Internal and External problems of McDonalds

Topics: Fast food, Hamburger, Fast Food Nation Pages: 6 (1188 words) Published: April 23, 2015


Internal and External Problems; McDonalds
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Internal and External Problems; McDonalds
Various factors affect the management of McDonalds Company and such relate to the internal and external threats. As part of the internal problems, the complicated nature of McDonalds menu that makes it harder for the customers to choose what they want alongside the challenges of opening a new franchisee as a result of the high costs clearly affect the company. The major external threat affecting the firm is the fact that people want to eat healthy diets and therefore this greatly contributed to it losing business because of the related health concerns. The complexity of the fast-food industry has led to a situation whereby in order for firms to compete, it is essential that they differentiate their products according to the needs and preferences of the customers and at the same time ensure that they serve healthy products while being price competitive (Goodman & Cohen, 2004). Understanding the internal and external problems facing McDonalds will therefore be important, as this will help in presenting a clear action plan on how the organization will get to improve on its business performance. Internal threats

Complicated nature of McDonalds menu
In order to market its products to a large client base, the management of McDonalds found it necessary to come with a broad line of its products. In terms of the chicken delicacies, it has over fifteen brands that include chicken McNuggets, chicken select tenders, grilled artisan sandwich, McChicken, premium McWrap chicken and southern style chicken among many others. Developing and articulating the attributes that make one meal differentiated from the other and at the same time offering quality meal packages, for the purposes of attracting value-oriented customers, may have numerous benefits but in the case of McDonalds, this leads to over complication in its menu (Kincheloe, 2002). This in turn leads to the clients receiving garbled messages over the specific line of products and therefore makes it harder for them to choose their preferred delicacies. Ideally, in as much as the menu may be tailor made to allow for many different delicacies, the regular clients still end up on sticking to one line of their delicacies and this clearly presents numerous disadvantages to the firm. Another concern relating to the complicated menu is that while going through the menu, panic may grip a customer because of the nouns and adjectives used to define the respective foods. For instance, while checking for the burgers, there is the Jalapeno Double, Buffalo Ranch LaFrieda custom blend, Angus beef patty, SMC (super-melty-cheese) served with a Donkey Sauce slathering on garlic-buttered brioche. To be precise, the menu is more of an unreliable predictor of the actual food presented at the table. Ideally, the only thing eatable without any fear or regret is “lunch sandwich of chopped pork-glazed soy with cucumbers and coleslaw” (Kincheloe, 2002). Expensive to open a new franchisee

In as much as opening a McDonald’s franchise may seem a lucrative business; it requires too much capital, which may end up scaring investors. To start with, for the successful opening of a single restaurant, it is mandatory from the company that the potential franchisees do get to have liquid assets exceeding $750,000. This has to be personal and non-borrowed resources. This clearly presents a high figure and as argued by analysts, the company charges excessively for rent alongside the fees for training and remodeling and therefore this makes the business less profitable (Goodman & Cohen, 2004). The startup costs are inclusive of equipment and construction expenses that average between $950,000 and $2.5 million. The total figure corresponds to the restaurant size, selection of the kitchen equipment, style of décor, signage as well as landscaping. Moreover, it is a requirement that the...

References: Goodman, D. J., & Cohen, M. (2004). Consumer culture: A reference handbook. Santa Barbara, Calif. ;Oxford: ABC-CLIO.
Kincheloe, J. L. (2002). The sign of the burger: McDonald 's and the culture of power. Philadelphia, Pa: Temple Univ. Press.
Schlosser, E. (2012). Fast food nation: The dark side of the all-American meal. Boston: Mariner Books/Houghton Mifflin Harcourt.
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