OF EXTERNAL BUSINESS
ENVIRONMENT OF COMPANY
To find factors which are affecting business operations of company in marketplace are as
follows:
PESTLE analysis of McDonald’s
McDonald's is a famous leading restaurant across the world. There are some negative
effects with overall affecting its business operations. To determine its factors, pestle analysis of
company is as follows-
Political factors: Main problem which company faces is with the government policies of
particular countries. Opportunities which company has with this factor is regarding high stability
of politics, political support for globalisation. Cultural changes are the biggest threat for
company which overall influencing its business operations. But the threat which is affecting
business operations is regarding political pressure for paying higher wages to workers of
organisation. Threat is because cost goes against cost minimisation essentials of company.
Economic factors: Company has significant pressure with economic changes in countries
which overall affecting revenues of the company. Opportunities which generated with these
changes for company is by decreasing unemployment in developed counties and growth in
developing countries (Arlidge and France, 2018). Threat which is impacting its business
operations is with inflation in some countries. US firms are majorly affecting with Bureaucracy
in market of Eastern European countries.
Social factors: This is the factor influencing customers of McDonald's regarding their
perception and preferences. With healthy lifestyle change and with cultural diversity, an
opportunity has been created to achieve growth of company. But the continuous changing
demand of customers negatively affecting business operations of company.
Technological factors: To achieve success of company, McDonald's needs to address
technological trend in its business operations. Therefore, its recent changes and innovation helps
company in gaining competitive advantage in business market. Threat for company is regarding
continuous technological change in this digital world which require huge cost for its
development.
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Environmental factors: This is an important concern for organisation for achieving its
success in business market. To achieve sustainability, McDonald's has to improve its operational
efficiency so that effective contribution will be provided to environment.
Legal factors: These are the factors which usually impacts retail firms. Main threat for
McDonald's with this factor is regarding Tax law reform which leads to higher tax reforms. To
improve its quality of services, company has an opportunity to follow food safety regulation in
countries (Düking, Holmberg and Sperlich, 2018).
Competition, direct and indirect competitors, strengths and weaknesses in comparison to
Woodpecker restaurant, expectation of new entrants and existing barriers
With comparison to Woodpecker restaurant, overall business operations of McDonald's
will not affect because it has a loyal customer support across the world. This is the organisation
which is outperforming the market from last few years in international market. Its strength and
weaknesses are as follows: Strengths: Recently, developed items which overall provides a success to company are
coffees, smoothies and Angus burgers which have attracted a lot customers in
organisation. Its performance and profitability do not get affected in recession period
because of strong market strategies which helps company in maintaining its performance
in that period as well. Its major strength is that company has diversified business in all
around the world and because of that, it does not have to rely on one currency or
economy.
 Weaknesses: For achieving growth of company in developed countries, it has become a
difficult problem to find prime location which helps organisation in attracting customers.
Different cultural changes across the world majorly affect business operations which is a
major weakness for company. Another weakness of company is regarding its dividend
growth rate (Alakavuklar and Alamgir, 2018).
As the business operations of McDonald's are worldwide, because of that reason, tourists
majorly attract with woodpecker restaurants because they want to try something new in market.
Woodpecker restaurant is the one which has the best capabilities of serving food and to offer the
best quality of services to customers which affect business operations of McDonald's. Both these
organisations have different direct and indirect competitors. Direct competitors of McDonald's
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are Burger King, KFC etc. and for Woodpecker, direct competitors are the restaurants which
situated in cities of Azerbaijan.
Both companies offer different food services and facilities by which they will not be able
to attract customers of each other. Both companies have different food services and offering
because of that performance will not be affected with each other operations. But McDonald's
face some indirect competition with small local and other food restaurants which are its indirect
competitors that are not providing same valuable services as McDonald's but are fulfilling
consumer needs. It is because of the restaurant which avails same products and services to
customers with its different business operations.
If any new competitor enters into market then this will affect McDonald's business
operations because in European market, difficult business climate is regarding bureaucracy by
other firms towards customers. This bureaucracy serves as a barrier for new competitors for
entering in the marketplace of countries like Azerbaijan (Banks, 2018).
Analysis of customers, their behaviour, needs and also decision making process for choosing a
restaurant, their expectations and the way they become excited in a restaurant
To improve the relationship of customers with its clients, there are various strategies and
policies develop by McDonald's organisation. To analyse the needs and behaviour of customer,
company has an effective customer relationship model. To analyse the new potential customers,
these effective relationship of company with customers helps in increasing profitability of
company. McDonald's is known for largest advertiser across nation therefore, its target
customers are all families, children and mainly youth which mainly spend time in restaurant for
their enjoyment.
McDonald's have effective decision making process by which various effective strategies
get developed to influence customers regarding products and services of organisation. Through
customer decision-making process, McDonald's marketing managers identified and tracking
factors on which customer choose their preferences of choice. By problem recognition, managers
will able to identify exact needs of customers. By searching information which required to fulfil
needs of customer, McDonald's will able to improve its strategies for attracting customers in
organisation. This method helps customers in developing decision for purchasing products and
services of restaurant in accordance with their needs and wants.
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To know the needs and behaviour of customers, various methods are adopted by
marketing managers of organisation. Factors which influence consumer behaviour are cultural
factor, social factor, personal factor and psychological factor (Vijayalakshmi, 2018). To identify
the customer’s needs, questionnaire is a way which helps to analyse needs and wants.
Questionnaire is the process which directly analyse customer’s needs. This is the research which
directly communicates to customers where they are asked to fill the form. This will help
company to consider improvement in accordance with the customers of business market.
In the market of bureaucracy, customer relationship is the model which is established by
company to promote its products and services among customers easily. With this model,
company will be able to enhance better customer services and also, it will able to discover new
customers in organisation. To attract customers and make them excited about new products of
company, this model helps in promoting services among them effectively. Effective advertising
policies also help organisation in promoting new products and services among customers which
develops excitement among them and influence them to try goods and services.
3. EXPLANATION ON ELEMENTS OF INTERNAL BUSINESS
ENVIRONMENT OF COMPANY
Strengths Weaknesses Strong brand image: it is the most
recognizable brands across the world.
Company is consistent with its taste of
food and also providing the best
cultural diversity of food. Diversified income: with its business
operations worldwide, company has an
effective sales volumes and earning
which makes them stronger in business
market. Strong product offering: Company has
strong product offering by which its
income does not affect in a period of
 Unhealthy food products: Sometimes
with its good image in market, there are
some negative perception of company
regarding unhealthy food products.
 High rate of employee turnover: There
is a high employee turnover in
organisation. It has low skilled and low
paying employees which overall leads
to lower performance of organisation
(Li and Yang, 2018).
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recession.
With its strength, McDonald's will able to enhance its growth in business market. With
the strong brand image, company will able to increase its possible value of company. With its
good brand image, company also will able to motivate and direct employee in getting effective
business operations. Motivates employees of company will provide the best possible services to
customers which helps in satisfying needs and wants of company.
Effective brand image helps company to explore its business in areas where they want to
set up business. It also helps company in building credibility and equity among loyal customers
of organisation. With strong product offering, McDonald's will easily able to capture different
cultures of countries which helps them in increasing its overall performance and profitability in
business market.
Suggestions to improve weaknesses and the way to exploit strengths
To overcome with the weaknesses of the company, effective marketing research and
primary data of collection like interview, questionnaire and observation will majorly help to
overcome with weakness. These methods will help in solving negative perception of brand
among customers of business market.
To overcome with high employment turnover, human resource management of company
will have to develop effective strategies by which right candidate will get hired for completing
the specific projects of company (Vignjević-Đorđević and Plojović, 2016). To hire the right and
knowledgeable candidate, management has to provide effective compensation and benefits
which satisfy needs and expectation of employees so that productivity of company get increases.
Business strategies:
Mission and vision of company:
There is an effective mission and vision of company which helps them in attracting
customers in its organisation. McDonald's adjusts its mission and vision statement in accordance
with changes across the global food service industry. Mission and vision statement is developed
by proper strategic planning and tools so that growth of company will get generated in business
market.
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Mission of company sets related purpose and activities of business so that employees
work in accordance with company's strategies. To develop vision statement of company, long
term goals of the company is considered by its owners. Therefore, a corporate vision statement
of company sets to achieve long term success of company. Therefore, its mission and vision
statements are as follows- Mission- Its brand mission is to become a favourite place of customers so that a way is
provided to customer to eat and drink (Mission & Values, 2018). Their worldwide
operations are aligned around global strategy which is the centre on exceptional customer
experience. To target the customers of business market, management of company will
consider preferences of business market so that their needs and wants gets satisfied.
 Vision- Its vision is to gain the best quick service restaurant experience. McDonald's
wants to become the world’s best quick service restaurant experience. Best here means
providing outstanding quality, service, cleanliness and value by which customer’s smile
will be achieved with restaurant services (Meyer, 2018). Placing customers at core value
and committed towards their services with striving to continuous development also come
under the vision statement of McDonald's.
Aim of company is developed in accordance with improvements which needs to include
for operating functions effectively. Factors which considered for achieving effective growth is
product development, marketing, franchising and by developing effective human resource
management.
Values that guide the behaviour and action of management and personnel
In getting the effective growth of company, there must be a proper rules and code of
conduct in which company operates. This code of conduct and ethical practices in company will
also motivate employees towards their working. Therefore, proper values of work culture overall
helps in developing effective growth of company in business market. Belief considered as the
behaviour therefore, leaders of McDonald's organisation will have to shape behaviour and beliefs
of employees. Values of individuals of organisation plays huge role for developing effective
organisational working culture (Why is business ethics is important, 2018).
Values in work culture is the most important process developed by the leaders of
organisation. By developing effective values in workplace, leaders will able to know needs and
wants of individuals from organisation. Therefore, at individual level, values means concepts
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such as caring, empathy, and trust among each other and at organisational level, values includes
accountability, customer service and safety.
For conducting business operations of organisation smoothly, there must be proper
ethical practices of work in organisation. By developing valuable ethical practices, McDonald's
will be able to provide the best possible services to its customers which overall helps them in
improving business performance and profitability among its competitors.
For safeguarding assets of company, there must be a proper and effective ethical practices
in organisation. With these practices employees also work in proper ethical behaviour where they
respect each other and share their views to complete the specific projects of organisation.
Therefore, leader’s role is very important in developing effective ethical practices and to
influence employees to work with proper code of conduct. Proper values in work culture helps
manager in following ways:
Productivity and team work: To increase productivity and to develop team work, ethics at
workplace is the most important thing which needs to be developed by managers of organisation
(Cameron and Green, 2015). With the ethical practices, managers will able to align values and
will also able to encourage employees regarding for generating better productivity in business
market.
Public image: With the proper ethical values, managers will able to earn good image of
company among customers of society. McDonald's is very much concerned with proper ethical
values at workplace. Therefore, main motive of company is to reduce its wastage to operate with
proper integrity. This practices of company help them in developing good image of company in
business market.
Decision-making: When there is a proper value of doing work in organisation, this will
create a positive work culture where effective decision get develop for increasing performance of
company (Szczepańska-Woszczyna, 2015). A strong ethical culture guides managers in reducing
conflicts at workplace and to develop positive work culture where all employee work with
motivation in meeting needs and goals of organisation.
Respect: To create positive culture in organisation, leaders must have to develop effective
practises where mutual respect is provided to each and every employees. Views and shares of
employees in decision-making process of company needs to given equal importance so that they
will also feel motivated for completing specific projects of organisation.
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Diversity: by valuing diversity of stakeholders and employees, management of
McDonald's entity will able to influence their support in developing new operational strategies at
marketplace. This support will also help organisation, in developing new technological
innovation for operating business functions.
Suggestion for appropriate organisational structure according to business operation of
McDonald's:
For handling global operations, it is necessary for every organisation to develop effective
business structure. Organisation structure is a system which define overall system of company
for coordinating components towards achievement of business goals. For developing smooth
business operations at global level, there must be an effective organisational structure so that
effective strategic decisions will get developed for achieving growth of company.
Timely new products will have to be developed by McDonald's according to current market
trends and emerging market issues.
Currently company's structure is followed as:
At top level
(Chief executive officer)
It is followed by
(Chief operating officer)
(Chief people officer)
(Chief financial officer)
Again these departments are broken into corporate affairs, marketing, human resources,
national operations, national operations, regional managers, finance, information and strategic
planning. With that other functional department which currently followed by McDonald's are
legal, customer services, franchising, safety, security and licensing, property and construction,
supply chain and restaurant services. Appointment of general manager helps them in leading all
the business functions of McDonald's. Department manager will be in charge with three heads
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departments, people, guest service, and for kitchen. Therefore, all business function of store will
be in hands of DM also if it is a responsibility of general manager (Elsmore, 2017).
Shift managers are the one which supervise each and every function of department. Their
work is to ensure that business practises runs smoothly during their shift time so that
performance of company gets increases. Crew trainer of McDonald's will be accountable and
will have to respond to divisional manager of company, so that effective training program will
get conducted for employees. For smooth running of store, crew member will be responsible and
without their permission store could not function. So by analysing organisational structure of
McDonald's, it will be suggested that same structure will get continued by company and
strategies will get developed in accordance with needs.
Therefore, to operate at global level some suggestions are as follows-
Design of services: for achieving growth of business at global level, goal of McDonald's
needs to in strategic decision area. With this decision, company will able to provide range of
products which is at affordable products (Guiso, Sapienza and Zingales, 2015). This prices of
products must be developed with the expectation of customers so that effective business
operations smoothly get developed at worldwide. Services must be developed in accordance with
customer needs so that expectations will get fulfilled. Such services include fast food delivery
and in a appropriate manner.
Kitchen: operating at global level, management must have to develop appropriate
strategies where clean and hygienic food will be provided to employees. With appropriate quality
management and with process capacity design, valuable services will be provided to customers.
McDonald's have strategy where they have transparent food processing system where customer
will able to see techniques of preparing food. Explanation of such are as follows-
Quality Management: company must have to develop aim which maximise product
quality within its constraints. This will be developed by limiting cost and price of products. At
global level, company must have to follow production line method, with that product quality will
consistently be managed and best services will get offered to customers. This will help in
maintaining clean and hygienic food processing equipments.
Process and capacity design: for developing smooth business functions at global level,
operation management of company needs to focus on maintaining adequate capacity and
efficiency of process by which demand will get fulfilled. For that proper organisational strategies
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