Examining Contemporary Business Issues: A McDonald's Case Study

This report provides a comprehensive analysis of the contemporary business issues confronting McDonald's. It begins with a company description, including its profile and financial performance, highlighting a revenue dip in recent years followed by a slight increase. The report then applies Porter's Five Forces to assess the competitive landscape, revealing intense rivalry, high customer bargaining power, moderate supplier power, potential new entrants, and substitute products. A PESTLE analysis examines the political (Brexit impact), economic (GDP growth), social (brand fascination), technological, legal (strict regulations), and environmental factors affecting McDonald's. The core issue identified is McDonald's declining market share due to increased competition, slow management adaptation, confusing pricing, and menu complexity. Comparing McDonald's issues with those of Starbucks and Burger King suggests that addressing pricing and market share through management improvements and national brand campaigns could be effective. The report concludes by emphasizing the importance of marketing, menu simplification, and stakeholder satisfaction in revitalizing McDonald's brand image and financial performance.

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Contemporary business issues
Name of the author
Name of the university
Author note

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Table of contents
Task 1.........................................................................................................................................2
Company description.................................................................................................................2
Company profile.....................................................................................................................2
Describe Porter’s five forces of the company........................................................................2
Conduct PESTLE analysis.....................................................................................................4
Task 2.........................................................................................................................................5
Critical discussion the business issue of the company...............................................................5
Major issues within the industry of the company..................................................................5
What is the company’s business issue?..................................................................................6
Examine the company business issues from different perspectives.......................................7
Argue by discuss your opinion on your company business issue critically by......................7
Task 3.........................................................................................................................................9
Reflection on contemporary business issue...............................................................................9
How the contemporary business issues have given me the opportunities?............................9
Considering the business issues in different perspective allowed me to find the new ways
of approaching......................................................................................................................10
Articulating/revising/re-evaluating my opinion gave me the opportunity to
examine/explore/become an independent learner................................................................10
It helped me to expand my professional knowledge/gain a sense of ownership of my
professional development.....................................................................................................11
Reference list and Bibliography...............................................................................................12

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Task 1
Company description
Company profile
In the year 19540, McDonald’s was founded by Maurice McDonald and Richard in
San Bernardino, California, United States (Mcdonalds.com 2018). This can be considered as
the popular fast food manufacturing organization in the current business industry. The
company McDonald's has established its popularity in the market by providing good quality
of products at the reasonable prices. The company serves the customers through its 30,000
restaurants in near about 100 countries (Mcdonalds.com 2018). It has introduced diversified
products in the fast food industry, which has helped the company to increase its brand value.
After the year 1990, the company named McDonald's has established its growing plans in the
market. In the year 2003, the company adopted new leadership strategy for bringing the
organizational development. The product named Hamburger is the bestselling product of the
company. If the business revenue of the company named McDonald’s is being analysed, it
will be identified that in the year 2017, the business revenue of the company was 22.82
billion US dollar. However, in the year 2013, the business revenue of the company was 28.11
billion US dollar (Mcdonalds.com 2018). After analysing the financial report of the company,
it has been identified that with in last three years the company has faced the financial
challenges. However, in the year 2018, it has been identified that the business revenue has
increased 0.1% (Mcdonalds.com 2018).
Describe Porter’s five forces of the company
Situation Analysis
Existing
rivalry
In the UK business industry, there are various fast food selling
organizations, which have established its strong brand image in

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the market (Dey 2016). In the fast food selling industry,
Starbucks, Yum Brands, Subway and Barger king has created
tough competition for McDonald's. Not only the market
popularity but also these organizations have introduced same
types of product in the market. This indicates that the company is
facing tough competition from the existing organizations.
Bargaining
power of the
customer
As UK market has brought the large scale of opportunities for the
organizations, therefore, the availability of food selling
organization is high (McDonald et al. 2016) As its result, the
customer gets various options before purchasing any products
from the market. Therefore, this can be said that bargaining power
of the customers is high.
Bargaining
power of the
supplier
On the other hand, with the increasing rate of organizations in the
market, the number of the supplier has also, which maintains the
supply of raw material in the organisation (Duke 2017).
Therefore, this can be said that bargaining power of the supplier is
moderate. This can be considered as the positive influence on the
organizational development.
New entrants With the developing economy, the new small organizations have got
the chance to enter the UK food industry (McLean 2018). Therefore
this has increased the competition for McDonald’s in the market.
Substitute
products in the
market
The new entrants have introduced similar products in the market
in lower ranges, as its result, McDonald’s has faced various
challenges.

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Conduct PESTLE analysis
Situation Analysis
Political The political situation in the UK is not in the peaceful situation.
After the vole of Brexit, the government of UK has decided to cut
all the business elation with European countries (Irani and Sharif
2018). This has impacted on the customer base of McDonald's in
the international market. On the other hand, it has also influenced
the business revenue of the company.
Economic If the GDP rate of UK has been analysed, it will be identified that
it is gradually increasing. From the report of January 2018 this
can be said that the British economy has grown 0.1 percent
compared to the previous year (Martin et al. 2016). Therefore this
can be said that UK Economy is in the favourable situation for
McDonald's as it increases the rate of employment.
Social People of UK are brand fascinated, and standard of living of them
is high. Therefore, this can be said that the company named
McDonald's always faces the pressure for maintaining its
popularity in the market (Burns et al. 2016). On the other hand,
this can be said that this living standard impacts on the labour
wages. Hence, this has been identified that social situation of UK
business industry is not in favourable condition for McDonald’s.
Technological Various software and hardware have been developed in the
industry (Andreou et al. 2018). By using the modern technology,
McDonald’s has developed strong promotional strategy and
product delivery system, which has helped the organization to

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grab a large number of customers' attention.
Legal The government of UK has introduced various strict international
rules and regulations, which have created challenges for the
company in order to expand its business (Andreou et al. 2018).
Environmental The Environmental protection act 1986, has various changes in
the waste management and carbon emission in the business
industry (Burns et al. 2016). As its impact, the company named
McDonald has brought changes in its packaging.
Task 2
Critical discussion the business issue of the company
Major issues within the industry of the company
In this study, it has been identified that the UK fast food manufacturing industry is
dealing with the issues regarding large numbers of products in the market in order to run with
the competitors, the food product developers are generation modern ideas in the industry
(Kelly, 2016). As its result, none of the products is able to attract the customers for a long
period. On the other hand, it has been identified that start-up companies are developing same
types of products in the market (Ziv et al. 2018). This has increased the competition. If the
rules and regulations in the UK food industry are being analysed, it will be identified that
there are numerous rules and regulations, which have created various challenges for the food
selling organizations. Food Safety Act 1990 and Food standards Act 1999, has created
pressure on the organizations for maintaining food hygiene in the food selling industry
(Watson et al. 2018). In the fast food industry, it is the biggest issue that is affecting the food
industry in the UK is Brexit. It has been mentioned that near about 10% vegetables and foods

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come from the European countries. After the Brexit incident, supply chain gets hampered
(Kelly, 2016).
What is the company’s business issue?
In the current scenario, it has been identified that the company named McDonald’s
has started losing its market share from the UK fast food industry (MacDonald, 2017). It has
also been identified that due to increase number of competitors in the market the sales
revenue of the company has also decreased. With the increasing competition in the market,
the business organizations have brought various changes in the management system;
however, due to huge corporate standards, the company is not being able to bring the
necessary changes in its management. As its result, it has become very difficult for
McDonalds’s to manage the situation (McDonald et al. 2017). The company has also faced
the issues regarding its confusing price menu. This has been identified that McDonald’s has
the confusing menu because it features its menu in the dollar. On the other hand, the items
are premium offerings, which are very expensive for a large number of customers. The
company is not providing good quality of products in appropriate ranges. Therefore, this can
be said that it has created various challenges for the company. Within last few years, the
company has added near about 100 items in its menu. This has created the complexity in its
menu. This has become so confusing for the customers to understand (Mcdonalds.com 2018).
Not only the customers are suffering but also this has blogged the workers, which has
decreased their performance speed.
Examine the company business issues from different perspectives
If the issues of Starbucks are being analysed it will be identified that the company is
running is the huge financial loss. It has been identified that mist of the shareholders has
refused to invest in this organization for its decreasing financial revenue (Starbucks.co.uk

7CONTEMPORARY BUSINESS ISSUES
2018). On the other hand, it has been identified that the company is losing its availability of
customers in its stores. This has impacted on its popularity as well as sales revenue. The
study has also mentioned that Starbucks traffic was flat in the current quarter
(Starbucks.co.uk 2018). In the case of Burger King, this has been identified that the company
is dealing with the identity crisis (Burgerking.co.uk 2018). This has been identified that the
popularity of brand image of the company has decreased. Therefore, this has become very
difficult for the organization in order to survive in the market (Burgerking.co.uk 2018). With
the increasing competition in the market, it has become very difficult for the company to run
with the competition. After analysing the issues of the other popular organization in the
market, this can be said that issues of McDonald’s can be solved easily. As the company is
dealing with its pricing and market share related issues, therefore, this can be said that if the
company focuses on developing strong management in the workplace, it will be beneficial for
the company.
Argue by discussing your opinion on your company business issue critically by
After analysing the entire business issues, it has been identified that although the
company is dealing with the issues regarding the menu and decreasing market share in the
organization will focus on bringing the changes in its organization. The CEO can take the
wise step in the case of dealing with the issue chain; it will be more beneficial. If the
company focuses on national brand campaigning, this will help the organization to get back
its brand image in the international market. On the other hand, if core menu items will be
introduced, this will be helping in reducing the menu confusion. In order to deal with the
financial crisis, the company can focus on bringing the changes in its financial structure. By
developing the strong relationship with the franchises, this will be helping to deal with the
situation.

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As stated by Ansari and Riasi (2014), marketing is an essential element in business
development. By developing campaigns in the international business industry, the business
organization gets the chance to establish its strong brand image. By supporting this Gensler et
al. (2015) said, the campaign is the smart business strategy which helps to grab the attention
of large scale of customers at a time. On the other hand, Wansink and Love (2014) opined
that due to large menu list, employees are being failed to serve the customer within the
expected time, this impacts on organizational impression. As the market share of the products
has decreased, therefore, this can be said that if the organization focuses on satisfying the
stakeholders by providing rewards, this will influence them to invest in the organization.
The executive officer of McDonald’s named Steve Easterbrook has said that "While
our second quarter results were disappointing, we see early signs of momentum. Looking
ahead to the third quarter, we expect positive global comparable sales... " (Mcdonalds.com
2018). In order to deal with the situation, the company has introduced the campaign named
“I’m loving it”, which is introduced by partner and Heye (Campaignlive.co.uk 2018). This
has helped the company to increase its popularity in the market. Executive vice-president of
McDonald’s named Larry Light, and global chief marketing officer at McDonald's, created
the tagline 'I'm lovin' it' , which had become major part in the language and added that the
campaign, "the attitude and all of our integrated marketing" , which have helped the company
named McDonald's dramatically (Campaignlive.co.uk 2018).
Task 3
Reflection on the contemporary business issue
How the contemporary business issues have given me the opportunities?
In the above study, I have identified that the company named McDonald’s is dealing
with the contemporary issues regarding the chain management, decreasing share in the

9CONTEMPORARY BUSINESS ISSUES
market and menu confusion. In the current business scenario, the company has also loosed its
popularity in the market. Therefore, this can be said that it has brought tough situation for the
company. On the other hand, this has also been identified that most of the food selling
organizations are dealing with the same types of issues. This can be said that it is the current
business scenario, this has brought opportunities for me. In this situation, when the Economy
of UK is developing in the fastest way, this can bring advantages for me to develop my
business. In this situation, if I will be able to develop my own fast food selling business, I
will be able to grab the attention of the customers. On the other hand, after analysing the
issues, I have learned that which types of issues can occur. With the issues, I have also get the
knowledge about the causes of the issues. In this study, I have also learned about the
recommendations.
The importance of marketing has become clear to me. Depending on the marketing
strategy, I will be able to, develop the proper marketing strategy, which will be helping me in
the case of increasing my brand value. He re I have also identified that McDonald's is dealing
with the issues regarding the issues regarding its menu confusion. The company has
introduced a large number of dishes in its menu. Therefore this has become so difficult for
customers to decide. On the other hand, I have also identified that the company was not
providing the god quality of products in the reasonable range. As its result, most of the
customers were not being able to experience the products. Due to an excessive rate of
products, it has become very difficult for the employees to provide good service to the
customers. Therefore, this can be said that if will focus on selecting my menu properly by
introducing reasonable product ranges, this will be easy for me to attract a large number of
customers. This will also be helping in the case of providing efficient customer service in the
organization.

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Considering the business issues in different perspective allowed me to find the new
ways of approaching
After identifying the contemporary issues of Starbucks and burger king, I have
analysed that the marketing and customer relation is very important part of a business
organization. If the organization provides good quality of products in the reasonable ranges,
the customers will be attracted towards the organization. On the other hand, I have also
analysed that by increasing the menu, the complication in the organization increases. After
analysing the issues, I have understood that if the internal management is strong enough to
accept the changes, it will help to increase the productivity of the organization. I have also
analysed that by if the internal management structure will be less complex, this can also help
to adopt the changes easily.
Articulating/revising/re-evaluating my opinion gave me the opportunity to
examine/explore/become an independent learner
After analysing the study, I have begun to analyse my knowledge about the issues
which can be occurred in an organization. I have also got the knowledge to analyse the
important element, which is required for business development. After analysing the business
issues, I have learned that marketing is an essential part of business development. As the
company named McDonald's has introduced the strong marketing strategy for grabbing the
attention of the customers, therefore this can be said that if my organization faces such kind
of issues, I will be able to develop an effective marketing strategy for developing my
organization. It has helped me to develop new ideas in the management so that my employees
will be efficient to maintain the relationship with the customers.

11CONTEMPORARY BUSINESS ISSUES
It helped me to expand my professional knowledge/gain a sense of ownership of my
professional development
In this study, I have learned about the contemporary issues in fast food
manufacturing industry in the UK. Through this study, I have also analysed the importance of
marketing in the case of developing strong brand value. I have got the knowledge from my
previous experiences that depending on the preferences of the customers, the pricing strategy
needed to be developed in the organization. This has helped me to develop my personality so
that I will be able to take the challenges. On the other hand, I have also analysed that
shareholders are very important in an organization. Therefore, I have learned to satisfy my
shareholders and convince them in investing more in my organization. Through this process I
have understood that, if I want to maintain the popularity of my organization, I need to focus
on customer satisfaction. For increasing the customer satisfaction, I have learned to develop
new facility in the organization, which will influence the business revenue of my organization
indirectly.