According to a McDonald's corporate press release:

"i'm lovin' it is a key part of McDonald's business strategy to

connect with customers in highly relevant, culturally significant
ways around the world."

Translation: the focus groups they used happen to listen to rap

and hip-hop. In an effort to show that McDonald's is "down" with
their customers, they bought off a few rap artists to pose with this
goofy white guy and their dumbass mascot:

55
55
Introduction

McDonald as being ninth most valuable brand in the world

which has replaced the US army as the Nation’s largest job
training organization &Controls the market share of more than 3
food chains taken together in America started in 1940.
McDonald's Corporation (MCD) is the world's largest chain of fast
food restaurants, serving nearly 47 million customers daily.
McDonald's primarily sells hamburgers, cheeseburgers, chicken
products, French fries, breakfast items, soft drinks, milkshakes
and desserts. More recently, it has begun to offer salads, wraps
and fruit. Many McDonald's restaurants have included a
playground for children and advertising geared toward children,
and some have been redesigned in a more 'natural' style, with a
particular emphasis on comfort: introducing lounge areas and
fireplaces, and eliminating hard plastic chairs and tables.

Company has also expanded the McDonald's menu in recent

decades to include alternative meal options like salads and snack
wraps in order to capitalize on growing consumer interest in
health and wellness.

Each McDonald's restaurant is operated by a franchisee, an

affiliate, or the corporation itself. The corporations' revenues
come from the rent, royalties and fees paid by the franchisees, as
well as sales in company operated restaurants. McDonald's
revenues grew 27% over the three years ending in 2007 to $22.8
billion, and 9% growth in operating income to $3.9 billion
55
 McDonalds’s success is the result of superior products, high
standards of performance, distinctive competitive strategies and
the high integrity of our people. McDonalds is continuing to
expand and introduce new alternative beverages in the market.
Approximately 85% of McDonald’s restaurant businesses world-
wide are owned and operated by franchisees .All franchisees are
independent, full-time operators. McDonald’s was named
Entrepreneur’s Number-one franchise for 1997

McDonald’s corp. is currently one of the most successful

consumer products company in the world with annual revenues
exceeding $23 million and has more than 1.6 million employees.

McDonald’s products are recognized and are most respected all

around the globe. Currently, its divisions operate in all over the
world in beverages, snack foods, and restaurants. The
corporations increasing success has been based on high
standards of performance, marketing strategies, competitiveness,
determination, commitment, and the personal and professional
integrity of their people, products and business practices.

McDonald’s believes their success depends upon the quality

and value of their products by providing a safe, whole some,
economically efficient and a healthy environment for their
customers; and by providing a fair return to their investors while
maintaining the highest standards of integrity.
55
McDonald's - A Global Phenomenon

McDonald's opened its doors in India in October 1996. Ever

since then, our family restaurants in Mumbai, Delhi, Pune,
Ahmedabad, Vadodara, Ludhiana, Jaipur, Noida Faridabad,
Doraha, Manesar and Gurgaon have proceeded to demonstrate,
much to the delight of all our customers, what the McDonald's
experience is all about. Our first restaurant opened on 15th April
1955 in Des Plaines, Illinois, U.S.A. Almost 50 years down the line,
we are the world's largest food service system with more than
30,000 restaurants in 100 countries, serving more than 46 million
customers every day.

Locally Owned
55
 McDonald’s in India is a 50-50 joint venture partnership
between McDonald’s Corporation [USA] and two Indian
businessmen. Amit Jatia’s company Hardcastle Restaurants Pvt.
Ltd. owns and operates McDonald's restaurants in Western India.
While Connaught Plaza Restaurants Pvt. Ltd headed by Vikram
Bakshi owns and operates the Northern operations.

Amit Jatia and Vikram Bakshi are like-minded visionaries

who share McDonald's complete commitment to Quality, Service,
Cleanliness and Value (QSC&V). Having signed their joint-venture
agreements with McDonald's in April 1995, they trained
extensively, along with their Indian management team, in
McDonald's restaurants in Indonesia and the U.S.A. before
opening the first McDonald’s restaurant in India.

History
55
The McDonald's History - 1965 to 1973

McDonald's Comes To Wall Street

In 1965 McDonald's went public with the company's
first offering on the stock exchange. A hundred
shares of stock costing $2,250 dollars that day
would have multiplied into 74,360 shares today,
worth approximately $3.3 million on December 31,
2006. In 1985 McDonald's was added to the 30-
company Dow Jones Industrial Average.
A Big Idea Called "Big Mac"
"Introduced systemwide in 1968, the Big Mac was
the brainchild of Jim Delligatti, one of Ray Kroc's
earliest franchisees, who by the late 1960s
operated a dozen stores in Pittsburgh."

The Egg McMuffin

Introduced in 1973, the Egg McMuffin was
developed by owner operator Herb Peterson.
55
The First Ronald McDonald House in Philadelphia, PA
In 1974 Fred Hill of the Philadelphia Eagles teamed
up with McDonald's to create Ronald McDonald
House. Here the families of critically ill children
have a place to call home while they're away from
home as the young patients undergo treatment for
their conditions.
The Happy Meal
Since 1979 the Happy Meal has been making kids
visits that much more special. Clubs the world over
collect Happy Meals toys & boxes.

The Future Begins Now

McDonald's Express for a world that can't slow
down! McDonald's is popping up in more non-
traditional locations like Amoco & Chevron
stations, with full menu offerings & dining room
seating, just like you'll find in a traditional
McDonald's.

Another slide
History of McDonald’s. 55
McDonald's has come a long way ever since it’s beginning
in 1955. Here are a few milestones of the McDonald's
journey...

1955 Ray Kroc opens his first restaurant in Des Plaines, Illinois
and the McDonald's Corporation is created.

1957 Quality, Service, Cleanliness and Value (QSC& V) becomes

the company motto.

1959 The 100th McDonald's opens in Chicago.

1961 Hamburger University opens in Elk Grove, near Chicago.

1963 One billion hamburgers sold. Ronald McDonald makes his

debut.

1964 Filet-O-Fish sandwich is introduced.

1965 McDonald's Corporation goes public.
1967 The first restaurants outside of the USA open in Canada and
Puerto Rico.

1968 The Big Mac is introduced. The 1,000th restaurant opens in

Des Plaines, Illinois.
55
1972 A new McDonald's restaurant opens every day. The Quarter
Pounder is introduced.

1973 Egg McMuffin is introduced.

1974 The first Ronald McDonald House

1983 Chicken McNuggets is introduced. New Hamburger

University campus opens in Oak Brook, Illinois. Set in 80 wooded
acres. Training is provided for every level of McDonald's
management worldwide.

1984 50 billionth hamburger sold. Ronald McDonald Children's

Charities is founded in Ray Kroc’s memory to raise funds in
support of child welfare.

1989 McDonald's is listed on the Frankfurt, Munich, Paris and

Tokyo stock exchanges.

1990 McDonald's opens in Pushkin Square and Gorky Street,

Moscow.

1993 The first McDonald's at sea opens aboard the Silja Europa,
the world's largest ferry sailing between Stockholm and Helsinki.

1994 Restaurants open in Bahrain, Bulgaria, Egypt, Kuwait,

Latvia, Oman, New Caledonia, Trinidad and United Arab Emirates,
bringing the opens in Philadelphia. The Happy Meal is launched.
total to over 15,000 in 79 countries on 6 continents.

1996 McDonald's opens in India – the 95th country.

Background
55
Founded: 1955 Franchising since: 1955

Ray Kroc, a milkshake mixer salesman, ventured to

California in 1954 to visit McDonald's hamburger stand, where he
heard they were running eight mixers at once. Kroc was
impressed by how rapidly customers were served and, seeing an
opportunity to sell many more milkshake machines, encouraged
brothers Dick and Mac McDonald to open a chain of their
restaurants. Kroc became their business partner and opened the
first McDonald's in Des Plaines, Illinois in 1955. McDonald's and
the Golden Arches have since become an internationally-
recognized symbol of quick-service hamburgers, fries, chicken,
breakfast items, salads and milkshakes.
Franchisor is a publicly-held company with 885 employee(s); 20
employee(s) in franchise department.

Franchise Units

U.S. Canadian Foreign Company

Year
Franchises Franchises Franchises Owned
2009 12,221 1,070 12,510 6,357
2008 12,136 1,046 12,283 6,502
2007 11,674 927 10,498 8,078
2006 11,608 890 10,056 8,269
Products of McDonalds
55
 Beverages

Cold-Coffee Ice-Tea

Hot Serves McShakes

55
Coca-Cola Frozen Desserts

55
Flavour Burst Floats

55
McSwirl Soft Serves

Soft Serve Cone 55

 Non- Veg Menu

Filet-O-Fish Chicken Maharaja Mac

55
Chicken McCurry Pan McChicken

55
Chicken McGrill Chicken Mexican Wrap

Veg Menu

55
Crispy Chinese McALOO Tikki

55
McCurry Pan McVeggie

55
Pizza McPuff Paneer Salsa Wrap

Services of McDonalds
55
McDonald's - More Than 15,000 Wi-Fi Enabled Restaurants
Around the Globe!

We believe in bringing you innovative and convenient

services that enhance your McDonald's restaurant visit, and Wi-Fi
is a perfect example.

As McDonald's continues to deliver fast and friendly food

service at more than 30,000 convenient locations around the
world. To access the Wi-Fi services in a restaurant, you need a Wi-
Fi enabled device, such as a laptop or PDA.

Our local service providers provide high-quality Wi-Fi service

through several convenient connection options: on-line credit card
payment, subscriptions, prepaid cards, or (sometimes)
promotional coupons. If you have questions or need technical
help, the Wi-Fi provider's customer support number should be
handy in the restaurant.
55
 Currently there are no roaming capabilities between different
countries, neither for customers nor McDonald's employees. You
will have to connect separately with the respective Wi-Fi service
provider.

Enjoy surfing and working in your local McDonald's!

Connectivity and/or usage fees may apply and be required for Wi-
Fi services. Access details, fees and availability subject to change
without notice.
55
Management structure

Managing Director

Head of Marketing Director of Finance Human Resource head

Accounts Manager
Senior marketing executive Finance manager Employees

Marketing executive Brand Manage Research & Development officer

Assistant Brand Manager

Customer service manager Product Development

Sales manager Market research Team Compensation officer

Branch manager Recruitment & Selection

Training & Development

Branch employees

55
Levels of strategic Management

The products and services mentioned above reflect three

types of major strategies employed by the organization at various
levels. Namely they are:

Corporate strategy
Corporate level strategy fundamentally is concerned with
the selection of businesses in which the company should compete
and with the development and coordination of that portfolio of
businesses.

McDonald's is engaged in. Mc Donald’s only deals in the

restaurant business, so its corporate strategy is a single business
unit strategy, likely of growth. To make this clearer, GE's
corporate strategy is of interrelating business units. Consumer
electrics, submarines, locomotives, light bulbs etc share some
synergies and each is a separate business unit.
55
Corporate level strategy is concerned with:
• Reach - defining the issues that are corporate
responsibilities; these might include identifying the overall
goals of the corporation, the types of businesses in which the
corporation should be involved, and the way in which
businesses will be integrated and managed.
• Competitive Contact - defining where in the corporation
competition is to be localized. Take the case of insurance: In
the mid-1990's, Aetna as a corporation was clearly identified
with its commercial and property casualty insurance
products. The conglomerate Textron was not. For Textron,
competition in the insurance markets took place specifically
at the business unit level, through its subsidiary, Paul
Revere. (Textron divested itself of The Paul Revere
Corporation in 1997.)
• Managing Activities and Business Interrelationships -
Corporate strategy seeks to develop synergies by sharing
and coordinating staff and other resources across business
units, investing financial resources across business units,
and using business units to complement other corporate
business activities. Igor Ansoff introduced the concept of
synergy to corporate strategy.
• Management Practices - Corporations decide how
business units are to be governed: through direct corporate
intervention (centralization) or through more or less
55
 autonomous government (decentralization) that relies on
persuasion and rewards.
Corporations are responsible for creating value through their
businesses. They do so by managing their portfolio of businesses,
ensuring that the businesses are successful over the long-term,
developing business units, and sometimes ensuring that each
business is compatible with others in the portfolio.

Business strategy:

A strategic business unit may be a division, product line, or

other profit center that can be planned independently from the
other business units of the firm.

At the business unit level, the strategic issues are less about
the coordination of operating units and more about developing
and sustaining a competitive advantage for the goods and
services that are produced.

This might be low-cost strategy, differentiation, or focus

strategies. McDonald’s has pursued two strategies since 2003. To
keep up with rapidly changing consumer preferences,
demographics, and spending patterns, McDonald's has introduced
new items (Premium Chicken sandwiches and the Angus Beef
Burger) and campaigns to create more healthy foods (Premium
Salads). The strategy reflects the philosophy that novelty, as
opposed to loyalty to traditional products, is the key determinant
of sales in the fast food industry.
55
 McDonald’s has also focused on increasing sales at existing
restaurants instead of opening new ones. To do so, McDonald's
has remodelled many restaurants, kept stores open longer, and
increased menu options. Nevertheless, new McDonald’s
restaurants are still opening around the world at a rapid rate - the
company plans to open about 1,000 units in 2008, and continues
to grow its restaurant base by 1-2% each year.

At the business level, the strategy formulation phase deals with:

• positioning the business against rivals
• anticipating changes in demand and technologies and
adjusting the strategy to accommodate them
• Influencing the nature of competition through strategic
actions such as vertical integration and through political
actions such as lobbying.

Michael Porter identified three generic strategies (cost leadership,

differentiation, and focus) that can be implemented at the
business unit level to create a competitive advantage and defend
against the adverse effects of the five forces. 55
Functional Level Strategy

The functional level of the organization is the level of the

operating divisions and departments. The strategic issues at the
functional level are related to business processes and the value
chain. Functional level strategies in marketing, finance,
operations, human resources, and R&D involve the development
and coordination of resources through which business unit level
strategies can be executed efficiently and effectively.

Functional units of an organization are involved in higher

level strategies by providing input into the business unit level and
corporate level strategy, such as providing information on
resources and capabilities on which the higher level strategies
can be based. Once the higher-level strategy is developed, the
functional units translate it into discrete action-plans that each
department or division must accomplish for the strategy to
succeed.

55
KEY STEPS TOWARDS STRATEGIC PLANNING
The preparation of a strategic plan is a multi step process
covering Vision, Mission, Objectives, Values, Goals, Strategies and
Programmes.

Vision

Mission

Objectives

Goals

Value

Strategies

Programmes
55
Vision Statement
"McDonald's vision is to be the world's best quick service
restaurant experience. Being the best means providing
outstanding quality, service, cleanliness, & value, so that we
make every customer in every restaurant smile."

Mision statement

 Be the best employer for our people in each community

around the world
 Deliver operational excellence to our customers in each of
our restaurants;
 Achieve enduring profitable growth by expanding the brand
and leveraging the strengths of the McDonald's system
through innovation and technology.
 

Objectives

In a business when a number of brains are working together,

there are always different views on a certain aspect, therefore
55
aims and objectives are used to help them focus on one view on
the aspect which either seems right or is right.
Aims & Objectives help an organisation grow; it is used as a
guideline, a plan & goal. What the organisation is heading for &
how it is heading there & where it is heading? All the answers for
these questions are answered by Aims & Objectives.

The Main Objectives of a Business are:

Sales – Sales revenue is the total amount of money a company

has earned by providing their service or selling their stock.

Growth – An increase in the Business capacity to produce more

stock or provide better or greater service.

Profit – Residual value gained from business operations after

cutting out expenses such as stock cost etc.

Customer Satisfaction – Providing service to customers to their

satisfaction level such as hygienically clean place or high quality
food.

SMART
Before a business can set objectives it is important that they
follow the SMART criteria.
• Specific – Detailed and Exact

• Measurable – Targets should be measurable

• Achievable – Something that can be achieved
55
• Realistic – Targets must be realistic, so that they can be met
• Time Specific – That can be achieved by a deadline

Aims & Objectives of McDonald’s’ – “it’s what I eat and

what I do…I’m lovin’ it”

McDonalds objectives are to reverse the decline of sales, to

continue staying ahead of the competition in the fast food
industry and to find new strategies that would help the restaurant
successfully compete in the a fiercely competitive market.

Goal

McDonalds goal in laid our in their second Worldwide

Corporate Responsibility Report is to communicate our progress
and direction related to the most relevant and material corporate
responsibility - related aspects of their business. To that end, the
report is structured according to key elements of our business
strategy - the “Plan to Win.”

The Plan is a global alignment around five drivers of

exceptional customer experience, all beginning with the letter P.
They have focused on three of the five Ps: Products, People and
Place. (The remaining two are Price and Promotion.)
55
 Values
 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 QSC&V for each &
every customer, each & every time.

 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.

 We believe in the McDonald’s System

McDonald’s business model, depicted by the “three-

legged stool” of owner/operators, suppliers, and company
employees, is our foundation, and the balance of interests
among the three groups is key.
55
 We operate our business ethically

Sound ethics is good business. At McDonald’s, 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

McDonald’s is a publicly traded company. As such, we

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

 We strive continually to improve

55
 We are a learning organization that aims to anticipate
and respond to changing customer, employee and system
needs through constant evolution and innovation.

Strategy

"McDonalds possesses a highly visible and popular

brand image around the world. The firm has grown to become one
of the most popular food brand names in the world, with
continuous increases in exposure in new markets, such as Asia
and Europe, amongst others.

Although McDonalds has been in existence in North

America for many decades, the increasing popularity in new
markets has positioned the firm for continued growth in market
share and customer buying power. The McDonalds strategy map
encompasses four key perspectives:

1) Financial;
2) Customer;
3) Internal Process;
4) Learning.

These perspectives have evolved over time into a well-

defined vision for the corporation, which is to become the most
positive dining experience in the world ("McDonalds")."
55
Key steps towards business strategies

A scan of the internal and external environments forms an

important part of the strategic planning process. Environmental
factors internally affecting the firm can be classified as Strengths
or Weaknesses and those externally affecting to the firm can be
classified as Opportunities and Threats. This is referred to as
SWOT Analysis.

Strengths

 Global brand
55
 McDonald’s has a well-established global brand that
appeals to all age groups and customer segments. In 2005,
McDonald’s placed ninth in the top 100 global brands
ranking of Business Week magazine and Interbrand, a
branding consultancy.
 Strong operational capabilities

McDonald’s has strong operational capabilities which

allow it to provide high quality products and customer
service across its restaurants. The company has a world-
class supply-chain and standardized processes to deliver
products of uniform quality across restaurants, regardless of
their location or nature of operation (company-owned or
franchisee-operated). The company and its partners
purchase food and related items from an approved group of
suppliers.

 Successful items

Some of its products such as Big Mac, and Chicken

McNuggets and have become brands in their own right.
Strong brand draws customers to the company’s restaurants
and provides it with a recognized ’brand currency’ in new
markets.

 Quality Products

McDonalds is the symbol of quality with respect to its

offering.
55
 Weakness

 Weak revenue growth

Low revenue growth suggests that the company has

not been able to expand customer traffic at existing
restaurants thanks mainly to the maturation and saturation
of its key markets.
 Weak product development

McDonalds faces a strong competition and its weak

product development creates problem.

Opportunities

 Expansion

McDonalds is serving only in few cities of Pakistan.

There is a large market for McDonalds still to serve.
Furthermore it has few outlets within cities in which it is
currently serving, so McDonalds also has opportunity to
expand within cities.
 Franchisee-operated restaurants
McDonald’s intends to sell about company-operated
restaurants in the Pakistan to franchisees. The operating
margin of franchisee-operated restaurants is higher than
that of company-operated restaurants.
55
 The sale of company-operated restaurants to
franchisees is likely to increase the overall profitability of
McDonald’s Pakistan’s business.

 Growing dining-out market

As the lifestyle trends of consumers are changing, the

dining out market is growing, that would serve as an
opportunity for the McDonalds

Threats

 Intense competition

McDonald’s restaurants face intense competition from

international, national, regional and local retailers of food
products. The company competes on the basis of price,
convenience, service and quality of food products.

The company’s competition includes restaurants, quick

service eating establishments, pizza parlors, coffee shops,
street vendors, convenience food stores, delicatessens and
supermarkets.

 Growing health consciousness

As the education level in Pakistan has increased in last

few years, health consciousness has also increased .A
growing consciousness of health matters could reduce
McDonald’s revenues
55
 Increased Sales Tax

Sales tax has increased which results in the increased

customer prices and reduced sales level.

Strategic Management Process

The strategic management process of McDonalds is made
up of four elements: situation analysis, strategy formulation,
Internal implementation, and strategy evaluation. These
strategy
Assessment
elements are steps that are performed, in order, when developing
a new strategic management plan. Existing businesses that have
already developed a strategic management plan will revisit these
steps as the need arises, in order to make necessary changes and
improvements
Strategy
Strategy Strategy
Implementatio
Formulation Control
n

Environmental
Analysis
55
Situation Analysis

Situation analysis is the first step in the strategic

management process. The situation analysis provides the
information necessary to create a company mission statement.
Situation analysis involves "scanning and evaluating the
organizational context, the external environment, and the
organizational environment". This analysis can be performed
using several techniques. Observation and communication are
two very effective methods.

To begin this process, organizations should observe the

internal company environment. This includes employee
interaction with other employees, employee interaction with
management, manager interaction with other managers, and
management interaction with shareholders. In addition,
discussions, interviews, and surveys can be used to analyze the
55
internal environment.

Organizations also need to analyze the external

environment. This would include customers, suppliers, creditors,
and competitors. Several questions can be asked which may help
analyze the external environment. What is the relationship
between the company and its customers? What is the
relationship between the company and its suppliers? Does the
company have a good rapport with its creditors? Is the company
actively trying to increase the value of the business for its
shareholders? Who is the competition? What advantages do
competitors have over the company?
Strategy Formulation

Strategy formulation involves designing and developing the

company strategies. Determining company strengths aids in the
formulation of strategies. Strategy formulation is generally
broken down into three organizational levels: operational,
competitive, and corporate.

Operational strategies are short-term and are associated

with the various operational departments of the company, such
as human resources, finance, marketing, and production. These
strategies are department specific. For example, human resource
strategies would be concerned with the act of hiring and training
employees with the goal of increasing human capital.

Competitive strategies are those associated with methods of

55
competing in a certain business or industry. Knowledge of
competitors is required in order to formulate a competitive
strategy. The company must learn who its competitors are and
how they operate, as well as identify the strengths and
weaknesses of the competition. With this information, the
company can develop a strategy to gain a competitive advantage
over these competitors.

Corporate strategies are long-term and are associated with

"deciding the optimal mix of businesses and the overall direction
of the organization" (Coulter, 2005, p. 216). Operating as a sole
business or operating as a business with several divisions are
both part of the corporate strategy.

Strategy Implementation

Strategy implementation involves putting the strategy into

practice. This includes developing steps, methods, and
procedures to execute the strategy. It also includes determining
which strategies should be implemented first. The strategies
should be prioritized based on the seriousness of underlying
issues. The company should first focus on the worst problems,
then move onto the other problems once those have been
addressed.

"The approaches to implementing the various strategies

should be considered as the strategies are formulated”. The
company should consider how the strategies will be put into
55
effect at the same time that they are being created. For example,
while developing the human resources strategy involving
employee training, things that must be considered include how
the training will be delivered, when the training will take place,
and how the cost of training will be covered.

Strategy Evaluation

Strategy evaluation involves "examining how the strategy

has been implemented as well as the outcomes of the strategy”.
This includes determining whether deadlines have been met,
whether the implementation steps and processes are working
correctly, and whether the expected results have been achieved.

If it is determined that deadlines are not being met,

processes are not working, or results are not in line with the
actual goal, then the strategy can and should be modified or
reformulated.

Both management and employees are involved in strategy

evaluation, because each is able to view the implemented
strategy from different perspectives. An employee may recognize
a problem in a specific implementation step that management
would not be able to identify.

The strategy evaluation should include challenging metrics

and timetables that are achievable. If it is impossible to achieve
the metrics and timetables, then the expectations are unrealistic
and the strategy is certain to fail.
55
Conclusion

The strategic management process is a continuous process.

"As performance results or outcomes are realized - at any level of
the organization - organizational members assess the
implications and adjust the strategies as needed". In addition, as
the company grows and changes, so will the various strategies.
Existing strategies will change and new strategies will be
developed. This is all part of the continuous process of improving
the business in an effort to succeed and reach company goals.

BCG Matrix

The need for strategy in order to expand its existing product

in very promising markets for McDonald’s is very essential.
McDonald’s along with KFC and other major fast food chains have
dominated the American continent as well as elsewhere. BCG
Matrix:

The market growth rate measures industry attractiveness.

The underlying theory for examining market growth rate is the
industry life cycle. The BCG assumes that growth rates, life cycle
stages affect a firm’s finances.
55
Placing products in the BCG matrix results in 4 categories in a
portfolio of a McDonalds:

1. Stars (=high growth, high market share)

o Frequently roughly in balance on net cash flow. However if

needed any attempt should be made to hold share, because
the rewards will be a cash cow if market share is kept. So,
McDonald’s USA is under Star position.

2. Cash Cows (=low growth, high market share)

55
 o Profits and cash generation should be high, and because of
the low growth, investments needed should be low. Keep
profits high.

3. Dogs (=low growth, low market share)

o Avoid and minimize the number of dogs in a company.

o Beware of expensive ‘turn around plans’.

4. Question Marks (= high growth, low market share)

o Have the worst cash characteristics of all, because high
demands and low returns due to low market share

GE Matrix
Growth matrix The GE Matrix is a model to perform business
portfolio analysis on the Strategic Business Units of a corporation.
The General Electronics of USA with the support of consulting firm
Mckinsey and Co. developed a more complicated matrix as a
technique of portfolio analysis. The GE business screen can be
shown with the help of the following diagram:
55
McDonald don’t have GE matrix

7s MCKINSEY’s MATRIX

Mckinsey developed a new framework to better represent

the challenges of Services Marketing and for analysis and
improving organization’s effectiveness i.e. the 7S model which
can be shown with the help of the following diagram:
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 Most of us grew up learning about 'the 4Ps' of the marketing
mix: product, price, place, promotion. And this model still works
when the focus is on product marketing. However most developed
economies have moved on, with an ever-increasing focus on
service businesses, and therefore service marketing.

To better represent the challenges of service marketing,

McKinsey developed a new framework for analyzing and
improving organizational effectiveness, the 7S model:

The 3Ss across the top of the model are described as 'Hard Ss':

• Strategy: The direction and scope of the company over the

long term.
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• Structure: The basic organization of the company, its
departments, reporting lines, areas of expertise, and
responsibility (and how they inter-relate).

• Systems: Formal & informal procedures that govern everyday

activity, covering everything from management information
systems, through to the systems at the point of contact with the
customer (retail systems, call centre systems, online systems,
etc).

The 4Ss across the bottom of the model are less tangible, more
cultural in nature, and were termed 'Soft Ss' by McKinsey:

• Skills: The capabilities & competencies that exist within the

company. What it does best.

• Shared values: The values and beliefs of the company.

Ultimately they guide employees towards 'valued' behaviour.

• Staff: the Company’s people resources and how they are

developed, trained, and motivated.

• Style: The leadership approach of top management and the

company's overall operating approach.

In combination they provide another effective framework for

analyzing the organization & its activities. In a marketing-led
company they can be used to explore the extent to which the
company is working coherently towards a distinctive & motivating
place in the mind of consumer.
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Organizational Chart

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Supply Chain
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 Our growth plan for the next three years is more a
function of getting our logistics and cold chain right rather
than going to far off places.“

- Amit Jetia, managing director, McDonald's India, Mumbai

Joint Venture,

Supply
chain

Local
Overvie Cold Supplier
Sourcin
w chain s
g

Supply Chain

Suppliers Manufacturing Distributors Retailers Customers

Strategies of McDonalds
Following are the strategies adopted by McDonalds
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• International Growth
McDonalds has expanded to international markets in
the face of increasing regulations in the United States and
domestic market saturation. They initially entered
international markets by leveraging standardized product
offerings, clean and bright environments, and American
brand equity.

However, recent years have seen McDonalds adapt to

local regions by remodeling its retail space while changing
the product line to appeal to local tastes. While the strategy
has paid off well in the short term and McDonalds has
realized that they must adapt to each country they enter,
their tactics of both catering to local tastes and changing the
restaurant’s design and appeal is diluting brand equity. This
will have disastrous consequences in the long term.

 US Market Saturation – Slow Expansion

 Focus on Same Store-Sales Growth and Improving
Delivery Outlets
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 • Forward Integration

A business strategy that involves a form of vertical

integration whereby activities are expanded to include control
of the direct distribution of its products.

 Distribution through Franchisees

• Backward Integration

Acquiring ownership of one's supply chain, usually in the

hope of reducing supplier power and thus reducing input
costs.

 Local Sourcing, Cold Chain, Suppliers

• Market penetration & Development

Market penetration occurs when a company

enters/penetrates a market with current products. The
best way to achieve this is by gaining competitors'
customers (part of their market share).

Other ways include attracting non-users of your

product or convincing current clients to use more of your
product/service (by advertising etc). Ansoff developed the
Product-Market Growth Matrix to help firms recognise if
there was any advantage of entering a market.
 McDelivery
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 New Product Development

Product development is the process of designing,

creating, and marketing an idea or product. The product
can either be one that is new to the marketplace or one
that is new to your particular company, or, an existing
product that has been improved.

In many instances a product will be labeled new and

improved when substantial changes have been made.

Aloo Tikki, Salad

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Recommendation

 Increase and Provide Delivery Services to every

Potential Customer-Potential Segment.
 Increase Drive through Branches.
 Remove U.S. Branding Consciousness.
 More Awareness to remove Obesity link with
McDonald’s.
 Understand Local Tastes.

Conclusion
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 If the Golden Arches are more representative of America
than GEORGE BUSH is, McDonalds isn’t exactly an alien entity
in India too. After spending Rs. 25 crores on its Indian
operations, the global food-chain is out to make its presence
felt in every part of the country and it has succeeded in
serving up an exciting new combo to Indian customers.

Take two pieces of bun, put in a patty and garnish it with

two equations. Price leads to volumes. Children bring in the
family that explains why McDonalds is the only food chain in
India that can afford to stand tall.

McDonalds is in the throes of a major expansion. Rs.30

crores plan will be funded through internal accruals and loans.
It is adding 10 outlets to the 25 existing ones-13 in Delhi and
12 in Mumbai. Early next year, McDonalds will foray into the
southern metros, starting with franchisee operations.
McDonalds in corporate India is also associated with the
excellent in Supply Chain Management

Increase its product line. To have more variety to choose

from, to include more deserts and more items like Pizza McPuff. It
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should continue to provide better and quick service. By lower the
supply chain cost so that it helps in cost reducing. McDonald is
willing to expand their Happy Meal choices to attract and retain
customers& can also Introduction of MacAfee’s serving premium
and specialty coffees and other beverages and other products
such as cakes, pastries etc in the existing McDonald’s. Focus on
gifts for all generations i.e. youth, kids’ especially senior citizen
which is a completely new concept.

McDonald should provide special promotions during

festivals. They should increase the space for provision of birthday
party areas& try to sponsor college festivals. After analyzing the
marketing mix of McDonald’s, it is clear that the company can be
said to be `global’, i.e. combining elements of globalization and
internationalization. McDonald’s have achieved this through
applying the maxim, `think global, and act local’

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