McDonald's Australia: Business Environment, Marketing Strategies, And Sustainable Initiatives Essay.

Business environment, challenges and opportunities

Discuss about the Hospitality Management of McDonald's.

McDonald's is among the largest food chain across the world and it serves a incredible number of customers all over the world on almost a daily basis. Ths said organisation has built such high profile brand image on the basis of the quick service, quality food, everyday value, cleanliness etc. Besides this, there are several other factors which have assisted the firm in building up its image, like the advanced operational system, experienced management, information system, modern infrastructure, customer friendly policies and many more. In this report, we have discussed many topics about the McDonald's in Australia, like its business environment, marketing strategies, sustainable initiatives taken by the firm etc. The McDoland's has been operating successfully in Australia for more than 40 years and has also been given an Australian nickname- Macca's.

Macro Environment Analysis:

The macro environment of McDonald's can be studied through the PESTEL analysis:

Political factors: The business of the cited organisation is under the control of regulations and rukes of the government. The prime issues of governing food business are tax issues, employee laws, license, etc. McDonald's abides with the foreign investment policies as well as the policies of the local government for the franchise business strategy (Goulding and Lim, 2014).

Economical factors: As the McDonald's operates internationally, it has to face various scale of revenue and tax measurement in various countries. The company also faces some issues due to the fluctuation in the international currency especially in the worldwide food distribution.

Social factors: People of the modern urban society demands latest facilities and service of the highest level for the hospitality organisations (Nadolny and Ryan, 2015). In addition to this, the changing demands differs society wise as wwell as counrty wise, thus, McDonald's has to do effective reserach on the market in order to provide an effectice menu.

Technological factors: In order to meet the technological innovations, there are certain factors that helps the McDonald's in Australia, such as speedy and modern distribution channels, quick and easy payment facilities, internet facilities at the stores etc.

Environmental factors: Environmentalists have criticised McDonald's as its food packaging is based on the polystyrene and it also uses some perilous elements for the drink glasses.

Legal factors: It is compulsory for the organisation to follow the procedures and rules of the country in which it operates the business, like tax, safety rules, registration, stuff laws, etc. Being a huge food chain, McDonald's in Australia tries its best to abide with the legal formalities of the country.

Description of operational area

Suppliers: The firm has divided suppliers in two divisions, i.e., indirect and direct suppliers. Ingredients to direct suppliers is being delivered by the indirect suppliers and food for the firm is produced by direct suppliers.

Competitors: McDonald's has various competitors in the global market like Pizza Hut, Burger King, KFC, etc., all these firms possess a good brand image, huge market share etc. Thus, McDonald's should consider power of these competitors to retain the dominating poistion.

Customers: The organisation serves to almost every kind of person and has got millions of customers. It gives first priority to the customers and also tries to provide them maximum satisfaction.

Public: It includes the external groups which are related to and interested in the company. It also considers the importance and power of various groups like local and central government, consumer group, media, pressure group, financial community, etc.

Intermediaries: Business operation of a fast food chain is quite different from that of other hospitality firms. for promoting business, the firm performs promotional activities and the other restaurants act as the distribution centres.

Challenges And Opportunities:

Source: Soontiens and Lacroix (2009)

Opportunities:

• Inventing new food can can help in attracting more customers and can raise the sales as well.
• It can take opportunity of setting at affordable price at any situation like at the time of economic slowdown, when people avoid spending their money on other things.
• Availing the technological benefits can also attract the customers.
• Sponsoring for the community support helps in working for humanity which in turn helps in promoting the business.

Challenges:

• It has to face fierce competition from several companies like Burger King, Pizza Hut, Subway, KFC, etc.
• It is sometimes criticesed for the health issues.
• Fluctuations in the foreign currency also affects the business operations.

McDonald's has seggregated the job roles and responsibilities among several operational area for the purposr of providing effective and efficient customer services, for boosting the sales and for making the brand image even stronger:

Quality, Service, Cleanliness (QSC): It includes using the hazard log for identifying the hazards, ensuring workmen's safety and security, making the employees abide with Personal Protective Equipment (PPE) etc.

Workplace safety: It includes maintaining the critical standards for raw and finished products, fast delivery, quality serive, customer satisfaction, supporting national and local promotions, accomplishment  of the sales and other goals, etc. (Crew Role Description, 2016).

Food safety/hygiene/sanitation: It includes abiding with the practices and requirements related to sanitation, hygiene and food safety.

People: It includes following the basic requirements, understanding the procedures and policies of McDonald's. promoting the teamwork, etc.

Promotional marketing strategy

The marketing strategy of McDonald's can be explained by the following 4 P's:

Product: Product has certain specific characterstics and aspects like appearance, packaging, quality, etc. The cited firm has several meal and food deals for customers and some of them are quite popular, such as Cheeseburger, Hamburger, Chicken Wrap, Big Mac, Chicken Nuggets etc. McDonald's offers breakfast menu and Extra Value meal like Kids meal and Family meal. Regular items of the firm includes salad, fries, soft drinks etc.

Promotional marketing strategy

Price: Pricing is an essential part of marketing mix. In some cases, price helps in determining competition level between the existing firms in market. McDonald's utilises own pricing strategy by providing priority on the basis of effective pricing:

Product line pricing: In this, different type of products, yet related to each other in use, are clubbed in the same product line (Tanahashi, 2008).

Promotional pricing: The organisation offers promotional price which is visible on the posters, store banners, or is advertised through various modes of media. For instance, buy one get one free.

Penetration pricing: While starting up selling a new product, the company provides penetration price for promoting it. Sometimes, it also offers its new products for free to the customers in order to promote it and to get the feedback for the same.

Place: Organisation should have certain location for reaching the clients or customers. Location is a crucial part of the business organisation. McDonald's in Australia, just like in other countries, prefers a busy area for operating the business and considers some basic factors like population density, communication, life style of the local people, etc.

Promotion: Promotion includes marketing communication mix for promoting the services or products. McDonald's uses different promotion channels to ensure an effective communication.

Some of the popular marketing compaigns are as follows:

"You deserve a break today, so get up and get away- to McDonald's."

"I'm loving it."

"Food, folks and fun."

Customers' experience practices

McDonald'd investors and observers have been searching for signals that this restaurant chain is planning for continuing the momentum after displaying five cintinuous quarters of its growth (Lambert and Mizerski, 2011). the answer seems to be the new concept of table service restaurant, which according to the chain has raised the customer satisfaction as well as the sales in the initial markets of various countries like Australia.

Customers have also stated that though the stores are  now updated with WiFi and even more modern interior, but still table service is the biggest change. Now they can place order either on the digital kiosks or at cashier in which they can customize the order with, say, artisanal bun and gourmet maple bacon burger. Kiosks can now accept credit as well as debit cards, Android pay and Apple Pay. Once a order is being placed, one of the crew members brings food for them. McDonald's claimed that it is planning to add mobile payment and ordering in Australia by the next year.

Customers' experience practice

The cited firm is also planning to put more controlling power in the hand of its customers. The company also believes that inspite if cutting the crew members through automation, it is rather investing in the people and is providing them training to be a part of this hospitality experience. it has also suggested that the crew members will roam in the dining rooms and will assist the patrons with kiosks (Pollak, 2016).

McDonald's in Australia is also planning to run local television as well as other advertising for introducing concept with the campaigns which are handled by the regional agencies. the people who cannot visit the same can do so through virtual reality together with the Oculus glasses at the events.

McDonald's is always looking forward to the opportunities of improving sustainablity of the business. Its new practices and products are trialed well in advance and launched to aid in minimizing impact of the operations on environment.

Reducing energy use:

• In 2012, it has started Australia's first green star authorised restaurant at Kilsyth in Victoria. It has taken several sustainable initiatives like rainwater harvesting, solar panels, air conditioning, energy efficient lighting, recycled steel and concrete.
• A range of such restaurants also utilises energy efficient technology of LED and not that standard fluorescent lamp of 240V. it has resulted in the energy saving of around 50 to 70 per cent per sign.
• The present lighting system and restaurant design are now installed with the lux level sensors which are attached to the dimmer system for controlling loghing of the dining room. These sensors helps in determining level of the available natural light and helps in adjusting internal lights accordingly.
• It also utilises waste heat from air conditioners, kitchen or also absorbs heat from ambient air in order to heat the hot water. This has resulted in a reduction in the overall energy by upto 7% (Macca's & the Environment, 2017).

Reducing and recycling waste:

• It recycles the used cooking oil and cardboard packaging.
• Now the organic waste is being seperated in kitchen and is then being sent to the Earth power. The remaining wastes like general waste from dining room is being collected as the co-mingled waste.
• Compactor trials are presently underway for reducing the waste collections and volumes.

Reducing the water use:

• Rainwater is now collected by this organisation and is then utilised in toilet flushing and irrigation.
• Time flow taps are being used in all re-modelled and new restaurants. It is capable of saving around 100 to 200 liters of water on daily basis.
• All the remodelled and new restaurants are now using water efficient sanitayware and tapware including the dual flush toilets and time flow taps.
• the guidelines for new landscape design promotes plantation of native as well as drought resistent plants (Wellard, Glasson and Chapman, 2012). in addition to this, it also utilises advanced methods of stormwater retention.

Conclusion

A hospitality organization is closely and directly related to the customers. There are a lot many tasks it need to perform. The customers’ demands regarding every section need to be fulfilled completely, like the demands related to standard service, food quality, affordable price, friendly dealing, etc. Besides this, an organization also has to face fierce competition in the international as well as the local market. It implies that the firm needs to stay strong in all aspects.

In this report, a detailed discussion has been done on the various activities performed by the McDonald's in Australia. The environmental analysis depicts some general restrictions that need to be overcome as much as possible. The cited firm can take the benefit of the opportunities for building a stronger brand image and it also need to take some effective steps for overcoming the challenges discussed in the report. Present marketing strategies and communication is quite good but still it can be improved.

The service line of McDonald's in Australia should be more efficient and effective. Though customer dealing is ultimate act of the business operation, it should perform it in an influencing manner in order to provide satisfaction to the customers. Competitive and affordable pricing is yet another important part of an hospitality organisation. Price of a product is considered seriously by the customers. thus, cost benefit analysis need to be done in an effective way.

Being a multinational organisation, the community support provided by MsDonald's throught the social responsibility and environmental policy is really appreciable and encouraging.

References

Crew Role Description, 2016. [Online]. Available at: <https://apply.mcdonalds.com.au/orionfiles/content/files/Crew%20Role%20Description.pdf>. [Accessed on: 16^th May 2017]

Macca's & the Environment, 2017. [Online]. Available at: <https://mcdonalds.com.au/learn/responsibility/maccas-and-the-environment/initiatives-and-trials>.[Accessed on: 16^th May 2017]

Pollak J., 2016. McDonald's Unveils New 'Customer Experience' With Table Service, Ordering Kiosks. [Online]. Available Through: <https://www.adageindia.in/marketing/cmo-strategy/mcdonalds-unveils-new-customer-experience-with-table-service-ordering-kiosks/articleshow/55485991.cms>. [Accessed on: 16^th May 2017]

Nadolny A. and Ryan S., 2015. McUniversities revisited: a comparison of university and McDonald's casual employee experiences in Australia. Studies in Higher Education. 40(1). pp. 142-157.

Soontiens W. and Lacroix A., 2009. Personality traits of franchisees–McDonald’s restaurants in Australia. Problems and Perspectives in Management. 7(1). pp. 238-244.

Tanahashi S., 2008. Succeeding globally depends on localization: A case study on McDonald’s Corporation. University of China. pp. 57-73.

Lambert C. and Mizerski R., 2011. Kids, Toys and Fast Food: An Unhealthy Mix?.

Wellard L., Glasson C. and Chapman K., 2012. Sales of healthy choices at fast food restaurants in Australia. Health Promotion Journal of Australia. 23(1). pp. 37-41.

Goulding E. and Lim B., 2014. McDonald transvaginal cervical cerclage since 1957: from its roots in Australia into worldwide contemporary practice. BJOG: An International Journal of Obstetrics & Gynaecology. 121(9). pp. 1107-1107.