Internal

Internal

1. Brand Power

   • McDonald’s have the highest Market Cap of all the companies in the restaurant sector at an approximated $106.4b as of May 2017. (Forbes, 2017) also penetrating the Forbes most valuable brands ranking #9 being the highest-ranking restaurant. (Forbes, 2017)
     • Being heavily invested in McDonald's would look to always gain a high ROI for investors and keep the shareholders happy, a good P/E ratio, which is the current stock price divided by the earnings per share (EPS). and high intrinsic value which is the equation of, (EPSx(PE+2G) x 4.4)/Y this is so investors can value McDonald's and decide whether to invest or not. they would want more investors to increase market capital, which would help them expand and control the market completely.
       • We see here that over the last 5 years McDonald's share price has gone up rather consistently. Looking a steady investment, for longtime and short time gain.
   • According to Wells Fargo ‘McDonald's is advancing rapidly in mobile, and will become the first fast-food chain to achieve full mobile order and payment functionality at all its outlets’ (SmartBrief, 2017).

2. Location

   • Location influences the internal running of a business. Taking into consideration of the social constraints, a successful business would provide a good location. Be that the internet or be that in a highly populated location, to make the most sales we would take in consideration the influence the location would have
     • According to McDonald's to start a franchise you would need between £250,000 and £500,000 this would be depending on location. Properties are more expensive in the city of London than other cities and towns in the UK. Being prepared to open a franchise you would want to put your business in a highly populated place close to the competition already there, considering their R&D Team and using less of your own and saving some time and money, they would have looked for the SOS. Taking on your own franchise is a 20 year commitment with McDonald's
   • McDonald’s also has the advantage of location with 36,899 stores worldwide (McDonald’s Corporation, 2016), All of which are in prominent locations placed strategically using the Socially Optimal Solution (SOS) for choosing the location of their restaurants meaning they think where the bulk of the customers are and provide them with the restaurants. Competition will follow suit and place their product closely using Harold Hotelling’s model of Spatial Competition.

3. Price

   • McDonald's would use the destroyer pricing strategy having the advantage of being the first movers and controllers of the market. With an ever increasing competition, they would increase their market share by beating all competition on price.
   • Comparison websites that are now available make it increasingly harder and harder to destroy competition, as everything is being produced and compared via external organisations. With this attack on your company you would have to keep on your toes, by producing a team ready to check if all that is being shown on the competitive sight is right and if it portrays your business in a justified manner. A website by the name of Burgerlad has produced the menu's of a few of the major fast food chains. in which we are able to compare prices.
   • They smash the competition with promotional offers, whether that be the 'Taste of America' special offers or the 99p savers selection. Prices that no one else can beat, but only match.

4. Employee Relations

   • Employee relationships with the company and with the consumers, can cause either regular customers and a happy team, or unhappy customers and an unhappier team; destroying loyalty altogether. A recent survey on the glassdoor website shows us that McDonald's has a huge amount of unsatisfied and unhappy employees.
   • Management style, in McDonald's may be a cause of concern if they are ranked the lowest when it comes to employee satisfaction. Sinek (2014) expresses that, stress and anxiety at work have less to do with the work we do and more to do with weak management and leadership.
     • This being said, the military have a stronger bond and love for each other, and see themselves as 'brothers'. An organisation that strangers are willing to die for their country and friends. Medals are given for those who sacrifice themselves for others, where in companies bonuses may be given to those who sacrifice others for them. However Bob Chapman CEO of Barry-Wehmiller manufacturing company, when they could no longer afford their labour pool and had to cut $10m announced the programme in which no one would get fired. They would have to take 4 week unpaid vacation and everyone including him would take a pay cut. He said they following 'it's better that we should all suffer a little than any of us should have to suffer a lot'. Moral went up and they saved $20m and the employees traded with each other holidays, making the employees closer than ever before. This is the effect of good leadership.
   • McDonald’s Human Resource Executive Rich Floersch declares, executive turnover was about 20% worldwide while that of the team individuals was around 80 percent and 90 percent. (Jargon J., 10 April 2013, McDonald’s Tackles Repair of ‘Broken’ Service, Wall Street Journal).
   • They may consider choosing between regional or individual managers, which would effect the trust the managers have with their employee's and vice versa due to lack of communication. An example of this is Pret A Manger have changed the following stores into regional management, Bluewater, Canterbury, Maidstone, Lakeside. The Bluewater team have expressed that they feel unprotected by the manager not knowing who she is and if there is a problem for any reason they would not have her support but be fired.
     • Considering this the company would look at all the factors of what might cause the employee's to be upset, with either a survey for the employee's or a change of personnel be that staff member or manager. Change the benefits of the employee's they may change the rate of pay. Survey monkey is used in Pret A Manger to get to the root of their employee's feelings. Also an inside organisation is prepared. Though this isn't done anonymously, which can effect the accuracy of the survey with employees being scared to express themselves.

5. Quality

   • With health consciousness on the rise, McDonald’s have to consider the healthiness of their products. This being because we are looking for healthier substitutes
   • In 2004 Morgan Spurlock filmed the documentary ‘Super Size Me’ which consisted of a full body examination before he started to eat McDonald’s for every meal for 30 days, a quest that rose his cholesterol dangerously to critical conditions and had him gain 25 pounds with the extra of accumulating fat in his liver.
     • McDonald's as a company would have to look at the health benefits, provided from their food. knowing it can causes health problems the company would look at the production of it the supplier and try find healthier but cheaper alternatives in their products. reviewing the PLC and SCM. This could cause a loss of profits if they decide to find a more expensive but a healthier alternative which could gain customer loyalty in the long run (LR).

6. Service and technology

   • New self service checkouts at McDonald's, that make it more convenient for the customer can make it less convenient for the company. The company then would have to train employee's to use this system and be prepared to maintain it if any technological problems occur.
   • If there is a demand for technology for example online ordering McDonald's would have to hire web developers, web designers, run it through the board, with their R&D team to see the effectiveness, compare it against other competitors to see if it has either grown their market share or just made it a little more convenient for their already loyal customers.
     • The effect on the running of the business here would be, either cutting employee's to allow new technology or on the contrary maintaining, retraining and possibly hiring employee's to be prepared to meet the demands of the machines, whether that be changing till roll from the printers, rebooting and troubleshooting the software, and having people ready at the tills that are not self services in an event that they may all have malfunctions. then they would still have to be trained in not only how to use manual tills but, customer service. however if they transfer to online ordering they would have to hire more people because the demand may go up if customers would rather they delivered. a whole new team would have to be hired.

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