McDonald Corporation Case Study Analsis
Targeting Millennial:
The fast casual restaurant segment of the industry is experiencing tremendous growth, almost double from the sale of traditional food chains. Similarly, the organization has always seemed unattractive to the millennial segment, which prefers restaurants that offer premium quality meals and the transparency of the meal preparation process. Similarly, assuming that as a result of employing this strategy, the sales of the corporation will increase by 5%, the corporation will experience an increase of $4247 million in the net income. Moreover, in order to employ the strategy, an investment will be required for developing a digital application and for improving its social media presence. Furthermore, as average development costs ranges from $50,000-100,000, it is assumed that the corporation will require $75,000 for the implementation of this strategy.
Labor:
As the corporation received various customer complaints regarding large order processing time, longer Ques in Drive through and unfriendly staff. The CEO decided to raise the pay of the employee by $1 per hour above the minimum labor rate, in order to attract and motivate the employees to practice professional and friendly behavior with the customers. It is projected that as a result of employing this strategy, the organization’s net income for the prospective year will increase by 16%. The projected net income is based on the assumption that this strategy will result in an increase of 2% in the annual sales.
Recommendation
Based on the financial analysis, the CEO is recommended to implement the strategy of targeting millennial as the strategy requires less investment as compared to other proposed strategies, and has the maximum potential of resulting in an increase of 89% in the organization’s net income. Moreover, the strategy also seems viable from qualitative perspective as the millennial segment is the largest consumer of the restaurant industry and growth in demand of fast casual restaurants is also projected. However, in order to ensure the success of the strategy; the organization will need to improve its product quality, bring transparency in its business process, increase the customers’ loyalty and improve its HR policy to encourage the employees to build a friendly environment and having pleasant interaction with the customers.........................
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