General Report
An Organizational Evaluation On
McDonald's Corporation and Its POS System
Matriculation no: 40612246
Module no: INF07103/INF07403
Word count: 1391
Table Of Content
Abstract......................................................................................................................................................................................3
Introduction...............................................................................................................................................................................4
1) An Organizational Analysis of McDonald's Corporation...................................................................................5
2) Point-Of-Sale System and its functions..................................................................................................................10
Conclusion................................................................................................................................................................................12
References................................................................................................................................................................................13
Appendices...............................................................................................................................................................................15
Appendix 1- Full Hierarchy Diagram of McDonald’s Corporation......................................................................15
Appendix 2- PESTEL Analysis in Depth..........................................................................................................................16
Appendix 2- SWOT Analysis in Depth............................................................................................................................18
This study examines the structure and execution of the point-of-scale system inside the McDonald's firm. Each organization has internal strengths and weaknesses, as well as external opportunities and threats, which are keys to their success. SWOT analysis has been performed to determine the results. PESTEL analysis is also used to illustrate all the external factors political, economic, social, technological, environmental, and legal that might have an impact on an organization. Also, the Strategic importance of point-of-sale in McDonald’s is discussed along with Strategic Grid Diagram. A rich picture is also shown illustrating the problem situation inside and outside of the store.
INTRODUCTION
McDonald's Corporation was first opened as a restaurant in San Bernardino, California, the United States in 1940. “There are over 1300 Mc Donald's restaurants in the UK, with its first location opening in Woolwich in southeast London in 1974” (McDonald’sA,2022). As the business grew, McDonald's gradually expanded its franchise network internationally and introduced customers to a variety of technological systems and platforms such as POS (Point of Sale) system, JIT (Just in Time) system and many more that has shown an outstanding performance for both customer pleasure and business gains.
A point of sale (POS) is a tool used to check sales and money collected in any area where a transaction is being conducted. As it had a great chance not just to collect money but also to track sales and inventory “McDonald's put the system into place at the restaurant in 2008” (McDonald’sB,2022) replacing cash register, which later also became a huge time saver for customers in the busy restaurant setting too.
This study will outline the organizational analysis, Cultural Web diagram, Rich Picture, and system features and functionality of POS system with Input-Process-Output, Strategic Gird diagram, and Conclusion.
1) An Organizational Analysis of McDonald's Corporation
According to new data, as of 2021, McDonald's has served more than 69 million customers (about twice the population of California) each day in more than 100 countries at more than 40.000 locations, making it the largest restaurant chain in the world by revenue (McDonald'sC, 2022). McDonald's has been identified with every sector in this transition from a restaurant to the greatest fast-food chain in the world, overcoming every obstacle and reaping the rewards in every practical way while proving patience and constancy. “According to Whittington et al. (2019 p.36), PESTEL framework is one of numerous frameworks that classify environmental elements into major kinds, along with the related PEST and STEEPLE frameworks. Political, economic, social, technical, ecological, and legal issues are six specific environmental variables that PESTEL research reveals”. McDonald's uses tactics to deal with external elements in the organization's environment, and it builds on its advantages to adjust to shifts in its industry, like the patterns revealed by this PESTEL research in Figure 2 and Indepth Analysis can be found in Appendix 2.
Figure 2: PESTEL analysis of McDonald’s Corporation (author’s own creation)
Every organization, regardless of its size, has its own strengths and weaknesses. “The process of evaluating an organization's internal and external surroundings and identifying practical plans based on its strengths, weaknesses, opportunities, and threats is known as a SWOT analysis”(Ghazinoory et al., 2011). Since McDonald's is a corporation with a large reputation and recognition, they are followed by enormous strengths and possibilities as well as significant problems and challenges. McDonald's often arranges programs or meetings for reviewing the analyzation of the situation of the company through SWOT and make strategic decisions about how to address such issues, which may also be the reason the company is still running in this market despite the competition. SWOT analyses aid a firm to understand its condition by highlighting its strengths and weaknesses. The below figure of SWOT analysis shows the current situation of McDonald's with its Strength, Weaknesses, Oppurtunites and Threats.
McDonald's has decentralized organizational structures. A company is known for having decentralized organizational structure if “The intermediate and lower levels of management are tasked by the top management of a company with making choices that affect the day-to-day operations of the company”(Vedantu, 2022). McDonald's, the champion in the worldwide fast food restaurant industry, leverages its corporate culture to draw customers and brilliant personnel.
In research from Thompson, “The traditions, customs, and values that guide employees' conduct are defined by an organization's organizational culture. The organizational culture of McDonald's promotes learning in order to guarantee business efficiency in production and service. This situation emphasizes the relevance of organizational culture as a success factor in McDonald's global company. In a manner, the organization's ongoing evolution reflects the firm's ability in implementing its corporate culture to reach the necessary levels of human resource capabilities.” (2017)
Given that McDonald's has several franchisees throughout the globe, its organizational culture appears to be one of task culture, where individuals create teams and remain in one location while performing their specific tasks. Since every employee at McDonald's has received training, they are familiar with all aspects of the business, reducing the need to rely on one person for a given task and allowing for easy substitution by other staff members. In a store, the employees' workspaces are likewise changed every few hours so that they don't get bored or stressed out.
Figure 4: Cultural Web Diagram of McDonald’s Corporation (author’s own creation)
“According to Monk, A., & Howard, S, A rich picture is a tool for documenting and thinking about various components of the work setting, specifically how they should affect the design. It is a tool in the same way that notation or representation is” (1998)
2) Point-Of-Sale System and its functions
A point of sale (POS) is a device usually used for tracking sales and collecting money in any area where a transaction is taking place. For example, Fast Food Restaurant, Hotels, Retail Shops and in many more places. POS systems can be found in various forms such as mobile apps, pc apps as software and receipt printer, monitor as hardware too. The volume of both cash and credit cards that move through a restaurant on a daily basis presumes point-of-sale financing. In research from Abelson, Restaurants employ point of sale (POS) systems for sales, food preparation, beverage preparation, inventory, theft reporting, and more (2021). For any restaurant, each of these items is an asset, and the POS system helps to take care of them all.
POS systems help to keep track of the current inventory in the store and also notify when the stock is being low, making it simple for the organization to establish new inventory at the right time. They also collect data on the items being sold in copious amounts, which creates insight and enables the establishment or preparation of those items in large numbers. Additionally, all the restaurant monitors are connected to the POS system, so when a customer orders food or drinks and pays for them, the item they ordered is immediately displayed on the monitor used in the kitchen. For this reason, POS systems also aid in the quickest preparation of food, which saves customers' time.
Figure 6: Input-Process-Output Diagram supporting POS System (author's own creation)
Since McDonald's sells meal products at lower costs than any other fast-food restaurant, almost all of its locations are always crowded. Both the front counter and the rear kitchen of the restaurant look to be in a highly hurried state. Each customer has their own preferred form of payment. One uses cash to place an order at the counter, which is then processed by the installed point-of-sale system on the computer they received at the desk. The other uses a credit or debit card. The big order screen displays at McDonald's are mounted to the table or the floor, where they execute the transaction using a hardware point-of-sale system and print the order number and receipt. Everything that is present throughout this procedure is monitored by the system that is creating the data on the primary device. This becomes Mcdonald’s big strength as they are gaining all the information about their stocks and the data of daily sales without any other device or systems.
The POS system can track theft in addition to sales, thus it may be determined whether an employee took merchandise like beverages or supplied extra drinks for which no payment was made. With the aid of the recorded sales and the quantity of remaining stock, the point-of-sale system also assists McDonald's in buying fresh inventory.
Conclusion
The Pos System is so effective that it immediately began gaining market notice when it was originally developed. It has also been giving the firm that has been utilizing it the most assistance. For McDonald's, point-of-sale has been a corporate asset since its installation. As previously mentioned, inventory management is totally controlled by the POS system which leads the company to profitability by reducing the expense of keeping and placing orders for inventory, which is exactly what any firm desires. Figure no 7 clearly reveals the importance of pos system within the organization.In this technological era, there are so many opportunities available in the market with the same number of skills people, utilizing it, McDonald's may realize its ambition of being the most preferred restaurant for the people by exploiting it.
References
Abelson, M. (2021, December 21). What is a POS System in a Restaurant? Lendza.com.
Admin. (2022, November 1). SWOT Hub.https://swothub.com/McDonald's-swot-analysis/
Farooq, U. (2019, October 9). PESTLE Analysis of McDonald’s. Marketing Tutor.
Ghazinoory, S., Abdi, M., & Azadegan-Mehr, M. (2011). SWOT methodology: a state-of
the-art review for the past, a framework for the future. Journal of Business Economics
And Management, 12(1), 24-48. https://doi.org/10.3846/16111699.2011.555358
Greenspan, R. (2022A, July 14). McDonald’s PESTEL/PESTLE Analysis & Recommendations. Panmore Institute.https://panmore.com/McDonald's-pestel-pestle-analysis-recommendations
Greenspan, R. (2022B, July 14). McDonald’s PESTEL/PESTLE Analysis & Recommendations. Panmore Institute.https://panmore.com/McDonald's-pestel-pestle-analysis-recommendations
McDonald’s. (2022A, October 21). Retrieved October 21, 2022, from https://www.McDonald's.com/gb/en-gb/newsroom/history.html
McDonald’s. (2022B, October 28). Retrieved 28 October 2022, from
McDonald’s. (2022C, October 17). Retrieved 17 October 2022, from https://www.corporate.McDonald's.com/corpmcd/our-company/who-we-are/ourhistory.html
McDonald’s Company Hierarchy. (2018, March 22). Hierarchy Structure.
Monk, A., & Howard, S. (1998). Methods & tools: the rich picture: a tool for reasoning about
work context. interactions, 5(2), 21-30.
Rajawat, A. (2020A, May 20). Factors: Responsible for McDonald’s Performance | Rajawat | Journal of the Community Development in Asia(JCDA). http://www.ejournal.aibpm.org/index.php/JCDA/article/view/806/771
Rajawat, A. (2020B, May 20). Factors: Responsible for McDonald’s Performance | Rajawat | Journal of the Community Development in Asia(JCDA). http://www.ejournal.aibpm.org/index.php/JCDA/article/view/806/771
Shaw, A. A. (2022, March 13). McDonald’s SWOT Analysis. Marketing Tutor.
Thompson, A. (2017, February 5). McDonald’s Organizational Culture Analysis. Panmore
Vedantu.(2022, April 27).Decentralisation.VEDANTU
Whittington, R., Regnér, P., Angwin, D., Johnson, G., Scholes, K., Whittington, R., Regnér, P., Angwin, D., Johnson, G., & Scholes, K. (2019). Exploring strategy, text and cases. Pearson Higher Education & Professional Group
Appendices
Appendix 1 – Full Hierarchy Diagram of McDonald's Corporation
(McDonald’s Company Hierarchy, 2018)
Figure 8: Full Hierarchy Diagram of McDonald's Corporation
Appendix 2 – PESTEL Analysis in Depth
Political Factor
McDonald's has a great chance to increase its expansion in worldwide commerce, which will benefit the supply chain there as well. Because the government cares about the citizens' health, new laws and policies pertaining to health have been enacted. Both seem like threat and Oppurtunites for McDonald's. And the expansion of these public health policies can pose threats to McDonald's because it sells a variety of foods that contain oils, ice, and beef meat, and because for Hindus, the cow is God. This can make it difficult to open new McDonald's franchises in countries where the majority of the population practice the Hindu religion, but it can also present opportunities for the company to produce or add items to its menus that can equally appeal to customers of all religions. Nonetheless, “the company has the chance to give more healthy alternatives to customers. McDonald's currently offers healthy alternatives such as salads, but the firm may expand its offerings to handle this political external element” (GreenspanA, 2022)
Economical Factor
While changes in the value of foreign currencies might have an impact on the installation of foreign country inventory, many emerging nations can be a good source for worldwide sales and franchise profitability. Economic recession, the pandemic covid or back in 2001-2 are the things that have affected the sales of McDonald's. However, in 2003, the Inter Brand Corporation and Business Week worldwide board ranked McDonald's ninth out of 100 brands, indicating that it is among the most well-known and successful brands in the world (RajawatA, 2020)
Social Factor
McDonald's has the greatest responsibility in taking care of the food or beverage that they are selling, should be healthy to eat or drink. If McD's thinks the meal is not excellent, they say they do not work with the supply team. Customers at McD's have the flexibility to customize their requested things and do both including and excluding the goods from the order. “Early 1990s international growth into new eating customs led in the introduction of new products in several places. McDonald's new products often receive no commercials or only a few ads during the testing phase” (RajawatB, 2020)
Technological Factor
In terms of technology, McDonald's has used all means at its disposal to market its brand name so that everyone on earth is aware of what it is. McDonald's has also placed technological systems within the restaurant that aid in excellent customer satisfaction and time savings. Systems like the ordering system are flexible in that customers can place their own orders using the screen that is available in the store. Additionally, McDonald's has its own websites, through which it is connected to everyone and presents offers and promotions that draw customers to the restaurant. Additionally, it compiles sales data and analytics to generate insights for the second day's improvement and lower inventory installation costs.
Environmental Factor
McDonald's has adequate trash management in virtually every one of its stores and is affiliated with many recycling facilities. Mc Donald's uses paper packaging for practically all of its products, which is easily recyclable and a big step in the direction of environmental conservation. “As the world becomes more environmentally concerned, McDonald's has a chance to present itself as a brand that takes its corporate social responsibility seriously. By making their supply chain, logistics, and operations more environmentally friendly, the company may obtain a big client base that will undoubtedly identify with its environmentally conscious activities” (Farooq, 2019)
Legal Factor
McDonald's food is frequently consumed by most students and workers in the field, and for their safety, many tough health rules have been formed with dietary restrictions that impact the person's health within the classroom and job. The menu at McD's includes both vegetarian and nonvegetarian options, and several animal welfare activists run numerous campaigns to protect the lives of the animals utilized as food sources. The increase in minimum wages, which threatens to raise McDonald's expenses and pricing, is also relevant to this PESTEL study. “The fast-food industry must maximize its efficiency to preserve competitiveness in costs and pricing despite growing salaries because of this legal trend cannot be stopped” (GreenspanB, 2022)
Appendix 3 – SWOT Analysis in Depth
Strength
One of McDonald's greatest strengths is its name; everyone knows what it is and how cheap its meals are compared to others. McDonald's has devoted customers who have made the restaurant their second home. You have a variety of items on the menu including breakfast combo. To create enticing offerings, the business gathers information and analyses consumer desires.
Weakness
Since every employee at McDonald's works in a hectic setting from the front to the kitchen, they are less happy with the minimum salary they receive and the rate at which they must complete their tasks to fully satisfy customers. They have also seen some growth-related effects from the ongoing bad press. According to new research, “Franchisees are becoming increasingly upset with the costs imposed by McDonald's, and as the firm grows, so are the fees imposed on franchisees for utilizing the famed fast-food name. People are upset, and as a result, many franchisees are selling their companies” (Admin, 2022)
Oppurtunites
Since there are currently more than 35000 McDonald's restaurants operating worldwide, expanding its presence in Asia presents one of the company's greatest opportunities. Because Asian nations are home to a diverse population of religious believers, McDonald's may decide to make some menu changes in these regions. In research from Shaw “McDonald's has formed a relationship with Door Dash and UberEats to provide home delivery services in the United States. Online ordering and home delivery services have altered the landscape of business ownership and operation. McDonald's should seize this opportunity by spending more resources in the development of the online platform” (2022)
Threats
Environmental contamination is one of the biggest risks to McDonald's since the company previously utilized plastic packaging and straws, which produced a lot of pollution and made waste disposal challenging. The paper packaging and paper straws that are now available at practically every McDonald's location are recyclable and beneficial to the environment. McDonald’s also has high competitors like KFC, Burger King, Subway and many other
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