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McDonalds

WELCOME TO THE WORLD OF

McDonalds

One world, One Burger- McDonalds

MCDONALDS CORPORATION

EXECUTIVE SUMMARY
one of the world's largest chain of hamburger fast food restaurants.
McDonalds currently operates in over 119 countries around the world with over 32,000 stores.

Daily serving nearly 47 Million customers. hamburgers, cheeseburgers, chicken products, French fries, breakfast items, soft drinks, shakes, and desserts main products of McDonalds. McDonald's revenues grew 27% over the three years ending in 2008 to $22.8 billion, and 9% growth in operating income to $3.9 billion.

Business of the McDonalds:


-About 9,000 of the restaurants are company owned and operated; the remainder is run either by franchisees or through joint ventures with local businesspeople. -75 percent of overall sales from 9 Major areas. -McDonalds Business Model is slightly different from others like as ordinary Franchise fees , marketing fees & Rent. -McDonald's trains its franchisees and at Hamburger University in Oak Brook, Illinois. others

History of McDonalds
1940 First McDonalds 1952 Attempts at franchising 1954 Milk Shake Machine 1955 prototype opens in Des Plaines, IL 1956 14 McDonalds 1961 McDonald brothers sell rights

History Continued

1994 Kuwait City,

Kuwait 1965 McDonalds go public 2002 Forty seven years 1968 Introduction of Big after Mac and shift to 30,000 locations Network Television 2000 new restaurants 1970 1600 restaurants World Wide Web 1980 6000 McDonalds McDonalds a Restaurants recognized Brand 1990 record sales Name

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Quick Facts About McDonalds


McDonald's was started as a drive-in restaurant by two brothers, Richard and Maurice McDonald in California,US in the year 1937. By mid-1950s, the restaurant's revenues had reached $350,000. Ray Kroc, distributor for milkshake machines, expressed interest in the business, and he finalized a deal for franchising with the McDonald brothers in 1954. He established a franchising company, the McDonald System Inc. and appointed franchisees. In 1961, he bought out the McDonald brothers' share for $2.7 million and changed the name of the company to McDonald's Corporation. In 1965, McDonald's went public

McDonalds
The McDonald's headquarters complex:
McDonald's Plaza, is located in Oak Brook, Illinois.
(It sits on the site of the former headquarters and stabling area of Paul Butler, the founder of Oak Brook.)

Industry and Competitive Analysis


First question is: WHAT ARE THE INDUSTRYS DOMINENT ECONOMIC FEATURES? McDonalds competes with other businesses from these other categories as substitute product competitors but primarily competes in the quick-service sandwich market

Second question is: WHAT KINDS OF COMPETITIVE FORCES ARE INDUSTRY MEMBERS FACING?

1. Rivalry Among Firms 2. Threat of New Entrants 3. Threat of Substitute Products 4. Bargaining Power of Customers 5. Bargaining Power of Suppliers

Industry and Competitive Analysis


Third question is: WHAT FACTORS ARE DRIVING INDUSTRY CHANGE AND WHAT IMPACTS WILL THEY HAVE? the fast-food industry has begun to focus on the needs of the customer thats why needs to improve the quality of customer service and the cleanliness of the restaurant locations in order to please their customers in hopes that they will become a repeat customer.
Fourth question is: WHAT MARKET POSITIONS DO RIVALS OCCUPY-WHO IS STRINGLY POSITIONED AND WHO IS NOT?

Industry and Competitive Analysis


Fifth question is: WHAT STRATEGIC MOVES ARE RIVALS LIKELY TO MAKE NEXT? Identifying the competitors strategies, resources strengths & weakness.

Sixth question is:


WHAT ARE THE KEY FACTORS FOR FUTURE COMPETITIVE SUCCESS?

McDonalds Key Success Factors (KSFs) are cost efficiency, product development, marketing, and promotions for future competitive success.

Industry and Competitive Analysis


Seventh question is: DOES THE OUTLOOK FOR ATTRACTIVE OPPORTUNITY? THE INDUSTRY PRESENT AN McDonald will continue to drive success in 2009 and beyond by remaining focused on being better, not just bigger. McDonald will do so by further enhancing our understanding of consumers needs and wants; facilitating greater sharing and adoption of best practices and new ideas worldwide; and leveraging a strategic approach to implementing initiatives to drive the best bottom-line impact. Despite challenging economic conditions, the McDonalds System is energized by our current worldwide momentum. McDonald will continue to build on their strength in five key areas.

Company Situation Analysis


First question is: HOW McDonald IS THE COMPANYS PRESENT STRATEGY WORKING? In 2008, McDonald continued to focus on our key global success factors of branded affordability, menu variety and beverage choice, convenience and depart expansion, ongoing restaurant reinvestment and operations excellence. As a result, every area of the world contributed to 2008 global comparable sales and guest counts increasing 6.9% and 3.1%, respectively, despite a challenging economic environment in many countries.

Company Situation Analysis


Second question is: WHAT ARE THE COMPANYS RESOURCE STRENGTHS AND WEAKNESS, AND ITS EXTERNAL OPPORTUNITIES AND THREATS?
Strengths Owns one of the worlds best known brand names Real estate operations bring in large revenues and allow McDonalds to open more stores Countless new innovations- breakfast, playpens, etc. Specialized training for managersReinstitute the restaurant review operation (QSC) Large market share Strongest international presence among fast-food chains Strong leader in Jim Cantalupo McDonalds does not need to act as finance corporation to franchises McDonalds Plan to Win- focuses on people, products, place, price and promotion Opportunities Diversification and acquisition of other quick-service restaurants Low-cost menu to attract different customers Initial public offerings in other countries could raise revenues Retail merchandise potentially used to raise revenues Weakness Customer service ranking is the loMcDonaldst among fast-food chains Many stores beginning to look dated Quality becoming inconsistent Order accuracy is low compared to other chains

Threats Increased competition among rival sellers, including price wars, product innovation, and growth Health conscious consumers demanding better quality, healthier menu items All fast-food chains expected to struggle to meet new consumer health expectations Overall McDonaldaker economy

Company Situation Analysis


Third question is: ARE THE COMPANYS COMPETITIVE?
PRICES AND COSTS

The value chain at McDonalds is very competitive in the global fast-food industry. The following table shows the costs and markups associated with McDonalds signature hamburger, the Big Mac, bought at a McDonalds.
Value Chain Analysis
McDonald's Production Costs McDonald's Overhead Costs Royalties 4% Service Fee $ 0.13 $ $1.48 $1.32 $ 2.80 $ 0.65 $ 0.70

Total Costs
Retail Markup Average price to Consumer

Strategic Task Analysis


Vision
To be the best & leading fast food providers around the globe

Mission
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."

Values

Our values summarized in Q.S.C & V. Provide good quality, services to customer . Have cleanliness environment when customer enjoys their meal .The value of food product makes every customer is smiling.

Strategic Task Analysis

Industry Demand Drivers McDonalds is Well Positioned Margin Expansion Healthy Financials Valuation Looking Good on other Criteria Risks

Strategic Task Analysis

Ratio Analysis and Forecasting Marketing Performance of McDonalds The 4Ps:


i. Product ii. Price iii. Promotions iv. Place

Problem Analysis

Major Problems:

Poor Customer Service Opposing Viewpoints Health Factor Increasing Competitor

Problem Analysis

Minor Problems:

Lacking in Management & Marketing Quick Service Make Customer Dissatisfaction Employee Dissatisfaction

Alternate Strategies

Stay-on-the-offensive strategy Quick Fortify-and-defend strategy Global strategy Diversification

Recommendations
Stay-on-the-offensive strategy

The main goal of the stay-onthe-offensive strategy is to be a proactive market leader. The principle of this strategy is to continually stay one step ahead of your competitors and force them to play catch up.

Implementation Plan
The Plan to Win strategy is important in the offensive strategy because it is about being innovative and challenging to the competitors. Therefore, it needs to continue onward with its successes while being a head every time with new product innovation, marketing schemes, technology development, customer service, employee training.

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