Business Proposal for Mcdonalds Essay

McDonalds has always been a connection that sh bes in the happiness of a child. deep after taking my own children to McDonalds, I make believe found that there is non a eat pickaxe for children. McDonalds should tot up a prosperous meal excerpt to the breakfast menu. Current demands by consumers be to add a happy meal option al secondarying p arnts to purchase child size packages of breakfast items. This option could foster McDonalds to add-on gets by attracting more(prenominal) consumers. sh arholder reports show a quarterly bills dividend per share append of 15% and yearbook dividend of $2.80 per share. Comparable gross revenue grew 5.6%.Cash by operations change magnitude $808 million to $7.2 billion. hap to shareholders $6.0 billion (McDonalds.com, 2012). pushover of demand and the grocery store structure for the companys best or service. * Profit-maximizing bill is reckon by determining the expandibleity of the product. * By dividing the swop in quant ity exchange by the corresponding change in determine, you get a coefficient that avers you how conciliatory or in tensile your product is with coefficients between n mavenntity and one being inelastic and coefficients greater than one being elastic. * The elasticity of this point product is determined by the individualistic instead of the population. Considering this fact, fast food is considered an elastic good. An elastic good is more of a luxury, and fast-food is not a requirement to survive.* An elastic good, the footing must be doctor at a reasonably low level to improver the revenue. * McDonalds goat lend oneself the formula of peripheral cost = borderline revenue to determine its price. Demand is elastic when it is easily affected by the superlative or lowering in the price of a product or service. * When McDonalds raises its prices, gross sales provide decrease. Decreasing prices, McDonalds forget percolate an increase in sales. * McDonalds has such a co mpetitive foodstuff. To stay ahead of competitors, they abide a lower price alternate from competitors. thitherfore, pricing must be wedded a great deal of pitch in your marketing strategy because early(a) conditions exist.* The degree of elasticity will tell McDonalds how much they can raise prices in the lead sales start to decline. Not everyone can afford to eat out every(prenominal) the time and people who do go out for breakfast are usually going to work or displace children off at school. * Calculation Elasticity of Adding Happy Meal (Q2-Q1/Q1) Q1 20 Q2 23 total quantity demand increase total 15%. (P2-P1/P1) P1 $6 P2 $3 total price decreased by 5%. Divide percent change in quantity by price 15% divided by 5% = 3% elasticity. participations Strategies to sum up tax income* Exploring the disceptation to see what the others are doing in terms of fast-food breakfasts and children. * Customer focus strategies to see what other customers want in the childrens bre akfast meals. This can be done through questionnaires and feedback surveys both in and out of the store. * Using proper learn methods to ensure quality service to customers. * straitlaced introduction in promoting the clean breakfast will ensure customers know rough the new product. Define the Economic surmisal and Show How You Can Determine the profit-maximising Quantity. * Economic theory is a theory of commercial activities (such as the production and expending of goods), (McConnell, Brue, & Flynn, 2009).* Determining the profit-maximizing quantity requires and understanding the economic concept of bare(a) analysis. Marginal analysis is the study of incremental changes in profit. The quantity that maximizes profit is where bare(a) profit shifts from positive to negative (eHow.com, 2013). How Could You subprogram the Concepts of Marginal Costs and Marginal Revenue to Maximize Profits? What Information Do You Need to Determine This? Without This Information, How Would You Make a Decision? * Determine the profit at all(prenominal) level of sales. As sales increase, account for prod costs, quantity discounts, change magnitude shortage (loss, theft and breakage) and other versatile costs. * Determine the marginal profit at apiece incremental increase in sales. Marginal profit is defined as the change in profit for each additional unit sold.* Determine the profit maximizing quantity. This is the point before marginal profit becomes negative. Why? It is likely that the more items sold, the higher variable costs are. versatile costs take labor, commissions, raw materials and shortage. In addition, when large quantities are sold to one party, a quantity discount is much given, resulting in lower per-unit revenue. * Determine where expenses could be lessened and revenue could be increased to optimize sales. Marginal analysis is not static (eHow.com, 2013). * $350 = $150, $370 = 250, $390 = $550, $3110 = $500 -50 negative marginal profit. * Witho ut this information, you are taking a recall on the decision causing potency risk. Pricing and Non-Pricing Strategies* Price is one of the prerequisite elements of the four Ps of marketing, which include price, promotion, place and product. * Research should be conducted in a number of areas including the customer market, competition and the life cycle of the product. * By examining each of these areas, McDonalds can develop a pricing strategy for its products and services. * McDonalds must find a way to attract their customers. The childrens portions will be smaller than regular portion so the price will be less. * The non-pricing strategy will be the new menu marketing options. Using childrens television and radio stations will jockstrap in this strategy. What Are the Barriers to main course For Your Chosen Product? Can You shape or Increase Barriers to portal? If so, how?* Entry barriers are the result of competitive expression by existing argumentes within the marketpl ace. There is no limit to the barriers a detail business may face (eHow.com, 2013). * Barriers are McDonalds competitors of the same market and rightfulness now the competition of a fast-food breakfast kids meal option is non-existent among the competition. * According to the current economic articulate of our country, credit borrowing from lenders will not be needed. * Costs of supplies will not be a barrier because the items are already a part of McDonalds menu. Demand by customers will increase or decrease cost supplies during the execution of instrument stages.* McDonalds internal countries will too help to increase profits. * Choosing long-term goals for competitors sideline McDonalds will eventually cause competition barriers. Consistent analysis of current market conditions will help McDonalds to continue a profit growth. Are There some other Ways to Minimize Costs for the Company or Product? * Analyze labor costs. Offering flexible work schedules, recognition, additio nal benefits and ongoing training can help retain employees. * Reduce supply costs. Supplies have two major categoriesproduct materials and delegacy supplies. Check multiple sources to ensure last-place cost. Research the use of the supplies. * Reduce operating(a) expenses. Review electricity expense. Ideas such as this can have multiple benefits, including boosting employee retention, saving on utilities. (eHow.com, 2013). ConclusionThe above business proposal outline will help in defining what McDonalds would do when implementing the creative thinker of adding a childs happy meal to its menu. This proposal would help in achieving McDonalds goals of quality food and customer service.