Posted: June 4th, 2021
McDonald’s Corporation (Plc) is the first worldwide company by sales. Found in over 100 countries and territories in the world and last recorded to be serving 52 millions customers each day, it’s the world’s largest chain of fast food restaurants. The first McDonald’s restaurant and franchise was opened and founded by Raymond Albert Kroc in the year 1955, he was inspired by the speedy service system of the McDonald’s brothers. (McDonalds website) ‘Franchisees are crucial to McDonald’s success; they deliver our brand values straight to the customer.
Worldwide, over 70 percent of our restaurants are run by independent entrepreneurs’ (Lancaster and Reynolds, 2004, P. 335). McDonald’s is considered to be in a monopolistic competition; ‘it is a market structure where there are a large number of sellers producing a differentiated product’ (Worthington and Britton, 2006, P. 505) With no price competition, the goods are slightly differentiated by advertising, branding or local production. There are many ways to determine a size of an organisation, we can see the increase in size of McDonalds over the years by the increasing number of restaurants and the revenue.
We can see this in McDonalds worldwide financial profile, appendix 7. 1. ‘Organisation structures provide a frame work through which communication can occur and within which the processes of management can be applied’. ( Worthington and Britton,2006,P. 23) On a globalised scale McDonalds functions on a Matrix structure. Within countries McDonalds operates on a functional structure, which is beneficial as it’s suited to a small scale. Specialise and technical expertise through personnel can be divided between departments, so McDonalds is able to facilitate the development of their business.
This develops a clear pathway for career development. However, the downside to using this structure is it’s simplicity, as it’s been argued that the structure is more appropriate to single product organisations. In relation to McDonalds, due to the diversity and product range they may have to consider restructuring their organisation. Appendix 7. 2 is an example of McDonald’s UK functioning structure. ‘The swot analysis is a technique for firms to highlight their internal strengths and weaknesses and its external opportunities and threats.
‘(The Worthington and Britton,2006,P. 510) PESTLE analysis looks at likely changes in political, economic, socio-cultural and technological factors and seeks to predict the extent to which change is likely to occur and its possible consequences for the organisation’ (Worthington and Britton,2006,P. 475). McDonalds has been hit with publicity through media in recent years, allegedly exploiting the company’s nutritional facts and leading to them being sued on obesity issues.
Furthermore, their target for consistent expansion experienced a fall back in late 90’s from the outbreak of Mad Cow Disease resulting in their profits in a massive drop back closing 177 stores from three countries. But McDonalds now supplies “handy booklets” of ways to improve and maintain a healthy life style and a compulsory sheet of the nutritional factors of their food, recommended by the government for people to be aware of their own health.
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