Business Proposal for Mcdonalds Essay

McDonalds has always been a company that sh bes in the happiness of a child. belatedly after taking my own children to McDonalds, I have found that there is not a eat choice for children. McDonalds should add a happy meal option to the breakfast menu. Current demands by consumers ar to add a happy meal option allowing parents to purchase child sized portions of breakfast items. This option could servicing McDonalds to increase meshworks by attracting more consumers. Shareholder reports show a quarterly bills dividend per share increase of 15% and annual dividend of $2.80 per share. Comparable gross sales grew 5.6%.Cash by operations increase $808 million to $7.2 billion. Return to shareholders $6.0 billion (McDonalds.com, 2012). duck soup of demand and the commercialize structure for the companys ripe or service. * Profit-maximizing quantity is figured by determining the resilientity of the product. * By dividing the win over in quantity exchange by the corresponding cha nge in price, you get a coefficient that tells you how elastic or inelastic your product is with coefficients between zero and peerless be inelastic and coefficients greater than one being elastic. * The gingersnap of this particular product is determined by the individual 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 price must(prenominal) be set at a reasonably low level to increase the revenue. * McDonalds sess intent the formula of marginal cost = marginal revenue to determine its pricing. subscribe is elastic when it is easily affect by the raising or lowering in the price of a product or service. * When McDonalds raises its prices, sales pass on decrease. Decreasing prices, McDonalds willing see an increase in sales. * McDonalds has such a competitive market. To extend ahead of competitors, they have a lower price al ternative from competitors. thitherfore, pricing must be give a great deal of weight in your marketing strategy because another(prenominal) conditions exist.* The degree of elasticity will tell McDonalds how much they can raise prices before sales start to decline. Not everyone can afford to eat out all the time and people who do go out for breakfast are usually going to work or dropping 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. callers Strategies to Increase Revenue* Exploring the competition to see what the others are doing in terms of fast-food breakfasts and children. * Customer counsel strategies to see what other customers want in the childrens breakfast meals. This can be done through and through questionnaires and feedback surveys both in and out o f the store. * Using proper training methods to ensure quality service to customers. * straitlaced introduction in promoting the new breakfast will ensure customers know about the new product. restore the Economic Theory and Show How You Can suss out the Profit-Maximizing Quantity. * Economic opening is a theory of commercial activities (such as the production and consumption of goods), (McConnell, Brue, & Flynn, 2009).* Determining the profit-maximizing quantity requires and understanding the economic fancy of marginal analysis. marginal analysis is the study of incremental changes in profit. The quantity that maximizes profit is where marginal profit shifts from positive to negative (eHow.com, 2013). How Could You Use the Concepts of Marginal Costs and Marginal Revenue to Maximize Profits? What info 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 labor costs, quantity discounts, increased shortage (loss, theft and breakage) and other variable costs. * Determine the marginal profit at each 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 high variable costs are. Variable costs include labor, commissions, raw materials and shortage. In addition, when large quantities are sold to one party, a quantity discount is often given, resulting in lower per-unit revenue. * Determine where expenses could be change magnitude 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. * Without this information, you are taking a guess on the decision causing potential risk. Pricing and Non-Pricing Strategie s* Price is one of the essential elements of the four Ps of marketing, which include price, promotion, place and product. * query 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 armed service in this strategy. What Are the Barriers to access For Your Chosen Product? Can You Create or Increase Barriers to Entry? If so, how?* Entry barriers are the result of competitive behavior by existing businesses within the marketplace. There is no limit to the barriers a particular business may face (eHow.com, 2013). * Barriers are McDonalds competitors of the same market and right now the competition of a fast-food breakfast kids meal option is non-existent among the competition. * fit to the current economic state 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 implementation stages.* McDonalds internal countries will also help to increase profits. * Choosing long-term goals for competitors following McDonalds will eventually cause competition barriers. consonant analysis of current market conditions will help McDonalds to continue a profit growth. Are There Other Ways to Minimize Costs for the Company or Product? * Analyze labor costs. pass flexible work schedules, recognition, additional benefits and ongoing training can help retain employees. * Reduce furnish costs. Supplies have two major categoriesproduct materials and office supplies. Check t riune sources to ensure lowest cost. Research the use of the supplies. * Reduce operating 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 idea of adding a childs happy meal to its menu. This proposal would help in achieving McDonalds goals of quality food and customer service.