Unit 1 Business Environment – M2 Alisha-Jayne Cooper
Within this report I’m going to be looking at comparing recession and boom actvites and how the
business McDonalds has adapted to these two difering economic climates. I will be looking at what
challenged they have had to face and how they have adapted themselves as a business in order to
get through these challenging tmes.
During a recession a business like McDonalds would have to adapt them in such a way so
that they weren’t put in a positon where they were facing too much fnancial strain. They will want
to make sure that they aren’t going to be losing out on too much money and they will also have to
make sure that they are in a positon where they aren’t being faced with having to close some of
their restaurants. In order for them to keep up with the constraints that a recession will put on the
business they decided to introduce a savers menu. This menu was priced between 79p and £1.39
which means that people that are hard of cash are stll able to aford to eat within the restaurant
which also means that they are contnuing to make a proft. Also these partcular items on the menu
don’t contain a lot of ingredients so it means that they are able to be made very cheaply. McDonalds
need to make sure that they aren’t overstocking on their items that they don’t sell much of because
this will turn out to be dead money.
During the recession McDonalds chose to not market as many premium products as they
knew that these partcular products don’t sell that well. So products that they normally would have
on promoton in the winter or summer months were reduced in order to make sure that everyone
could stll aford to buy food from there. McDonalds would have to make sure that in order to
reduce the amount of overstocking of products that they were having a lot more frequent deliveries
this in turn would save on products being wasted and it would help to also give them a contnuing
flow of money throughout the week. Also by not overstocking it means that they are able to keep a
close eye on what products they are selling a high level of, this in turn will enable for them to be able
to make a good assumpton of what they need to invest their money into more.
Within McDonalds they will have certain products which they will tend to make within the
store. In a lot of cases they will need to outsource products, in order to do this they need to reduce
the wage bills because they don’t have the people there to make those specifc products. This in turn
would result in them keeping a smaller amount of these products within their store. When products
are being outsourced this means that they, like mentoned above, are going to have more frequent
deliveries.
When a recession hits a business like McDonalds would have to cut a lot of jobs, so more
people would have to be made redundant in order for them to contnue to trade and make a proft.
By making these cuts it will allow for them to make a proft stll as they have got rid of a lot of people
that they don’t have to pay any longer. During the recession McDonalds brought in the self-service
machines. By bringing these in it meant that they would be able to have less people on the tlls are
customers could serve themselves, this in turn although it would cost a lot for the inital outlay for
the machines, they would end up saving the business a lot of money. One of the other ways in which
they have reduced their wage bill as well is by promotng their products online. By using technology
to promote them it’s a very good way to go about doing things. Most people use technology these
days, if not everyone. This also means that they will be able to reduce the number of staf that they
have to use to explain the ofers as the consumers are able to read up about the ofers online
themselves.
Within this report I’m going to be looking at comparing recession and boom actvites and how the
business McDonalds has adapted to these two difering economic climates. I will be looking at what
challenged they have had to face and how they have adapted themselves as a business in order to
get through these challenging tmes.
During a recession a business like McDonalds would have to adapt them in such a way so
that they weren’t put in a positon where they were facing too much fnancial strain. They will want
to make sure that they aren’t going to be losing out on too much money and they will also have to
make sure that they are in a positon where they aren’t being faced with having to close some of
their restaurants. In order for them to keep up with the constraints that a recession will put on the
business they decided to introduce a savers menu. This menu was priced between 79p and £1.39
which means that people that are hard of cash are stll able to aford to eat within the restaurant
which also means that they are contnuing to make a proft. Also these partcular items on the menu
don’t contain a lot of ingredients so it means that they are able to be made very cheaply. McDonalds
need to make sure that they aren’t overstocking on their items that they don’t sell much of because
this will turn out to be dead money.
During the recession McDonalds chose to not market as many premium products as they
knew that these partcular products don’t sell that well. So products that they normally would have
on promoton in the winter or summer months were reduced in order to make sure that everyone
could stll aford to buy food from there. McDonalds would have to make sure that in order to
reduce the amount of overstocking of products that they were having a lot more frequent deliveries
this in turn would save on products being wasted and it would help to also give them a contnuing
flow of money throughout the week. Also by not overstocking it means that they are able to keep a
close eye on what products they are selling a high level of, this in turn will enable for them to be able
to make a good assumpton of what they need to invest their money into more.
Within McDonalds they will have certain products which they will tend to make within the
store. In a lot of cases they will need to outsource products, in order to do this they need to reduce
the wage bills because they don’t have the people there to make those specifc products. This in turn
would result in them keeping a smaller amount of these products within their store. When products
are being outsourced this means that they, like mentoned above, are going to have more frequent
deliveries.
When a recession hits a business like McDonalds would have to cut a lot of jobs, so more
people would have to be made redundant in order for them to contnue to trade and make a proft.
By making these cuts it will allow for them to make a proft stll as they have got rid of a lot of people
that they don’t have to pay any longer. During the recession McDonalds brought in the self-service
machines. By bringing these in it meant that they would be able to have less people on the tlls are
customers could serve themselves, this in turn although it would cost a lot for the inital outlay for
the machines, they would end up saving the business a lot of money. One of the other ways in which
they have reduced their wage bill as well is by promotng their products online. By using technology
to promote them it’s a very good way to go about doing things. Most people use technology these
days, if not everyone. This also means that they will be able to reduce the number of staf that they
have to use to explain the ofers as the consumers are able to read up about the ofers online
themselves.
