Assignment Title: Explain Mc Donald’s Basic Philosophy?

Assignment Title:

Explain Mc Donald’s Basic Philosophy? How Does It Enforces This Philosophy And Adapt To

Different Environments While Operating In Pakistan?

“Introduction”

Richard “Dick” Mc Donald And Maurice “Mac” Mc Donald Were The Two Brothers Who Are The Founder Of Mc Donald’s.

Mc Donald Family Was Irish But They Lived In Manchester, New Hampshire.

Mc Donald Brothers Fast Food Venture Was In 1937 With A Hot-Dog Stand Which They Named It As “AIRDROME”. Which Was in Monrovia, California…

Ray Kroc (1902-1984):

Ray Kroc was born in 1902 to A Czech Family originated in Chicago, IL.

Ray Kroc was a trained Ambulance Driver in World War I

Ray Kroc tried his hand in so many trades like, Paper-cup salesman.

He also was a pianist and he had worked with some band as well.

Then Ray Kroc Worked for Ray Damburgh Restaurants.

He Eventually became a Multi-Mixer milkshake machine salesman in the year 1954.

In 1955 Ray Kroc And Mc Donald Brothers joint together and opened a Mc Donald’s Restaurant.

In the year 1961, The McDonald brothers agreed to sell Kroc business rights to their operation. The agreement was for the McDonald Brothers to receive $2.7 million for the chain and to continue to receive an overriding royalty of 1% on the gross sales

“Mc Donaldization- The Basic philosophy”

George Ritzer is a US sociologist best known for advocating the Mcdonaldization thesis Ritzer (1996,1998,2002). In his first book on this subject(1996)he argued that the principles on which Fast-food restaurants such as McDonald’s were organized were becoming an increasingly common feature of society.

THESE PRINCIPLES INCLUDES:THESE PRINCIPLES INCLUDES:

Trying to maximize efficiency.

To make all aspects of provision fast-foods calculable.

To make the process of producing and consuming burgers predictable.

4.Ensuring that management retained the maximum possible control over the process.

THE PRINCIPLES OFTHE PRINCIPLES OFMCDONALDIZATION:MCDONALDIZATION:

Four alluring dimensions lie at the heart of the success of mcdonaldization.

Efficiency

Calculability

Predictability

Control

EFFICIENCY:EFFICIENCY:

Ritzer definesefficiency as “theoptimum method forgetting from one point to another” .To thecustomer of McDonald’sthis means ‘the best wayof getting from beinghungry to be full’.

FOR EXAMPLE:FOR EXAMPLE:The process was speeded up

if the buns supplied to the restaurants were pre-sliced.

Optimum amount of wax put on the pieces of paper separating individual beef burgers.

The use of conveyor belts.

Developed a system whereby a frozen burger could be moved over a flame and cooked in 94 seconds.

CALCULABILITY:CALCULABILITY:

McDonald’s offers calculability, or emphasis on the quantitative aspects of product sold (portion size, cost) and service offered. Quantity has become equivalent to quality.

PREDICTABILITY:PREDICTABILITY:

McDonald’s offers predictability, the assurance that their products and services will be the same over time and in all locals

CONTROL:CONTROL:

Control, especially through the substitution of non-human for human tech, is exerted over the people who enter world of McDonald’s. A human technology is controlled by people and a non-human technology controls people.

“Adeptation of Mc Donald’s In Different Enviorments”

Opening Strategy of Mc-Donald's:Ray Kroc opened the first

McDonald’s restaurant in 1955. He offered a limited menu of high-quality, moderately-priced food served fast in spotless surroundings.

McDonald’s “QSC&V” (quality, service, cleanliness, and value) was a hit. The chain expanded into every state in the nation.

By 1983 it had more than 6000 restaurants in the United States and by 1995 it had more than 18,000 restaurants in 89 countries, located in six continents

Price Ranges:

The prices vary considerably around the world ranging from $5.20 in Switzerland to $1.05 in China for the Big Mac that costs in the United States $2.32

The Economist magazine even devised a `Big Mac Index’ to estimate whether a currency is over or undervalued. Thus, the $1.05 Chinese Mac translates into an Implied Purchasing Power Parity of $3.88.

The inference is that the Chinese currency is undervalued while the Swiss France is overvalued.

Taste Setting:

Its traditional menu has been surprisingly successful

People with diverse dining habits have adopted burgers and fries wholeheartedly.

Services:

Despite the global operation, McDonald’s stays in close contact with its customers who want good taste, fast and friendly service, clean surroundings, and quality

Advertising:

The advertising campaigns are based on local themes and reflect the different environments

In Japan, where burgers are a snack, McDonald’s competes against confectioneries and new “fast sushi” restaurants.

Regional Distribution:

McDonald’s ensures consistent products by controlling every stage of the distribution.

Regional distribution centers purchase products and distribute them to individual restaurants.

The centers will buy from local suppliers if the suppliers can meet detailed specifications.

Competitive Strategy:

McDonald’s uses essentially the same competitive strategy in every country: Be first in a market, and establish its brand as rapidly as possible by advertising very heavily

Competitive Strategy:

New restaurants are opened with a bang. So many people attended the opening of one Tokyo restaurant that the police closed the street to vehicles.

Competitive Strategy:

The strategy has helped McDonald’s develop a strong market share in the fast food market, even though its US competitors and new local competitors quickly enter the market

Challenges:

Despite its success, McDonald’s face tough challenges in the form of its competitors such as Burger King, Wendy’s Kentucky Fried Chicken, and now also Pizza Hut with its pizza.

However, fast food in reheat able containers is now also sold in supermarkets, delicatessens (a store selling foods already prepared or requiring little preparation for serving) and convenience stores, and even gas stations.

McDonald’s has done very well, with a great percentage of profits coming now from international operations.

“Created Place In Pakistan Food Industry”

Aiming to be the world’s best quick service restaurant experience, Mc Donald’s started it’s operation in Pakistan in 1998 and is a leading fast food service retailer for its valued costumers.

To realize the Mc Donald’s service vision, we believe in strengthening and we focus to deliver:

I. Resources & Recognition II. Values & Leadership Behaviors

III. Competitive Pay & Benefits

IV. Learning Development & Personal GrowthV. Resources to get job done

Demand Trends:

There are many variations observed in the demand trends for Mc Donald’s in pakistan.

The demand also fell because of security issues that affected demand for Mc Donald’s e.g., Suicide attacks on western establishments a year ago.

Key Success factors:

Mc donald’s pakistan has an aggressive plan to expand in all other cities of pakistan and is rapidly growing with the focus to provide friendly and a quick service restaurant experience to its costumers.

“How Mc Donald’s Can Sustain It’s Status In Pakistan”

Strategic Problems:

The problem Mc Donald’s is facing now a days is developing new strategies in order to sustain a competitive advantage in a market.

Innovation & Diversification:

In order for Mc Donald’s to sustain in this market or counter this problem they must stay innovative & Further diversifying their business to sustain their comparative advantage.

Cheap & Greasy Image:

Main problem they are facing is of having Cheap & greasy “Image” countred by Subway in Middle East and other countries.

Market Evolution & Mc Donald’s Image:

The evolution of fast food is causing Mc Donald’s it’s meet & has forced it to re-think their overall stratagy introducing new products and re-shaping of their image.

Solution to the problem:

Mc Donald’s has tried to satisfy this need through government sales and wraps but there is a need to introduce non-burger products.

Through implementing new trends

Some new exciting offers will be helpful.

Set new Trends.

Coffee or three hot + Cold drinks can really help.

As people of Pakistan are health concious provide them with some new products with fulfils the requirement.

Making itself available to move people

Start a campaign our something like that for people so they can express their views on brining a new product into the market.

Conclusion: