The Market and Technology Pressures of Mcdonalds®

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The Market and Technology Pressures of McDonalds®
ITC 101 Group Assignment

[to explore and gain knowledge in areas concerning Information Technology (IT) impacts on the business operation and development in the digital economy (Turban, Chapter 2).]

Contents

Introduction……………………………………………………………………………………………………3 Market Pressures
* Global Economy and Strong competition …………………………………………..4 * The Changing Nature of the Workforce ……………………………………………..5 * Powerful Customers …………………………………………………………………………..6

Technology Pressures
* Technology Innovation and Obsolescence …………………………………………7 * Information Overload ………………………………………………………………………..8
Competitive Advantage
* McDonalds Competitive Advantage ………………………………………………..9 * Porters Competitive Forces Model ………………………………………………….10 * Customer Orientation Strategy ……………………………………………………….11 Conclusion…………………………………………………………………………………………………….12 References…………………………………………………………………………………………………….13 Appendix & attachment………………………………………………………………………………..14

Introduction
Business Model is the method by which a company generates revenue to sustain itself. In another words, business models convert technology to economic value, which means it connects new technology to economic in order to run the business well.

Because of the modern organizations have started to use business model as an essential items, it has become a challenging environment. So to compete in the environment, they must react rapidly to problems and opportunities arising from extremely dynamic conditions. What drives business models to changes? 1. Business Pressures

* Combination of social, legal, economic, physical and political factors * Respond to these pressures with activities supported by IT. 2. Business Critical Response Activities
* A reaction to a pressure already in existence
* An initiative intended to defend an organization against future pressures or an activity that exploits an opportunity created by changing conditions But in this assignment, we are required to answer the factors of business pressures in detail.

For this assignment, the company that has been chosen for this assignment is the Golden Arches Restaurant, which is also known as McDonalds.

Market Pressures
They are generated by the global economy and strong competition, the changing nature of workforce, and powerful customers (Rainer, Cegielski, 2011)

1. Global Economy and Strong Competition

McDonalds Malaysia has a lot of labour, consisting of many different categories throughout the organisation, with varying par grades. In general, labour costs become higher as the position goes higher, labour cost can be a huge expense for McDonalds as some of the employees are hired from developed countries like Australia to be in the management team. To reduce the cost and at the same time increase the productivity, the company has come up with employees benefit like insurance while working, annual leave. It sure make the cost higher but the organization has also taken a step further by moving their manufacturing operations to countries with low costs. Other than that, McDonalds is a multinational company; they are not only competing with their close rival but also the local fast food companies. They adjust their pricing in order to be on par with the competition.

2. The changing Nature of the Workforce

a. There are not a lot of people who want to do work in McDonalds. This is because the pay in McDonalds is very low and yet it is also hard work. Because of the lacking of number workers, McDonald’s has no choice but to hire part timer to fulfil the duties.

b. However, part timers will only work during the holiday, because of this the operation in outlets are instable. What McDonalds did to overcome this problem is that McDonalds came up with a system that even if a person comes in as a crew member, there...
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