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Table of Contents
McDonald's, one of the world's greatest firms, worked incredibly logically during the economic crisis by keeping to its policy of targeting more buyers with innovative menu offerings with a reasonable price point-from cheap sandwich wraps to more costly fruit smoothies. However, their strategy started to fall down with the consistent challenge faced by the employees in satisfying customers with speedy and friendly service. During a webcast with franchise owners (approximately 90 percent of McDonald's restaurants are owned by franchisees), this failure came into company-wide view in March 2013. It was stated that complaints came from every 1 in 5 customers and were mostly related to speedy delivery and consumer-friendly behaviour. It becomes a major challenge to the McDonald's company industry. This study is a clear representation about various problems related to McDonald’s and its customer service across the globe. It is reported that global customer base of this restaurant is declining day by day because of improper food quality and supply of products are not ensured within time. Along with this, economic recession affects McDonald’s broadly and improper press handling is another cause to reduce business viability. The aim of this study is to explain various problems of McDonald’s and future recommendation for problem solution purpose are also enlisted later.
McDonald’s being a very recognized company of fun snacks worldwide was successful in overcoming the economic downturn by sticking to its strategy of introducing many new items to the menu at an affordable range. It also remodelled and tidied up many of its 14000 US restaurants (Zhu, Anagondahalli & Zhang, 2017).
The organisation began to face several challenges, however, as its reputation went downhill. For a business to prosper, customer loyalty should be their first and foremost priority, and that is where this business begins to sink. A constant challenge was providing consumers with speedy and polite service. In March 2013, the evil news about customer loyalty became a company-wide priority after inaccurate data provision (Xu, 2014). (Approximately 90% of McDonald's restaurants are owned by franchisees.) McDonald's executives noted that 1 in 5 customer complaints were related to friendliness issues and that the problem was enhancing gradually. The vice president of business research for McDonald’s USA, Steve Levigne, showed on one of his slides that “Service is Broken”. The most common complaints from the customers were “rude and unprofessional employees”, “service was chaotic” (Wu, 2018). The whole situation became very much transparent in front of the press very soon.
Coherence has been one of McDonald's draws for a long time. People want to know just what they can because whenever they buy a Big Mac. So now consumers are increasingly moving towards places that allow users to customise their orders, like Chipotle. McDonald's recently carried out prep tables in its kitchens that can accommodate further condiments and spices to provide better flexibility down the road (Raduzzi & Massey, 2019).
McDonald’s in its response accepted that the problem was due to the sudden uprise in the menu. However, this strategy became a problem mainly due to the unskilled employees. The quality of employment of the company decreased severely (Qian & Chen, 2019). Due to the employment of not so well educated, trained and skilled people, this situation resulted to be so much worse. The not-so-proper training resulted in the bad service. The strategy of introducing new items to the menu does attract many consumers and that obviously created a little bit more pressure on the employees. If the employees would have been properly trained, they would have had the knowledge of proper management of this situation (Povod, Roldugina & Dmitrienko, 2016). Due to the lack of knowledge, it became really hard for the unskilled employees to handle the situation which ultimately resulted in the hostile behaviour towards the consumer.
The constant challenge faced by the company of consumer’s increasing complaints was initiated by the introduction of new strategy, aggressive expansion of the menu. The president of McDonald’s USA, Jeff Stratton, has defended by saying that the chain introduced several new products and limited-time offers this year to give customers more variety. According to him, the pace of product introduction was way too fast. There is always a way of implementing things (Paul & Roy, 2014). A sudden and huge introduction can lead to creating chaos. The main target of this strategy was to attract as many consumers as possible due to the ongoing economic downturn. But the company overlooked the efficiency of its employees. The company was full of unskilled, uneducated, untrained employees, who did not have any idea of management so they were unsuccessful in outstanding this situation. The massive pressure of work resulted in their hostile behaviour towards the customers (McMurtrey & Rowley, 2016). The huge number of unsatisfied consumers when started to open their mouths then this became a huge topic for the media to cover. Through the media, this news spread worldwide and before knowing, the shining name of McDonald’s got all down.
While McDonald's admitted and spoke about several of their errors, they totally overlooked why they recruited the undeserving workers. It was believed that employee pay was the key factor behind this type of unfriendly operation (Lawrence & Weber, 2014). The corporation was accused of not supplying the staff with the rightful pay. In the business news, numerous papers and analysts attributed inadequate service to the high unemployment rate, which they related to low pay. This allegation was never officially authorised by McDonald's, but the turnover figure was almost 60% recorded by different fast-food franchises. It is very clear that decent workers will never work for a poor salary and the unemployment rates soared because of that (Jeon et al. 2016). The company introduced the new strategy of adding several new items to the menu and this was followed by the requirement of more workers. But this fact got completely reversed with the increasing rate of turnovers, which resulted in the employment of non-deserving people.
Internal business environment can be analysed for understanding potential issues related to McDonald’s business process and this can help to provide better information about this organisation. SWOT analysis table is given below to forecast potential problems as well as threats of this company.
· Brand value is high for McDonald’s products
· Diverse product range is another popular factor for this organisation and it is a potential strength
· Accurate promotional strategy provides better insight for this company
· Limited vegetarian options within the store
· Quality of foods are cheap
· Busy periods are not handled properly by employees
· McDonald’s café is a recent introduction that helps to provide better opportunity
· Global expansion is opportunistic for this organisation
· KFC, Subway are other fast-food stores provide high quality product in a low price
· Stakeholder management is poor
Table 1: SWOT analysis
(Source: Mcdonalds.com, 2020)
All of these together resulted in the increasing dissatisfaction of the consumers and thus, this is the root of all the problems. Stakeholders management theory can be implemented in business process of McDonald’s to solve business problems of this famous food chain. From the case study, it is retrieved that this organisation is not able to maintain proper relationship with both the internal and external stakeholders (Chaudhari, 2018). Therefore, this theory can help to analyse importance of employees and customers in business process. On the other hand, understanding of demands and complaints of consumers can also be analysed by applying this theory in McDonald’s business process.
McDonald’s has faced number of problems in modern business environment and it is required to solve all of the problems as soon as possible to gain better profit in competitive business environment. All the recommendations are enlisted below that can help to reduce viability of identified problems for this famous food chain and future sustainability in business process can also be ensured.
It can be concluded from this study that McDonald is a famous restaurant chain across the globe and it handles number of potential customers in several international sectors. The strength of this organisation is to provide regional taste for their food products and this is really effective for better business propagation across the globe. However, recent economic recession is really vulnerable for this organisation and trust from customers is decreasing in a potential order. Along With this employee dissatisfaction level is increasing because of improper payment schemes and low scale salary. Moreover, wage problem is really vulnerable for this company and it is required to solve such issue as soon as possible.
Public relationship strategy is not authentic for McDonald’s and bad media relation also affects their business reputation negatively. In addition, internal work process is not good for this firm and it is needed to restructure work progress by delivering proper training for all employees. Along with this, bot the technological and behavioural training is needed for McDonald’s employees to improve customer relationship. On the other hand, PR battle can be resolved by developing business websites and proper development of communication pages in social media such as Facebook, Twitter and Instagram can help to increase business reliability and future sustainability can also be managed.
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