5.1 Task Individual Case Study (70%) McDonald’s More than half a century ago, Ray Kroc, a 52-year-old salesman of milk-shake-mixing machines, set out on a
Individual Case Study (70%)
More than half a century ago, Ray Kroc, a 52-year-old salesman of milk-shake-mixing machines, set out on a mission to transform the way Americans eat. In 1955, Kroc discovered a string of seven restaurants owned by Richard and Maurice McDonald. He saw the McDonald brothers’ fast-food concept as a perfect fit for America’s increasingly on-the go, time-squeezed, family-oriented lifestyles. Kroc bought the small chain for $2.7 million, and the rest is history. From the start, Kroc preached a motto of QSCV—quality, service, cleanliness, and value. These goals became mainstays in McDonald’s customer-focused mission statement.
Applying these values, the company perfected the fast-food concept—delivering convenient, good-quality food at affordable prices. McDonald’s grew quickly to become the world’s largest fast-feeder. The fast-food giant’s more than 32,000 restaurants worldwide now serve 60 million customers each day, racking up system-wide sales of more than $79 billion annually. The Golden Arches are one of the world’s most familiar symbols, and other than Santa Claus, no character in the world is more recognizable than Ronald McDonald. In the mid-1990s, however, McDonald’s fortunes began to turn. The company appeared to fall out of touch with both its mission and its customers. Americans were looking for fresher, better-tasting food and more contemporary atmospheres.
They were also seeking healthier eating options. In a new age of health-conscious consumers and $5 lattes at Starbucks, McDonald’s seemed a bit out of step with the times. One analyst sums it up this way: McDonald’s was struggling to find its identity amid a flurry of new competitors and changing consumer tastes. The company careened from one failed idea to another. It tried to keep pace by offering pizza, toasted deli sandwiches, and the Arch Deluxe, a heavily advertised new burger that flopped. It bought into non burger franchises like Chipotle and Boston Market. It also tinkered with its menu, no longer toasting the buns, switching pickles, and changing the special sauce on Big Macs. None of these things worked. All the while, McDonald’s continued opening new restaurants at a ferocious pace, as many as 2,000 per year. The new stores ed sales, but customer service and cleanliness declined because the company couldn’t hire and train good workers fast enough. Meanwhile, McDonald’s increasingly became a target for animal- rights activists, environmentalists, and nutritionists, who accused the chain of contributing to the nation’s obesity epidemic with “super size” French fries and sodas as well as Happy Meals that lure kids with the reward of free toys. Although McDonald’s remained the world’s most visited fast-food chain, the once shiny Golden Arches lost some of their luster. Sales growth slumped, and its market share fell by more than 3 percent between 1997 and 2003. In 2002, the company posted its first-ever quarterly loss. In the face of changing customer value expectations, the company had lost sight of its fundamental value proposition. “We got distracted from the most important thing: hot, high-quality food at a great value at the speed and convenience of McDonald’s,” says current CEO Jim Skinner.
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The company and its mission needed to adapt. In early 2003, a troubled McDonald’s announced a turnaround plan—what it now calls its “Plan to Win.” At the heart of this plan was a new mission statement that refocused the company on its customers. According to the analyst: The company’s mission was changed from “being the world’s best quick-service restaurant” to “being our customers’ favorite place and way to eat.” The Plan to win lays out where McDonald’s wants to be and how it plans to get there, all centered on five basics of an exceptional customer experience: people products, place, price, and promotion. While the five Ps smack of corny corporate speak, company officials maintain that they have profoundly changed McDonald’s direction and priorities.
The plan, and the seemingly simple shift in mission, forced McDonald’s and its employees to focus on quality, service, and the restaurant experience rather than simply providing the cheapest, most convenient option to customers. The Plan to Win—which barely fits on a single sheet of paper—is now treated as sacred inside the company. Under the Plan to Win, McDonald’s got back to the basic business of taking care of customers. The goal was to get “better, not just bigger.” The company halted rapid expansion and instead poured money back into improving the food, the service, the atmosphere, and marketing at existing outlets.
McDonald’s redecorated its restaurants with clean, simple, more-modern interiors and amenities such as live plants, wireless Internet access, and flat-screen TVs showing cable news. Play areas in some new restaurants now feature video games and even stationary bicycles with video screens. To make the customer experience more convenient, McDonald’s stores now open earlier to extend breakfast hours and stay open longer to serve late-night diners—more than one-third of McDonald’s restaurants are now open 24 hours a day. A reworked menu, crafted by Chef Daniel Coudreaut, a Culinary Institute of America graduate and former chef at the Four Seasons in Dallas, now provides more choice and variety, including healthier options, such as Chicken McNuggets made with white meat, a line of Snack Wraps, low-fat “milk jugs,” apple slices, Premium Salads, and the Angus burger. Within only a year of introducing its Premium Salads, McDonald’s became the world’s largest salad seller. The company also launched a major multifaceted education campaign—themed “it’s what i eat and what i do . . . i’m lovin’ it”—that underscores the important interplay between eating right and staying active.
McDonald’s rediscovered dedication to customer value sparked a remarkable turnaround. Since announcing its Plan to Win, McDonald’s sales have increased by more than 50 percent, and profits have more than quadrupled. In 2008, when the stock market lost one-third of its value—the worst loss since the Great Depression—McDonald’s stock gained nearly 6 percent, making it one of only two companies in the Dow Jones Industrial Average whose share price rose during that year (the other was Walmart). Through 2010, as the economy and the restaurant industry as a whole continued to struggle, McDonald’s outperformed its competitors by a notable margin. Despite the tough times, McDonald’s achieved a lofty 15.5 percent three year compound annual total return to investors versus the S&P 500 average of 5.6 percent. Thus, McDonald’s now appears to have the right mission for the times. Now, once again, when you think McDonald’s, you think value—whether it’s a college student buying a sandwich for a buck or a working mother at the drive-through grabbing a breakfast latte that’s a dollar cheaper than Starbucks. And that has customers and the company alike humming the chain’s catchy jingle, “i’m lovin’ it.”
Kotler, P. & Armstrong, G. (2006) Principles of Marketing. Englewood Cliffs, N.J.: Prentice Hall.
You should attempt these questions only after you have read the case study, and note that you will be expected to do some additional research outside the case. Compile a report covering (answering) all the questions – using examples from McDonald’s. As indicated below, marks will be awarded for the quality of the report’s presentation and for the quality of research undertaken.
I. Analysis covering answers to all the questions (60%)
a. Explain key marketing concepts and terminology applicable to McDonald’s(15%)
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b. Identify the role of marketing strategies and programs in achieving McDonald’s objectives, including ethical considerations (15%)
c. Explain (show you understand) how marketing concepts and principles are used in McDonald’s daily organisational operations (15%)
d. Explain the relationships of the marketing functions to other functional areas in McDonald’s (15%)
II. Presentation, formatting and quality of argument (5%)
III. Harvard reference list and citations (not included in the 3000 word count) (5%)
IV. Up to 5 extra pages for appendices (only if needed and referred to in the text).
Assessment by coursework is not just about the actual writing of an assignment, and it is certainly not about writing down everything you know about a topic. The secret to writing a successful assignment is to remember that this is an organisation-based assignment. You should show that you have an enhanced understanding of a topic, and that you are able to apply your knowledge to real-life business situations. As such, the main purpose is to show that you can deconstruct the question being asked, plan a coherent structure for your answer, conduct the necessary research and produce an assignment that meets the criteria for academic writing (clearly laid out, logical and in academic English).
The report should be 3000 words, excluding the reference list and appendices (1.5 spaced, 12-point font, 2.5 cm margins on all sides). You may use up to five pages of additional appendices.
Read the question carefully. Start by deconstructing the question to identify the various components:
Establish where the relevant material relating to this question is in the core study text. Read and make sure you understand the text, and make careful notes on the material you will be using in your answer.
Research information about your case study organisation(s) with care. Is the material current and relevant? Is the information readily available from public sources?
Identify credible and current sources to consult; remembering that these need to be included in your reference list. Think quality, not quantity. It is far better to have fewer, but credible and current sources in your reference list.
5.2 Submission requirements
You are required to submit this assignment by Monday/26 June 2017/2pm. You must submit your
assignment by using the Turnitin gateway in the module’s Canvas site.
Note: The act of submitting your work electronically will be taken as a Declaration of Authorship of the work, see Appendix 2.
6. Extensions and Mitigating Circumstances
You cannot apply for an extension at the re-submission opportunity.
You can apply for mitigating circumstances; however, this will not allow you to have another opportunity to submit this item of assessment. If a mitigating circumstances application is granted then, if the module is failed overall, the module must be repeated from the beginning.
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The University of Northampton’s Mitigation Circumstances Policy and Procedure document can be accessed through our Quality and Enhancement Manual:
Further information about extensions and mitigating circumstances can be found on our Quality and Enhancement Manual:
7. Word limits
All written assignments include clear guidance on the maximum amount that should be written in order to
address the requirements of the assessment task (a ‘word limit’).
If the submission exceeds the word limit by more than 10%, the submission will only be marked up to and including the additional 10%. Anything over this will not be included in the final grade for the item of assessment.
Abstracts, reference lists, and footnotes are excluded from any word limit requirements.
Where a submission is notably under the word limit, the full submission will be marked on the extent to which the requirements of the assessment task have been met. Generally speaking, submissions under the word limit fall short of the requirements of the assessment task.
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Appendix 1: Level 4 Grade Criteria
The Grade Criteria for Level 4 modules are as follows:
An outstanding Distinction
Work which fulfils all the criteria of the grade below, but at an exceptional standard.
A very strong distinction
Work of distinguished quality which is based on a rigorous and broad knowledge base, and demonstrating sustained ability to analyse, synthesise, evaluate and interpret concepts, principles and data within field of study, using defined principles, techniques and/or standard formats and applications. This will form the basis for the development of sound arguments and judgements appropriate to the field of study/ assessment task. There will be strong evidence of competence across a range of specialised skills, using them to plan, develop and evaluate problem solving strategies, and of the capability to operate autonomously and self-evaluate with guidance in varied structured contexts. Outputs will be communicated effectively, accurately and reliably.
A clear Distinction
Work of very good quality which displays most but not all of the criteria for the grade above.
Work of highly commendable quality which clearly fulfils the criteria for the grade below, but shows a greater degree of capability in relevant intellectual/subject/key skills.
A very strong Merit
Work of commendable quality based on a strong factual/conceptual knowledge base for the field of study, including an assured grasp of concepts and principles, together with effective deployment of skills relevant to the discipline and assessment task. There will be clear evidence of analysis, synthesis, evaluation and application, and the ability to work effectively within defined guidelines to meet defined objectives. There will be consistent evidence of capability in all relevant subject based and key skills, including the ability to self-evaluate and work autonomously under guidance and to use effectively specified standard techniques in appropriate contexts.
A strong merit
Work of good quality which contains most, but not all of the characteristics of the grade above.
A clear Merit
Work which clearly fulfils all the criteria of the grade below, but shows a greater degree of capability in relevant intellectual/subject/key skills.
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