McDonalds Australia Analysis

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McDonalds Australia Analysis


The market is becoming highly competitive that the consumers are seeking quality products and services. Therefore, it is important that business entities align their processes and products with the specific needs of the customers. The report focused on the failure experienced by McDonalds Australia and recommended the best action that would assist to address the issue. The major issue in this study is the menu issue, which does not meet the desired needs of its customers.

McDonalds Australia Analysis


McDonalds Australia is one of the outlets of the United States based fast food company that has been registering better performance in the past; however, with the rising competition, the Australian branch has been experiencing several challenges. Due to poor management strategies, the fast food registered reduction in the sales by 3.3 percent, which marks the fourth straight quarter of declines for the world biggest hamburger chain. Within the Australian context, the company acquired its competitive advantage through ensuring flexibility, good brand image, prices, and well-motivated employees. In the recent years, the company has been experiencing several challenges associated with the poor marketing strategies and inefficiency associated with the performance of the workers. Currently, the major problem associated with McDonald’s management is the menus that do not satisfy the needs of the customers (Peterson, 2015). McDonalds Australia undertook a series of marketing analysis but all registered failures due to poor involvement of the consumers. The report analysed the problems experienced in the McDonalds and recommended the actions that would ensure the achievement of the desired competitive advantage.

Problem Analysis

Over the last 10 years, the sales at the McDonalds recorded the worst results. In Australia, which is part of the Asia-Pacific, Middle East, and Africa operations of McDonalds, was worst performing sector in the second quarter of 2014 with 7.3 percent sales decline. While undertaking the changes in the services provided, businesses often need to conduct a market analysis to identify the specific needs of the customers. Besides, there are several fast food companies entering the industry, which makes competition stiff for McDonalds. Recently, the McDonalds have been trying to change in the menu in most of its outlets especially in Australia in a bid to attract more customers. Most attempts to change the menu failed since the food outlets failed to undertake an extensive market research to determine the tastes and preferences of its potential customers. In Australia, the McDonalds growth policy played an important role in the sales (Devlin, 2016). Initially, in the 1990s, the company followed the Greenburg’s law, which stated that the more stores the company puts within the city, the more capital transactions the company would realize. The significant factor behind the achievement of the competitive advantage is that McDonalds increased its consumers’ convenience and the market shares at the expense its competitors in the Australian market. According to the management, with institutional performance at its best, there was a need to ensure cost efficient operations in McDonalds Australia.

The major challenge faced by the company lies in its menu. Greenburg tried attacking the problem through ensuring that the McDonalds sold the two of its biggest sandwiches for $1 each, through the introduction of the 40 new menu items and spending many monetary resources in purchasing the items that would ensure freshness and hotness of the foods. Nonetheless, the company registered poor customer responses. Moreover, domestic sales in the Australian market declined partly due to drift by the older customers. The company began experiencing such problems about five years ago but introduced the “grown-up taste” to target its target within the market segment with sandwich, fish, Arch Deluxe line of beef, and chicken burgers in its menu (Sullivan, 2016). McDonalds introduced segmentation to assist in the management of its different customer needs through identification of the homogenous market segments with allowed it to experience an improvement in understanding the customers and integration of better-tailored marketing mechanisms. Even with such strategy, McDonalds Australia still failed. Besides, the growth decline could also be attributed to the shift in the opinion of the public towards eating a healthy food. Besides the menu, McDonalds experienced reduction in sales due to a reduction in the quality standards, services, and cleanliness, which are organizational core competencies. Moreover, the study undertaken by the company in 1995 revealed that McDonalds Australia registered declined sales due to the quality of food, services, and cleanliness while in 2001, McDonalds was ranked among the poorest performing fast food chains registering 11 per cent dissatisfaction of the customers owing to dirty stores, rude employees, wrong orders, and slow services.


While changing or adjusting any service offered to the customers, it is important to take consideration of the potential customers and targets. McDonalds is a renowned fast food that operates in the Australia and established. Besides, it acquired its current competitive advantage through offering flexible and quality products and services. However, it is important to note that the needs of the consumers change with time which the company needs to integrate into its operations. In its bid to adjust the menu, the McDonalds failed since it never undertook extensive market analysis. Therefore, it is important to search for the wants and needs of the customers as well as establishing the reason why the old customers are no longer eating at the McDonalds Australia. To acquire such answers, the fast food could consider conducting the surveys, focus groups, and interviews on some of the services and products that it offers (Peterson, 2015). Additionally, McDonalds Australia could utilize customer-oriented methods to ensure deeper involvement of the customers. In deep, the customers often seek and shape their experiences irrespective of the prevailing conditions, whether individually or with the others.

One method that would ensure possibility in consumer engagement is crowdsourcing, which traditionally involves taking the job and performed by a designated agent from the organization especially that one who understands organizational processes, culture, and structure. The outsourcing activities usually target the undefined large group of people with similar views and objectives. Such method could assist in gathering the collective intelligence of the online communities through soliciting their ideas and solutions. When registering poor performance, it is critical to involve the customers since they determine organizational sales. Every company usually tries to integrate the needs of its customers; however, it is important to note that businesses cannot satisfy the needs of every customer. Through the solicited information, the company could undertake an analysis to determine the common needs of the customers and align institutional processes to fulfil such needs. Moreover, involving the consumers could assist in unlocking the potential of the masses. Such strategy could appealing for the McDonald Australia as it could assist in the generation of new ideas and creation of direct and emotional connection with the customers, consequently, the strategy could as well assist in heightening the services and products’ market success which could ensure rapid and economic understanding of the market needs, priorities, and opportunities at McDonald Australia.

Whenever the customers are involved in the organizational processes, it is likely that the company would acquire favourable consumer responses. Upon the development of new product or service with the assistance of outsourcing, McDonalds could undertake the test in the markets before investing many resources. If the fast food realizes positive results, then it could expand further the strategy to other areas of management (Brown, 2013). Such strategy could also provide a strong research tool for McDonalds Australia. Through participation of the people in the outsourcing activity, McDonalds Australia would be in a position be in a position to develop menu that touch specific needs of its customers, properly identify its market, and align institutional processes with the changing needs of the potential customers. Besides, these are some of the challenges faced by most McDonald’s outlets.


From the analysis, it is clear that McDonald Australia needs to improve its menu to attract its potential customers within the Australian market. With the rising competition in the fast food industry, the company is likely to lose more customers. Poor services and product delivery affect institutional reputation. Customers are seeking products and services, which meet their specific needs, which make it important to put much focus on the customers while developing the marketing strategies. Concerning the menu issues, the company has been focusing on changing the menu throughout the years without any success due to failure to undertake an extensive market research. Therefore, McDonalds Australia needs to focus on market research and follow the customer-oriented strategy such as crowdsourcing as the method would assist in understanding the market needs, opportunities, and priorities. On the core competencies of the company, quality, services, and cleanliness, McDonalds needs to develop new methods of setting the internal controls.


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