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MCDONALDS
SERVING FAST FOOD AROUND THE WORLD
Prepared by: Jay H. Shah, Department of Technology Management, CSPIT,
CHARUSAT

WHAT IS QSC&V?
If I had a brick for every time Ive repeated the
phraseQuality, Service, Cleanliness and Value, I think
Id probably be able to bridge the Atlantic Ocean with
them. Ray Kroc
The secret of McDonalds success lies in its QSC&V
That is Quality, Service, Cleanliness & Value and limited menu of high quality,
moderately priced food served fast in spotless surroundings
Adopting different ways of promoting own products, welcoming people of different
culture with peoples choice of food helped McDonald to grow rapidly all over the
world.
Prepared by: Jay H. Shah, Department of Technology Management, CSPIT, CHARUSAT

McDONALDS CORPORATION
Name

McDonald's Corporation

Industries served

Restaurants, Food

Geographic areas
served

Worldwide

Headquarters

Oak Brook, IL, United States of America

Current CEO

Don Thompson

Employees

1,800,000 (2013)

Main Competitors

Burger King Worldwide, Inc., Yum! Brand Inc., Subway,

Wendys Company.

Prepared by: Jay H. Shah, Department of Technology Management, CSPIT, CHARUSAT

MISSIONS AND VALUES

1) We place the customer experience at the core of all we do.Our
customers are the reason for our existence. We demonstrate our appreciation by
providing them with high quality food and superior service in a clean, welcoming
environment, at a great value. Our goal is quality, service, cleanliness and value
(QSC&V) for each and every customer, each and every time.
2) We are committed to our people.We provide opportunity, nurture talent,
develop leaders and reward achievement. We believe that a team of well-trained
individuals with diverse backgrounds and experiences, working together in an
environment that fosters respect and drives high levels of engagement, is
essential to our continued success.
3) We believe in the McDonalds System.McDonalds business model,
depicted by our three-legged stool of owner/operators, suppliers, and company
employees, is our foundation, and balancing the interests of all three groups is key.
Prepared by: Jay H. Shah, Department of Technology Management, CSPIT, CHARUSAT

MISSIONS AND VALUES

We operate our business ethically.Sound ethics is good business. At
McDonalds, we hold ourselves and conduct our business to high standards of
fairness, honesty, and integrity. We are individually accountable and collectively
responsible.

We give back to our communities.We take seriously the responsibilities that come
with being a leader. We help our customers build better communities, support Ronald
McDonald House Charities, and leverage our size, scope and resources to help make the
world a better place.

We grow our business profitably.McDonalds is a publicly traded company. As

such, we work to provide sustained profitable growth for our shareholders. This
requires a continuous focus on our customers and the health of our system.

We strive continually to improve.We are a learning organization that aims to

anticipate and respond to changing customer, employee and system needs
through constant evolution and innovation.
Prepared by: Jay H. Shah, Department of Technology Management, CSPIT, CHARUSAT

The difference exists

in countries in
different stages of
economic
development has an
influence on price
variations. People in
different countries
may have different
power to spend
money.
Specially, in India
more than half of the
population have low
purchasing power.
The McAloo Tikki (INR
25.00) is one the
examples.

Prepared by: Jay H. Shah, Department of Technology Management, CSPIT, CHARUSAT

Socio-Cultural
Factors:

The policies of
governments affect
business of
McDonalds in
various ways; in how
their products are
produced, promoted,
and sold.
Price margin
regulation is the
factor that
McDonalds need to
focus when launching
in international
market

Economic Factors:

Political Factors:

PESTEL ANALYSIS
Sociocultural
demographic trends
will also affect
McDonalds
business, hence,
analysis of culture
and modification of
menu is also
important.
When McDonalds
entered in India,
company decided
not to launch its Big
Mac Burger as a
result of deferring to
the Hindu
prohibition against
beef consumption.

It is very important
for McDonalds to
consider thephysical
terrain and climate
in the appraisal.
The climatic
conditions can affect
products in foreign
market.
Being environment
friendly is also
another important
factor.
Environmental
groups force to
reduce use of plastic
bags and Styrofoam
packing to reduce
pollution.

Prepared by: Jay H. Shah, Department of Technology Management, CSPIT, CHARUSAT

Legal Factors:

Thesystematic
substitution of
equipment for
people and the
carefully planned
use and positioning
of technology have
helped each
franchise to be of
thesame high
standard.
As Soviet machinery
lagged 15-20 years
behind Western
technology, new
machinery from
Holland was used to
harvest potatoes.

Environmental
Factors:

Technological
Factors:

PESTEL ANALYSIS
As discussed above,
political and legal
forces are highly
important as they
cover the main
aspects of the
company.
Legal issues
occurred in many
places around the
world. A legal issue
in Russia for
McDonalds when, in
1993, a law passed
in Moscow requiring
all stores to have
Russian names or at
least names
translated into the
Cyrillic alphabet.

SWOT ANLALYSIS
Strenghts:
1) Largest fast food market share
2) QSC&V
3) Locally adapted food menus
4) Children targeting

Opportunities:
1) Increasing demand for fast food
2) Home meal delivery

SWOT

Weaknesses:
1) New innovations
2) Unhealthy fast food
3) Negative publicity
Prepared by: Jay H. Shah, Department of Technology Management, CSPIT, CHARUSAT

Threats:

1)Trend towards healthy eating

2) Local fast food restaurant chains
3) Currency fluctuations
4) Lawsuits against McDonalds

SWOT - STRENGHTS
Largest fast food market share: It is the largest fast food chain in terms of total
worlds sales serving more than 70 million people around the world in more than 120
countries. McDonalds traditional menu has been surprisingly successful. People with
diverse dining habits have adopted burger and fries wholeheartedly. The very nicely
prepared menus for different people have been McDonalds biggest strength.
QSC&V: QSC&V also has been its key strength, which it maintains time by time, by
training employees through Hamburger University and maintains quality standards by
opening quality assurance centres.
Locally adapted food menus: Preparing various menus according to peoples choice in
different countries adds to McDonalds strength. For Example, In India McDonald does not
serve beef as Hindu culture does not accept it. Whereas it serves chicken in India.
Children targeting:The business successfully targets very young children through
offering playgrounds, toys with its meals and advertisements.
Prepared by: Jay H. Shah, Department of Technology Management, CSPIT, CHARUSAT

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SWOT - WEAKNESSES
New innovations: McDonalds has been around for a long time.
Customers want new things very frequently and they switch to new
products very easily if they are attractive. So McDonalds need to be very
innovative to hold their stake of customers.
Unhealthy fast food: Fast food is not even healthy, so it is not accepted
everywhere on the earth. So, they also need to practise on this factor to
stand in all markets maintaining the regional taste.
Negative publicity:McDonalds is heavily criticized for offering
unhealthy food to its customers, stimulating obesity and strong marketing
focus on very young children.
Prepared by: Jay H. Shah, Department of Technology Management, CSPIT, CHARUSAT

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SWOT OPPORTUNITIES
Increasing demand for fast food: In the technological era the life style
of people has changed. People are more and more demanding fast food,
which is served fast, friendly and good in quality. Demand from people
can be McDonalds opportunity. It can grow its food chains wisely to win
the markets.
Home meal delivery: Nowadays, the trend is to order food by telephone
to the places where we want. Providing free home delivery service for
customers can be a large opportunity for McDonalds.

Prepared by: Jay H. Shah, Department of Technology Management, CSPIT, CHARUSAT

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SWOT THREATS
Trend towards healthy eating:Due to government and various organizations attempts to fight
obesity, people are becoming more conscious of eating healthy food rather than what McDonalds
has to offer in its menu.
Local fast food restaurant chains:Local fast food restaurants can often offer a more local
approach to serving food and menu that exactly represents local tastes. Although McDonalds does a
great job in adapting its own menu to local tastes, the rising number of local fast food chains and
their lower meal prices is a threat to McDonalds.
Currency fluctuations:The business receives a part of its income from foreign operations. The
profits that are sent back to US have to be converted into dollars and may be affected by the
exchange rates, especially when the dollar is appreciating against other currencies. In 2012,
McDonalds profit was largely affected by appreciating dollar.
Lawsuits against McDonalds:McDonalds has already been sued for many times and lost quite a
few lawsuits. Lawsuits are expensive as they require time and money. And as McDonalds continues
to operate more or less the same way, there is high probability for more expensive lawsuits to come.

Prepared by: Jay H. Shah, Department of Technology Management, CSPIT, CHARUSAT

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PORTERS FIVE FORCE ANALYSIS

The entry of new competition to
the market.
The threat of substitutes or
replacement products.
The bargaining power of buyers.
The bargaining power of suppliers.
The rivalry between firms of the
same sector.
Prepared by: Jay H. Shah, Department of Technology Management, CSPIT, CHARUSAT

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PORTERS FIVE FORCE ANALYSIS

The entry of new competition to the market:
The barriers to entry are quite highfor new entrants, as the size of McDonalds
means they have achieved economies of scale and have preferential access to raw
materials and distribution channels. New entrants may find that a high cost of
investment is required in securing plant and machinery.

The threat of substitutes or replacement products:

A substitute product is one that can be used as an alternative to a companys own.
It
couldbearguedthatthethreatofsubstitutestoMcDonaldscomesfrompizzasan
d other domestic kebab and fast food houses. However, most of the above do not
have the same level of convenience that McDonalds offers, in having a number of
outlets in big cities and also through the use of multiple drive-through outlets.
Prepared by: Jay H. Shah, Department of Technology Management, CSPIT, CHARUSAT

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PORTERS FIVE FORCE ANALYSIS

The bargaining power of buyers
This area is perceived to be fairly low risk for McDonalds as consumers have little control over the
variations in the product offerings, price and place of distribution. The company should keep
customers satisfied, as switching cost is low and the possibility ofswitching to another brand in
case of dissatisfaction is relatively low.

The bargaining power of suppliers

This ranges from the threat of forward integration to the threat of cutting off supplies. As
McDonalds has a great deal of influence over their suppliers, due to the fact that it aids them and
trains them, the threats from suppliers are low. Due to the scale of McDonalds operations,
suppliers are keen to retain their contracts with the firm. McDonalds internationalisation could also
mean greater sales potential for suppliers.

The rivalry between firms of the same sector

The concentration of firms within the fast food industry is low due to the established presence of
McDonalds, Burger King and KFC. However, in certain markets, McDonalds will face competition
from established domestic fast-food outlets.
Prepared by: Jay H. Shah, Department of Technology Management, CSPIT, CHARUSAT

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IMPORTANT TO DISCUSS
Before McDonalds entered the European market, only few people believed that fast food could be
successful in Europe. Why McDonalds succeeded? What strategies it followed? How did it differ
strategies in Asia?

Despite global operations, McDonalds stay in close contact with its customers, who want good taste, fast & friendly services clean surroundings, and
quality. It is interesting that McDonalds was one of the first restaurants in Europe to welcome families with children. Not only the children are welcomed but
in many restaurants they are also entertained with crayons and paper, a playland, and clown Ronald McDonald, who can speak 20 languages.

Whereas in Asia, the trend is different. The people in Asia want food as per their taste, which McDonalds served them. They prepared their menus, which
included regional taste of people.

Prepared by: Jay H. Shah, Department of Technology Management, CSPIT, CHARUSAT

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IMPORTANT TO DISCUSS
Should McDonalds expand its menu? If no, than why not? If yes,
what kinds of products should it add?

McDonalds do not need to expand its menu. McDonalds has been famous and liked for its very short and well prepared traditional menu, which people
loves to have in their day to day life. Even expanding the menu requires more resources for varieties and more skilled persons. Though it can add some
items according to regional taste but it should not change its traditional menu of burgers.

Prepared by: Jay H. Shah, Department of Technology Management, CSPIT, CHARUSAT

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IMPORTANT TO DISCUSS
Why is McDonalds Successful in many countries around the world?
We can point out following points for McDonalds success story
around the world.

Quality, Service, Cleanliness & Value.

Innovative way of presenting itself among people.
Welcoming all categorys people.
Regional taste and menu.
Various kinds of ventures in market.
Increasing demand of fast food over the world.

Prepared by: Jay H. Shah, Department of Technology Management, CSPIT, CHARUSAT

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CONCLUSION
McDonalds effectiveness and profitability is obviously well supported by
their strong competitive position and market share in their primary
product market.
Its international success is achieved by the companys strategy and
tactics, which complement each other and work in harmony,providing
the optimum return bounded by efficiency.
The companyis thriving asit is both effective (doing things right) and
efficient (doing the right thing).
McDonalds portfolio of products is wellmanaged and ensures the best fit
between the companys strengths and weaknesses and for offsetting the
threats found inits competitive environment. In considering the strong
competitive
position
of Management,
the firm
inCHARUSAT
a highly attractive market.
Prepared
by: Jay H. Shah, Department
of Technology
CSPIT,

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IF YOU WORK JUST FOR MONEY, YOU'LL NEVER

MAKE IT, BUT IF YOU LOVE WHAT YOU'RE DOING
AND YOU ALWAYS PUT THE CUSTOMER FIRST,
SUCCESS WILL BE YOURS.
-Ray Croc
Prepared by: Jay H. Shah, Department of Technology Management, CSPIT, CHARUSAT