Why Have McDonalds Sales Been Declining - Free Essay Example

Founded in the 1940s, McDonalds has become the largest, the most successful and most well known fast-food chain in the world. When ranked amongst the rest of their industry competitors, McDonalds are consistently ranked as the most valuable fast-food brand in the world as well as being in the top 10 of all the overall brands in the world . Achievements like this highlight the enormity of the firm when they are ranked amongst the likes of Apple, Google and Coca-Cola year after year (Forbes, 2015). Between 2003 and 2011, McDonalds saw a rise in its value from $12 per share to $100 per share at its peak in 2011 (The Economist, 2015b). However, over the last 18 months, the firms dominance is not as apparent as it once was. With a fall in sales revenue and a more substantial challenge from other fast-food competitors, the question being asked is why, after so long, is McDonalds starting to falter and what can they do to solidify their top spot? This essay will argue that the main reason behind the decline in McDonalds sales is the change in the social and cultural makeup of many of its consumers. Whilst other factors will be highlighted through the use of a PEST analysis, this essay will argue that the main reason is a generational shift that McDonalds has failed to keep up with and will ultimately offer recommendations that could potentially help the fast-food chain increase sales. The essay will primarily focus on ways to increase sales in the UK. The UK is home to ove r 1,200 McDonalds restaurants. In recent years it has become the UKs third largest fast-food chain behind the likes of Costa and Greggs (Armstrong, 2015). Despite sales increasing in the UK by 0.5%, worldwide, the firm saw a decrease of 1.8% in sales (Fortune Magazine, 2015). There are things that are out of the control of those in charge of UK operations such as food safety scares in Japan and China but there can be measures taken to increase sales so that it can offset the problems in other parts of the world (Fortune Magazine, 2015). All businesses, no matter the size of the company, or the scope of their operations, must consider the external environment they are operating in. Failure to do so can result in missed opportunities to maximise ones profit-making or allows competitors to come into the market and control a significant portion of the market share (Worthington, 2009). PEST analysis (an acronym for Political, Economical, Social and Technological) is a tool used to exa mine the external environment to outline potential limitations in various aspects of a business operations. Anything that can hinder the ultimate aim for a company, to make money, needs to be a priority for any business on the behalf of their shareholders. The political environment analyses the political sphere and the way the it can have a direct effect on the way business operates (Worthington, 2009). This incorporates aspects such as the political system and its attitude to private enterprise; as well as legislation and regulation that governs the way firms operate at various levels from local government to international governance. The UK is a very business-friendly political system. The UK operates with some of the lowest corporation tax rates in the developed world with companies such as McDonalds having to pay a rate of 20% as they earn over ÂÂ £300,000 in profit and this to be cut further in the future to 18% (HMRC, 2015). With this being kept in mind, the UK poli tical environment encourages enterprise and is therefore difficult to suggest that the political workings of the UK are contributing to the downward spiral of the companys sales revenue and ultimately, limited actions the business could take within this environment to increase sales. A similar conclusion can be made of the economic environment. This environment focuses of the wider macroeconomic activity and the way it affects the way businesses operates (Worthington, 2009). This includes taxation in its various forms such as, in the UK, national insurance, income tax and corporation tax; the unemployment level, as higher unemployment means less demand for products due less money flowing through the economy, or interest rates. The economic and political environments are closely interlinked and economics can dictate policy and policy can dictate. The economic crisis saw a rise in unemployment which has a knock-on effect on the ability for a business to generate revenue. However , growth in the economies of the highly developed nations has resulted in unemployment falling. As of April 2015, the UK unemployment rate stood at 5.6% (Eurostat, 2015). Therefore despite the fact that the macro- and microeconomic climate is improving, the revenue of McDonald still falls suggesting that the reason behind it is not economic. The aim of this essay is to argue that the main reason for McDonalds recent failings is due to its neglect in adapting to the current social and, by extension, technological environments. The social environment is concerned with the social and cultural aspects that can affect a way a business operates and technological environment is concerned with the use of modern day technology to maximise opportunities, for example, cheaper methods of production or more efficient ways of delivering a service or product (Worthington, 2009). Regardless of the industry, a business needs to understand the societal norms of the area they operate. For example, a company like McDonalds should not sell beef burgers in a country like India, where the Hindu population does not eat beef. Whilst it appears that McDonalds has catered for the various social differences in the variety of countries it operates in, on the surface level at the very least, the company has failed to keep up with cultural changes in its base the West. Businesses maximise their sales through segmentation. Segmentation is the process where companies focus their marketing by segmenting the market into small groups of shared traits such as demographics, age, gender and occupation. Segmenting the market has no merit in itself; a business needs to understand the consumer behaviour of that particular segment. Consumer behaviour entails all the activities that are normally associated with the purchasing of a product by examining why people buy what they buy and not just what they buy (Kardes et al, 2014). McDonalds have been caught between two different marketing methods aiming to the lower end of the market and directly competing with the likes of Burger King and attempting to aim for the higher-end fast-food restaurants such as Chipotle, Wahaca and Five Guys; who are a little more expensive but are growing in popularity. There has been a growth in the demand for the upmarket, fast-food chains due to their key selling point being high quality food with the option to customise ones dish (The Economist, 2015b). The rise in the high -end fast-food chains can be attributed to the rise of a particular segment Generation Y or otherwise known as the Millennials. Generation Y, is the term that refers to individuals born after 1982 and grew up in a post-Cold War age, through unprecedented prosperity, and throughout the advent of the internet and globalisation. Over the last decade, they have begun to make up the majority of the market (Strauss Howe., 2009). As a result of the age Millennials grew up in, they are less susceptible to traditional market ing techniques and are much more cynical in what a brand has to offer them. Gray (2015) believes that whilst Generation Y are still very aware of the marketing techniques but because they have been targets to it at various levels for their entire life, as opposed to many individuals from Generation X, Millenials are much more desensitised to it. They no longer accept products on face value, but attach a greater concern for being valued as a customer. Jobber (2013) writes that we have entered into a New Marketing Era where the customer is the centre of the marketing mix and attempting to build a long-term relationship with the customer as opposed to previous era in which Generation X were part of. A study into Millennial consumer loyalty found that Millennials will often choose where to shop based on the quality of the product or service and being rewarded for their loyalty. This study found that 74% of participants were more likely to choose a brand that offers a reward or loyalty p rogramme (Ferguson, 2012). This can be seen amongst the fast-food chains such as Starbucks, Costa and Nandos where consumers are rewarded through loyalty cards or apps that can be redeemed for free products and discount. Many argue that McDonalds should head back to its roots and continue to focus on the lower end of the market with the likes of Burger King. However, with this increasing trend in upmarket food-chains, McDonalds should focus on this market if they hope to increase sales. Martin (2002) found that one third of Millennials in the US are from an ethnic minority which brings about a global mix-and-match culture amongst Millennials resulting in a greater demand for culturally diverse foods. One of the key selling points of chains like Chipotle or Five Guys is the ability to build your own dish. With a combination of ingredients, these restaurants offer customers a chance to create something that matches their taste as much as possible. McDonalds in Australia is trail ing a new Create Your Taste menu, where customers have the ability to create their own gourmet burger from a selection of ingredients through a digital kiosk and have it delivered to their table (Macleod, 2014). A trial like this automatically combines that customisation element that many of the Generation Y individuals enjoy so much as well as making use of the modern day technology and is therefore the first thing that McDonalds in the UK should introduce to increase sales. Due to the fact that many of these restaurants such as Five Guys are relatively expensive compared to the likes of Burger King and KFC means that it is not an economic issue; consumers are willing to pay if they feel the quality is appropriate and they are valued. This means that McDonalds could charge more for their customisable burgers and further increase revenue. The greatest innovation over the last 20 years has been the advent of the internet and many companies have made it their priority to make use o f it to expand their business opportunities. When it comes to fast-food restaurants, the opportunity to expand on the internet is limited due to the nature of the industry. However, through the introduction of smartphones and smartphone applications, a number of fast-food chains are utilising these to allow a smoother and more convenient experience for their consumers. For instance, Nandos in the UK uses an application that allows customers to pre-order their meal for it to be ready for collection. It means that commuters on their way home from work can order their food whilst mid-journey and their meal will be ready to be collected for take-way when they have arrived at their local Nandos restaurant. Therefore a second recommendation that would help increase the sales in the UK for McDonalds would be to increasingly utilise the technology available to them. Fergusons study into Millennial consumer loyalty (2012) found that 59% of Millennials use smartphones and with the increasing availability of smartphones at a more affordable price since 2012, it can be assumed, that the figure in 2015 is greater. This further supports the claim that McDonalds is missing out on an opportunity to enter into a thriving market where the tools such as affordable application development and smartphones are readily available. . To conclude, whilst these recommendations on how McDonalds should change the way it operates does not guarantee success, it at the very least means that it is competing with its fellow fast-food chains on an even keel. However, there is the possibility that McDonalds has reached the maturity period of its lifecycle. Like Nokia and Microsoft, two giants in their respective industries, before trendier competitors were introduced to the market, namely Apple, Samsung and Google, no matter how these two giant corporations tried to update their operations and appeal to a newer, more modern market, they have failed to hit the heights of the 1990s. Many of the recommendations are slowly being rolled out by McDonalds throughout the course of 2015 and will undoubtedly reach the shores of the UK shortly afterwards. However, McDonalds is too successful to be judged by a few bad years. BIBLIOGRAPHY Armstrong, A., (2015) McDonalds holds global day of joy after worst sales in a decade, The Daily Telegraph, (24th March) [Online] Available at: https://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/11491125/McDonalds-launches-day-of-joy-after-worst-sales-in-a-decade.html The Economist (2015a), When the chips are down, The Economist, (10th January) [Online] Available at: https://www.economist.com/blogs/economist-explains/2015/01/economist-explains-7 The Economist (2015b), Why McDonalds sales are falling? The Economist, (14th January) [Online] Available at: https://www.economist.com/news/business/21638115-after-long-run-success-worlds-largest-fast-food-chain-flounderingand-activist Eurostat (2015), Unemployment rate by sex and age groups monthly average %, [Online] Available at https://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=une_rt_mlang=en Ferguson, R. (2012), How Generation Y Will Reshape Customer Loyalty Born This Way: The UK Millennial Loyalty S urvey, London: Aimia Forbes (2015), The Worlds Most Valuable Brands, Available at: https://www.forbes.com/powerful-brands/list/#tab:rank Fortune Magazine (2015), McDonalds posts a global sales decline as troubles linger, Fortune Magazine, (February 2015) Gray, R (2015), Generation Y: What Every Marketer Needs to Know, The Marketer, (2015) HMRC, (2015) Rates and Allowances: Corporation Tax, HMRC website. (July 2015)(found at Jobber, D., F.Ellis-Chadwick (2013), Principles and Practices of Marketing, 7th ed. Berkshire: McGraw-Hill Education Kardes, F., M. Cronley, T. Cline, (2014) Consumer Behaviour, Hampshire: Cengage Learning, Macleod, D. (2014) McDonalds Create Your Taste in Learning Lab Restaurant, The Inspiration Room, ( 9th October), Martin, L.P. (2012) Targeting Generation Y, Public Relations Quarterly, 47(2). , pp.46-48 Strauss, W. N. Howe (2009), Generations: The History of Americas Future 1584-2069, London: Vintage Books) Worthington, I. and C. B ritton (2009), The Business Environment, 6th Ed.. Harlow: Pearson Education Ltd.,

Social, Emotional, and Behavioral Functioning EDSS 6379 - 3575 Words

Social, Emotional, and Behavioral Functioning EDSS 6379 (Editing Sample) Content: ADHD in AmericaSocial, Emotional, and Behavioral Functioning EDSS 6379Fall 2014AbstractThe human brain plays an important role in coordinating normal body processes and growth, however, when the brain is not in its rightful state; an individual is bound to suffer in different ways. One of the conditions of the brain that continues to affect many children and older people in the United States is Attention deficit hyperactivity disorder (ADHD), also referred to as hyperkinetic disorder (Farrar, 2011). This condition is usually described as a psychiatric disorder; that most often affect an individuals process of neurodevelopment. A person suffering from this condition experiences reduced levels of attention and hyperactivity, at the same time, other people often act impulsively in ways that are said to be not suited to their age. An individual suffering from ADHD starts to manifest these signs and symptoms at the age of six years to twelve, for effective diagnosis to be made, the person goes on to portray these symptoms for six more months. School going children that are suffering from this condition often perform poorly as reflected in the low grades and a general dislike for the entire learning process. This paper examines the prevalence rates of ADHD as a condition that can result in a life-long illness if it is left untreated; it explores various intervention approaches that have been used in treating the disease and the success of such interventions in America and other places.Rationale for an interest in the study of ADHDADHD is one of the most studied among all other conditions and complications affecting neurodevelopment according to recent research reports (Smith, 2012). Many teachers have been blamed for their inability to help learners perform well in their academic endeavors, while other performance related issues are easily tackled with; ADHD has remained to affect many children without parents, teachers and other caregivers unable to detect it. Another point of interest in the study of this condition arises from the fact that medical interventions are yet to bring about solid evidence effectively for treatment approaches and mechanisms. There are several research programs being conducted in various parts around the world in order to establish the root cause of this conditions as well as the possibility for reliable intervention strategies.Essential features of ADHDOne of the most prevalent features of ADHD is a continuous pattern of inattention as well as hyperactivity-impulsivity that most often interferes with the normal functioning of an individual (APA, 2013). All these features appear prominently in the affected individual while performing various duties and responsibilities at home, at school as well as during their social relationships on various occasions. It is important to understand that this condition most often begins at childhood, this means that chances of it affecting a grown-up in his older ages are rare. For a child, the signs and symptoms being exhibited from this condition need to be apparent in the manner and degree that is consistent with the childs present development level, something that can be seen from a childs behavior.Social and Cultural perspectives on ADHDAccording to various research reports, social and cultural factors are essential in understanding the past and present, as well as future trends concerning the prevalence of ADHD, its diagnosis as well as methylphenidate treatment plans (Longworth, 2005). According to this research report, the impacts of the consumption of methylphenidate have helped to reduce the effects of this condition in many children across the world. The development of treatment plans by different countries has led to a significant reduction of cases of ADHD among children between 10 years and 11 years (Longworth, 2005). According to this study, less than one percent of children in England are diagnosed with this condition yearly whil e in America, five percent of the same age group as those in England are said to be suffering from this condition.These findings are attributed to the fact that UK doctors are less likely to deploy ADHD label compared to US doctors. The difference may also be tied to cultural factors. The United Kingdom uses most stringent criteria in the diagnosis of ADHD. Geffner (2009) notes that people in most western countries give preference to value autonomy and independence, on the other hand, the culture of people in East Asia give preference to a strong moral responsibility that comes with learning and education. In addition, children in East Asia show great acceptance for what their American counterparts call excessive parental involvement (Cook, Blakemore Press, 2013). Another important feature of parental concerns is that it varies greatly across cultures. In general, there is still a dire need for continuous education to parents, teachers and caregivers about ADHD; this has to be in t erms of signs and symptoms as well as intervention mechanisms.Theories held about ADHD conditionADHD can generally be described as a common disorder that affects many children during their early years and can continue to affect them in adulthood if proper intervention is not taken into consideration. The process of understanding the action cause and treatment mechanisms has continued to remain a mystery across the medical spectrum; however, there are several theories that have been devised in order to try to unravel the mystery behind this condition.Neurobiological theoryWhile the real causes of ADHD continue to be a mystery to many people, studies about cerebral blood flows have tried to explain some of the possible causes of this condition. According these medical reports, positron Emmis on tomography scans that have been carried out on parents whose children suffered from ADHD indicated that they experienced decreased metabolism in their left frontal and parietal regions (Glannon , 2007). Studies reveal that those people that suffer from these brain conditions have decreased brain operation, which are responsible for the control of their motor systems and attentiveness. According to this theory, children that are diagnosed with ADHD condition often exhibit different neurotransmitters extent in their forebrain section (Trimble, 2007). In this regard, these children found it hard to effectively attend to various activities happening in their environment, they are unable to concentrate in their academic work in school, at work as well as coordinate important family affairs.Environmental TheoriesAccording to the environmental theory, conditions that are prevalent at the time the child is being born are important I influence occurrence of ADHD condition. According to this theory, pregnancy and birth insults are instrumental in contributing to the prevalence of this condition; this may happen if the newborn baby suffers a knock on the brain while being handled (Ka plan, 2011). The child may end up having neurotransmission problems as his brain develops if not properly treated; ADHD or a related condition prevails in the child.In addition, the way a mother handles herself and her pregnancy plays an important role in determining whether a child develops this condition or not. For instance, there are those who explain that poor diet and emotional instability by a mother while carrying pregnancy can make their babies develop certain allergic reaction that can play a part in affecting a childs brain developmental processes (Glannon, 2007). Besides the condition of a mothers pregnancy there are different other environmental factors that contribute to the development of ADHD. In addition, exposure to certain environmental conditions is also known to contribute actively in the development of ADHD in children.Exposure to various agents such as in the environment carries a strong chance of development of this condition, these agents cause injury to the brain, leading to trauma on the neurons of the brain. It is this trauma that causes the development of ADHD on a child or even a grown up, for this reason; it is always important for an individual to remain safe in his environment. According to research on these two theories, the environmental theory seems to be the most comprehensive, presenting a clear illustration on how this condition can develop in children and people in general. Environmental factors are also linked to the risks of ADHD. These factors include head injury, toxic chemicals such as lead and pregnancy complications. Brain injury is associated with later problems that affect learning and attention. Brain injury may worsen attention problems. Predisposition to lead lowers the intelligence quotient that may affect learning and reading abilities. Lead may also reduce attention and increase criminal behavior. This presents practical approaches that people can observe in order to be safe in their environment; they are able to avoid situations that can harm them in various ways in order to contribute to the development of ADHD and its related consequences.Therapeutic Approaches to ADHDIn as much as clear intervention approaches for ADHD are yet to be formalized, research on the same has found two strategies that are being employed in the process of dealing with this condition in children and adult people (Nigg, 2006). The treatment approaches to this condition follow two main components; psychotherapeutic interventions, which are for children and older people, as well as the use of specific medications. Research has shown that medication approaches to treatment of ADHD plays an important role providing the much-needed relief against the signs and symptoms arising from ADHD. However, the person that is suffering from this disease should learn various ad...