McDonalds Change Management Case Study

McDonalds Change Man shape upment Case StudyIn this report I will analyze the handling of a significant qualifying that occurred in McDonalds few years back, how the focus and other employees reacted to this agitate, how the defense was handled, what were the major factors that led this transport happen and to what extent the change was successful in achieving companys objectives.It is very significant for organizations to prepare themselves for the changes that they may have to face in raise to compete with the latest festering that is happening within and outside their environment. However these changes can stupefy many improvements and progress to that organization in certain aspects. For example it may be benefactorful for making the work easier it can open styluss for next existences and can likewise military service to gener on the wholey improve tribes life. Colin Carn entirely (2002)The primary purpose of my report is to provide insights nearly the change ch arge mental process in McDonalds that occurred of late and evaluate the outcome of applying it. Moreover to highlight any resistance associated with it and how it was overcome by the caution. subdivision 11.1 A Little about McDonaldsMcDonalds started its operations in 1954. As everybody is now familiar with the clown character which is Ronald McDonald, that has been designed as the trademark for the company. McDonalds restaurants offer a uniform menu to a large extent, including hamburgers, cheeseburgers, wimp sandwiches, French fries, salads, milk shakes, desserts and ice cream sundaes. The companys top sellers are the Big Mac, Quarter Pounder with cheese, the Fillet-o-Fish and Chicken McNuggets. The customer marking of McDonalds is usually children and young people.1.2 skeleton description of the recent change occurred in McDonaldsThough McDonalds has a reputable brand construe and a memorable history of previous achievements, yet instruction at McDonalds started feeling that the ripening population has developed different nutritional attitude and behaviours as they are extremely different from the population of the previous decades. They entangle a severe regard to redefine the meet of McDonalds and repositioning the brand in the minds of customers as people today are more than concern with their health and figures than ever before. Since last few years peoples perception about McDonalds nutrient has changed considerably, as they feel that it provides greasy food which is very high in fats and more expensive than its competitors, whereas the competitors have already made measures to reduce fats in their products and overly provide less expensive meals. Moreover McDonalds had to face a considerable spillage few years back as the consumers began to switch to its competitors, such as Burger King, Subway and KFC for the rationality that they offer fresher and high quality food at comparatively lower price with faster service. In coiffure to keep gaining the commercialise share and supporting its customers McDonalds had to respond to the changing behaviour of consumers. Furthermore, noticing that the obesity issue in the UK is getting serious and complex, McDonalds received a tolerant challenge to implement certain changes the soonest possible cartridge clip. Understanding the changing behaviour of its consumers and the health-conscious factor customary in the market, Management finally decided to implement a new integrated marketing communication plan as part of their marketing dodging that primary(prenominal)ly involved innovations in their advertising and promotional campaigns focussing on changing the customers perception for McDonalds food quality.1.3 Main Objectives in making this changeThe master(prenominal) objectives of McDonalds for adapting to the changing demand of its customers wereImplementation of co-ordinated Marketing Communication (IMC) plan as part of their marketing strategy.Providing a ba lanced diet and an active life- vogueOperating with freedom to adapt practices to local markets, and to share best practices internationally between restaurants, markets and countries, while holding on to a common brand indistinguishabilityInnovation in advertising and promotional campaignsTo be the customers favourite place and way to tireEffectively tackling the obesityAdopting a new health-conscious brand imageMeeting the latest trend of health awareness and the growing concern in obesity among the children and target marketIntroducing a new, separate low-fat menu for children changing the do chief(prenominal) image of McDonaldsMaintaining the traditional efficiency of fast food restaurant and provide comfortable environment to customers.2.1 Main Drivers of the changeLike most big companies, McDonalds engages with a variety of different stakeholders in the countries where it operates, as well as monitoring all pending political initiatives. McDonalds is a large multinational melody with many stores on high streets and in shopping centres across the coun analyse. As such, the company is affected by the external factors that impact all retail stemma in UK. The main drivers of this change are described as underEnvironmental ShiftsChanging social call for and market demands of customersIncreased awareness in people about health and food consumption and refugetyEmerging diet programs that encourages public to be figure consciousGrowing concern in obesity among target marketLatest trends of health awarenessTechnological ChangesInnovation by the competitorsDevelopments in technologyEconomic trends and developmentsMarket Competitionconsumer sanctionlocal environmentcompetitive pressure2.2 Explaining the have for change using appropriate frameworkAbove are the main derivers that created a need for changing the brand image of McDonalds over the last few years. downstairs I will explain in detail using models and frameworks as to how these drivers created th e need for this change which took place.2.2.1 PESTEL ANALYSISIn this section, I will explain the all the factors (drivers) of this change with the use of the Pestel Analysis that comprises of political, economic, social, technological, environmental and legal factors that combine to be the main reason for bringing a change in an organisation.(P)olitical factorsMcDonalds just like other organizations follow certain rules and regulations imposed by the government. For that reason they need to obey all the policies in establish to achieve their organizational goals. The UK government is very particular about health and safety of its people and have set somewhat standards to be met by every food chain in rule to keep the communication channel running so McDonalds had to bring this change of repositioning itself in its consumers minds so as to give them a demonstrable image of their food quality and price.(E)conomic factorsDue to the heavy slump in the economy, people have become o ft more price sensitive than ever before. Every single penny counts a lot now. because they want to spend for the quality food that matches their demand, in other words they want return of every single penny they pay and that return includes the quality and contentment. These changing economic trends in truth affected the gainfulness in terms of take to be for money and highly created a need for McDonalds to adapt itself to the changing market demand and standards.(S)ocial factorsSocial factors include the changing life style of people which has made them more health conscious and safety sensitive. In facial expression of food chain, demographics play an important role to affect the market conditions. Therefore, the age group which is the main target market for McDonalds is between 10-50yrs that includes children and young people who are truly becoming more aware of diet planning day by day receivable to the increased information available to them through various research pla nners and diet programs that encourage them to be figure conscious. This changing style of target market was a big challenge for McDonalds to keep itself running successfully that could only be achieved by adapting itself to the environmental change and delivering what customer actually demands from them.(T)echnological factorsAdvancement in technology has too such(prenominal) affected the mindset of people. As the technology evolves so does the human behaviour. With the use of internet and information technology, people have become more aware and active. They have got a quick access to all types of information, be it diet planning or education or environment or safety or any other issue. Developments in technology highly demands from businesses to evolve themselves as and when required by their consumers and same was the case with McDonalds.(E)nvironmentalEnvironment is a very vital part of every business. McDonalds faces a tough competition by its competitors including Subway, KF C and Burger King. Realizing that its competitors are evolving their business according to the changing life-style of customers, McDonalds was forced to take prompt decision in order to beat the competition and staying ahead of it.(L)egalLegal factors involved the safety regulations as set by the government for all food chains. These regulations are actually set keeping in mind the customers needs and are also monitored and improved on unvarying basis as per the changing lifestyle of consumers. Consumer protection is another factor that McDonalds is pass judgment to consider while doing business as part of the legal bindings.SECTION 33.1 Evaluating the process of change management by McDonaldsIn this section I am going to evaluate the effectiveness of the process of change management by McDonalds. Their main aim was to change the mindset of the consumers and creating positive perception and image of McDonalds in their minds. Here I will use ADKAR model of change management to ana lyze the effectiveness of the process adopted by the management of McDonalds to bring this change in place. This model comprises of five key goals including awareness, desire, knowledge, ability and strengthener. Below is the in depth analysis of the change management process of McDonalds.3.1.1 ADKAR MODEL OF CHANGE MANAGEMENTAwarenessAwareness helps the company to realise and feel the need for bringing certain change that is wherefore it is considered as a basic tool for innovation. In this case, when management felt that their sales started going down they well-tried to look for the reasons and found that the living style and needs of their target market has evolved. They realised that people have become too much health conscious, which is why they started to consider the fast food as unhealthy and greasy food. This gave them the awareness about the lifestyle of their target market and their changing demands.DesireDesire relates to the specialization of McDonalds to participat e and support the change. It is quite understood that every organization wants to excel in the market by making huge profits and customer satisfaction so does McDonalds. With the economic development there has been a great change in peoples living standard as they have become more concerned about their health issues. Realizing this, the management at McDonalds responded to the changing demands of its customers in a very supportive way, and was successful to handle the resistance by other cater members.KnowledgeIt was important for McDonalds to have knowledge of how to change itself in order to match with the changing market demand. Once it was aware of the changing behaviour of the target market and was ready to adopt a change, management focused on what they needed to do in order to retain and satisfy the customers in the massive run. The external factors including the competitors strengths and the changing consumers behaviour gave McDonalds, knowledge of what exactly to be done to make it stable and running.AbilityMcDonalds ability to implement the change can be analyzed by evaluating its goal and objectives. McDonalds goal was to implement Integrated marketing Campaign to adopt a new health-conscious image in the minds of customers. It focussed heavy on the advertising and promotional campaign of the company. The company decided to introduce a new low fat menu for children that would help them to overcome the growing bad publicity about McDonalds food for being rich in fat and to manage the obesity issue among children. Realizing the importance of consumers health, McDonalds introduced McKids Meals having both nutritional value and no fat thus making it different from the traditional McDonalds meals. Moreover the innovation in their Integrated Marketing Communication provided an effective advertising and public relations campaign to successfully introduce the new McDonalds to the public.Moreover they introduced McChicken Premiere and a zesty chicken to s atisfy customers desire for good quality products at affordable prices. To keep the children, it also started to give more choices with Happy Meal including no-sugar-add fruit drink that is a low fat drink and also McDonalds umber which appeals to adult. Furthermore McDonalds have responded in time to the changing healthy trend by adding salads and other lighter options in their menu.As children are one of the biggest consumers groups to McDonalds, wherefore they paid considerable attention to them. They tried to provide a huge variety for children including the happy land with happy meals with toys. They believe that if they make themselves best accommodate for children, they can attract the whole family too.Finally the foundation for all above innovations was the Integrated Marketing Communication through the use of attractive advertising and promotional activities which could promote these new products in the market and made people aware of these innovations. These promotions w ere the basic tool for creating a positive perception in consumers minds for McDonalds and gaining their trust back. Therefore McDonalds created its new image in the market by the use of new advertisements and new theme I love it even more.ReinforcementIt was not enough to bring the change or adapt to the changing environment but it highly demanded from McDonalds to retain the change in the long run. That is why reinforcement of practicing and retaining that change played a vital role as post implementation of that change. McDonalds is quite successful to reinforce its employees to continuously practice retain their changed positive image in consumers minds. This was successfully done through positive encouragement and other rewards for the employees.3.2 Resistance occurred in implementing this changeDifferent people react differently to a change in the organisation. However it is important to accept this reality that resistance is always there in any form which may be there before , during or after the implementation of the change. McDonalds had to face certain conflicts and resistances in the process of bringing this change. This resistance came both from customers and McDonalds employees. Some of the employees were in favour of implementing Integrated Marketing Communication whereas some were against it and same was the case of customers as some of them opposed the change whereas others liked it. Overall the company faced following main conflicts/resistanceDifferent assessments of the situationSome managers and employees opposed it because they had a fear of the company being going into a loss if this implementation would not help to produce a positive resoluteness. They were confused that this change may make the problem more complicated and could 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 required IMC (Integr ated Marketing Communication) in place. They were remembering that the team may not be able to produce an effective quality due to lack of knowledge.Lack of communication and inadequate informationThe other resistance was related to the technological facilities being used by the McDonalds team. As employees thought that the systems that were used by the McDonalds team to implement IMC campaign might be downgraded due to the rapid advancement in the field of IT these days. Therefore they were very unsure whether the customers would have a positive reaction to their new campaign or not, which could result in not achieving the core objective of the change for McDonald as a whole.Low tolerance of changeAnother conflict among the managers was related to the get under ones skin of the team that was organized to help sustain the implementation of the changes. Some of the managers had a view that McDonalds may face a shortage of qualified workforce to keep up the capability of the marketi ng communication approach.Cultural differences among employeesAnother issue was the cultural differences among the staff that created some inner conflicts. Due to this the team may not cash in ones chips with proper co-ordination thus making the implementation of change be more complicated.Unwillingness to take riskAnother resistance came from the staff was due to unwillingness to take risk. They were quite doubtful about the reaction of customers after the implementation of this change.Psychological resistance involved with new working challengeManagement and employees were also resistant due to pressure of working with a new challenge and new environment.3.3 How McDonalds managed the Resistance to changeIt was really a crucial phase for McDonalds to implement these changes and overcoming the resistance by employees and customers. Management knew that their plan would only be successful if they would be able to handle this resistance successfully as they knew that achieving their organisational goals entirely depends upon the way any resistance to it is managed. They had to obtain the strong support in sustaining the success as bringing the change is something that has to be a continuous process that needs equally important post implementation attention as well. However comprehending the whole scenario, McDonalds tried its best to overcome the resistance by adopting following techniquesInvolving everyone in the process of changeFor McDonalds, the most important point to start with solving the resistance was to involve everyone in the change process so that everybody should undergo some learning experiences in order to understand and appreciate the objectives of that change. Management provided them complete information to let them understand the objectives in making this change so that they must(prenominal) realize and appreciate the importance of doing this and also let the employees feel that they are important in making this change successful. This help ed McDonalds in gaining the support from the staff and overcoming their resistance. personal interaction to gain trust of employeesThe management created an environment where they can have face-to-face interaction with all employees to develop strong interpersonal relationships and trust.Providing enough time to employeesIt was important for the management to let employees understand the changing environment and required changes to be made accordingly. For that employees need to have tacit knowledge which comes from observation and experience so management tried to provide space to employees to learn from their experience and observe the surroundings.Providing updated technology to facilitate knowledge managementAs the management was liable to implement this change so they decided to deteriorate all the negative responses related to the technology, by providing the customers, employees and staff their respective demands. For that they provided the staff with the technology that cou ld last much longer. Moreover they facilitated them with systems that guaranteed long lasting functions in order to assure them that the technology they will be using is quite compatible with the latest development in the world of IT.Education and CommunicationManagers tried to educate and inform people about the change effort so as to why it was needed and the expected outcome of that change which would be for the betterment of the company and employees as well. This helped the employees to realize the logic in the change effort. It also reduced any doubts in their minds about the negative effects of the change.Training and follow-up programs for the team involvedAs far as the conflict was raised regarding the deficiency of the talented team that was designed to work for the marketing communication, McDonalds decided to conduct special follow-up programs for the staff that was involved in the said changes, which would enable them to receive proper training and development required to implement the required changes.Developing a thriving organizational cultureTo overcome the inner conflict that was raised due to differences in culture, the management of McDonald developed a thriving organizational culture and a stronger organization by proper management of the staff, providing them what they actually deserved in order to trip them. They highly focussed on the proper handling of elements such as organizational design, compensation programs for employees, performance management and career path in order to motivate employees and create interest in them to word dedicatedly for the company and support them bringing this change. Furthermore, the human capital management of the McDonalds also incorporated a process to ensure equality among employees to make them feel an important part of the organization irrespective of their cultural differences. This helped them gaining employees loyalty and hard that not only helped the employees but also the organization.Overall McDonalds management was quite successful in handling the resistance and conflicts raised by employees and customers and they all participated and supported the implementation and helped McDonalds gain its positive image back.SECTION 44.1 Assessing the effectiveness of the Change in meeting its ObjectivesIt was very important for McDonalds to handle the conflicts and resistance carefully because it is something which leads to the success or failure of the change for being properly handled or by being neglected otherwise. Therefore management of McDonalds understood the importance of handling the resistance properly in order to make the change occur successfully. However McDonalds was quite successful in implementing the change effectively and was able to meet its following objectives shift key the attitude of childrenShifting the attitude of children about healthy fast food meals was not easy but through proper marketing communications and campaigns strong encouraging characteristic s, management was quite successful in doing it. As parents are the one who are responsible for eating patterns of their children so McDonalds aim was to encourage parents about their new better food plans for children and let them enjoy McDonalds more than ever before.Positive Image BuildingMcDonalds new image successfully created a place in minds of people as they could see the new advertisements of McDonalds at all types of media which let them associate with the brand in a more positive way than ever before. with the new advertisements and new theme of I love it even more McDonalds was successful inencouraging parents to let their children eat healthy meals. This helped them to achieve its main objective of positive image building.Creating a safe environmentMoreover the management was able to implement the change effectively by creating a safe environment for change that encouraged all employees to support and stay committed to the organizational efforts in bringing the change to meet its overall objectives. This helped them to overcome all the conflicts raised by employees and customers, before and during the implementation of these changes.Gaining organizational strength and competitivenessThis change also helped McDonalds to parent its overall organizational strength and competitiveness by gaining customer loyalty back and positive image building of the brand. People started associating themselves again with McDonalds and started encouraging their children to eat McDonalds which was the core element for bringing this change.Expand the business portfolioMoreover it also encouraged the management to strengthen and expand its business portfolio and survive to the tough competition in the market. By gaining its customers back, McDonalds started to earn more market share as compared to its competitors which led them to enter new market with same brand and expand the business to be childrens most favourite place to eat and entertain themselves.4.2 Assessing the need for any further changesAs people are getting very particular about their health so it is necessary for McDonalds to retain its good image in minds of customers and to maintain its food quality and standard along with the prices. They may need to focus on producing low fat products and should think of entertaining children in a lot more other ways as well just like the play section they already have. They need to keep a proper check on the services of its competitors so as to manage it accordingly. McDonalds must try to maintain its services in order to cope up with the changing social needs and market requirements. Furthermore management at McDonalds should be able to carefully plan such innovation and they must use effective strategic tools to implement such change in future as well, this would help them to achieve its vision of a food industry that provides a health-conscious sub-image which is consistent with the latest trend in health awareness today and for the future .Moreover the management leaders at McDonalds should always try to monitor what is working and not working in the process of the organization change in order to implement the change effectively. Such changes will help McDonalds to enhance its competitiveness and strength. Whenever the management observes the need of any further change, then that is the only time, they must impose required changes to be done in order to save the company to undergo any downturn again. It is recommended that McDonalds must see to it that any further changes are well planned and implemented carefully, because these will be the basis for the success or failure of the organization. McDonalds must continuously review, update and improve its products according to the changing environment in order to ensure and enhance its competitiveness.