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The problem of our case study is the decreasing business activities at McDonalds. The fast food joint that was growing at a higher rate has become a last resort for most customers. Several branches have closed down as the rate of the new ones being established reduces in percentage. The franchisees that would wait in queues to be allowed to operate under the name have reduced substantially as others sell back their businesses to the company (Smith, 282). The company is now receiving very low attention from consumers who would rather go elsewhere for their burgers. The changing eating habits of the people have also affected this organization as it was mainly dealing in a particular line of products. It has basically remained with no alternative but to probably change its line of activity in order to suit the needs of their customers.
The best thing that is remaining for the company is to change its line of production. Even though there are many other things that are being related to their poor performance, it has to be admitted that people are currently not into fast foods as they were in the late 80’s and early 90’s (Case 3-3, 283). The company will hence think of modifying the restaurant and make it into a hotel. By doing this they will be guaranteed that they will start off with their loyal customers who will bring in others as they realize that their services are of good quality. The company will probably have a place where those who want the first foods can go to. It should however venture mainly into the hotel industry to at least maintain the status of its name.
Alternatives – Pro and Con
By establishing a hotel industry, the company will have many options that they can rely on and will hence be able to stay in the market for a longer period. This will however change the image of the company completely as it is mainly known for fast foods. It will look strange for a customer to actually go to a McDonalds’s to obtain hotel services contrary to what they are used to. The industry may also not pick up at a faster rate as the restaurant did, considering the costs that are involved in establishing and running the same. As a restaurant, it was a place where they youth could meet in large numbers to have fun, it being transformed into a hotel will not be able to attract this caliber of customers. A hotel industry will however be accommodative enough to handle many other activity that the company may desire.
The company is in urgent need of a solution considering the state of affairs. The fast food idea that made the company to soar higher is no longer working as the number of customers continues to reduce day in day out. If the company mainly wants to retain the name, then it will have to consider an alternative in the food industry. It should provide more than just a place to sit eat and have fun. More services as those of a hotel will be beneficial to the company. It should not completely wipe out the fast food idea but test it for another period of time. The most urgent thing to do know is to ensure that its name is not completely thrown to the drench. It can have an alternative that will keeps its customers alert for the changes that may be made.
Case 3-3 McDonalds Corp Smith, Brian. Making marketing happen: how great companies make strategic marketing planning work for them, Publisher Butterworth-Heinemann, 2005.