1.) Identify and discuss which macro-environmental variables triggered the creation of McDonalds new business strategies. Justify your answer from the case study. (12 marks)

2.) Identify and discuss the external stakeholders that have contributed towards McDonalds success. Substantiate your answer by referring to the case study. (10 marks)

3.) Discuss the information sources and approaches used by McDonalds to obtain information in order to stay abreast of the environmental changes. (6 marks)

Case study

MCDONALD'S ADDRESSING CHANGING FOOD VALUES THROUGH RESEARCH Health and fitness have become increasingly important issues in the 21 century. With concerns about rising obesity levels and a greater understanding of the importance of good nutrition, consumers have been demanding healthier food options. McDonald's was in a very good position to undertake the market research required to start making the appropriate changes and thus lead the revolution. This ability to move with the times is what made the business successful to begin with. The business environment is not static. it evolves with time, reflecting changes in the broader social environment. Our lifestyles are very different from those of our grandparents and even our parents, partly because technological advances have transformed the workplace and the family home. The pace of life is increasing, and many families turn to the convenience of takeaway and fast foods on a regular basis. However, change is pushing the food-service world in different directions. Advances in health care and preventative medicine have stressed the importance of a healthy diet. On top of it all McDonald's had to ensure that no laws and/or food regulations were broken. A team was put together to ensure legal requirements. Increased access to mass communications, such as television and the Internet, has meant that consumers are becoming savvier about health issues, and are demanding better choices in convenience foods. As the business environment changes, so too do the views of stakeholders. Reconciling the interests of stakeholders is crucial for continued business success. Compare it with a three-legged stool. If one leg is weak or not properly aligned, the entire stool is weakened and can topple over. A strong relationship between McDonald's, its customers and its other stakeholders is essential, with all elements working together to meet customer needs. Responding to a changing business environment is easier if the basic structure is strong. Stakeholders are coming to expect more out of businesses in terms of corporate citizenship. Businesses need to be mindful of the effect they have on the broader community, including the health of its youngest members. McDonald's Australia's philosophy is to be continually responsive to market demands and accept that there is always more to learn. Catriona Noble, the chief operating officer of McDonald's, notes that, "Social responsibility challenges are always evolving, and we are focused on learning from experts and adapting our operations to maximise the positive impact we can have on our society and ensuring sustainability for the environment in the long run." In responding to consumer needs, McDonald's approach has been to listen and learn. Market research is the key to ascertaining the needs of customers. McDonald's undertook a major research project called Project Discovery. The results showed some pleasing consumer perceptions, but also revealed areas that needed attention, particularly in the area of health. To supplement this major research project, McDonald's conducts regular tracking studies every quarter that measure the customers' point of view. Customers are asked questions regarding food image, brand image, quality, service, cleanliness and value. Creating the changes To create the changes, it was first necessary to identify exactly what those changes should be. In 2012, Guy Russo, who was then McDonald's CEO, started attending obesity summits and participating in obesity forums. He met with key organisations, including the Obesity Taskforce, In the following year, McDonald's formed a relationship with The Food Group, a group of accredited dieticians, who provide McDonald's with ongoing advice on nutrition. Once expert advice was obtained, it was then a matter of translating these lessons and the research findings into concrete menu changes. McDonald's took a twofold approach - improving existing products and creating new ones. Existing products were improved by methods that include: Switching to a canola and sunflower oil blend, which is low in saturated fat and trans fatty acids Reducing the amount of sugar in buns to 5%, which is similar to the amount of sugar found in bread rolls in the supermarket Reducing the amount of salt Creating smaller serve sizes for muffins. New products include: The Salad Plus range, with items containing less than 10g of fat The Deli Choices range, again with items containing less than 10g of fat The option of multi-grain rolls in the Deli Choice range, The Pasta Zoo Happy Meal, which contains pasta shapes with no artificial colours or flavours, with 'zoo goo' or a tomato dipping sauce, and a serving of fat-reduced milk with a flavouring straw New Happy Meal Choices, which include fruit bags, apple juice and water. McDonald's was the first quick service restaurant chain to earn the Heart Foundation tick for some of its meals. This makes it easier for customers to select the healthier meal options. Making healthier choices has also been made easier by extensive nutritional labelling, both in-store and on the organisation website. New packaging includes percentage daily intake information, so customers can see how their food choices relate to their overall daily requirements. Despite the changes, the new menu options are still in keeping with Mc-Donald's brand. Importantly, the packaging, presentation and service are all recognisably McDonald's, a brand that already enjoys widespread recognition and success. Communicating with the consumer Making the changes is crucial, but it is equally important to communicate these to the consumer. McDonald's developed an advertising campaign that had the key goal of communicating its new healthier food options, countering misconceptions within the community. McDonald's has made use of various advertising media: print, billboards, radio, television and the Internet. Each media type targets its audience carefully. The "make up your own mind" website at http://www.makeupyourownmind.com.au invites the customer into the virtual store, to see what goes on inside McDonald's to make up their own minds. By having the capacity to include significant amounts of information, the websites are a key part of McDonald's commitment to transparency in its advertising and operations. As well as advertising products, the websites fulfil another purpose: staff recruitment. Both the "make up your own mind" site and the parent site contain career information McDonald's recruitment is not limited and can include parents wanting to re-enter the workforce or students working their way through school, college or university. Conclusion The story does not end there. McDonald's is also making significant changes in other areas of its operations: customer service, quality and speed, and its physical impact on the environment. McDonald's is committed to the use of sustainable business practices, and this will be one of the key areas of focus in the days ahead. CEO Peter Bush summarised McDonald's attitude when he said: "While I am proud of the changes that we have made, I believe we still have more to do, which is all part of this exciting journey we are on."