McDonald’s is a large corporation which have nearly thirty-five thousand branch stores in the world. McDonalds mainly serving fast food to their customers. For nearly fifty years, it’s breakfast has become synonym to breakfast. Its target customers are normally families or people who have busy lifestyle and no time to cook. However, for this year, McDonald’s faces an issue which is the drop in their breakfast’s market share. This would be a big trouble to McDonald’s as twenty-four percent of their profit comes from breakfast sales. Therefore, the management team of McDonald’s should take this seriously, figure out the causes of this situation in order to recover their breakfast market share. McDonald’s management team should consider their management approach which carried from a few decades ago until today as the main reason of their market failure today. McDonald’s is facing challenges as new potential rivals are getting into the field. McDonald’s start to fail to attract their customers since the world is changing, and their rivals are performing better and better. They should modify their ways to produce and present their product and services to customers. Customers’ preferences are changing from time to time. Therefore, a company’s management strategies should change as well to catch up with the current trend.
Scientific management used by McDonald’s from years ago until today should undergo an analysis on whether it should be continue in this modern era. Scientific management was developed by Frederick W. Taylor (1856-1915) which defined as an application of engineering science at the production floor or the operating levels, mainly to increase workers’ productivity. McDonald’s apply scientific management in their operating system. McDonald’s practices the principle of develop a standard method for all employees to perform every single task. To ensure that customers experience same quality of service and food in every franchise, McDonald’s develops a list of throughout and precise working procedures. For example, McDonald’s require employees to produce food by following the assemble line such as the Made-For-You (MFY) System. Referring to McDonald’s Hong Kong’s official website, The Made-For-You System is a system which the kitchen will start to process after receiving the order while each of the worker will be responsible in only each step of making the burger. This system is to guarantee the quality of burger produced as well as production efficiency. This practice not only apply to food production but also on service line. McDonald’s workers must follow a rigid script when they communicate with customers. However, too much restriction and control over the employees will stress and demotivate them in performing tasks. For example, according to a news published by The Sun at 14th March 2018, McDonald’s staffs quit their jobs due to increase in complicated tasks bring by mobile apps order system. A worker even switches to the rival chain as he felt he was overstress. Therefore, we might conclude that McDonald’s is too anxious to improve their technology system to provide fast and quality service but they ignored their employees’ mental health. Different from McDonald’s, their rival, Burger King produce burgers mainly by machine, which is easier and more relax while there is no time. Relate back to the problem why McDonald’s losing their market share, we can say that time pressures and unclear instruction given will affect employees’ performance negatively. (Murali, Basit, Hassan, 2017). Working early in the morning is dispirited and downcast, plus with their stresses, employees would perform less efficiently which produce low quality food and services to customers. Therefore, customers who have a bad experience with McDonald’s breakfast will less likely to choose McDonald’s compare with their rivals who perform better.
Other than that, by using Porter’s Generic Strategies model which founded by Michael Porter to analyze McDonald’s management strategies, McDonald’s is applying cost leadership strategies. Cost leadership strategies normally apply to company that targeting low cost production in order to bring the price to minimum and increase their market share. McDonald’s states in their vision that, they strive to deliver affordable foods with good quality, and this is the reason why they adopt the cost leadership strategies. According to McDonald’s official website, its company is a major customer of British and Irish farming. Therefore, they have a world class efficient supply chain which enables them to achieve low cost production and offers cheap price to their customers. Take the beef burger as example, the reason why McDonald’s beef burger is cheap is because they are producing in a huge amount as all of the franchises are require purchase their supplies from McDonald’s. To achieve low cost production, McDonald’s forced to cut or transfer their funds from other aspects such as employment, machineries maintenance, restaurant decoration or other aspects. This lead to an issue which is to reduce average production cost to minimum, McDonald’s employed insufficient employees in their restaurant. It makes their workers unable to perform perfectly in their tasks while they have too much works to do. This situation causes worsen of customer service. A real-life example was taken from Independent, a British online newspaper, showed that an employee of McDonald’s posted few disgusting photos of McDonald’s ice-cream machine with a lot of impurities and their unclean kitchen on his Instagram. The employee also stated that he sometimes even saw his colleagues simply pick up a dropped food and put it back to the bun to serve. To relate back to the topic, this post would definitely bring a negative impact to McDonald’s as the poor restaurant condition is distracting customers to have their meals there. This situation may result from their cost saving action as they have insufficient workers to maintain the cleanliness of the restaurant or they rather use the money for food production instead of spending on these areas.
In general, the reasons which causes McDonald’s to lose their breakfast’s market share are the inappropriate use of some approaches and strategies to their management system. This included constant use of scientific management that resulted bored and stressed feeling on their employees and over taken of cost leadership management which causes lack of resources to manage the other part of the restaurant other than production. As a result, McDonald’s should go through the basic management process again instead of retaining the previous management system. They should figure out their weaknesses and rivals’ strengths in order to overcome the obstacles and possible future challenges.