Eco 561 Business Proposal for Mcdonalds Essay

1224 Words Jun 27th, 2013 5 Pages
McDonalds Business Proposal Paper

February 3, 2012

McDonalds Business Proposal McDonalds has always been a company that shares in the happiness of a child. Recently after taking my own children to McDonalds, I have found that there is not a breakfast option for children. McDonalds should add a happy meal option to the breakfast menu. Current demands by consumers are to add a happy meal option allowing parents to purchase child sized portions of breakfast items. This option could help McDonalds to increase profits by attracting more consumers. Shareholder reports show a quarterly cash dividend per share increase of 15% and annual dividend of $2.80 per share. Comparable sales grew 5.6%. Cash by operations increased $808
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* 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.
Company’s Strategies to Increase Revenue * Exploring the competition to see what the others are doing in terms of fast-food breakfasts and children. * Customer focusing strategies to see what other customers want in the children’s breakfast meals. This can be done through questionnaires and feedback surveys both in and out of the store. * Using proper training methods to ensure quality service to customers. * Proper introduction in promoting the new breakfast will ensure customers know about the new product.
Define the Economic Theory and Show How You Can Determine the Profit-Maximizing Quantity. * Economic theory 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 concept of
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