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代写英国case study:Managing Corporate Reputation

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  MMB 011 Managing Corporate Reputation

  McDonald’s Branding Case Study

  According to Marketline (2012) McDonald's franchises and operates McDonald's branded fast food restaurants all over the world. The company is one of the world's largest food service retailing chains, preparing and serving a range of food products and beverages. As of December 31, 2011, the company operated 33,510 restaurants in 119 countries, out of which 6,435 were company-operated and 27,075 were franchised. The franchise agreements include conventional franchise arrangements as well as developmental license agreements and foreign affiliates. Of the total franchises, 19,527 restaurants were franchised to conventional franchisees, 3,929 to developmental licensees and 3,619 to foreign affiliates.

  Under the conventional franchise arrangement, McDonald's owns or secures leases for the land and building while franchisees provide a portion of initial capital outlay in the form of equipment, signs, seating, decor and maintenance. These franchisees, in turn, contribute to the company's revenue through the payment of rent and royalties based on a percentage of sales along with minimum rent payments and initial fees.

  Under the developmental license arrangement, licensees provide capital for the entire business, including the real estate interest. For this type of franchises, McDonald's receives an initial fees as well as the royalty based on a percentage of sales. The company's largest developmental license arrangement operates more than 1,800 restaurants across 19 countries in Latin America and the Caribbean. Also, the company owns an equity investment in some of the foreign affiliated markets, referred to as affiliates. The company receives a royalty based on a percentage of sales in these markets. At the end of 2011, Japan was the largest affiliates market with approximately 3,300 McDonald's restaurants.

  McDonald's restaurants offer a standardized menu, although there may be geographic variations. McDonald's key product offerings includes hamburgers and cheeseburgers, chicken sandwiches, French fries, wraps, chicken nuggets, salads, oatmeal, desserts, sundaes, soft serve cones and pies. It also offers beverages such as shakes, soft drinks, coffee, flavored tea and others. McDonald's restaurants in the US and many international markets also offer a breakfast menu.

  McDonald's markets its products under a wide range of brand names that include Big Mac, Big N' Tasty, Filet-O-Fish, Chicken McNuggets, Mac Snack Wrap, McChicken, McMuffin, McGriddles, and McCafe among others.

  McDonald's is one of the well-established global brands.. Many of its products like Big Mac and McMuffin are fast food brands with strong customer loyalty. McDonald's products are recognized by many as affordable fast food products that offer good quality. The company's brand equity can be gauged by the fact that on an average the company serves 68 million customers every day. Also, the company consistently ranks among the top 10 brands in several brand surveys.

  Interbrand (2012) valued the brand in excess of $40 billion, claiming that it is the 7th most valuable brand in the world. In their comments about the corporation they stated:

  “McDonald’s, the leading global foodservice retailer, stands out because of its exceptional brand management, significant global presence, leadership in sustainable practices and admirable approach to consumer engagement. McDonald’s continue to expand, most notably in Asia. The company deftly manages its franchise model, delivering a remarkably consistent customer experience while still allowing for locally relevant menu and service variations (such as home delivery in India and China). The company is also working to respond to critics by increasing the number of healthy menu options and effectively communicating its sustainability efforts to both customers and employees, building energy saving and waste reduction into staff incentives.”

  The robust brand equity has enabled the company to sustain its leadership in the fast food chain industry. The company has increased its global market share, both in developed and emerging markets. The revenues have also grown consistently and the company's global comparable sales increased by 5.6% in FY2011, representing the ninth consecutive year of same store sales growth.

  The strong brand recognition has also helped successful product extensions aimed at capturing a new customer base, for example McCafe branded coffee products and a full range of breakfast and salads menu have been instant hit with customers. Strong brand recognition hence enables the company to consolidate its market share both through new restaurant openings as well as product extensions.

  McDonald's franchising model helps the company to keep its costs low. At the same time, rent and royalty income from various franchise owners ensures a stable revenue stream to the company. The company claim that the franchise model is also helping it achieve strong cash flows. Furthermore, Marketline (2012) claim that the franchise business model, which is less capital intensive than the company-owned model is allowing the company to be a locally-relevant one.

  Excerpts from the CEO’s statement by Skinner (2011), taken from the company's Annual Report for FY2011 emphasises the success the Corporation has been enjoying.

  “ 2011 was another strong year for McDonald's. Global comparable sales increased 5.6%, our ninth consecutive year of same store sales growth. Operating income grew 10% in constant currencies and we continued to extend our market share lead around the world. In addition, we returned $6 billion to shareholders through share repurchases and dividends paid, and we delivered a 35% total return to investors, making us the top performing company in the Dow Jones Industrial Average for 2011.

  Today, McDonald's is serving a record number of guests nearly 68 million people every day. Our menus are more extensive, diverse, and relevant than any time in our history. We are elevating our brand experience in entirely new ways, from digital ordering to delivery to newly reimaged restaurants. And we are strengthening our commitment to both the communities we serve and the larger world around us.

  Our success continues to be truly global, with all areas of the world contributing. Some highlights include the U.S. adding more than 350 million customer visits in 2011, Europe continuing to grow and now generating about 40% of our overall revenue, and Asia/Pacific, Middle East, and Africa doubling its income contribution to our business over the past six years. Such balanced growth highlights our deepening connection with customers everywhere, as well as the underlying strength of our business in today's ever increasing global economy”.

  McDonalds are subject to pressure from numerous stakeholders and are operating within a field that has high significance.


  Please read the case study above and undertake the following:

  Produce a report (3000 words +/- 10%) on the development of McDonald’s brand. Your report should cover the following:

  1. A critical evaluation of the way in which McDonald’s have developed their domestic and global identities, including a critical analysis of the elements that contribute to the identity McDonald’s projects to its stakeholders;

  2. A critical appraisal of the linkage between corporate and market communications;

  3. An evaluation of the impact that Corporate Social Responsibility (CSR) activities have on their reputation.

  The task set is to address the following Learning Objectives

  1. Critically evaluate the way organisations develop their domestic, international and global identities and how some organisations use these to form images and assign reputational status.

  2. Critically analyse the domestic, international and global elements that contribute to the identity that an organisation projects to its stakeholders, sometimes through a corporate brand.

  3. Critically evaluate linkage between how an organisation wants to be seen and how it is seen, namely corporate and market communications.

  Please note: a small amount of information from within the case can be used to establish context but you will not be given marks for repeating information which is given to you in the case study.

  Your report should be fully referenced using the Harvard referencing system.

  The report should be 3000 words (+/- 10%)

  Hand in Date 3 May 2013 at 2pm

  University policy on length of work

  The University policy on the length of work can be viewed here: ...

  Disability and Assessment

  If you have a disability or specific learning difficulty such as dyslexia and require alternative assessment arrangements e.g. extra time for exams, for this module, please contact your tutor or module leader and the Disability Unit within 3 weeks of starting the module. Please note this is necessary even if you have already been in contact with the Unit.

  1. Assessment Criteria

  Marks will be awarded in respect of:

  Knowledge and understanding 25%

  Content and exploration of theories and ideas 25%

  Analysis and synthesis 20%

  Critical engagement and analysis 20%

  Technical skills and referencing 10%