By Que Sabmeethavorn

Achievement Standard: 90984

(1.2)

Would You Like Fries

With That?

A. Resources

McDonald’s is large fast food business that is highly regarded and successful in the market of fast food takeaways. Like every business, McDonald’s must use resources to produce or supply their goods (e.g. A Burger). Resources are the economic inputs used by producers in the production process to create the outputs (the goods and/or the services). These resources can be categorized into four main groups: Capital, Human, Entrepreneur and Natural. In this report, I will be identifying and explaining how McDonald’s uses and manages these resources in New Zealand. I will also explain and link the possible benefits to the New Zealand economy and society (Consumers, Producers, Government) of McDonald’s use of these resources.

Natural ResourcesNatural resources are the gifts of nature. By this I mean that these resources are available to use through nature. (E.g. Plants, Animals, Land, etc.) The payment for the use of natural resources is rent. Being a fast food business, McDonald’s produces mainly food to their market and to do so, they use a wide range of natural resources in their chain of production that are sourced in New Zealand. In 2009, McDonald’s sourced the following ingredients from New Zealand producers:

5.58 million kg of beef 2.3 million kg of chicken 1.4 million kg of lettuce (to be processed) 230,000 kg of tomatoes 85 million buns, rolls, bagels and muffins 4.6 million litres of milk 15.6 million kg of potatoes for processing 1.2 million kg of cheese 10.8 million kg of eggs 300,000 kg of Hoki (fish)

To gain these ingredients, McDonald’s must use natural resources. The beef is sourced through the cattle, which is a natural resource. McDonald’s claim to have 100% New Zealand beef. This comes from a number of farms throughout New Zealand such as Taranaki, Marlborough, Waikato and Manawatu. This means that McDonald’s also uses land, this being the farmland that the animals are produced. This also applies to the other ingredients that are sourced through the use of farming/farmland, such as the vegetables and dairy products (like the milk).

McDonald’s manages these natural resources in a variety of efficient and productive ways. To manage the quality of these natural resources, McDonald’s have a system of food safety and quality checks that these resources run through before being used. For example, the beef patties go through 52 of these safety and quality checks before being able to be used in the restaurant. To control and monitor the delivery of their natural resources such as the beef patties, McDonald’s utilizes the trusted McKey Distribution Centre that ensures premium quality. With the large amount of natural resources being used, McDonald’s utilizes bulk buying to reduce costs. McDonald’s also has a warehouse in Auckland that distributes the natural resources to the McDonald’s outlets. This allows them to keep track of what goes in and what goes out.

Human ResourcesHuman resources are the individuals, who create the work/labour force providing their work or effort. (E.g. staff, chefs, drivers, etc.) The payment for the use of human resources is wages. Like most businesses, McDonald’s uses human resources to provide their excellent service and assist in the chain of production. Across the country, McDonald’s employ more than 9,000 staff and annually the payroll is about $2 million. The amount of staff is constantly increasing as McDonald’s continues to expand. This may include people with different skills and work ability, but in a local McDonald’s restaurant setting, the crew is divided in 4 sections: the Drive-thru, the front counter, the back-area and the McCafe. This means that any of the staff could be at any of these stations at a given time. Looking further down the chain of production, McDonald’s uses human resources such as freighters (to deliver other resources) and farmers (who supply the ingredients).

McDonald’s manages their human resources in a variety of ways. As stated before, the crew is divided into the 4 sections of a standard McDonald’s restaurant. McDonald’s do this because its gives them a more structured work place and therefore making it easier to control and keep track of. McDonald’s also manages their human resources through a web-based program called Promapp. This program allows McDonald’s to create and store business processes online. McDonald’s uses Promapp, as it is so simple and easy to use. Their crew also utilizes this program to keep up to date with the current processes as Promapp updates their

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information live, meaning that there is never any outdated information on this program.

Entrepreneurial ResourcesThe entrepreneurial resources or the entrepreneurs are the individuals willing to organize the other factors and take risks for the business. (E.g. owners, directors of firms, managers, etc.) The payment of use of entrepreneurial resources is profit. McDonald’s uses these entrepreneurs to help manage their business along with also helping them take risks. McDonald’s is a large business and to manage all of the 162 outlets in New Zealand, McDonald’s has a franchising system. 80% of these outlets are franchised. This is where local businessmen and women get to own and operate their local McDonald’s restaurant. An entrepreneurial resource that McDonald’s also uses is their national management team. This team consists of:

Patrick Wilson- Managing Director (CEO) Jacky Hollingsworth- Chief of Finance Lauren Voyce- Head of HR and Talent Katrina Gray- National Operations Manager Brett Watson- Director of Development Chris Brown- Director of Marketing

McDonald’s manages their entrepreneurial resources through a few methods. To manage the individuals who invest in a McDonald’s franchise (Franchisee), McDonald’s have an agreement and outlines they have to follow before running the outlet. The franchisee also goes through applicant training which last up to 10-12 months and is full-time and unpaid. The management team makes the big decisions that affect how McDonald’s operates and how they can improve that. Within an outlet, there is a structured and hierarchical management system meaning that the outlet managers are able to keep track and control their human resources.

Capital ResourcesCapital resources or ‘goods’ are man-made aids/goods that are used to produce other goods and/or services. (E.g. Machinery, buildings, vehicles, etc.) The payment for the use of capital resources is interest. McDonald’s is a fast food business and to be in this market, McDonald’s has to be efficient in doing so. To achieve this, McDonald’s use a wide range of capital goods to aid them in being efficient and help them to produce their goods. McDonald’s uses 162 outlets or the restaurants all over New Zealand to supply their goods. This is one of their main capital resources because this allows them to supply their goods. There are also the abattoirs (slaughterhouses) and the patty production plants used by McDonald’s to source their beef. This leads onto the transportation vehicles McDonald’s uses to deliver these resources. To cook this beef, McDonald’s uses specialized two-sided hot plates that are also efficient as it produces a regular cooked patty in 36 seconds. McDonald’s also use tray-mats. (15million printed per year) Being a fast food business, McDonald’s has a Drive-Thru service that provides the customers with takeaway orders. To run the drive-thru, McDonald’s uses the inter-communication system for the ability to receive orders from the customers. Along with this, McDonald’s also uses a range of monitors to keep track of customer’s orders both in the drive-thru and on the front counter. To produce other goods available on McDonald’s menu, they use capital goods such as deep fryers (for cooking French fries), ice-cream dispensers and drink dispensers. With the addition of the McCafe, McDonald’s also uses capital good such as coffee machines to run this service. Within the restaurant itself, there are tables and chairs to provide a venue for the customers to eat.

Since McDonald’s utilizes many capital resources, they also have multiple methods of managing these resources. Like the delivery of the natural resources through McKey distribution, the delivery vehicles and where they go are controlled and monitored through this service also. The McDonald’s outlet managers maintain and keep track of the capital that is being not used and being used, so that they do not waste any of the scarce resources available. On a national level, McDonald’s is constantly maintaining and upgrading to newer types of technology to improve their productivity through researching and investigating these new types of technology. McDonald’s does this because improving their productivity means that they are able to supply more at the same or higher rate and therefore increase their profit.

Benefits to SocietyThere are many benefits for the NZ economy and society (Consumers, Producers, Government) of McDonald’s use of their resources.

To The Producers

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McDonald’s uses a large amount of natural resources, as shown in the list of natural resources purchased in 2009. This means that the producers of these resources will have a source to sell/supply to (as 95% of the product is NZ sourced). This is beneficial as it provides these producers a sales opportunity. For example, the beef used by McDonald’s is 100% NZ beef sourced from NZ farmers.

The investigation of new and more efficient technology for McDonald’s could also benefit other producers in the fast food industry. This is beneficial because the other producers could use this newer, more efficient technology. (E.g. this research could possibly lead to a new instant food cooker that is more efficient and could be used by other businesses?)

McDonald’s spends a large amount of money on natural resources. (E.g. $145 million was spent on NZ suppliers in 2010) This is beneficial to producers because with these purchases from McDonald’s, their profits increase. This enables the producers to possibly expand, which could also lead to a further profit increase.

To The Consumers McDonald’s uses a large amount of human resources (over 10,000 employees in NZ) and this amount

is constantly increasing due the McDonald’s expansion. This is beneficial to consumers because this use of human resources provides employment opportunities for the general public.

With the possibly of expansion of other producers due to McDonald’s purchasing of resources, this will also provide employment for the consumers which is beneficial.

McDonald’s has a franchising system where local businessmen and women get to own and operate a McDonald’s restaurant. This is beneficial to consumers as it gives a business opportunity to the local communities.

McDonald’s utilizes bulk buying and due to economies of scale, the costs are less and therefore keeping the price down for consumers which is also a benefit.

To The Government Due to the employment opportunities created through McDonald’s use of human resources, the

employment rate will go down. This is beneficial to the government because they won’t have to give out as much unemployment benefits, and with this money left over, it allows the government to spend it in more important areas.

The increase in employment because of McDonald’s use of human resources means that the consumers that are employed now earn or earn more income. This is beneficial to the government, as these consumers employed by McDonald’s now have to pay income tax, which provides the government with more money to spend on improving New Zealand.

McDonald’s purchases large amount of natural resources such as the ingredients in the list on page 1 and in doing so they also indirectly pay tax to the government. (The tax is paid through the supplier that McDonald’s purchased the goods from.) This is beneficial to the government as it provides them with extra money to spend on further improving and developing the country.

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B. Goals of McDonald’s Restaurants (NZ)

All businesses have goals. The reason for this is because the goals are what drives them to do what they do. Goals may vary from business to business, but the most common goal for a business is Profit Maximization. (Making as much revenue over the cost as possible.) All the goals can be divided into 2 categories, commercial and non-commercial goals. McDonald’s is a very large fast-food business that has a range of goals and values to back these goals up. In this report I will identify these goals and the values McDonald’s NZ claim to have that drives these goals. Commercial Goals

Profit Maximization-This goal of profit maximization is when a firm or business aims to create as much excess over costs as possible. In other words they want to make as much profit (revenue-cost) as possible.McDonald’s have a profit maximization goal as most businesses do. The value they claim is: “We grow our business profitably. Our stakeholders support our ability to serve our customers. In return, we work to provide sustained, profitable growth for all members of our system and our investors. ” – (2 in bibliography) This quote shows that this is the value that drives McDonald’s NZ to profit maximize.

Business Expansion-McDonald’s NZ have a goal of business expansion. This is when a business grows through increasing the number of stores. This is a McDonald’s goal as the value they claim is: “We strive continually to improve. We consider ourselves a learning organization that is green and growing which anticipates and responds to changing customer, employee, system and community needs through constant evolution and innovation.” – (2) This quote infers that McDonald’s is continually growing. In other words, they want to constantly expand.

Sales Maximization- This goal of sales maximization is when a business wants to gain as much sales as possible to brand them and gain market share. This is a goal of McDonald’s as McDonald’s want to profit maximize and a way of doing so is through sales maximization (to gain market share and therefore increasing profit). The quote about growing their business profitably is inferring that they also want to sales maximizes.

Non-commercial Goals Environmental Goals

-McDonald’s have environmental goals that aim to improve and help our environment. McDonald’s have these environmental goals as stated on the website as a value: “We strive continually to improve.We consider ourselves a learning organization that is green and growing…” – (2) This stated value shows that McDonald’s wants to expand while also trying to help the environment.

Community Goals-McDonald’s have some community goals such as setting up the Ronald McDonald’s house charities and supporting the Variety children’s charity. McDonald’s have community goals as they value their consumer base as stated in: “We strive continually to improve. ... Anticipates and responds to changing customer, employee, system and community needs through constant evolution and innovation.” – (2) This statement displays McDonald’s involvement in the community through constant evolution and innovation.

Providing a good/service-Businesses may have a goal of supply a good or service to the market. McDonald’s definitely have a goal of providing a good and service as the value stated is: “The wellbeing of our customer is our top priority...” - (3) Also, McDonald’s motto is: “Quality, Service, Cleanliness and Value (QSC&V)” – (2)This shows that McDonald’s value their customers and want to provide their goods and services.

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C. Price and Non-Price Marketing Strategies

Price and non-price strategies are utilized to gain sales and market share. Price competitions are strategies that involve reducing the price to therefore increase sales and market share. Non-price competition is when uses a variety of strategies that do not change the price. These strategies can be separated into two categories, product differentiation (making the product ‘appear’ different) and product variation (Actually changing the product). In this report I will present and explain the price and non-price strategies used by McDonald’s NZ to increase their sales and market share. There are consequences to the New Zealand society of the choices of price and non-price strategies used by McDonald’s. I will also explain these consequences and evaluate the decisions made by McDonald’s NZ over the last 5-10 years that correspond with the goals highlighted in Part B.

Price Marketing StrategiesIn many businesses, price competition is a key strategy, especially in the fast-food industry. There are a variety of strategies to attract customers by altering the price. Some examples of this are discounts, loss leaders, ‘buy one get one free’, interest-free terms, etc. Businesses use these methods to increase their sales and profit. The reason being is because they have fixed costs (resources that need to be used and therefore have to be paid) such as the land and buildings. The higher their total sales, the higher their profit and for many businesses, profit maximization is one of their main goals. McDonald’s NZ use the following price marketing strategies:

Combo MealsMcDonald’s have a variety of meals available for their customers. A combo is a combination of goods that complement each other and have their total price reduced. For example, a burger, french fries and a drink would cost $5.50 rather than the total cost individually of $7.50 (prices are just examples). This is a price

strategy as McDonald’s is reducing the price of their goods collectively. This is where the question “would you like fries with that?” originated. The consumers will see these ‘combos’ as value for their money as they are getting larger quantity for less than want it would have been and therefore achieve a higher level of satisfaction. This means that sales will increase due to more customers purchasing these combos (because of the value for their money) and this results also in an increase in market share.

A ‘Loss Leader’A loss leader is when a business decides to lower the price of a good at very low prices and/or below costs for a short period of time to attract more customers, in hope that they will also purchase their other goods. While the business makes a loss of that good, their sales will have increased due to the large amounts of customers in the store also purchasing other goods as well. McDonald’s occasionally holds a ‘loss leader’ to do exactly this. For example, McDonald’s had a Big Mac special at the price of $3, which was a very low price at the time. This was a success as it attracted more customers that also purchased other goods as well. This resulted in increased sales and market share.

DiscountsA discount is a strategy used by businesses that involves a reduction in the price of their selected goods. This is to attract more customers as they see these ‘discounts’ as a cheap deal, or value for their money. The purpose of this is to increase the sales through attracting more customers by reducing the price. McDonald’s uses this discount strategy as they have menus that have reduced prices on goods. An example is the addition of the ‘loose change’ menu where there are 7 goods that are at $2.50 or less. These 7 goods are usually higher in price, but McDonald’s have reduced the price of these goods to amounts that are both easy to get (because it is coin value) and cheap. This is increases their sales as the customers see this loose change menu as a ‘cheap’ deal and therefore they purchase more. Another Example of this is the use of coupons by McDonald’s. They have a range of coupons for their customers that are from a variety of providers. Coupons also give the customers reductions in price, but also encourage them to go back to McDonald’s again because the coupons have expiry dates.

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Non-price Marketing StrategiesNon-price competition involves other strategies that do not change the price of the goods/services to attract customers or appeal to other market segments. (A market segment is a group of individuals within the market that have special or different needs/wants.) Non-price competition can be done through Product Differentiation (making the product appear different) and Product Variation (actual changes to the product.) Some examples of product differentiation are advertising, branding, sponsorship, location, etc. The purpose of these methods is to increase sales and market share through gaining public awareness and perception. McDonald’s NZ utilizes many non-price strategies to achieve this. McDonald’s uses the following Non-price strategies:

Product Differentiation

AdvertisingMcDonald’s uses a variety of advertising techniques. These techniques are aimed at both branding the McDonald’s image and displaying the differences or ‘unique qualities’ their products have. The purpose of this is to increase the public awareness and to also appeal to other market segments to increase sales and market share. By increasing public perception, the sales will increase, as more consumers will know of McDonald’s. By appealing to other market segments, McDonald’s have expanded their consumer base and therefore increase their sales. McDonald’s have used this non-price strategy as they already have many advertising campaigns on TV, on the Internet and an example of appealing to other market segments is the Weight-Watchers approved meals available at McDonald’s. These meals aim to attract the market segment of more health conscious consumers and in doing so, increasing McDonald’s sales and market share. McDonald’s utilize advertising because it is an effective way of making known their image and products.

ServiceMcDonald’s is constantly improving and changing their services to attract more customers and in return, increase their sales. McDonald’s has many services available to their customers and all of these services are aimed at attracting more customers and appealing to other market segments. To attract more customers, McDonald’s have services such as catering for children’s birthday parties, the addition of Free Wi-Fi in restaurants, staying open for longer, children’s playground, the drive-thru, and the improved dining conditions. By catering for children’s birthday parties and having a children’s playground, McDonald’s is appealing to the market segment of parents/caregivers with young children. In doing so, they are achieving more sales and gaining a larger consumer base, because of the parents/caregivers purchasing the service while also purchasing McDonald’s other goods. The addition of Free Wi-Fi in McDonald’s restaurants attracts many consumers and also appeals to the market segment of people who use the Internet for a variety of reasons. The consumers, who want to use the Internet, go to McDonald’s to do this and while being there may also purchase other goods as well. The drive-thru allows customers to quickly get their takeaway orders with the convenience of not having to get out of their car. This service allows McDonald’s to make more sales while also attracting more customers. McDonald’s utilizes their many services because it allows them to increase their sales and appeal to more market segments to therefore increase market share.

Location

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To McDonald’s, the location of their restaurants is vital. This is a strategy that involves situating their outlets in convenient places alongside similar businesses to create competition and attract customers their customers to increase sales and market share. For example, McDonald’s usually places their restaurants near other fast-food restaurants such as Burger King or KFC. This is to provide convenience for the consumers of this market (fast food takeaways) and to also possibly attract consumers of Burger King or KFC to increase their sales and gain market share. McDonald’s uses this strategy because it provides competition and could possibly increase their market share by taking business off other fast food takeaway firms.

Sponsorship Sponsorship is when a firm supports an activity through donation. McDonald’s utilizes sponsorship to get involved with the community. This is to improve public perception and gain public awareness of McDonald’s image and brand. In doing so, McDonald’s image/brand will be known, therefore attracting more customers to increase sale and market share. McDonald’s sponsors a variety of activities, some of which include supporting junior sports teams, Variety (children’s charity), the summer and winter Olympics and the Ronald McDonald’s house charity. McDonald’s uses this non-price strategy because through these sponsorships, McDonald’s have and will continue to greatly improve their public perception and create more public awareness.

PromotionsPromotions involve making known a product, organization, or venture to increase sales or public awareness. McDonald’s uses this strategy of promotions through a variety of ways. McDonald’s occasionally holds ‘limited time specials’ of a certain product. The consumers see this as an opportunity to buy and therefore, increasing the sales. McDonald’s also promote ventures to improve public perception such as the use of free ranged eggs in Christchurch and Dunedin restaurants. By improving public perception McDonald’s will attract more consumers and in return, increase their sales.

BrandingBranding is the marketing strategy of creating a name, symbol or design that identifies and differentiates a product from other products. This means that branding is a way to make known a business’s product and how it differs from other products. To McDonald’s, branding is one of their key strategies to increase their sales and market share. This is because to brand themselves and their image, McDonald’s uses many other strategies such as advertising, sponsorship, etc. This is so the image and brand of McDonald’s is well known. If the consumers of fast food takeaways know the brand of McDonald’s, then they will go to McDonald’s rather than other fast food businesses. This has been done effectively as McDonald’s image, The Golden ArchesTM, is more recognized than the Christian Cross.

Product VariationProduct variation is when actual changes are made to the product itself. McDonald’s uses this non-price strategy to increase their sales, market share and also appeal to different market segments. McDonald’s have included new and different products to try to appeal to different tastes, preferences, income brackets and health conscious consumers. Some of these include:

The McCafe/M selections range: - With the addition of the McCafe and M selections range, McDonald’s have create a menu that appeals a different market segment of people with higher income brackets and of age. McDonald’s added these menus to gain a larger consumer base, which results in increasing their sales and market share.

The Breakfast menu: - McDonald’s have created a menu for breakfast. This is to appeal to the market segment of people who want a fast way of having breakfast. McDonald’s introduced this menu because they wanted to attract more consumers and therefore increase their sales.

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Weight watcher’s approved meals: - Alongside the other healthy alternatives, McDonald’s have created a weight watcher’s approved menu that tries to appeal to the market segment of health conscious consumers. Again, this is aimed at trying to achieve a larger consumer base to increase sales and market share.

Upsizing: - When a consumer is purchasing a ‘combo’ they are giving the option to upgrade the size of their drinks and fries. This is called upsizing. McDonald’s have included this to attract those consumers who want more in the their meals and in return, increases the sales and market share.

Consequences to Society of Price and Non-price strategiesMcDonald’s use a range of price and non-price marketing strategies that can have an effect on the New Zealand society (Consumers, Producers, Government). These price and non-price strategies are engineered to increase sales/market share to increase their revenue and therefore profit. This is so McDonald’s meets their commercial goals such as profit and sales maximization. McDonald’s non-commercial goals also set out to improve public perception and awareness through their community service/involvement in hope that it will attract more customers to purchase their goods. The following are some consequences (good and bad) to the NZ society of McDonald’s use of these marketing strategies:

To Producers: McDonald’s is aiming to gain Market Share and increase sales by providing price and non-price

competition. In doing so, other producers in the fast food takeaway industry may lose business and potentially close down. This may be because of the tough competition McDonald’s is giving them through their effective branding techniques and taking away market share of these businesses.

By increasing their profits through price and non-price strategies, McDonald’s have allowed for further expansion and in doing so, more money is being spent on staff (wages). The staff can benefit the other producers, as they are able to spend their new income. Producers of machinery and repairing machinery in the fast-food industry will also benefit, as McDonald’s will have need of them in the process of expansion.

McDonald’s utilizes many non-price strategies such as advertising frequently. By doing this, they have need for more advertisement producers. This is beneficial as it provides these producers with more sales opportunities and therefore increasing the advertisement producers’ profit.

By McDonald’s reducing the price of their goods as part of their price competition strategies, they are at risk of starting a price war with other producers (by undercutting a competitor’s price, that firm

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may react by using the same tactics therefore starting this ‘price war’). This is definitely a negative as both McDonald’s and the other producers will suffer a loss and the likely outcome of this is that the market share of both firms will remain the same and profits may be reduced.

To The Government: By McDonald’s taking market share and sales off of other fast food businesses through the use of

their price and non-price strategies such as branding, advertising, discounts, etc. could force these producers out of business. The result of this is the staff of these businesses will lose their jobs, adding to the unemployment rate in New Zealand. This is a negative for the government; as they have to pay the unemployment benefit to these staff and in doing so, lose money that could have potentially been put into something more important.

With McDonald’s being more successful through their use of price and non-price strategies, McDonald’s receive increased revenue. A result of this is that McDonald’s is indirectly increasing the amount of GST (Goods and Services Tax) the Government receives. Since McDonald’s are attracting more customers through strategies such as advertising and providing services, there are more potential customers that will pay the GST on McDonald’s goods. This is beneficial for the government as this means they will have more money to spend on improving New Zealand.

To Consumers: For some segments of the market, such as the regular consumers of fast food takeaways, there could

be people who are eating more fast food than they should or they could be making poor food choices. This is shown through the use of the non-price strategies such as advertising and promotions because these strategies are aimed at attracting more customers and making their products appear different when they are actually not. This could result in people regularly consuming McDonald’s fast food, which is bad as it can be unhealthy.

Childhood obesity is a possibility due to some prices strategies that make it easier for the younger consumers (children/students) to get McDonald’s goods. For example, the addition of the loose change menu or value picks menu allows students/children to purchase fast food easier as they can afford these products. This could lead into younger consumers eating fast food regularly as it is easier for them to get which is bad as it could result in an unhealthy diet and cause problems for them later on in their lives.

Through the use of price competition, McDonald’s have made their products cheaper for their consumers. This is a benefit as the consumers are able to save their money that is not being spent. This is displayed in the combo meals price strategy. The consumers see this as value for their money as they are getting more for less.

The community could benefit through McDonald’s use of non-price strategies such as sponsorship. McDonald’s regularly sponsors local activities and events. For example, McDonald’s sponsor the junior sports teams to improve public perception and awareness. In doing so, McDonald’s gets more sales and the junior sports teams receive more sponsorship.

Through the use of Product Variation, the consumers of fast food may get a wider range of products to choose from. This is a benefit for consumers as having a wider range of products gives them a better choice of what they are willing and able to get.

The purpose of all the price and non-price strategies is to increase sales, market share and then ultimately profit. By using these strategies McDonald’s have increase their profits and this means that a larger dividend is given out to the McDonald’s shareholders, which is beneficial.

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Evaluation of decisions that correspond with goalsThe decisions made by McDonald’s NZ over the last 5-10 are related to the commercial and non-commercial goals they have. The following are evaluations of these decisions based on the goals:

Profit MaximizationOver the past 5-10 years, McDonald’s NZ have made a range of decisions that have been aimed at their goal of profit maximization. Some of the decisions made were through the use of non-price and price competition. For example, McDonald’s have made the decision to add a ‘loose change’ menu to attract other market segments and in doing so, have increased their sales. They have also decided to do an advertising campaign on this loose change menu, as seen on TV and on various websites. By increasing their sales, through the use of price and non-price strategies, McDonald’s is maximizing profit and therefore they are meeting their goal of profit maximization.

Sales MaximizationMcDonald’s goal of sales maximization is to sell as much as possible to increase their market share. This has been done as McDonald’s have decided to use a variety of price and non-price strategies that are aimed at increasing sales and market share. Some of these decisions include going into partnership with Weight Watchers to attract different market segments (and therefore sell more) and adding in the healthy alternatives such as the Salad Plus menu. These decisions made by McDonald’s NZ meet their goal of sales maximization because of how these decisions have increased their sales.

Providing a Good or ServiceMcDonald’s from the start have set out to provide their customers with quality goods and services. (As stated in company motto.) Over the past 5-10 years, McDonald’s have decided to add a variety of goods and services. These decisions include the addition of the Angus Beef burger, launching the Made to Order cooking platform to provide freshly prepared food for their consumers and the addition of the free Wi-Fi service within restaurants. These decisions do match McDonald’s goal of providing a good or service as these decisions all have assisted McDonald’s in giving their consumers a range of goods and services.

Community GoalsMcDonald’s have made decision in the past 5-10 years that have been involved with the local communities of New Zealand. McDonald’s have community goals that aim to get involved with local communities and support them. The decisions made were aimed at doing this and they did. Some of the decisions were the sponsorship of junior sports teams, the addition of Wi-Fi allowing for community use and supporting the Variety children’s charity. These decisions have made McDonald’s community involvement greater and therefore match this goal.

Environmental GoalsOver the last 5-10 years, McDonald’s have made decisions that affect the environment. McDonald’s have environmental goals that aim to improve and help our environment. The decisions made were supporting the cleanup NZ week held every September and supporting the use of the 3R’s (Reduce, Re-use, Recycle). These decisions made by McDonald’s match their environmental goals as they do improve and help our environment.

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The Number 1 goal of McDonald’s Restaurants (NZ)

I believe that the number 1 goal of McDonald’s (NZ) is:

Profit Maximization

I believe that McDonald’s number 1 goal is profit maximization because of multiple reasons. McDonald’s utilizes many price and non-price strategies that are aimed at increase sales and market share. In doing so, McDonald’s ultimately increase profits too. This is no coincidence, McDonald’s have increased their profits through the use of price and non-price strategies as that want to maximize these profits. All of McDonald’s goals are closely linked to either increasing profit or maximizing it. The non-commercial goals such as helping the environment and community involvement are aimed at improving public perception and therefore attract more people to purchase their goods. Commercial goals such as business expansion also link to profit maximization as expanding could possibly mean an increase in revenue as a result of expanding. Increased revenue means increase profits. These are the reasons why I believe that McDonald’s (NZ) number 1 goal is profit maximization, as all of the goals are closely linked and the marketing strategies McDonald’s uses are all aimed at maximizing their profit.

ConclusionThroughout this report, I have found that McDonald’s (NZ) uses and manages their resources

effectively and efficiently to avoid wastage of these scarce resources. McDonald’s use of these resources has many benefits to New Zealand’s society. The major benefits I have found are the large sum of money McDonald’s spends on NZ producers, the employment opportunities McDonald’s gives to the public and the franchising agreement allows for local businessmen and women to own and operate McDonald’s restaurants. McDonald’s, like every business, have goals and values to drive these goals. I found that most of these goals are closely linked to what I believe is McDonald’s number 1 goal, which is profit maximization. McDonald’s utilize many price and non-price strategies to increase their sales and market share. I found that this ultimately leads to increasing profits. McDonald’s use of these strategies has consequences that could have possibly affected New Zealand’s society. I found that there is a balance of good and bad consequences to the society of NZ. In the end, McDonald’s are not only feeding their consumers, they are feeding the producers and the government of New Zealand through their production and sales decisions.

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Bibliography

1. http://www.promapp.com/case-studies/mcdonalds/ 2. http://mcdonalds.co.nz/careers/about-us/our-values 3. Resource Booklet4. http://mcdonalds.co.nz/about-us/corporate-responsibility 5. http://mcdonalds.co.nz/ 6. http://mcdonalds.co.nz/our-food/menu/#/ 7. http://www.mcdonaldsparties.co.nz/birthdayparty_nz/

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