Mcdonalds

Productivity Productivity is looking at output/inputs to see how efficiently the production process is working. McDonalds is very good at reviewing all parts of the process and finding ways to make it more efficient so they can cut costs of production, so increase profit and control safety and quality management. They know down to the second how long each stage should take, for instance their time management in production for cooking; the beef patties are cooked for just the right amount of time – that's a minimum of 36 seconds for a regular patty and a minimum of 101 seconds for a Quarter Pounder patof -1.98%, this was about the same time as the global recession started, so demand for takeaways decreased because this is a luxury good and when income decreases consumers focus on buying only the necessities like groceries. The producer will have taken a loss in revenue and most likely profit as well because they may have purchased more capital goods or hired more staff to meet the increased production needs of the previous year. This decreased revenue and profit also has negative consequences to society as well because workers may be laid off which reduces their income, the NZ suppliers who rely on McDonalds demand for their goods receive less revenue as well, and the government will receive less tax revenue from all these firms and households and also will have to pay out more in benefits to those unemployed.ASK 3 Commercial Goals McDonalds goals are profit maximisation, sales maximisation, increased market share of the takeaways industry, and business expansion through selling more franchises, setting up more McDonalds outlets throughout New Zealand. Non-Commercial Goals Some of the non-commercial goals are corporate responsibility (purchasing from mainly NZ suppliers). One of the positive benefits of McDonalds purchasing off NZ suppliers is the income this provides for other businesses in the NZ economy and for the consumers who work in these businesses. Community goals include helping to set up the Ronald McDonald House charities, and supporting Variety-The children’s Charity. Environmental goals include the 3Rs-reduce, re-use, and recycle and supporting Clean up NZ week. The franchising arrangement means many local business people run the restaurants and help out local junior sports teams and at other community events. The AUT scholarships assist Māori from Northland to attain tertiary qualifications. Special Christmas parties are organised for disadvantaged and disabled children around NZ. The environmental goals encourage reducing waste and support the clean-up of NZ campaign in September every year. Price Strategies McDonalds reduces prices to try and increase sales like their six lunch deals from $5.90, value picks – 6 items under $3 each, combo deals, limited time specials, and cheap burger coupons (on the back of supermarket till receipts). These strategies are designed to increase sales; once the consumers come in for the cheap items they may buy other items as well, so increasing revenue and profit for the producer. Non-Price Strategies McDonalds promotes sales without changing price like product variation (actual different products) including a Breakfast menu, M selections range, and McCafe to appeal to different tastes and preferences and income brackets, and healthy alternatives (fruit bags) to try to attract the more health conscious consumers. Non-price strategies also include product differentiation (products that appear different) including community sponsorship, branding, promotions, location, packaging, advertising campaigns (Weight Watchers approved meals), service, and Happy Meal which includes a free toy, catering for children’s birthday parties, and promoting free range eggs being used in Christchurch and Dunedin restaurants. These strategies are designed to increase market share by taking business off other takeaway firms, reducing competition, and so ultimately increasing profit for McDonalds. Consequences to society McDonalds price and non‐price strategies are designed tomeettheir commercial goals ofincreasing sales andmarketshare to increase revenue and ultimately profit. Even the non‐commercial goals are designed to improve public perception through their community service and therefore hopefully attractmore people to purchase theirfood items. The consequencesforsomemembers ofsociety is eatingmore fast food than they should ormaking poorfood choices(choosing food with little nutritional value). Childhood obesity is a consequence asthe value‐picks pricing makesit easierforstudentsto afford the products, and the combo deals appealto many consumers who perceive they are gettingmore value formoney. Perhaps because ofthis negative publicity McDonaldsmade the production decision to add more healthy alternativesto theirmenu list.Othersmallertakeaway businessesmay close down with the tough competition and theirstaff will lose theirjobs adding to the unemployed needing government benefits, which is bad forthe economy.