McDonalds

Introduction
The corporation was founded by businessman Ray Kroc in 1955. McDonald's Corporation is the world's largest chain of hamburger fast food restaurants, serving around 64 million customers daily. McDonald's is the leading global foodservice retailer with more than 33,000 local restaurants serving more than 64 million people in 118 countries each day. More than 80% of McDonald's restaurants worldwide are owned and operated by independent local men and women.

Mission & Vision

Vision: McDonald's vision is to be the world's best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile." Mission: Be the best employer for our people in each community around the world Deliver operational excellence to our customers in each of our restaurants; and Achieve enduring profitable growth by expanding the brand and leveraging the strengths of the McDonald's system through innovation and technology.

Values
McDonald's, worldwide, stands for QSC&V, where "V" stands for value and therefore the value proposition assumes special significance. At McDonald's, costs are kept low by increasing efficiency and cutting wastage at all levels. Customers, who walk into a McDonald's restaurant, expect to be served food that is hot and fresh, made from the highest quality ingredients, served within minutes of placing their order and at a price, which is affordable. Attention is given to minute details and things are done the right way. Continually review and improve menu offerings to make sure that not only customers' expectations are met, but also exceed them.

Potential Entrants

Relatively Weak Industry Competitors Suppliers Weak Buyers

Moderate to Strong

Rivalry among existing Firms Very Strong Substitutes

Supplier Power: Willingness of Supplier Supplier-seller collaboration Supplies are mostly commodities Customers- industry leaders

Threat of Substitutes: Readily available Attractively priced Satisfactory in terms of quality Buyers power A large number of small operators High fixed costs Undifferentiated and replaced Switching cost low Consumer-price-sensitive Produce the product Purchases in small volumes Well-informed about sellers products,prices, and costs

Barriers to Entry: Economies of scale Unattractive market growth Competitors strong offensive moves Competitors expertise in marketing and efficiency

Degree of Rivalry Several competing companies. Product and service differentiation inadequacy. Aggressive in making fresh moves -Domestic demand is growing slowly -- Competitors often rely on price cuts to boost volume -- Low switching costs for consumers

SWOT Analysis
Strengths Strong Brand name, image & reputation Large market share Strong global presence Specialized training for managers known as hamburger university Plan to win focuses on 4 ps Strong financial performance& position Proven production methods & countless new innovation ( breakfast, caf etc) Customer focus The company has favorable access to distribution networks Strong MCD performance in the global market place Weakness Unhealthy food image High staff turnover including top management Customer losses due to fierce competition Legal actions related to health issues :use of trans fat & beef oil Uses HCFC 22 to make polystyrene that is contributing to ozone depletion Lack of product offerings to meet varied customer tastes and preferences Many restaurants are outdated

Opportunities

Weakness

Growing health trends among the customer Falling global trade barriers in attractive markets Globalization , expansion in other countries Diversification & Acquisition of other quick- service restaurants Growth of fast food industry Worldwide deregulation Low Cost menu that will attract the customers Expansion of menu to meet healthier consumer preferences Freebies & discounts

Health professional& Consumer activist accuse MCD of contributing of high cholesterol, heart attacks, diabetes & obesity Relationship B/W MCD Corporate & Its franchisee Anti- American Sentiments Global recession & Fluctuating foreign currencies Industry to struggle to meet the customers towards health & environmental issues Rivals copy McDonalds innovations fairly quickly, eliminating first-mover advantages The company has the propensity to induces shifts in consumer tastes away from the firm's products

core competency
Able to produce and sell quick and cheap food to a large number of customers. McDonalds is well-known for its consistency in the production. With this concept, they have been able to expand into other countries, and they currently are the largest global fast-food chain in the world. Since they already hold this lucrative position, they should continue expansion in an effort to drive out competition.

Porter generic strategies

Cost Leadership Strategy. This generic strategy calls for being the low cost producer in an industry for a given level of quality. A leading cost strategy for McDonalds is the ability to purchase the land and buildings of its restaurants McDonalds also developed a strong division of labor for its production processes, tight management control and product development strategy. Creating a strong top-down style of management is another leading cost strategy for McDonalds Using fewer in-store managers allows the company to hire lower-wage workers to complete tasks.

PORTER VALUE CHAIN ANALYSIS OF McDONALDS

The goal of these activities is to offer the customer a level of value that exceeds the cost of the activities, thereby resulting in a profit margin for McDonald's.

Inbound logistics

Organizing the supply of food and materials to restaurants through approved third party logistics operators.
Production in huge plants denoted exclusive to McDonalds control food distribution and packaging system

Inbound Logistics

Operations

Firm

R&D in field research needs of end users. quality development in Relatively Few collaboration with good Management Layers to Infrastructure suppliers Reduce Overhead
Effective Training Programs Forward to Improve Worker integration: Efficiency and Effectiveness through franchisees with Investments in Technology in order control over store to Reduce Costs Associated with presentation, Manufacturing Processes menu items

Human Resource Management Technological Development

etc. and enhance improvement
Small, Highly Trained Sales Force

Procurement
Operations Outbound Logistics Inbound Logistics

Frequent Evaluation Processes to participation in process Monitor Suppliers Performances

Efficient Plant Delivery Schedule Scale to Minimize that Reduces Manufacturing Costs Costs Selection of Low Timing of Asset Cost Transport Purchases Carriers Policy Choice of Efficient Order Plant Technology Sizes Organizational Learning

Products Priced to Generate Sales Volume

Service

Outbound logistics Is the concern of the franchisee.

Firm Infrastructure

Outbound logistics are Human Resource Management growing as a part of McDonalds recycling system Technological Development integrating in the logistics of Frequent Evaluation Processes to distribution center Procurement Monitor Suppliers Performances

Selection of Low Cost Transport Carriers Efficient Order Sizes

National Scale Advertising

Interrelationships with Sister Units

Marketing & Sales Service

Outbound Outbound Logistics Logistics

Delivery Schedule Small, Highly that Reduces Trained Sales Costs Force

Effective Product Installations to Reduce Frequency and Severity Products Priced to of Recalls Generate Sales Volume

Marketing

Firm Infrastructure Human Resource Management Technological Development

Long term marketing objectives are broken down into shorter term measurable targets, which McDonald uses as milestones. Country teams are given autonomy in marketing mix decision.

Procurement
Operations Outbound Logistics Inbound Logistics

Marketing & Sales Marketing & Sales Service

Advertising & PR is outsourced (Mudra agency in India)

Service

Services Firm Infrastructure provided by the companies enrollment Human Resource Management standards

Technological Development

Procurement Marketing Service & Sales Service Inbound Logistics Operations

Outbound Logistics

Procurement

Firm Infrastructure Human Resource Management Technological Development

Procurement Procurement Marketing & Sales Service Inbound Logistics Operations

Outbound Logistics

Sought partners with expertise on down trade distribution

R&D

Firm Infrastructure Human Resource Management Technological Development

Procurement
Operations Marketing & Sales Inbound Logistics
Technology and development research in quality assurance, and packing readdressed at lower cost, faster delivery chain system and process control equipments, recycling system.

Outbound Logistics

Service

HRM

Firm Infrastructure Human Resource Management Technological Development

HRM specialists in R&D Procurement formulation, education to and expertise in food raise awareness of issues and raise demand. The addressing environmental issues and CRS.

Operations

Outbound Logistics

Marketing & Sales

Inbound Logistics

Service

Firm Infrastructure
Support Activities

Human Resource Management Technological Development

Strong real estate portfolio. International organization more than 50000 employees works in more than 50 countries,

Operations

Marketing & Sales

Outbound Logistics

Inbound Logistics

Service

BCG Matrix
APMEA
Busines s Growth Rate High

Others

5%

Europe
Low

USA
4 High 0 Low 0.2

Relative Position (Market Share)

 STAR- APMEA,OTHER COUNTRIES.

The growth rate of this SBUs is 17% for APMEA region and 12% for other countries. The Relative market share is 2 and 1.7 respectively considering the revenue earned in year 2010.

CASH COW-USA ,EUROPE.

The growth rate of this SBUs is 2% for USA region and 3% for Europe. The Relative market share is 1.79 and 2.5 respectively

Structure
McDonalds Corporation franchises and operates McDonalds restaurants in the global restaurant industry. All restaurants are operated either by it or by franchisees, including conventional franchisees under franchise arrangements, and foreign affiliated markets and developmental licensees under license agreements. The Company and its franchisees purchase food, packaging, equipment and other goods from various independent suppliers. Independently owned and operated distribution centers, approved by it, distribute products and supplies to McDonalds restaurants. s

Key Ratios

Management Efficency

Financial condition

RECOMMENDATIONS
Maintain alignment among the Company, its franchisees and suppliers (collectively referred to as the System) has been key to McDonalds success. locally-relevant restaurant experiences to customers Focus on the plan to win to attract customers & expansion in other countries Expansion in the market share by more investments in Asia

 Provide new product & keep innovation. Minimize customers losses by providing low cost menu & discounts. Reinforce the affordability of menu to consumers