McDonalds environment analysis for hospitality

McDonalds environment analysis for hospitalityINTRODUCTIONAs per British Hospitality Association, hospitality is UKs 4th largest industry which employs 2.7 million people in the UK and accounted for 27.7% of total job fruit in the UK. Importance of this industry to the UKs economy rear end never be overemphasised. In recent past the UKs economy has faced radical changes which led the presidency to adapt and change in determine to survive and grow. The aim of this explore is to analyse the daze of business environment on the success of an organisation chosen from this ever growing Hospitality and tourism industry. The study choses McDonald corporation which is a key nourishment service retailer. McDonalds serves over 69 million customers in over 100 countries through its 36000 locations. The organisation stepped in the UK market in 1974 and has more than 1200 restaurants across the UK.Referenceshttp//www.bha.org.uk/http//news.mcdonalds.com/Corporate/Press-Releases/Financial-Re lease?xmlreleaseid=1230621.2 FACTORS AFFECTING AN ORGANISATION INTERNAL AND EXTERNAL ENVIORNMENTAL FACTORSAs per www.study.com there atomic number 18 a number of events and situations that impact an organisation and they can be classified into internal environmental factors and external environmental factors (referred to as IEF and EEF hereafter). Few examples of IEF would be changes in the management, cultural changes and employee morale changes etcetera Similarly few examples of EEF go forth be industry regulations, economic and political factors, government regulations etc.Referenceshttp//study.com/academy/lesson/internal-and-external-environments-of-business-lesson-quiz.html1.2.1 INTERNAL AND EXTERNAL ENVIORNMENTAL FACTORS IN THE CASE OF MCDONALDS As per Campden BRI which is a food and drink research firm, there be six challenges that this industry forget face in 2012 and beyond. The Campden report broadly classifies these factors asManufacturing challenges inceptionFood Dr ink and the ConsumerSafetyKnowledgeThe tables below classifies the Campden BRIs six factors as IEF and EEF applied in the case of McDonalds.Source http//www.foodmanufacture.co.uk/Supply-Chain/Campden-BRI-s-six-food-industry-challenges1.2.2 ANALYSING INTERNAL AND EXTERNAL ENVIORNMENTAL FACTORS IN CASE OF MCDONALDSThis section tries to analyse various IEF and EEF based on1.2.2.1 RAW MATERIAL CHALLENGES/SUPPLIERS- AN EXTERNAL ENVIORNMENTAL FACTORThe foremost supporters for McDonalds are their supplier as they are the one of the largest company to supply burgers in the US. Customers reputation is highlighted through maintained system of service, quality and cleanliness in every aspect. They have excessively met or exceed USDA standards that are strictest in the food industry. The public supporters are in general multiple support clubs and with respect to customer pigeonholing represents multi fan sites and blogs.1.2.2.2 MANUFACTURING CHALLENGES / AN INTERNAL ENVIROMENT FACTORAnalysing the business environment will attempt to demonstrate the complexity of issues arise with the organisation. They have developed network operation and dissemination system. The company has been able to achieve consistent product taste. Their focus is on delivery sales and protecting its life m reputation. McDonalds has also done refining adaption to consider vegetarian options for their all universal food branch.1.2.2.3 INNOVATION / AN INTERNAL ENVIROMENT FACTORThe innovation will cast up both product quality and longevity.1.2.2.4 FOOD, DRINK AND THE CONSUMER /McDonalds had maintained the quite low bargaining power of buyers. They are very low risk of switching customers into other brands. There was quite stagnant scene among the customers through quality of differentiation, customer care and other promotions. 1.2.2.5 SAFETY / REGULATORY AND STATUTORY COMPLIANCE1.2.2.6 KNOWLEDGE /1.2.2.7 EXPANSION/ NEW GEOGRAPHICAL MARKETA number of key internal and external environmental factor s constitute the elements of long term sustainable growth plan and it will not be amiss(p) to say that the geographical diversification is vital element to fuel growth. As per the companys corporate websiteWe believe these priorities align with our customers evolving needs, and combined with our competitive advantages of convenience, poster conversion, geographic diversification and System alignment will drive long-term sustainable growth.Looking into the recent trends it can be said that McDonalds growth is fuelled by its prerogative business.As per the companys official websiteWe view ourselves primarily as a franchisor and believe franchising is important to delivering great customer experiences and madcap profitability. At year-end 2014, more than 80% of McDonalds restaurants were franchised.SOURCE http//www.aboutmcdonalds.com/mcd/investors/company_profile.htmlhttp//www.aboutmcdonalds.com/mcd/investors/company_profile.htmlReferenceshttp//www.bha.org.uk/http//news.mcdonal ds.com/Corporate/Press-Releases/Financial-Release?xmlreleaseid=123062http//www.mcdonalds.co.uk/ukhome/Aboutus/Franchising.htmlCompetitive advantagehttp//www.mcdonalds.co.uk/ukhome/Aboutus/Development/Locations_and_contacts.htmlMcDonald is very open about its grown plans. On the official website the company has posted geographical regions for its intended growth region and invites the public to propose a increment site. The study feel that by development this approach McDonalds is making an effective use of public culture by providing an open platform for the local. This information gathering methodology not only is more efficient in terms of using local public knowledge about the area, but is also effective way of reducing planning, research and development cost and time that goes is development of a new site. This marketing strategy also adds to Brand awareness, brand recognition and stronger connect via the local people.Negative The participation may end up losing a lot of tim e effort cost in moving in a direction which may not be fruitful.To afford a comparative analysis of the internal and external environment of McDonalds this study has used KFCs corresponding data.Its structured as an independent business with responsible accounting operations, community relations, training and human resources. They offer both counter service and drive through service with interior and outdoor seating. In 2006, introduction of forever young brand was to redesign the current structure acquittance of restaurant. One of the cornerstones of McDonalds success in the UK is its property portfolio, which provides a well located and convenient network of restaurants throughout the country for our customers to use and enjoy. There are almost 1200 restaurants to be found in a variety of locations such as traditional high streets shopping centres retail parks roadside locations leisure centres railway and airport termini and motorway service areas. We are known for being the pioneers of the drive-thru restaurant concept and are the UK and world leader in this sector. This continues to be the key focus for our growth.Due to the growing success of the Company, the intention is to increase the pace of acquisitions with a target of 40 new restaurant openings per year from 2014, which will create up to 2,400 new job opportunities annually.The primary vehicle for this magnification will be freestanding drive-thru restaurants where convenience is key or locations in new or existing retail and leisure parks and transport hubs where visits are often part of a linked trip.Competitorshttp//www.kfc.co.uk/join-us/become-a-franchisee/Mc Donalds has a much stronger presence in the UK Market as compared to its competitors whereas a key contest KFC has 800 branches across the UK.http//www.kfc.co.uk/join-us/become-a-franchisee/As evident from the information openly available on the website of Mc Donalds KFC it appres that the cost of opening a Mc Donalds franchise is m uch less as compared to cost of opening a KFC franchise.They suffer tough competition through burger kings that are specialised in beef products. Wendy has also been added as a competitor collectible to high hamburger chains. They are other companies as well who are gaining market shares due to specialised in gourmet coffees, pasties and fresh sub sandwiches like Subway, Greggs and Starbucks.http//www.kfcdevelopment.co.uk/faqs/KFC pays finders feeDo you pay finders fees for introducing a site?Yes we pay generous finders fees for recognised introductions 20,000 for DT sites and 12,500 for food courts/restaurants.*Figure Competitors of McDonaldsA table showing a comparative analysis relating to the franchise between Mc Donalds (UK) and KFC (UK) based on information directly available from the website.http//www.mcdonalds.co.uk/ukhome/Aboutus/Franchising/the-finance-bit.htmlhttp//www.kfc.co.uk/join-us/become-a-franchisee/OpponentsMcDonalds has been targeted due to their popularity in the food industry. Recently there was criticism about the cow disease crisis which showed serious threats towards world health. Children social welfare society also opposes this company about their advertisement on happy meal which continuously attract children to buy their products. The other opponents are mainly brute rights groups that supported animal cruelty, which are against the manufacture of food produced by killing animals.Environment AnalysisMcDonalds differs from its CompetitorsAll leases are dish outn in the McDonalds Restaurants Ltd nameMcDonalds point leases up to 25 yearsMcDonalds has a superior covenant strength achieving yields of between 5% and 6%Site requirementsMixed Use/Retail lay/Leisure Parks/Main Arterial RoutesCo-location opportunities with hotels and petrol stations consideredIdeal site size is 0.5+ acresAll opportunities considered Standalone units/Leasehold or Freehold sites up to one acreOur RecommendationsThe research asserts that being in food i ndustry the importance of maintaining a healthy and clean image in the eye of the public can never be overemphasized. Having said that, the increasing competition in the industry may lead to targeted negative criticism towards McDonalds. Developing a proactive crisis management team will be key element to manage any crisis situation.This study feels that there is a direct correlation between growth planning and the number of outlets that an organisation can open in new geographical areas across the UK. The franchise model plays a key role in deciding the growth pass in the UK market and how well McDonalds and its competitors manage this model will determine the organisations future share in this industry segment in the predictable future. Below are some key recommendationsProactive measures to find a store location in the newer markets Whereas, inviting public to propose a site for an outlet is a very cost effective and efficient way for growth planning, at the same time the study feels that McDonalds should take proactive steps to spellbind all the key locations in the major towns and cities. Using extensive market research, talking to local people and other direct means of research will be highly recommended for this purpose.Encouraging active participation of local resources From finding a new location to the stage of complete set up of a franchise store, the process may involve a close liaison with local public. The study feels that there should be more incentive for the local parties to take an enthusiastic participation in this process. The study found that the KFC offers a Finders Fee covenant openly disclosed under the FAQ section whereas training for such a clause was missing from McDonalds website.Full revelation of key information which is vital for decision making If the franchise procedure is explained well, it could play a key role in encouraging people to show active participation in the process. Whereas KFCs website discloses information a bout handing of planning permission and the time duration involved in the whole set up process very openly, this was found missing from the franchise FAQs section of the McDonalds website. Clear and full disclosure of the vital facts will afford more tools for informed decision making in the hands of perspective franchisee.