Mc DONALDS

By the time McDonalds, the world’s largest fast food service chain, had started its services in the UK in the 1970’s, the country was already preparing to allow multinational food brands to start shop. Britain’s national favourite, fish and chips, was being replaced by a more international plateful Consumer palates got a taste of what the world was eating:- chicken , burgers or pizzas – in the name of Burger King, Kentucky Fried Chicken(KFC),and of course, McDonalds. These brands offered choice at reasonable rates and convenient outlets and formed a very competitive industry. McDonalds was the one among these that continually reached and kept top position in the minds of consumers

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The script for McDonalds’ outstanding success was penned by Ray Kroc, an American businessman who saw an industry in burgers and fries outfits. Kroc made the vision real by spreading the empire of the Golden Arches (the world famous ‘M’ sign displayed at all its outlets) to more than 100 countries serving over 40 million customers everyday. The company’s reputation has spread through its servings of various types meat and vegetable hamburgers along with hot and cold drinks. Not only this, the fast food giant also kept its ears to the ground in order to anticipate and adapt to changing customer tastes and expectations. Doing so carried its brand values – based on quality, service, hygiene, and housekeeping- further into the heart of local communities in countries where it operates. The food service giant’s world wide acceptance and the huge success of its outlets is based on franchising and marketing. Till today, a portion of the revenue is put back into advertising and local campaigns. In the UK, football is followed passionately. McDonalds sponsored local events based around the game and was a present through its advertising and events in national versions of the game. This way, its values were intertwined with community ‘emotions’ and advertising reflected its strategy. Even 2 year old children could recall messages- such was the length to which the involvement went. No competitor managed to receive such success anywhere, including the UK. At heart, Kroc knew that in serving cheap platefuls of burger and fries, his outlets would not achieve profitability. The only way this could come was by huge volumes and quick turnover and advertising was a means to manipulate mass consumer dedication. (Dollard, 89-92)

Still, the products on offer would not be able to churn out the kind of industry turnover which Kroc visualised earlier had it not been for the opportunity he grabbed out of real estate. In the early 1950’s he purchased property and sold it out to eager franchisees wanting a piece of the hamburger profits. The franchise operations pit the company on the road to prolific growth. The logic was simple – once a new franchisee bought his way into the prospects offered by the company, he also shared an entire operation. This was the formula for the standard Mc Donald product which would have to be replicated down to the number of tomato slices and the size of the fries. By demanding total standardization, Kroc ensured that the quality of hamburgers would be the same wherever in the world there was a McDonald’s outlet

By the time it started its first outlet in UK’s Woolwich in 1974, McDonalds was a manufacturing industry not incomparable with any of America’s automobile factories. (Border, 227-228)

McDonalds in the UK

In the UK, the company’s rapid expansion saw outlets opening in towns across the nation. By thinking like a retailer and acting like a multinational, it invested money and strategy to keep in line with customer tastes.

Outlets were clean, hygienic and served delicious fast food to a varied clientele. Counters were served by youngsters who greeted customers with a smile and carried themselves with a generally cheerful disposition.  In keeping with its philosophy of QSC;V (Quality, Service, Cleanliness and Value), the organisation enabled restaurant staff to be trained. Newcomers were put through their paces in a basic training module which qualified them for a certificate in Hygiene. Experienced or older staff could take an advanced course in Restaurant Management. These courses were accredited by a well known British University. The company claimed this was life training enabling it to maintain uniform standards of service. The training program would also prop up career skills development in local communities and help to grab employment opportunities.

The brand became so popular that one in 3 customers visited at least one McDonald’s outlet twice a week, on an average – which meant that people dropped in regularly at its restaurants all over the U.K. The company rapidly invested in making a habit of burger eating by bringing out schemes like the Big Mac offer which promised one free burger against two consumed, free coffee and even packages for children.

The company won top awards for brand building and was far ahead of its nearest rival, Burger King in the hearts of customers. It tied up with local farmers to procure raw material and help get them a decent price. (Berkowitz, 189)

Setbacks

However, problems started for the group early in the new millennium. After the events of 2001, there was a wave of anti- American feeling across many parts of the world, including Europe and Britain. Even though the attitude was more liberal in allowing international brands, including big names in fast food, the motives of these enterprises came to be doubted. As McDonalds was by far, the top-of-mind global US brand in the UK, it had to face the brunt of There was the perception that an American  business was likely to go for maximizing profits over all else, even though it claimed social benefits to communities it was going to serve. The implication was that after the initial sweet talking, US giants such as McDonalds would bare their fangs and reveal their true intentions. After all, there was a limit to the extent a business would respect customer preferences – especially in the fast food industry. (Lamb, 243-245)

Quality complaints

Food Composition

At around the same time, awareness was growing about health related issues centring on food and health. There were concerns about fatty diet, cooking mediums and freshness. On all three counts, McDonalds, among others, faced widespread criticism about the fatty content of its food and its promotional campaigns inducing people to eat more off its fat rich and vitamin deficient diet – leading to health disasters. Public preoccupation over healthy eating was sharpened by the media. A film made at this time called ‘Super Size Me’ showed how the protagonist gained 25 pounds by eating only McDonalds’ food for 30 days. The film could not have come at a worse time for the organisation as its US operations were on the decline with profits stagnating and underperforming franchises – leading it to close unprofitable units. Despite its claims that it was serving fresh and wholesome food, it accepted that its products were fried in rapeseed oil which was high in saturated fats. It had to replace this with sunflower oil which was a less unhealthy alternative. But all this managed to achieve was that opinion was now divided over the subject. A large proportion of people still believed food served at outlets was not fresh being made to warm over burners, or that there still was a high proportion of saturated fat in meat burgers. Customers dropped in less frequently and this led to some franchises across Britain being shut down. (Deb, 323)

Market Compulsions

There were almost 1250 McDonald’s restaurants across the UK, by this time, with almost 37% being operated by franchisees. The strength of the business model lay in the franchise system which assured uniform quality. This aspect of the UK operations was under threat from competitors like Wendy’s and Burger King. Taking advantage of the shutdown of McDonalds outlets, rivals moved into prime property and opened out their own outlets. This only compelled the fast food mammoth to move in fast to open yet more outlets to prevent more broadside attacks. This stretched its resources further to maintain market share amid negative business circumstances. (King, 126)

Quality of Service

A factor linked to the move to open still more outlets resulted in the poor quality of service at counters. What was presented by McDonalds as high class service was revealed as really amateur behaviour in the rapidly filling customer complaints filtering into blogs and websites. Under pressure to open newer counters, service standards took a beating as store managers were under pressure every evening tracking the performance of numerous franchises .This may have caused service standards to slip as store supervisors were tied to routine reporting of business figures – rather than being at shop floor level among employees. Moreover the makeshift system of manual collation of data made it impossible to report any instance of service breach until the next morning

Many customers discussed or reported their experience of bad service, surly or unruly behaviour and delays in service. On top of this, McDonalds, reacting to complaints of stale food, had introduced made to order cooking at all restaurants of the group, meaning that now customers would get to order dishes which would be prepared. Food was not always served from shelves, delaying orders from being serviced and causing considerable waiting. (Dev, 78-81)

Many reacted with irritation at all this coupled with the sometimes boisterous behaviour of young employees which they felt unbecoming of McDonald’s employees.

Recruitment Practices

There were reasons why employee indifference was present.

Even though training was offered to young employees of the group, many did not actually view the job seriously in terms of making a career of it. To avoid being obliged to pay wages or salaries, franchisees, following McDonalds practice, recruited college graduates with little or no prior work experience to work even late nights. They could even get extra cash for extra work beyond normal hours. This was considered more of a lark by these casual employees. There was a time in the UK when ‘McJob’ was a derisive term applied to any job which meant long, dreary work with low wages – and this etymology went back to McDonalds !!. There was public resentment that in the name of employment the company was exploiting pliable youth and enticing them into dull low paid drudgery. To be fair to the organisation, many highly successful franchises were run by people who had once been junior employees.

This all added up to the many ‘intangibles’ which may even mar a service provider’s reputation for quality. Over the years, Ray Kroc had carefully worked to ensure that it was a combination of these that would make a visit to any McDonalds store anywhere in the world, a highly enjoyable experience. (Kar, 145)

Reliability

The basis for McDonalds’ most publicized controversy was laid thousands of miles away – in a rain forest.

In the early years of the new millennium, Greenpeace volunteers campaigned for the preservation of the Brazilian Rain Forest. Specifically, the protest was around the rapid de-forestation of vast tracts of land made ready for cultivation of crops like Soya which was used feed chicken. Why this had a connection with McDonalds was because of something called ’McNuggets’, a chicken preparation served at all its restaurants. It was alleged that Soya was used to feed chicken to ensure meat quality. This was a cruel practice which Greenpeace was lobbying to put an end to. It was claimed that McDonalds and others were paying for the crop to be commercially cultivated in the Amazon Rain Forest – though this was not true, the food service giant did have arrangements to rear the chickens. This arrangement was undoubtedly cruel as the birds were kept in cramped conditions.

Why the rain Forest drew worldwide attention was that it is one of the world’s most significant ecosystems and home to a large proportion of flora and fauna. The concerns, indeed, protests – of Greenpeace were over the fact that this precious ecological paradise was increasingly being ripped apart by deforestation across huge areas. The reason?- it was alleged that multinationals were inducing its inhabitants to grow crops and plant and cultivate much needed natural products available in the area, for instance, Soya. These were much sought after by the world’s culinary industry. This was only possible by felling trees and preparing land for the cultivation of crops. This would ultimately cause deforestation which had already rendered the region fragile. (Fletcher, 188)

Greenpeace intended to drive home awareness of the problem, especially in the UK and across Europe. For weeks volunteers staged demonstrations, sit-ins and protest meets if front of McDonald’s eateries. This made a significant dent in McDonalds’ reputation, even if a large budget had to be diverted toward damage control advertising. There was even a corporate campaign which did away with the world famous ‘M’ or Golden Arches logo – albeit for a short while- to tell people that the organization was having a complete make over with a new look menu. This was a brilliant manoeuvre as it addressed a potentially dangerous situation caused by the protests by brand positioning which completely altered public perception. But until it did so, customers avoided going to Mc Donald’s as an expression of empathy for the issues of ecology conservation.

Others stepped into the breach to the mighty giant’s credibility. The pubs once famous in England were revived and projected as places where one could have a ‘pint’ or two and even eat wholesome food. An ambience of congeniality was projected and even the décor and locations attracted clientele. The pubs also had to battle issues like excessive drinking.

Fish and chips eateries made their appearance again and roused British nostalgia and sentiment to provide a fair clientele. An American company called ‘Yum’ also set up base in the country and promised to offer bigger and better servings of Britain’s favourite food. However, there was the suspicion about the motives of ‘Super brands’ doing business in the country – apparently to build super profits while ingratiating their way into national sentiments. (Dos, 441-442)

What all this did for McDonalds was decidedly unsettling for a while. However, it took a crisis for the group to consolidate its efforts through marketing and revamping its business strategy. It took a decision not to open new franchises while restructuring its management to better control franchise operations. Reacting fast to the Greenpeace controversy, it agreed not only to discontinue Brazilian Soya but formed a coalition of food multinationals to deter commercial cultivation in and around the Amazon Rain Forest. This restored its place of pride in Britain. It reinvented itself through the advertising campaign described earlier and ‘softened’ its super calories image to describe a place where one could also get fresh fruits and wholesome vegetable diet.

There is the problem of service quality in McDonalds, UK, which remains. Under the circumstances an effort can be made to induct more experienced shop floor staff able to handle all sorts of customers.

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Bibliography

Berkowitz, L; Industry and Man. (New Haven and London: Yale University Press. 2006) pp 189

Border, S; Junk Food: Fire of the Mind (Wellington: National Book Trust; 2006) pp 227-228

Deb, J; Introduction to British Management ; Service Ethics: Technology for Mankind. (Dunedin: ABP Ltd. 2005) pp 323

Dell, S; Evaluation of Management (Dunedin: ABP Ltd. 2006) pp 78-81

Dos, M; Future of Thought Process in Service Industry (Christchurch: Alliance Publications; 2005) pp 441-442

Dollard, John; Modern Industrial Policies in England: A look into Tomorrow. (New Haven and London: Yale University Press. 2006) pp 89-92

Fletcher, R; Food Industry: Beliefs and Knowledge; Believing and Knowing. (Mangalore: Howard ; Price. 2006) pp 188

Kar, P; History of UK Fast Food Market Applications (Kolkata: Dasgupta ; Chatterjee 2005) pp 145

King, H; Outline of Fast Food Chains (Dunedin: HBT ; Brooks Ltd. 2005) pp 126

Lamb, Davis; Cult to Culture: The Development of Civilization on the Strategic Strata. (Wellington: National Book Trust. 2004) pp 243-245