Keywords: mcdonalds pestel, mcdonalds change management
In this survey I will evaluate the handling of a significant change that took place in McDonalds few years back, how the management and other employees reacted to the change, the way the resistance was handled, what were the major factors that led this change happen and also to what amount the change was successful in obtaining company's objectives.
It is very important for organizations to get ready themselves for the changes that they may have to handle to be able to contend with the latest development that is going on within and outside their environment. However these changes can bring many improvements and progress to that organization using aspects. For instance it can be ideal for making the work easier; it can open up ways for future improvements and can also help generally improve people's life. Colin Carnall (2002)
The primary reason for my survey is to provide insights about the change management process in McDonalds that happened recently and evaluate the outcome of applying it. In addition to focus on any amount of resistance associated with it and how it was triumph over by the management.
1. 1 JUST A LITTLE about McDonald's
McDonald's started its functions in 1954. As everyone is now familiar with the clown character which is Ronald McDonald, that has been designed as the trademark for the business. McDonald's restaurants give you a uniform menu to a sizable scope, including hamburgers, cheeseburgers, poultry sandwiches, French fries, salads, dairy shakes, sweets and snow cream sundaes. The company's top sellers are the Big Mac, One fourth Pounder with parmesan cheese, the Fillet-o-Fish and Fowl McNuggets. The client target of McDonald's is usually children and young people.
1. 2 Short explanation of the recent change took place in McDonalds'
Though McDonald's has a reputable brand image and a memorable history of previous successes, yet management at McDonald's began sensing that the growing society has developed different nutritional frame of mind and behaviours because they are extremely different from the populace of the prior decades. They noticed a severe need to redefine the image of McDonald's and repositioning the brand in the intellects' of customers as customers are more worried about their health and figures than ever before. Since last few years people's conception about McDonald's food has transformed considerably, as they believe that it provides greasy food which is high in fatty acids and more costly than its rivals, whereas the opponents have already made measures to lessen extra fat in their products and provide less expensive dishes. Moreover McDonalds' acquired to face a significant loss few years again as the consumers commenced to switch to its competitors, such as Burger Ruler, Subway and KFC for the reason that they give fresher and high quality food at relatively lower price with faster service. In order to keep gaining the market share and keeping its customers McDonalds' was required to react to the changing behavior of consumers. Furthermore, noticing that the fatness issue in the UK gets serious and complicated, McDonald's received a huge challenge to use certain changes the soonest possible time. Understanding the changing behaviour of its consumers and the health-conscious factor prevailing in the market, Management finally decided to implement a fresh designed marketing communication plan within their marketing strategy that mainly engaged improvements in their advertising and promotional campaigns focussing on changing the customers' belief for McDonald's food quality.
1. 3 Main Aims in making this change
- The main objectives of McDonald's for adapting to the changing demand of its customers were:
- Implementation of Integrated Marketing Communication (IMC) plan within their marketing strategy.
- Providing a well-balanced diet and a dynamic lifestyle
- Operating with freedom to adapt techniques to local marketplaces, and to discuss best practices internationally between restaurants, market segments and countries, while holding on to a common brand identity
- Innovation in advertising and promotional campaigns
- To be the customer's favorite place and way to eat
- Effectively tackling the obesity
- Adopting a new health-conscious brand image
- Meeting the latest craze of health consciousness and the growing matter in over weight among the children and target market
- Introducing a fresh, independent low-fat menu for children
- Changing the public image of McDonald's
- Maintaining the traditional efficiency of junk food restaurant and offer comfortable environment to customers.
2. 1 Main Motorists of the change
Like most big companies, McDonald's engages with a number of different stakeholders in the countries where it performs, as well as monitoring all pending politics initiatives. McDonald's is a huge multinational business with many stores on high roads and in shopping centres across the country. As such, the company is influenced by the external factors that impact all retail business in UK. The main drivers of this change are described as under:
- Changing cultural needs and market requirements of customers
- Increased consciousness in people about health insurance and food usage and safety
- Emerging diet plans that encourages people to be shape conscious
- Growing matter in excess weight among concentrate on market
- Latest trends of health awareness
- Innovation by the competitors
- Developments in technology
- Economic fads and developments
- consumer confidence
- local environment
- competitive pressure
2. 2 Detailing the necessity for change using appropriate framework
Above are the key derivers that created a dependence on changing the brand image of McDonald's over the last few years. Below I will explain at length using models and frameworks concerning how these motorists created the necessity because of this change which took place.
2. 2. 1 PESTEL ANALYSIS
In this section, I will clarify the all the factors (individuals) of the change by using the Pestel Examination that consists of political, economic, cultural, scientific, environmental and legal factors that incorporate to be the key reason for getting a change within an organisation.
McDonalds' just like other organizations follow certain regulations imposed by the government. For that reason they have to follow all the guidelines in order to attain their organizational goals. The UK authorities is very particular about health and basic safety of its people and also have set some requirements to be fulfilled by every food string to keep the business operating so McDonalds' needed to bring this change of repositioning itself in its consumers' minds so as to give them a confident image of their food quality and price.
Due to the heavy slump throughout the market, people have become much more price sensitive than ever before. Every single cent counts a whole lot now. Therefore they want to spend for the quality food that suits their demand, in other words they want go back of every one cent they pay and this return includes the quality and satisfaction. These changing economic trends actually afflicted the success in conditions of value for money and highly created a need for McDonalds' to adjust itself to the changing market demand and expectations.
Social factors are the changing lifestyle of individuals which includes made them more health mindful and safety very sensitive. In case of food chain, demographics play an important role to have an impact on the marketplace conditions. Therefore, this group which is the key target market for McDonalds is between 10-50yrs which includes children and young people who are truly becoming more aware of diet planning day by day due to the increased information available to them through various research planners and diet programs that cause them to become be figure mindful. This changing style of target market was a large obstacle for McDonalds' to keep itself jogging successfully which could only be performed by adapting itself to the environmental change and providing what customer actually calls for from them.
Advancement in technology has too much afflicted the mindset of individuals. As the technology evolves so will the human behaviour. With the use of internet and it, people have become more aware and productive. They have a quick access to all sorts of information, be it diet planning or education or environment or security or any other issue. Developments in technology highly calls for from businesses to progress themselves as so when required by their consumers and same was the circumstance with McDonalds'.
Environment is an extremely vital part of each business. McDonalds' encounters a hardcore competition by its opponents including Subway, KFC and Burger Ruler. Noticing that its opponents are evolving their business based on the changing lifestyle of customers, McDonalds' was forced to take quick decision to be able to beat your competition and staying ahead of it.
Legal factors involved the safety laws as established by the government for everyone food chains. These regulations are actually established keeping in mind the customers' needs and are also watched and upgraded on regular basis as per the changing lifestyle of consumers. Consumer safeguard is another factor that McDonalds' is expected to consider while conducting business as part of the legal bindings.
3. 1 Analyzing the process of change management by McDonalds'
In this section I will evaluate the performance of the procedure of change management by McDonalds'. Their primary goal was to improve the mentality of the consumers and creating positive understanding and image of McDonalds' in their thoughts. Here I am going to use ADKAR 'model of change management' to investigate the effectiveness of the process implemented by the management of McDonalds' to bring this change in place. This model consists of five key goals including understanding, desire, knowledge, potential and reinforcement. Below is the comprehensive examination of the change management process of McDonalds'.
3. 1. 1 ADKAR STYLE OF CHANGE MANAGEMENT
Awareness helps the business to appreciate and wish for providing certain change that is why it is considered as a basic tool for creativity. In this case, when management felt that their sales started out going down they tried to look for the reason why and discovered that the living style and needs of the target market has developed. They realised that individuals have become too much health mindful, which is why they began to consider the junk food as detrimental and oily food. This offered them the consciousness about the approach to life of their target market and their changing needs.
Desire pertains to the strength of McDonalds' to participate and support the change. It really is quite understood that each organization wishes to excel in the market by causing huge gains and client satisfaction so does McDonalds'. While using economic development there's been a great change in people's living standard as they have grown to be more worried about their health issues. Realizing this, the management at McDonalds' taken care of immediately the changing needs of its customers in an exceedingly supportive way, and was successful to handle the amount of resistance by other staff members.
It was very important to McDonalds' to know about how to improve itself in order to match with the changing market demand. Once it was alert to the changing behavior of the prospective market and was prepared to adopt an alteration, management focused on what they had a need to do to be able to maintain and satisfy absolutely free themes over time. The exterior factors including the competitors' advantages and the changing consumers' behaviour gave McDonalds, understanding of just what to be achieved to make it steady and running.
McDonald's potential to execute the change can be analyzed by evaluating its goal and aims. McDonalds' goal was to use Integrated advertising campaign to adopt a new health-conscious image in the heads of customers. It focussed seriously on the advertising and promotional advertising campaign of the company. The company decided to introduce a new zero fat menu for children that would help them to beat the growing bad publicity about McDonalds' food for being rich in excess fat and to control the obesity concern among children. Recognizing the importance of consumers' health, McDonalds created 'McKids Meals' having both nutritional value and no excess fat thus making it different from the traditional McDonalds' meals. Additionally the invention in their Integrated Marketing Communication provided a highly effective advertising and public relations campaign to efficiently create the new McDonalds' to the public.
Moreover they launched 'McChicken Premiere' and a 'zesty hen' to meet customers' desire to have good quality products at affordable prices. To keep carefully the children, it also began to give more alternatives with 'Happy Meal' including no-sugar-add berries drink that is a zero fat drink and also McDonalds' coffee which appeals to adult. Furthermore McDonalds' have responded in time to the changing healthy craze by adding salads and other lighter options in their menu.
As children are one of the biggest consumers organizations to McDonalds', therefore they paid significant focus on them. They attempted to provide a huge variety for children like the 'happy land' with 'happy foods' with toys. They believe if indeed they make themselves best suited for children, they can attract the whole family too.
Finally the building blocks for those above innovations was the Integrated Marketing Communication through the use of attractive advertising and promotional activities that could promote these services in the market and made people aware of these innovations. These campaigns were the basic tool for creating an optimistic conception in consumers' heads for McDonalds' and increasing their trust back. Therefore McDonalds created its new image in the market through new adverts and new theme "I love it even more!".
It had not been enough to bring the change or adjust to the changing environment but it highly demanded from McDonalds' to wthhold the change over time. That's the reason reinforcement of practicing and retaining that change enjoyed a vital role as post execution of that change. McDonalds' is quite successful to bolster its employees to constantly practice keep their altered positive image in consumers' brains. This was successfully done through positive encouragement and other rewards for the employees.
3. 2 Amount of resistance occurred in putting into action this change
Different people behave differently to an alteration in the company. However it is important to simply accept this simple fact that resistance is definitely there in any form which might be there before, during or after the implementation of the change. McDonalds got to face certain conflicts and resistances in the process of getting this change. This level of resistance came up both from customers and McDonald's employees. Some of the employees were towards utilizing Integrated Marketing Communication whereas some were against it and same was the circumstance of customers as some of them compared the change whereas others liked it. Overall the company faced pursuing main conflicts/resistance:
Different assessments of the situation
Some professionals and employees compared it because they had a concern with the company being going into a reduction if this execution would not aid to create a positive result. These were confused that change may make the problem more complicated and may make bad impression of McDonalds in customers' minds instead of improving it. Moreover they were quite uncertain about the capability of the team that was dedicated by McDonalds to bring the mandatory IMC (Integrated Marketing Communication) in place. They were convinced that the team might not exactly be able to produce an efficient quality as a consequence to lack of knowledge.
Lack of communication and insufficient information
The other resistance was related to the technical facilities being utilized by the McDonalds team. As employees thought that the systems which were employed by the McDonalds team to implement IMC campaign might be downgraded because of the rapid advancement in neuro-scientific IT nowadays. Therefore these were very unsure if the customers would have a positive a reaction to their new marketing campaign or not, that could lead to not obtaining the core target of the change for McDonald all together.
Low tolerance of change
Another conflict one of the managers was related to the knowledge of the team that was structured to help sustain the execution of the changes. Some of the managers experienced a view that McDonalds may face a lack of qualified labor force to maintain the capability of the marketing communication way.
Cultural variations among employees
Another issue was the ethnical differences among the staff that created some internal conflicts. Due to this the team may well not function with proper co-ordination thus making the implementation of change become more complicated.
Unwillingness to take risk
Another resistance originated from the personnel was due to unwillingness for taking risk. They were quite doubtful about the reaction of customers following the implementation of this change.
Psychological resistance associated with new working challenge
Management and employees were also tolerant due to pressure of dealing with a new concern and new environment.
3. 3 How McDonald's maintained the Resistance to change
It was really a crucial stage for McDonald's to apply these changes and overcoming the amount of resistance by employees and customers. Management realized that their plan would only achieve success if they would be able to handle this resistance successfully as they knew that reaching their organisational goals completely depends upon just how any level of resistance to it is been able. They had to get the strong support in sustaining the success as getting the change is something that has to be a continuous process that requires similarly important post execution attention as well. However comprehending the whole scenario, McDonald's attempted its better to overcome the resistance by adopting pursuing techniques:
Involving everyone along the way of change
For McDonald's, the most crucial point to begin with handling the amount of resistance was to entail everyone in the change process so that every person should undertake some learning activities in order to understand and appreciate the aims of that change. Management provided them complete information to let them understand the aims to make this change in order that they must realize and appreciate the importance to do this and also allow employees feel that they are essential in making this change successful. This helped McDonald's in increasing the support from the staff and conquering their amount of resistance.
Face-to-face interaction to get trust of employees
The management created a host where they can have face-to-face connection with all employees to develop strong interpersonal romantic relationships and trust.
Providing enough time to employees
It was important for the management to let employees understand the changing environment and required changes to be produced accordingly. For this employees need to have tacit knowledge which originates from observation and experience so management tried out to provide space to employees to learn from their experience and take notice of the surroundings.
Providing up to date technology to facilitate knowledge management
As the management was responsible to execute this change so they decided to deteriorate all the negative responses related to the technology, by giving the customers, employees and staff their respected demands. For the they provided the staff with the technology which could last much longer. In addition they facilitated them with systems that assured resilient functions to be able to make sure them that the technology they'll be using is quite appropriate for the latest development in the world of IT.
Education and Communication
Managers tried to teach and advise people about the change work to be able to why it was needed and the expected end result of that change which would be for the betterment of the business and employees as well. This helped the employees to understand the logic in the change work. It also reduced any doubts in their imagination about the unwanted effects of the change.
Training and follow-up programs for the team involved
As far as the turmoil was raised in connection with deficiency of the skilled team that was designed to be employed by the marketing communication, McDonald's decided to execute special follow-up programs for the personnel that was mixed up in said changes, which would permit them to receive proper training and development necessary to implement the mandatory changes.
Developing a thriving organizational culture
To overcome the inner conflict that was raised due to variations in culture, the management of McDonald developed a growing organizational culture and a stronger company by proper management of the staff, providing them what they actually deserved in order to stimulate them. They highly focussed on the correct handling of elements such as organizational design, settlement programs for employees, performance management and job path to be able to stimulate employees and create desire for them to phrase dedicatedly for the business and support them bringing this change. Furthermore, the human being capital management of the McDonald's also included an activity to ensure equality among employees to make sure they are feel an important area of the organization regardless of their cultural differences. This helped them increasing employees' loyalty and hard that not only helped the employees but also the organization.
Overall McDonalds' management was quite successful in controlling the amount of resistance and conflicts raised by employees and customers and they all participated and recognized the implementation and helped McDonalds' gain its positive image again.
4. 1 Assessing the effectiveness of the Change in meeting its Objectives
It was very important for McDonalds to handle the conflicts and resistance carefully because it is something contributes to the success or inability of the change for being properly completed or by being neglected often. Therefore management of McDonalds understood the value of managing the amount of resistance properly to make the change take place successfully. However McDonalds was quite successful in employing the change effectively and was able to meet its following objectives:
Shifting the frame of mind of children
Shifting the frame of mind of children about healthy junk food meals was not easy but through proper marketing and sales communications and campaign's strong motivating characteristics, management was quite successful in doing it. As parents are the one who are accountable for eating patterns of the children so McDonalds target was to encourage parents about their new better food ideas for children and let them enjoy McDonalds as part of your before.
Positive Image Building
McDonalds' new image successfully created a place in minds of people as they could see the new adverts of McDonalds at all sorts of media which let them associate with the brand in a more positive way than ever before. With the new adverts and new theme of "I love it even more!" McDonalds was successful in
encouraging parents to let their children eat healthy foods. This helped them to achieve its main objective of positive image building.
Creating a safe environment
Moreover the management could apply the change effectively by developing a safe environment for change that encouraged all employees to aid and stay committed to the organizational initiatives in bringing the change to meet its overall aims. This helped these to get over all the issues elevated by employees and customers, before and through the implementation of the changes.
Gaining organizational strength and competitiveness
This change also helped McDonalds to enhance its overall organizational power and competitiveness by increasing customer loyalty back again and positive image building of the brand. People started associating themselves again with McDonalds and started out pushing their children to eat McDonalds' which was the core component for delivering this change.
Expand the business enterprise portfolio
Moreover it also prompted the management to fortify and expand its business portfolio and make it through to the tough competition in the market. By getting its customers back, McDonalds began to earn much more market share when compared with its competition which led them to go into new market with same brand and increase the business enterprise to be children's' most favourite place to eat and amuse themselves.
4. 2 Assessing the need for just about any further changes
As people are receiving very particular about their health so it is essential for McDonalds' to keep its good image in minds of customers and also to maintain steadily its food quality and standard along with the prices. They could need to concentrate on producing zero fat products and really should think of enjoyable children in much more other ways as well similar to the play section they already have. They need to keep a proper check on the services of its competitors in order to manage it consequently. McDonalds must try to maintain steadily its services in order to cope up with the changing interpersonal needs and market requirements. Furthermore management at McDonalds' can carefully plan such creativity plus they must use effective proper tools to apply such change in future as well, this would help them to accomplish its vision of a food industry that delivers a health-conscious sub-image which is steady with the latest development in health recognition today and for the future.
Moreover the management leaders at McDonalds' should always try to watch what is working and not working in the procedure of the organization change in order to implement the change effectively. Such changes will help McDonalds' to enhance its competitiveness and durability. Whenever the management observes the necessity of any further change, then this is the only time, they need to impose required changes to be done to conserve the company to endure any downturn again. It is recommended that McDonalds' must see to it that any more changes are well planned and carried out carefully, because these would be the basis for the success or failure of the business. McDonald's must consistently review, upgrade and improve its products in line with the changing environment in order to ensure and improve its competitiveness.
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