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A Review of Mission Statement for Fast Food Industry

In: Business and Management

Submitted By wkzhao
Words 3180
Pages 13
HBM 524/533
Marketing Strategy Development

A Review of Mission Statement
For
Fast Food Industry

Prepared for: Dr Tony Lobo
Submitted: 29 March 2010

Prepared by: Wei Zhao
Student ID: 6623484
Executive Summary

This report is written to evaluate if the mission statement is still necessary for company's succuss and to review mission statements for five quick services restaurants which are competing in the fast food industry including: Hungry Jack’s, McDonald’s, Domino’s Pizza, Kentucky Fried Chicken and SUBWAY chain.

This report finds that a well written mission statement is able to guide the direction of the company and positively change employees’ behaviours which directly link to company profitability. Therefore is essential for successful organizations today.

This report also finds that except for McDonald’s, all other four companies’ mission statements are either focusing on these companies’ growth or profitability. This report believes it might be difficult for them to cope with this changing macro-environment and plan for the future scenarios. McDonald’s is the only organisation in these five companies that mentions customer experiences and perception towards the cooperation is also it is the only one communicate effectively this to the target audiences.

Table of Contents

1.Introduction 1 2.The need of Mission Statement 1 3. Hungry Jack’s 2
3.1 Company Description 2
3.2 Review of the Mission Statement 3 4. McDonald’s 5
4.1 Company Description 5
4.2 Review on mission statement 6 5. Dominos 9
5.1 Company Description 9
5.2 Review of Mission Statement 10 6. Kentucky Fried Chicken (KFC) 11
6.1 Company Description 11
6.1 Review of mission statement 11 7. SUBWAY Chain 14
7.1 Company Description 14
7.2 Review of mission statement 14 8. Conclusion 15 References List 16

1. Introduction
This report is written to review the mission statements for five companies in fast food industry –Hungry Jack’s, McDonald’s, Domino’s Pizza, Kentucky Fried Chicken and SUBWAY chain as well as to give a discuss of whether organizations need missions statements to be successful. Researches of this report could not find McDonald’s mission statement therefore the report reviews the vision statement of the company instead.

The report first gives brief company descriptions about these five companies, then states the mission statement for each company following by the critical review of each mission statements. This report has applied key elements that discussed in Johnson (2008) including Environment, Strategic Capability and Strategic Purports to these five companies. All information comes from secondary data and peered review articles.

2. The need of Mission Statement
A mission statement is both an organizational cultural symbol and an objective technical element of an organization's strategy. It imbued with meaning, reflecting the assumptions and values of the environments in which they are crafted (Biloslavo, 2007). A good mission statement is able to create organizational integration – getting everyone focused on common objectives and working together to pull in the same direction (Mullane, 2002).
A well written mission statement is very useful strategic tool if it is able to get the CEO, the top managers and the people in the organization involve and make sure the mission statement is understood by every level of the company: * According to Campbell (1997) that a mission statements is valuable for getting senior managers to work out a common view and as a company flag to rally around. It guides the behaviors of all people involved in the company from top to down.

* Klemm et al. (1991) also asserted that the mission formulation process could be used to generate new ideas and promote shared expectations among all levels of employees.

* According to Bart et al. (2001) a good mission statements could positively affect employee behavior when the organization displayed commitment and established internal policies which supported the statement. These positive changes in employee behavior are directly link to the financial performance for a company.

Organizations operate without mission statements are like ships sailing in the ocean without rudders. If they got lucky, they can still sail safely in the ocean. However, if they got back luck, the wind will let them crash into reef and sink.

3. Hungry Jack’s
3.1 Company Description
Hungry Jacks has operated in Australia since 1971. It is a franchise of the international Burger King Corporation and has over 300 stores Australia. Hungry Jack's is now a well established brand in the 'Quick Service Store' segment in Australia. The slogan of ‘The Burgers are Better at Hungry Jack's- has created a strong and well respected brand (Hungry Jack’s, 2010)

Hungry Jack’s mission statement:
‘To be the best fast food hamburger store in Australia in terms of customer satisfaction in product, service and individual store profitability (Hungry Jacks.2009)’

Company position statement:
Hungry Jacks offer the most delicious hamburgers at the best value for money to really satisfy your hunger (Hungry Jack’s 2010).

Market Objectives: * To lift the perception of 'quality' and 'consistency' of Hungry Jack’s amongst the target group (Hungry Jack’s 2010). * To maintain positive sales growth and increase market share (Hungry Jack’s 2010). * To increase the frequency of visitations to Hungry Jacks by the key purchasers (Hungry Jack’s 2010).

3.2 Review of the Mission Statement
The mission statement of Hungry Jack’s identified the industry that the company competes in (in the green area shown in figure 1), as well as gives the general goal of the organization –to be the best fast food hamburger store in this industry. It also states that customer satisfaction, product, service and individual store profitability are the three most important factors for Hungry Jacks to achieve its goal.

Figure 1. Layers of business environment

Source: Johnson, 2008
However, the mission statement seems to be too focusing on the products and the sales of Hungry Jacks as shown in the company position statement and market objectives. This report believes that it is time for Hungry Jacks to put more attention on the rapidly changing macro-environment (blue area of figure 1) which are: * Economic— doing good during recession. * According to Bladd (2009) fast food industry is doing very well during this recession. When the economic out of recession, the sales might drop.

* Social – growing health consciousness * Fast food has been blamed as the courses of obesity and chronic degenerative diseases because the large quantities of saturated fat contained in the diet (Horrigan, 2002).

* Technological – A key ingredient in running a fast food restaurant * More day-to-day operational issues are being orchestrated via technology tools. For example: systems that can automatically generate the purchase order when inventories run low (Pipes, 2007)

* Environmental— the probability of decrease meat consumption in future * Animal agriculture is a ‘major threat to the environment’ as it emits 18%, or nearly one-fifth, of human-induced green-house-gas emissions, more than the transportation sector (Steinfeld et al, 2006).

* Legal—the probability of ban in school and hospital area in future associates because of the health issue. * Coca-Cola withdrew from exclusive vending-machine contracts in schools. * McDonald's reduced the use of trans fats for cooking its French fries and has introduced a line of salads as well as leaner versions of its Chicken McNuggets. * KFC does not advertising target children blow 14years old (KFbC, 2010).

4. McDonald’s
4.1 Company Description
In 1971, McDonald’s opened its first restaurant in Sydney. Today there are over 780 McDonald's across Australia, with around 85,000 people employed in restaurants and management offices. McDonald's Australia Limited is an unlisted Australian public company. It's a franchise business with more than two thirds of restaurants owned and operated by individuals. The remainders of the restaurants are run by company staff (McDonald’s 2010).

McDonald’s vision statement
To be the world's best quick service restaurant experienced. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile.(Samples, 2010)

Company values * We place the customer experience at the core of all we do * We are committed to our people * We believe in the McDonald’s System * We operate our business ethically * We give back to our communities * We grow our business profitably * We strive continually to improve (McDonald’s, 2010)

4.2 Review on mission statement
McDonald’s, compared to Hungry Jack’s, stated experience and value in its vision statement instead focus on sales and profitability. This means the company is not only focuses on its products, but also wants its customer to have positive perception about the organization. MacDonald’s Corporate Social Responsibility Report, (CSR Report) evidenced that this company aim to balance the interests and exceed its minimum obligation to stakeholders (shown in figure 2) in order to cope with the changing macro-economic and maintains its organization’s reputation. Presumably, McDonalds is able to enlighten its self-interest and maintain it profitability in future years.

Figure 2

* Owners * Sales growth—the net value of McDonald’s sales in Australia in 2007 was $2.49 billion. This equalled a 10.35% increase on 2006. (CSR Report, 2007) * Continually to improve the business. (CSR Report, 2007)

* Government * New restaurants creating employment opportunities. * Sign the Federal Government’s Greenhouse Challenge Cooperative Agreement in order to protect the environment. (CSR Report, 2007)

* Customer * High quality food and superior service. (McDonald, 2010) * Good experiences for every customer. * Different rage of food including healthy salad and Mccaffe to satisfy different customer.

* Employee * Provide opportunity, recognize talent and develop leaders. (CSR Report, 2007) * Sports Grants which .recognize outstanding sporting achievements. (CSR Report, 2007) * Education Scholarships are also available for crew each year. (CSR Report, 2007)

* Suppliers * More new shops means more orders from suppliers.

* Activist Groups * Sydney Water Every Drop Counts business program to improve water management practices and implement water saving measures. (CSR Report, 2007) * Reducing electricity consumption and increasing use of renewable energy. * Clean Streets program to keep the area around our restaurants tidy and clean. (CSR Report, 2007) * Community * Ronald McDonald House Charities (RMHC) helps seriously ill children and their families. (McDonald, 2010)

* Competitors * McDonald as the number one fast food restaurant operated in Australia actually show investors that fast food industry in Australia is competitive but also has lots of opportunity as the market continuously to grow in recent years.

5. Dominos
5.1 Company Description
Domino’s Pizza Enterprises Ltd (Domino’s Pizza) is the largest pizza chain in Australia in terms of network store numbers and sales. It is also the largest franchisee for the Domino’s Pizza brand in the world (Domino’s Pizza, 2009). It has three divisions: corporate, franchise and corporate development (Dow Jones Company report, 2009). Domino’s Pizza Enterprises Ltd operated in Australia, New Zealand, France, Belgium, the Netherlands and the Principality of Monaco. The brand is owned by Domino’s Pizza. Inc, a listed US company. (Domino’s 2009)

Mission Statement:
Dominos Sell more pizza, have more fun (Domino’s, 2010).

Vision Stamens: * Number one in pizza * Number one in people (Domino’s, 2010)

5.2 Review of Mission Statement
The mission statement of Dominos Pizza stated that the purpose of the organization is to sell more pizza. It did not state the main stakeholder of the company or how the company is going to achieve its goal. However, the mission statement did mention about the culture of the company which is relax and fun atmosphere within the organization. It is also the unique competency and effective selling technique using by Domino’s Pizza:

* Teenage Mutant Ninja Turtles
Domino’s Pizza was in the famous cartoon ‘Teenage Mutant Ninja Turtles’ and it has become a very cool and fun thing to the children (The History of Domino’s Pizza, 2008)

* Avoid the Noid (Keep the Noid out and Domino quality in)
‘Avoid the Noid’ is a video game written 1989 to promote Domino’s Pizza. Noid was an evil cartoon character that heats pizza and wanted to destroy every pizza in the world. But quality Domino’s Pizza is too good to be destroyed therefore everybody should order from Domino’s. (The History of Domino’s Pizza, 2008)

These promotions were very successful which again reinforced the strong brand name of Domino’s and aligned with the ‘fun’ culture of Domino’s Pizza.

However, similar to Hungry Jack’s, the mission statement focus on its products and so were their promotions and TV acts. The organization has done something to giving back to the community, for example: during a dough raiser traditionally 50cents or $1 is donated per pizza to the set cause and donate pizza for people in times of need (The Facts, 2009). However, Domino’s Pizza did not communicate this to its stakeholders effectively and nothing is mentioned in the mission statement as well. The direction of the company is a bit blur: should the company put more recourse in its social responsibility or should the sales and profitability to be the first priority.

6. Kentucky Fried Chicken (KFC)
6.1 Company Description
KFC Corporation, based in USA is the world's most popular chicken restaurant chain. KFC operates more than 15,000 units around the world (KFCa, 2010). KFC now has more than 600 stores in Australia and New Zealand, which are company owned or franchised (KFCb, 2010).

KFC's Mission Statement:
“The Association of Kentucky Fried Chicken Franchisees, Inc. is united to protect, promote and advance the mutual interests of all member franchisees and the Kentucky Fried Chicken system (Scribdb, 2010)

KFC’s vision statement:
To bring people of all ages, races and backgrounds together to enjoy ‘Soul Food’ – ‘proper food at reasonable prices’ – within bright and fun interiors. KFC is designed to be perceived as a fun and inclusive brand (Scribda, 2010).

6.2 Review of mission statement

The KFC mission statement and vision statement mentioned different stake holders of the company: the franchisees and the customers. The mission statement is more likely to be an internal statement but the vision statement is focus on external. However, these two statements can be linked together by the value chain in order to achieve the objectives of the organization.
KFC apply strict roles on its suppliers, logistics and food safety which can be shown in Figure 3. All these value added components through the value chain ensure the franchisees have the best materials to satisfy its customer and therefore enhance the profitability of the owners or franchisees.

Figure 3

7. SUBWAY Chain
7.1 Company Description
SUBWAY chain is the world's largest submarine sandwich chain with more than 30,000 restaurants in 87 countries. The SUBWAY chain operates more units in the US, Canada and Australia than McDonald's does (SUBWAY, 2010). It provides a healthier lunch solution for people who have a short lunch break then the traditional fast food restaurants.

SUBWAY’s mission statement:
"To provide the tools and knowledge to allow entrepreneurs to successfully compete in the QSR (quick service restaurants) industry worldwide by consistently offering value to consumers through providing great-tasting food that is good for them and made the way they like it." (SUBWAY, 2010)

SUBWAY’s vision statement: An entrepreneurial spirit and a unique business philosophy (franchise-international, 2010)

7.2 Review of mission statement
The mission statement of Subway stated two stakeholders: the owners of the restaurants and the customer. It seems that the most important thing for SUBWAY is to open more restaurants and get as much as market share as it could. There is a very good opportunity for SUBWAY chain in most western countries as the traditional fast food restaurants are criticized about their unhealthy diet.

However, the mission statement does not point out the position of SUBWAY chain. It seems that SUBWAY chain is satisfied if the owners of the restaurants are satisfied about the profitability of selling sandwiches. This report believed that the mission statement did not set the bar high enough. Maybe it is time for SUBWAY chain to ask: does the business stop there? What is the next step?

It is very interesting that both Hungry Jack’s and SUBWAY chain put their mission statements under the section called ‘school information’. It is likely that both companies think that mission statements are for students who need to write assignment but not a strategic tool to guide the companies.

8. Conclusion
To sum up, this report believes that the mission statement as a useful strategic tool is an essential tool to guide organizations and it is pivotal to organizations’ successes. The five mission statements which have been reviewed do more or less fulfill their role within the organizations.

References List
Bart, 2001. A model of the impact of mission statements on firm performance. Management Decision, Volume:39 Issue:1 Page:19 – 35

Biloslavo, R. (2007). "Mission statements in Slovene enterprises: Institutional pressures and contextual adaptation." Management Decision 45(4): 773-788. ESCBhost

Bladd, 2009, Fast food firms across Middle East post record profits, viewed 21 Mar 2010
<http://www.arabianbusiness.com/548849-fast-food-firms-across-middle-east-post-record-profits>

Campbell, 1997. Mission statements. Long Range Planning 30(6): 931-932. ScienceDirect

Domino’s Pizza, viewed 23 Mar 2010<http://www.dominos.com.au/corporate/inside/visionmission.aspx>

Johnson, 2009, Exploring Corporate Strategy, Text and Cases, Whittington, 8th Edition Prentice Hall.

Franchise international, 2010, Vision, entrepreneurial spirit and a unique business philosophy, viewed 26 Mar 2010
<http://www.franchise-international.net/franchise/subway-sandwiches/vision-entrepreneurial-spirit-unique-business-ph/553>

Horrigan, 2002. How sustainable agriculture can address the environmental and human health harms of industrial agriculture. Environ Health Perspect. 110(5): 445–456

Hungry Jack’s, viewed 20 Mar 2010
<http://www.hungryjacks.com.au/about_school.php>

KFCa, viewed 26 March 2010
<http://www.kfc.com/about/>
KFCb, viewed 26 March 2010
<http://www.kfc.com.au/about-us/faqs.asp>

Klemm, et al. 1991. Mission statements: Selling corporate values to employees. Long Range Planning 24(3): 73-78, ScienceDirect

Libraryindex, 2005. Legal Political and Social Issues of Overweight and Obesity - The Food Industry Responds To Public Outcry, 2005, viewed 25 Mar 2010
<http://www.libraryindex.com/pages/2745/Political-Legal-Social-Issues-Overweight-Obesity-FOOD-INDUSTRY-RESPONDS-PUBLIC-OUTCRY.html>

McDonald’s, 2007, Corporate Social Responsibility Report, viewed 21 Mar 2010
<http://www.mcdonald’s.com.au>

Mullane, J. V. 2002. The mission statement is a strategic tool: when used properly. Management Decision 40(5): 448-455. ESCBhost

Pipes, 2007, Fast Food Franchise Industry Is Rushing To Acquire Technology Tools That Will Help It Stay, Well, Fast, viewed 23 Mar 2010
<http://www.franchising.com/articles/252/>

Samples, 2010, McDonald’s Mission statement, viewed 22 Mar 2010
<http://www.samples-help.org.uk/mission-statements/mcdonalds-mission-statement.htm>

Scribd (a), 2010, McDonald & KFC Intro, viewed 22 Mar 2010
<http://www.scribd.com/doc/6564878/McDonald-KFC-Intro>

Scribd (b), 2010, KFC value preposition, viewed 22 Mar 2010
<http://www.scribd.com/doc/20082884/KFC-Value-Preposition>

Steinfeld , 2006. Livestock’s Long Shadow: Environmental Issues and Options. Rome: Food and Agriculture Organization of the United Nations

SUBWAY, viewed 24 Mar 2010
<http://www.subway.com/StudentGuide/s_e_welcome.htm>

The History of Domino’s Pizza, 2010, viewed 21 Mar 2010
<http://www.recipepizza.com/the_history_of_dominos_pizza.htm>…...

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...Research Project Critical Success Factors One industry that has seen steady growth over the past ten years is the fast food industry or quick service restaurants. It is no secret that Americans have a tremendous love for greasy, unhealthy, quickly prepared meals. Not only Americans, but people around the world seem to be enjoying the tastes the fast food industry has brought to the table with McDonalds emerging as one of the biggest brands in the entire world. The growth and increase in this industry does still have its drawbacks. With newly enlightened consumers becoming more meticulous about what they eat based on calories, fat, gluten and so on, many fast food franchises have been under the gun to maintain the status they have bolstered for so long. Rather than lie down and wave the white flag, many companies have begun offering new products derived from new methods of preparation. Nowadays, everyone is on the move, everyone’s time is precious and there is high demand for a quick bite to eat. However, these consumers do not necessarily want to compromise their health in the process. Chick-fil-A has emerged as the top chicken fast food chain in the United States. They control the most market share and have done so in quite extraordinary fashion. Prior to being the number one chain, they trailed Kentucky Fried Chicken, who controlled 40% of the market back in 1999 while Chick-fil-A only had nine percent (Lutz, 2014). Chick-fil-A’s average sale is three times the amount......

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5 Force Fast Food Industry

...EX3 Industry Analysis Industry Analysis: Fast food industry Introduction Fast food industry report provide an analysis of the U.S. market environment of the fast food industry, evaluates the marketing activities and list several key player such as Panda express, McDonald's and Burger king as examples. The 5 force concepts framework is used for analyses the industry rivalry, threat of substitutes, buyer power, supplier’s power and entry barriers. (Porter's Five Forces) Five Force concepts rank Rivalry among firms: High Threat of Substitutes: High Buyer Power: Low Power of Supplier: Low Entry barriers: High Industry rivalry: Competition among fast food companies is really high, because there are a lot of competitors and fast food companies all try to again competitive advantage over the other companies in this industry. There are close to 50,000 fast food chains across the United States, with McDonalds being the largest restaurant chain. In the world, there are more than 500,000 fast food places. People can easily image the competitive because there are so many firms are sharing the fast food market. The increased presence of different fast food companies means a more competitive market. Fast food firm can gain a competitive advantage by some common ways such as product differentiation, channels of distribution and exploiting the relationship with supplier and customers. Industry......

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The Economic Impact on the Fast Food Industry

...Fast Food and Consumer Behavior ABSTRACT Marketing can impact the economy in one or two ways. First, marketing has the potential to increase the demand for a good or service. Effective marketing campaigns entice people to want/buy a specific good or service. The market demand curve is comprised of individual demand curves for a good. General theory states that consumers will buy less of a product as the price increases. However, marketing can cause the demand for the good or service to become more inelastic, which causes consumers to still buy even when the price increases. This is because strategic marketing plans have a goal to convince consumers that there is no real substitute for the good or service. Some argue that consumer behavior is manipulated by marketing and that consumers need to operate within a “laissez faire” market. This paper will discuss the impacts of marketing on consumer behavior in the fast food economy and the ability to generate demand curves. It will test the following three hypotheses: (1) consumer behavior is influenced by marketing (2) effective marketing impacts the indifference curve (3) marketing can override the individual and market demand theory. The research paper will present the research that supports the psychological and economic theory of consumer behavior in the fast food industry to support the results demonstrating the economic effect from the efforts of......

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Fast Food Industry

...Fast Food Chains Abstract The purpose of the study is to analyze the application of concepts and theories of managerial economics in relation to the actual data and information from the fast food industry and related companies. Two fast food chains have been studied and analyzed throughout the project. MacDonald’s and Burger King have been chosen as part of Fast Food industry because both companies are the biggest and closest competitors of each other; they both provide an insight of the frame of the industry, advantages and disadvantages of franchise system and production techniques, demand and supply chains, keys of success and weaknesses that could bust or hinder growth in short- and long-term. The study concentrates on demand and supply structure in the industry, market forms in which the industry can operate optimally, scope of production, production techniques, cost structures, prevailing market conditions and their impact on the firm, and financial analysis of the companies. To collect the relevant data, the companies’ annual reports were critically analyzed and evaluated for exact position to be sorted, the current market conditions to be measured and their possible future effects on the firms working environment to be evaluated. Companies’ Overview McDonald’s is located in 117 countries and on 6 continents and operates over 32,000 restaurants worldwide. McDonald’s is the clear market leader in the fast food industry. For 2010 the......

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Breakfast Fast Food Industry

...Industry Rivalry The five forces that Michael Porter uses to evaluate an industry are industry rivalry, buyers, suppliers, threat of substitutes, and potential entrants. The first force, industry rivalry, is used to describe the overall conditions in an industry, including the number of competitors. For Subway, breaking through to the breakfast market will not be easy due to industry rivalry. However, Subway has done some research and has found that many fast food restaurants are lacking in the healthy food options in the morning. This has led them to create products that will target the customers that are looking for healthy morning meals. “Subway’s offer includes four Fresh Fit Egg White Muffin Melts, each with less than 180 calories, 4.5 grams of fat and 5 grams of fiber” (Francella). This is an example of a product that Subway has created to try and gain ground in the fast food breakfast industry, a $40.7 billion business in the United States. While Subway may be gaining ground with their healthier morning meals, they are still trailing to one of their biggest competitors, McDonalds. One of the biggest reasons why McDonalds has been able to dominate the industry is the use of their drive-through. “Subway doesn’t have drive-throughs, which has become a big part of America’s breakfast tradition” (Channick). A drive-through is convenient and offers expediency. In today’s society where American’s are labeled as lazy, having a drive through is a big help in......

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