A brief history of McDonald's

PHOTO: The first McDonald's was built in 1940 by the .(McDonald brothers (Dick and Mac

1954
 Ray Kroc became the first franchisee appointed by Mac and Dick McDonald in San .Bernardino, California

1955
 Ray Kroc opened his first restaurant in Des Plaines, Illinois (near Chicago), and .the McDonald's Corporation was created

1957
 Quality, Service, Cleanliness and Value (Q.S.C. & V.) became the company .motto

1959
. The 100th McDonald's opened in Chicago
PHOTO: The McDonald brothers (Dick right and Mac center) .discussing plans with an executive

1961
 Ray Kroc bought all rights to the McDonald's concept .from the McDonald's brothers for $2.7 million  Hamburger University opened in Elk Grove, near .Chicago

1963
. One billion hamburgers sold . The 500th restaurant opened . The 500th student graduates from Hamburger University . Ronald McDonald made his debut . McDonald's net income exceeded $1 million

1964
. Filet-o-Fish sandwich introduced

1965
 McDonald's Corporation went public. Per earning ratio varies from 10 to 22 .during year; stock price range, 15 - 33.5

1966
. McDonald's listed on the New York stock exchange on the 7th May

1967
. The first restaurants outside of the USA opened in Canada and Puerto Rico

1968
. The Big Mac was introduced . The 1,000th restaurant opened in Des Plaines, Illinois

1970
. McDonald's restaurant in every US state  Ray Cesca (Director of Global Purchasing of the McDonald's Corporation) has admitted that when McDonald's opened stores in Costa Rica in 1970, they were using .beef from cattle raised on ex-rainforest land, deforested in the 1950's and 1960's . New countries - Virgin Islands, Costa Rica
.PHOTO: The first Japanese McDonald's in Tokyo

1971
 The Egg McMuffin sandwich was test marketed in the US as McDonald's first .breakfast menu item  McDonald's Japanese President, Den Fujita, stated "the reason Japanese people are so short and have yellow skins is because they have eaten nothing but fish and rice for two thousand years"; "if we eat McDonald's hamburgers and potatoes for a thousand years we will become taller, our skin become white and our ."hair blonde . New countries - Japan, Holland, Australia, Germany, Panama, Guam

1972
. Assets exceeded $500 million and sales surpassed $1 billion . A new McDonald's restaurant opening every day . New countries - France, El Salvador . The 2,000th restaurant opened in Des Plaines, Illinois . The Quarter Pounder was introduced  Ray Kroc made a $250,000 donation to the controversial 1972 presidential campaign of Richard Nixon, a donation which was perhaps a subject of investigation during the Watergate corruption scandal. Passages in the 'Behind The Arches' book (written with McDonald's backing and assistance) state that the donation came around the very time that McDonald's franchisees were lobbying to prevent an increase in the minimum wage, and to get legislation (dubbed 'The McDonald's Bill') passed to be .able to pay a sub- minimum wage to some young workers

1973
 McDonald's Golden Arches Restaurants Limited founded in UK as a joint venture partnership between the McDonald's Corporation and two businessmen; one British, .one American . New country - Sweden . Egg McMuffin introduced

1974
 The 3,000th McDonald's restaurant was opened in Woolwich (south east London) in October, the first in the UK. The company admitted that NOBODY went in and .later decided to target children with TV ads . The UK Head Office was sited in Hampstead, North London

 Up to 1974, McDonald's employees in Puerto Rico were unionised, but the company was sold to a new franchisee. A dispute followed, closing all the stores and .McDonald's pulled out of Puerto Rico. They reopened in 1980 with non-union labour . New countries - England, Netherlands, Antilles, Guatemala . The first Ronald McDonald House opened in Philadelphia  At a San Francisco Labor Board hearing, McDonald's workers testified that liedetectors had been used to ask about union sympathies, following which the company .was threatened with legal action
PHOTO: McDonald's buildings have undergone dramatic changes from the first one opened by Kroc in 1955 (top) which is now preserved as a museum, to this ultra modern .(restaurant opened in 1983 in New Orleans (bottom

1975
 The company's first Drive-Thru opened in .Sierra Vista, Arizona  New countries - Hong Kong, Bahamas, .Nicaragua  Fred Turner becomes Chairman, Ray Kroc Senior Chairman, and Ed Schmitt becomes .President . Broadcast advertising appeared in UK cinemas

1976
 McDonald's first UK TV advertisement was .broadcast . 4,000th store opened in Canada . New countries - Switzerland, New Zealand . Largest restaurant opens - with 334 seats

1977
. New countries - Ireland, Austria . Breakfast menu introduced, nationally in America

1978
 The 5,000th restaurant opened in Kanagawa, Japan and it made US $1 million in .its first year . Sundaes introduced in USA  In one store in Chicago (USA), a majority of McDonald's workers joined a union. The company then took legal action to stop recognition for the union unless they .could get a majority in the 8 stores run by the franchisee . New country - Belgium

1979
 A 7 month strike in Dublin (Ireland) lead to recognition of the ITGWU union. In 1985, two union activists won a victory at a labour court after claiming victimisation .and unfair dismissal . New countries - Brazil and Singapore

1980
. The 6,000th restaurant opened in Munich

 After workers in a store in Detroit (USA) joined a union, the company organised a visit by a top baseball star, staff disco, and 'McBingo' prior to elections for union .representation . First floating restaurant on a steamer in Missouri . 1,000th international restaurant opened

1981
. New countries - Spain, Denmark and Malaysia

1982
 Geoffrey Guiliano, a main Ronald McDonald actor, quit and publicly apologised, stating "I brainwashed youngsters into doing wrong. I want to say sorry to children ."everywhere for selling out to concerns who make millions by murdering animals . 7,000th restaurant opened in Washington DC  McDonald's were responsible for food poisoning outbreak caused by E. Coli .bacteria, which affected 47 people in Oregon and Michigan, USA .' Egon Ronay calls McDonald's burgers 'uninspiring . Breakfast was introduced to the British menu
.'PHOTO: The $40 million 'Hamburger University

1983
 The McDonald's Corporation became sole owners of McDonald's in the UK. The Company is .named McDonald's Hamburgers Limited  Five consignments of Brazilian beef are secretly .imported for McDonald's UK stores . The 100th UK restaurant opened in Market Street, Manchester . New country - Norway . Introduction of Chicken McNuggets in USA  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. A lodge with 154 rooms in also on the same site  In Arkansas (USA), the UFCW union, which was interested in recruiting McDonald's workers, was involved in a union dispute at a chicken processing plant supplying McDonald's. The union launched a boycott of McDonald's 'McNuggets' and picketed many of its stores. Stan Stein (McDonald's Head of Personnel and Labour .Relations) spent up to '80%' of a whole year fighting the union's campaign

1984
. Founder Ray Kroc dies .( James Huberty shoots 22 people dead at a McDonald's in San Diego (USA . 50 billionth hamburger sold  Ronald McDonald Children's Charities is founded in his memory to raise funds in .support of child welfare  A McDonald's pamphlet which is distributed to health professionals in the UK :states There is a considerable amount of evidence to suggest that many of the" diseases which are more common in the western, affluent world - diseases such as obesity, diabetes, high blood pressure, heart disease, stroke, and some forms of cancer - are related to diet. The typical western diet is relatively low ".in dietary fibre (roughage) and high in fat, salt and sugar

 McDonald's now serves 17 million customers a day - equivalent to serving lunch to the entire population of Australia and New Zealand. If McDonald's lined up all the -:hamburgers sold since 1955, they would ;Circle the equator 103.75 times• .Reach to the moon and back 5 times•
.PHOTO: Ray Kroc demonstrating his fetish for cleanliness

1985
 London Greenpeace (a radical group of civil rights and environmental campaigners, independent of Greenpeace International) launches a campaign intended to expose the reality behind the advertising .mask of the fast food chains, including McDonald's  Sergio Quintana, the sales director of Coop Montecillos (the sole supplier of beef to McDonald's stores in Costa Rica since 1970), stated on camera that his company's .beef was being supplied to McDonald's in the USA

1986
 Drive-Thru restaurants opened in UK at Fallowfield, Dudley, Neasden and .Coventry  Four workers in Madrid who had called for union elections were sacked by McDonald's. The company was forced to reinstate the workers after the labour court .ruled that the dismissals were illegal . The 200th UK restaurant opened in lpswich
PICTURE: Cover of the "What's wrong with McDonald's?" factsheet produced .by London Greenpeace

 McDonald's became the first UK restaurant group to introduce nutritional information, throughout the country, for the benefit of .customers  London Greenpeace published a 6-sided factsheet entitled "What's Wrong With ."McDonald's? - Everything They Don't Want You To Know . The first UK franchisee-operated restaurant opened in Hayes, Middlesex  The first World Day of Action Against McDonald's was held on 16th October .('(UN 'World Food Day

1987
 The Attorneys General of Texas, California and New York threatened to sue McDonald's under the consumer protection laws over an advertising campaign claiming that McDonald's food is nutritious. The Attorneys General concluded that ".the campaign was deceptive because "McDonald's food is, as a whole, not nutritious  McDonald's is serving 20 million people a day in nearly 10,000 restaurants in 47 .countries . The UK Midlands regional training centre opened in Sutton Coldfield  McDonald's started legal proceedings against the Transnationals Information Centre (an independent research and action group based in London) over a booklet they produced called "Working for Big Mac" which was highly critical of the company's employment practices. The TIC backed down lacking resources to fight the case to trial, discontinued publication and distribution of the booklet (which was .pulped), and the organisation itself went bust

1988

. McDonald's sponsored the Child of Achievement Awards . CFCs ceased to be used for most of McDonald's styrofoam packaging . 300th UK restaurant opened in Dagenham, Essex
PHOTO:An ad in a German newspaper which aims to counter criticism that McDonald's is changing German restaurant traditions .for the worse

1989
 Italian designer Valentino attempts in a Rome court to stop McDonald's opening near the Piazza di Spagna, ."complaining of "noise and disgusting odours  McDonald's is listed on the Frankfurt, Munich, Paris and .Tokyo stock exchanges  The Bournemouth Advertiser (UK) is threatened with a libel action by McDonald's over an article which discussed the captive-bolt method of slaughter for cattle. The .newspaper backed down and published an apology . Michael Quinlan is appointed Chairman and Chief Executive Officer . The UK company's name was changed to McDonald's Restaurants Limited  McDonald's send undercover private investigators to infiltrate London .Greenpeace over a period of 20 months  McDonald's charity for child welfare fundraising, Ronald McDonald Children's .Charities, was registered  McDonald's Child of Achievement Awards were presented by UK Prime Minister .Mrs Margaret Thatcher . The UK Manchester regional training centre was opened  McDonald's stores in Philadelphia (USA) were independently surveyed and accused of having racist differential wage rates between the inner-city stores (mostly .(black workers) and the suburbs (mostly white workers

1990
 September - libel writs were served on five supporters of London Greenpeace, three of whom feel unable to fight the case. The McLibel Support Campaign is set up .to generate solidarity and financial backing for the McLibel Defendants . McDonald's opened in Pushkin Square and Gorky Street, Moscow . McDonald's opened at a UK airport at North Terminal, Gatwick . The first Ronald McDonald House opened at Guy's Hospital, London  McDonald's Child of Achievement Awards attended by HRH The Princess of .Wales

1991
 McDonald's were responsible for a serious food poisoning outbreak in Preston (UK), when several customers were hospitalised as a result of eating undercooked .burgers contaminated by potentially deadly E.Coli 0157H bacteria . The 150th Ronald McDonald House opened in Paris . McDonald's opened in Beijing, China  The 400th UK restaurant (and first in Northern .Ireland) is opened in Belfast  McDonald's opens in Hampstead (North London) .despite strong opposition from local residents
.PHOTO: A 1950's newspaper advert

1992

 Mark Hopkins, a McDonald's worker in Manchester (UK), was fatally .electrocuted on touching a 'fat filtering unit' in the 'wash-up' area of the store  The manager of a Newcastle store (UK) was jailed for 6 months for inducing a crew member to phone through a hoax bomb threat to nearby Burger King in order to .boost sales at McDonald's  McDonald's Child of Achievement Awards attended by UK Prime Minister John .Major . McDonald's opened in a railway station at Liverpool Street, London  A UK Health & Safety Executive report made 23 recommendations for improvements in the safety of employees. One of its conclusions was "The application of McDonald's hustle policy [ie. getting staff to work at speed] in many restaurants ".was, in effect, putting the service of the customer before the safety of employees  Visitors to Salisbury Cathedral (UK) are offered two burgers for the price of one if they buy a commemorative parchment scroll. The idea is dropped when the bishop .gets back from holiday . First restaurant in a European hospital opened at Guy's Hospital, London

1993
 The first McDonald's at sea opened aboard the Silja Europa, the world's largest .ferry sailing between Stockholm and Helsinki  The Paris planning authorities refuse permission for a McDonald's under the Eiffel .Tower  The second Ronald McDonald House opened at Alder Hey Children's Hospital, .Liverpool . 500th UK restaurant opened in Notting Hill Gate, London  First UK operated restaurant on a ship opened on the Stena Sealink ferry ."Fantasia" sailing between Dover and Calais  McDonald's sponsored athletics in the UK through the McDonald's Young .Athletes' League and the International invitational meeting the McDonald's Games

1994
. McLibel Trial starts on 28th June  Restaurants opened in Bahrain, Bulgaria, Egypt, Kuwait, Latvia, Oman, New Caledonia, Trinidad and United Arab Emirates, bringing the total to over 15,000 in 79 .countries on 6 continents . McDonald's celebrated twenty years of operating in the UK  McDonald's environmental image was revealed to be a sham, and customers being conned when it was discovered that rubbish which customers were asked to put into .separated recycling bins throughout New Zealand stores was sent to the tip  McDonald's achieved the highest ever grade under the Royal Society for the .Prevention of Accidents (RoSPA)Quality Safety Audit scheme  McDonald's was voted the 'Most Parent Friendly' restaurant in the UK for the second successive year by the Tommy's Parent Friendly Campaign, supported by the .Daily Telegraph  Workers in an Ontario store (Canada) joined a union, but the company managed to .avoid recognition by ensuring victory in Labour Board sponsored elections  The McLibel Defendants issue a countersuit for libel against McDonald's over the .company's accusation in a leaflet that they are telling lies  Five McDonald's managers are arrested in Lyon, France for trying to rig union .elections  On 1st October, McDonald's UK executives held a celebration along with a jazz band and clown at their Woolwich store to mark 20 years since this first store opened

in the UK. Twenty five London Greenpeace and McLibel supporters gathered with a banner reading "20 Years of McGarbage" and handed out 4000 "What's Wrong With .McDonald's?" leaflets to passers-by  In October, there is an demonstration at McDonald's European headquarters in London where sackfuls of the company's litter picked up off the streets are returned. 500 people attend the National March Against McDonald's through central London to protest against the company's exploitation of people, animals and .the environment  The company threatens legal action against a topless ."restaurant in Australia called "McTits
PHOTO:An ad in a German newspaper which aims to counter criticism .that McDonald's is changing German restaurant traditions for the worse

1995
 McLibel Trial becomes the longest libel trial in British .history on Day 102 in March  On 15th April, there were international protests to mark the 40th anniversary of the opening of the world's first store of the McDonald's Corporation, and to celebrate 10 years of co.ordinated international resistance to McDonald's  On the first anniversary of the McLibel Trial (28th June), it becomes known that McDonald's had initiated secret settlement negotiations and had twice flown members of their US Board of Directors to London .to meet with the McLibel Defendants in an attempt to bring the case to an end  12th October, the third anniversary of the death of Mark Hopkins, was a Day of .Solidarity With McDonald's Workers in the UK  On 16th October, the 11th annual Worldwide Day of Action Against McDonald's, there were protests in at least 20 countries. In the UK, at least 250 of the company's .600 stores were leafletted  On 11th December (Day 199 of the trial), the McLibel Trial becomes the longest .civil case in English history  Following widespread opposition by local residents, McDonald's were refused .permission to open an outlet at their European headquarters in north London

1996
. February 16th 10am, the McSpotlight website was launched  In March, the public's intense concern over the links between the cattle disease BSE and its human equivalent CJD forced McDonald's UK to ban British beef. The company did not sell any beef products for a week while supposedly waiting for beef .supplies to arrive from other EU countries . The "Vegetable Deluxe" was launched in the UK . McDonald's opened stores in India  McDonald's and Disney announced a deal giving McDonald's exclusive rights to use characters from Disney films in its promotions around the world for 10 years. .Commentators called it the biggest global marketing alliance yet devised . McDonald's opened a store in Belarus, its 100th country  The movie star Robin Williams turned down a million-pound offer to advertise .McDonald's  McDonald's threatened the owner of a UK sandwich bar called "McMunchies" with legal action for breach of trademark. A retired Scottish school-teacher called Ronald McDonald, and the chief of the McDonald clan in Scotland were both outraged at this further attempt by McDonald's to claim global dominion over the

prefix "Mc" and the name "McDonald" which has been an Irish and Scottish family .name for centuries  The Supreme Court of Denmark ruled against McDonald's claim that a sausage .stand called "McAllan's" was in breach of its trademark  Following widespread opposition by local residents in Winchmore Hill (north London) which put a lot of pressure on the local MP (Michael Portillo, the Defence Secretary), McDonald's were refused permission to convert the local Conservative .Association HQ into a Drive-Thru  McDonald's sued for breach of trademark a Jamaican fast-food company (called the McDonald's Corporation Limited) which had been operating in Jamaica since the early 1970's. The Jamaican company succeeded in getting information from the McLibel Trial taken from the Internet ruled admissible in the case, and in getting an order barring McDonald's from opening stores in the country until the courtcase was .completed  McDonald's succeeded in its trademark battle in South Africa, when an appeal .court prohibited competitors from using its name and the golden arches symbol  McDonald's began spending $200 million on a promotional blitz in the USA & Canada to lure adults to visit their outlets. This included the launch of the new adult .burger, the "Arch Deluxe" in May. Despite this blitz, US sales continued to fall  The parents of a child, who died from E.Coli 0157 food poisoning after eating McDonald's burgers in Spain and England, began legal proceedings for compensation in the USA. Meanwhile, three children who suffered E.Coli 0157 food poisoning in England also from McDonald's burgers were granted legal aid to sue McDonald's and .their supplier McKey's  McDonald's opened the world's first fast-food ski-through in the Lindvallen resort .((Sweden  The McLibel Trial became the longest trial of any kind in English legal history in November. The evidence was completed in July, and the closing speeches in .December, but the Judge reserved his Judgment until the following year

The founder of the corporation
PHOTO: Ray Kroc

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McDonald's USA Nutrition Spotlight

McDonald’s serves a range of high-quality foods that can fit into a balanced diet. We believe that accurate and accessible nutrition information help guests make informed menu choices. It’s why we have provided this information for more than 30 years. The links below will provide you with tools and .information to help you make choices that are right for you and your lifestyle

McDonald’s now brings burger aficionados an extraordinary burger …experience with A third-pound of 100% Angus beef so thick and juicy it practically• melts in your mouth Fresh toppings that are new for McDonald’s, like sautéed• mushrooms, red onion slices, crinkle cut pickles and thick tomato slices all served between a perfectly toasted bakery-style sesame seed roll Three varieties to fall in love with: Angus Deluxe (leaf lettuce,• tomatoes, red onions), Bacon and Cheese, and Mushroom and Swiss

Marketing at McDonald’s
Introduction
McDonald’s is one of the best known brands worldwide. This case study shows how McDonald’s aims to continually build its brand by listening to its customers. It also identifies the .various stages in the marketing process Branding develops a personality for an organisation, product or service. The brand image represents how consumers .view the organisation Branding only works when an organisation behaves and presents itself in a consistent way. Marketing communication methods, such as advertising and

promotions, are used to create the colours, designs and images which give the brand its recognisable face. At McDonald’s this is represented by its familiar logo – the .Golden Arches In all its markets, McDonald’s faces competition from other .businesses ,Additionally, economic, legal and technological changes social factors, the retail environment and many other .elements affect McDonald’s success in the market Marketing involves identifying customer needs and requirements and meeting these needs in a better way than competitors. In this way a company creates loyal .customers The starting point is to find out who potential customers are not everyone will want what McDonald’s has to offer. The – people McDonald’s identifies as likely customers are known .as key audiences Having identified its key audiences, a company has to ensure a marketing mix is created that appeals specifically to those people. The marketing mix is a term used to describe the four main marketing tools – the 4Ps

The marketing mix and market research

Marketing Objectives
A marketing strategy must be created in order to determine .the means by which a set of clear objectives may be met ,Objectives communicate what marketers want to achieve guide marketing actions and are used to measure how well a ,plan is working. They can be related to market share, sales reaching the target audience and creating awareness in the .marketplace Long-term objectives are broken down into shorter-term measurable targets, which McDonald’s uses as milestones .along the way Results can be analysed regularly to see whether objectives are being met. This type of feedback allows the company to .change plans and allows flexibility Once marketing objectives have been established, the next stage is to define how they will be achieved. The marketing .strategy is the statement of how objectives will be delivered It explains what marketing actions and resources will be used .and how they will work together .At this point the marketing mix is put together

The 4Ps

i. Product
The important thing to remember when offering menu items to potential customers is that there is a huge amount of choice available to those potential customers with regard to how

.and where they spend their money Therefore McDonald’s places considerable emphasis on developing a menu which customers .want. Market research establishes exactly what this is However, customers’ requirements change over time. What is fashionable and attractive today may be discarded tomorrow. Marketing continuously monitors .customers’ preferences In order to meet these changes, McDonald’s has introduced new products and phased out old ones over time, and will continue to do .so Care is taken not to adversely affect the sales of an existing option by introducing a new option which will cannibalise .(its sales (trade off McDonald’s knows that sales of products on its menu will vary at different points in their life cycle as is illustrated on .the graph to the right

Marketing at McDonald’s

The type of marketing undertaken and the resources invested will be different depending on the stage a product has reached. For example, the launch of a new product will .typically involve television and other advertising support At any time a company will have a portfolio of products, each in a different stage of its cycle. Some of McDonald’s options are growing in popularity while arguably the Big Mac is at .the ‘maturity’ stage The customer’s perception of value is an .important determinant of the price charged Customers draw their own mental picture of what a product is worth. A product is more than a physical item; it also has .psychological connotations for the customer The danger of using low price as a marketing tool is that the customer may feel that a low price is indicative of compromised quality. It is important when deciding on the price to be fully aware of the .brand and its integrity A further potentially adverse consequence of price reduction is that competitors match the lower prices resulting in no extra demand. This means the profit margin has been

ii. Price

.reduced without increasing the sales The promotions aspect of the marketing mix covers all types .of marketing communications One of the methods employed is advertising, sometimes known as ‘above the line’ activity. Advertising is conducted on TV, radio, in cinema, online, using poster sites and in the .press for example in newspapers and magazines What distinguishes advertising from other marketing communications is that media owners are paid before the .advertiser can take space in the medium Other promotional methods include sales promotions, point ,of sale display, merchandising, direct mail, telemarketing ,exhibitions, seminars, loyalty schemes, door drops .demonstrations, etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that provides the most effective results. For example, TV advertising makes people aware of a food item and press advertising provides more detail. This may be supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on .buying the item

iii. Promotions

Marketing at McDonald’s

It is imperative that the messages communicated support each other and do not confuse customers. A thorough understanding of what the brand represents is the key to a .consistent message The purpose of most marketing communications is to move the target audience to some type of action. This may be to buy the product, visit a restaurant, recommend the choice to .a friend or increase purchases of the menu item Key objectives of advertising are to make people aware of an .item, feel positive about it and remember it The more McDonald’s knows about the people it is serving, the more it is able to communicate messages which appeal to .them Messages should gain customers’ attention and keep their interest. The next stage is to get them to want what is offered. Showing the benefits which they will obtain by taking action is usually sufficient. The right messages must be targeted at the right audience, using the .right media For example, to reach a single professional woman with income above a certain level, it may be better to take an advertisement in Cosmopolitan than Woman’s Own. To

advertise to mothers with families, it may be more effective .to take advertising space in cinemas during Disney films The right media depends on who the viewers, readers or listeners are and how closely they resemble the target .audience Place, as an element of the marketing mix, is not just about the physical location or distribution points for products. It encompasses the management of a range of processes .involved in bringing products to the end consumer

iv. Place

Conclusion
Once the marketing strategy is in place, various responsibilities are given to different individuals so that the plan can be implemented. Systems are put in place to obtain market feedback which measure success against short-term targets. McDonald’s has to ensure that this is done within the .confines of a tightly controlled, finite marketing budget :McDonald’s Corporation Company Profile
Serving billions of hamburgers has put a shine on these arches. McDonald's is the world's #1 fast-food company by sales, with about 32,000 restaurants serving burgers and fries in about 120 countries. (There are nearly 14,000 Golden Arches locations in the US.) The popular chain is well-known for its Big Macs, Quarter Pounders, and Chicken McNuggets. Most of its outlets are free-standing units, but McDonald's also has many units located in airports and retail areas. Each eatery gets its food and packaging from approved suppliers to ensure that a Big Mac purchased in Pittsburgh tastes the same as one bought in Beijing. Nearly 80% of the .restaurants are run by franchisees or affiliates

Contact Information: Adress:2111McDonald’s Dr.Oak Brook,IL60523 Phone:630-623-3000 Fax:630-623-5004 :Financial Highlights.

Key People

• •

Honorary Chairman: Fred L. Turner Vice Chairman and CEO: James A. (Jim) Skinner President, COO, and Director: Ralph Alvarez

Top Competitors

(Burger King Holdings, Inc. (bkc

.Doctor's Associates Inc

(YUM! Brands, Inc. (yum

Financial Highlights

:Fiscal Year End :(Revenue (2008 :(Revenue Growth (1 yr :(Employees (2008 :(Employee Growth (1 yr

December M 23522.40 3.20% 400,000 2.60%

McDonald's Income Statement
Top of Form

income All amounts in millions of US Dollars .
Bottom of Form

A

10974

except per share amounts

View: Annual | Quarterly
Dec 08 Dec 07 Dec 06

Revenue

23,522.4

22,786.6

21,586.4

Cost of Goods Sold

14,883.2

14,881.4

14,602.1

Gross Profit

8,639.2

7,905.2

6,984.3

Gross Profit Margin

36.7%

34.7%

32.4%

SG&A Expense

2,355.5

2,367.0

2,337.9

Depreciation & Amortization

1,207.8

1,214.1

1,249.9

Operating Income

6,680.6

3,982.2

4,568.4

Operating Margin

28.4%

17.5%

21.2%

Nonoperating Income

237.7

(103.2)

(680.7)

Nonoperating Expenses

(522.6)

--

--

Income Before Taxes

6,158.0

3,572.1

4,166.4

Income Taxes

1,844.8

1,237.1

1,293.4

Net Income After Taxes

4,313.2

2,335.0

2,873.0

Continuing Operations

4,313.2

2,335.0

2,873.0

Discontinued Operations

0.0

60.1

671.2

Total Operations

4,313.2

2,395.1

3,544.2

Total Net Income

4,313.2

2,395.1

3,544.2

Net Profit Margin

18.3%

10.5%

16.4%

($) Diluted EPS from Total Net Income

3.76

1.98

2.83

Dividends per Share

1.63

1.50

1.00

Data Definitions

Morningstar, Inc. Financial Data provided by 2009 ©

McDonald's Balance Sheet
Top of Form

balance All amounts in millions of US Dollars .
Bottom of Form

A

10974

except per share amounts

View: Annual | Quarterly

Assets

Dec 08

Dec 07

Dec 06

Current Assets

Cash

2,063.4

1,981.3

2,136.4

Net Receivables

931.2

1,053.8

904.2

Inventories

111.5

125.3

149.0

Other Current Assets

411.5

421.5

435.7

Total Current Assets

3,517.6

3,581.9

3,625.3

Net Fixed Assets

20,254.5

20,984.7

20,845.7

Other Noncurrent Assets

4,689.4

4,825.1

4,552.8

Total Assets

28,461.5

29,391.7

29,023.8

Liabilities and Shareholder's Equity

Dec 08

Dec 07

Dec 06

Current Liabilities

Accounts Payable

620.4

624.1

834.1

Short-Term Debt

31.8

1,991.1

17.7

Other Current Liabilities

1,885.7

1,883.3

2,156.3

Total Current Liabilities

2,537.9

4,498.5

3,008.1

Long-Term Debt

10,186.0

7,310.0

8,416.5

Other Noncurrent Liabilities

2,355.0

2,303.4

2,140.9

Total Liabilities

15,078.9

14,111.9

13,565.5

Shareholder's Equity

Preferred Stock Equity

--

0.0

0.0

Common Stock Equity

13,382.6

15,279.8

15,458.3

Total Equity

13,382.6

15,279.8

15,458.3

(.Shares Outstanding (mil

1,079.2

1,079.2

1,079.2

Data Definitions

Morningstar, Inc. Financial Data provided by 2009 ©

Financial Information: McDonald's Financials
Contact this company: 800-244-6227
In order to capture an historical perspective of the business, Hoover's includes McDonald's financial information for prior years. For example, subscribers have access to McDonald's financials that include up to a decade of revenue, employee, and stock data. Detailed McDonald's financials include annual and quarterly .financial information, market data, and comparison data :View a summary of McDonald's's Historical Financial Information
ANNUAL INCOME STATEMENTS
All amounts in millions of US Dollars Year Revenu e 23,522.4 Gross Profit 8,639.2 Operating Income 6,680.6 Total Net Income 4,313.2 Diluted EPS (Net (Income 3.76

Dec 08 Dec 07 Dec 06

22,786.6

7,905.2

3,982.2

2,395.1

1.98

21,586.4

6,984.3

4,568.4

3,544.2

2.83

(Interactive Stock Chart (NYSE : MCD
Latest
(EST 16:00:20 11/18/09)

($) Change

(%) Change

High

Low

$63.98 0.4100+ 0.6450+

$63.98

$63.22

Top of Form

McDonald's Cash Flow Statement
Top of Form

cash All amounts in millions of US Dollars .

A

10974

except per share amounts

Bottom of Form

View: Annual | Quarterly
Dec 08 Dec 07 Dec 06

Net Operating Cash Flow

5,917.2

4,876.3

4,341.5

Net Investing Cash Flow

(1,624.7 )

(1,150.1 )

(1,273.4)

Net Financing Cash Flow

(4,114.5 )

(3,996.3 )

(5,192.3)

Net Change in Cash

82.1

(146.8 )

(2,124.2)

Depreciation & Amortization

1,207.8

1,214.1

1,249.9

Capital Expenditures

(2,135.7 )

(1,946.6 )

(1,741.9)

Cash Dividends Paid

(1,823.4 )

(1,765.6 )

(1,216.5)

Data Definitions

Morningstar, Inc. Financial Data provided by 2009 ©

McDonald's Executives
.executives listed for McDonald's's Oak Brook, IL location 34
Title Honorary Chairman Name & Bio Fred L. Turner Age 76 James A. (Jim) Skinner Age 64 salary $1,337,500 Ralph Alvarez Age 53 salary $967,500 Contact Network

Vice Chairman and CEO

Network

President, COO, and Director

Network

Chief Creative Officer Chief Diversity Officer

Name On File Name On File

Corporate EVP and Global Chief Marketing Officer EVP, General Counsel, and Secretary Corporate EVP and Chief Human Resources Officer Corporate SVP and Corporate Controller Corporate VP, Associate General Counsel, and Assistant Secretary VP Communications, McDonald's USA VP and General Manager, Southern California Region President, Northern Division, McDonald's Europe President, Central Division, McDonald's USA President, Eastern Division, McDonald's Europe President, Southern Division, McDonald's Europe President, APMEA Greater Asia and Middle East Division President, East Division, McDonald's USA President, McDonald's Europe President, West Division, McDonald's USA President, McDonald's USA Managing Director, Australia SVP North America Supply Chain Management, McDonald's USA CEO, McDonald's China EVP and COO, McDonald's USA Chief Executive, McDonald's Norway President, McDonald's Asia/Pacific, Middle East, and Africa

Name On File

Name On File Name On File

Name On File Name On File

Name On File Name On File

Name On File

Name On File Name On File

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Name On File Name On File Name On File Name On File Name On File Name On File

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President, Western Division, McDonald's Europe EVP and Chief Restaurant Officer Director of Nutrition, McDonald's USA President, McDonald's Canada and Latin America SVP and Chief Marketing Officer, McDonald's USA Director President, COO, and Director

Name On File

Name On File Name On File Name On File

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Board Members
Title Honorary Chairman Vice Chairman and CEO Director Director Director President, COO, and Director Director Director Director Director Director Director Director Director Name & Bio Name On File Name On File Name On File Name On File Name On File Name On File Name On File Name On File Name On File Name On File Name On File Name On File Name On File Name On File Contact

McDonald's Competition
Now Viewing McDonald's's competition in: Fast Food and Quickservice Restaurants

Competitive Landscape
Demographics and personal income drive demand. The profitability of individual companies depends on efficient operations, effective marketing, and the ability to provide fast service. Large companies have advantages in purchasing, financing, and marketing. Small companies can compete by offering unique products or serving a local market. The industry is highly .labor-intensive: average annual revenue per worker is just under $40,000

Business Challenges
CRITICAL ISSUES Volatile Supply Costs - Unstable manufacturer prices for raw ingredients and paper products used in fast food restaurants can significantly impact margins. Commodity markets affect manufacturer prices for beef and poultry; manufacturer prices can change up to 13 percent in a single year. Fluctuating wood pulp prices affect the cost of paper products like cups, bags, and containers, where prices can change up to 6 percent a year. Food and paper costs are typically .25 percent of sales for fast food restaurants Increasing Competition in Away-From-Home Food Market - Fast food restaurants face increasing competition as a broader range of businesses tries to capture share in the awayfrom-home food market. By offering take-out or delivery, fullservice restaurants offer similar or better convenience and higher quality food. Grocery stores and warehouse clubs are providing more ready-to-eat meals and sides, often at a better value than fast food. Convenience stores, gas stations, coffee shops, and delis sell sandwiches and beverages, cutting into fast food’s .share of the lunch market

Industries Where McDonald's Competes
Leisure• Restaurants & Cafes○ Fast-Food & Quick-Service Restaurants

Editor-Selected Competitors List For McDonald's
Top McDonald's Competitors
Company Burger King Subway !YUM Location Miami, FL Milford, CT Louisville, KY

Key Burger King Financials
Company Type Public - NYSE: BKC Main Headquarters June $2,537.4 41,320

Fiscal Year-End (.Sales (mil 2009 Employees 2009

Key Subway Financials
Company Type Fiscal Year-End (.Sales (mil 2008 Employees 2008 - Private Main Headquarters December $926.6 700

Key YUM! Financials

Company Type

Public - NYSE: YUM Main Headquarters December $11,279.0 336,000

Fiscal Year-End (.Sales (mil 2008 Employees 2008

TRGETTING
McDonald's has based its segmentation on demographic variables (this is why demographic forces are so important to monitor). Most of the segments McDonald's targets are broken-down into age and lifestyle stage; this is probably because they are easily identifiable and consumer needs and wants vary closely with demographic variables. McDonald's primary target markets are seniors, adults and teenagers, but the most heavily targeted segment is .children Like McDonald's, essentially segment HIS market using demographic variables. IT’S also segment HIS market into seniors, adults, teenagers and children. However, unlike McDonald's, IT’S primarily target the teenagers and .adults segments

Promotion
McDonald's has one of the best promotion methods of any organisation. They use a number of different methods to maintain high awareness and promote their image, including: advertising (television, radio, billboards, etc.),

sponsorship (AFL, local basketball, Ronald House), sales promotion (e.g. the two-dollar burger), direct marketing (through birthday clubs, etc.) and publicity (McHappy Day). Hungry Jack's promotion efforts are not quite as ferocious. They tend to just maintain awareness through television advertising and billboards. They occasionally use sales promotion to persuade customers to try new products. Hungry Jack's also use direct marketing through 'Kids' .'Clubs

Place
McDonald's and Hungry Jack's have very similar "place" components. The locations and appearances of the stores would be hard to differentiate without signs telling consumers who they are. McDonald's, howeve,r holds a different place in the consumer's mind. This is due to the image built through promotion (price is fairly similar). McDonald's is seen more as a fun place for children through tools such as Ronald Mc Donald, while Hungry Jack's is seen more .as merely a place to eat

People
Both McDonald's and Hungry Jack's use their staff to emphasise a "friendly" environment and to promote the :"service" element of the product. Staff adopt the ideal that "the customer is always right". People are ultimately part of the product; therefore they must perform to customer expectations. This is an approach that is constant throughout any service industry

Process
McDonald's is the most innovative in terms of production processes. Examples of this are the recent installation of EFTPOS machines. Due to this Mc Donalds has been able to differentiate itself from competitors like Hungry Jack's. Both organisations have processes such as Drive-thru that is seen as a convenience and makes the product easier to consume

McDonalds Business Analysis
In the 1990s managers will be judged on their ability to identify, cultivate, and exploit the core competencies that make growth possible - indeed, they'll have to rethink the '.concept of the corporation it self Organizations do not exist in vacuum. They operate within a competitive industrial environment. Analyzing its competitors not only enables an organization to identify its own strengths and weaknesses but also help to identify opportunities for and threats to the organization from its industrial environment. SWOT analysis is a systematic analysis of these factors and the strategy that reflects the best match .between them

Let us analyze these principals in relation to the core competence of McDonalds, one of the largest food chain companies in the world. Let us first start with the strengths and the positive aspects which define the performance of this company. How can we define the company’s strengths? Strength is a distinctive competence that gives the firm a comparative advantage in the market place. For instance financial resources, image, market leadership and buyer supplier relations etc McDonalds is the no: 1 fast food chain stores with a 40 million customers visiting it per day. It has over 30,000 branches in 120 countries. It derives 80% of its revenues from eight countries like Canada, Brazil, Germany, France, Japan, UK, Australia and US. The greatest strength was creating an image in the minds of the people and introducing them to the fast food culture. Delivery speed, customer care and cleanliness are the core strengths on which these stores expanded. They created a corporate symbol and their advertisement campaigns were highly successful in establishing the brand image and logo in the minds of the millions. Two main competitors generally identified with McDonalds are the Burger King and the KFC. McDonalds marketing strategy is concerned with the internal resources, external .environment and its basic competencies along with its share holders McDonald’s product value is also its greatest strengths. Customers know what to expect when they walk into a McDonalds store. It gives great emphasis to human resources by satisfying both the customer and the employees. Next is the innovation aspect wherein new products line up to catch up with the new trends and tastes of the people. Its diversity into other new business ventures can also be considered as its .strengths How effective are these strengths to the company in the long run? McDonalds today is not that amendable as it was during its inception. What are the driving factors which results in its present decline in terms of sales and services? To analyze this factor we have to look at the weaknesses part of the companies business and marketing strategy. What can generally be termed as a weakness of a company? The same factors which were considered as strengths also become a weakness if it impedes the overall .performance of the company Customer trends change and so does their choices. People are generally tired of the same brands that they had been using over the years, so when they do not see the expected innovation they migrate to new brands. Moreover people see McDonalds every where and this over exposure might also be a reason for abstinence. Moreover maintaining the standards of such a huge chain becomes feasible and when there is .lack of quality service in one store it effects the whole brand The secret of any marketing strategy is to reach the target audience. And here again the target audience should be chosen carefully. In the case of McDonalds as projected in its ads, the targeted audiences were the kids. Demographics and customer financial and psychological aspects define a business concerns success. Health conscious women and senior citizen comprise the major population but kids soon grow out to become adults. Recent law suits and documentaries resulted in the companies recent innovation and a major change related to health related product ranges and this switch over as per the needs of today’s trend and needs has increased the lost popularity of .McDonalds a bit All the above factors point out the external strengths and weaknesses. There are also internal factors which affect the performance and overall benefits the company stands to enjoy. Kids based marketing strategy which was earlier a weakness has changed since 2003. Now more teenagers and adults rule the McDonalds ad world. The research and develop which lacked earlier is also looked into and the brand quality is

being defined with various research and development options today. McDonald at one stage started concentrating on expansion and growing big that it missed out on key .factors like quality maintenance and R&D One major threat to any brand is its relationship between the management and the franchise dealers. Organization strength is the back bone of any concern and when that starts shaking the whole system will collapse. But slowing McDonald is recovering from all these weaknesses as its brand managers can easily communicate, compare and improve their services through the latest technological developments wherein they can use the internet to motivate, compare and improve upon other .centers performances The overall analysis of all the external and internal strengths and weaknesses on this company should be linked in order to draft a sustainable plan for the companies’ further improvement. For any improvement or expansion the internal resources must be readily available. And thus analyzing this aspect can lead to a modified strategy to suit its vision. Keeping in mind the available resources the planner should think globally. Hence making use of all the core competencies the firm can definitely .sustain in the competitive market The change in the top managerial level has creating a new wave in its performance and major changes have been implemented to retain and sustain the brand quality and ,innovation. As the new CEO rightly quotes ".The world has changed. Our customers have changed. We have to change too“ James R. Cantaloupe, Chairman and CEO, McDonald's, 2003 Now let us analyze the sustainable competitive advantage of the company. What is sustainable competitive advantage? How can it be related to McDonalds? SCA is the advantage a company has which is difficult or impossible for other companies to possess or break through. It can either be the brand, dynamic customer care, cost structure or its patent. Whatever the advantage in order to be considered as sustainable it should either be proprietary or distinctive. Other than this three different aspects ,that help in SCA are The managerial and organizational process should share a good integration and • coordination. The much needed ‘value’ is created thereby as everyone strives to work for a common goal. The organization should learn and bring about changes according to the need of the hour and should always be flexible to changes in the environment such as customer trends, legal or government restriction and developments in the technology. McDonalds is presently concentrating on this advantage by concentrating on organizational behavior and managerial expertise. Previously this advantage was ignored as the organization was more into expansion of its outlets over the globe than strengthening its core advantage. As the result the revenue did not see much of a change while newer outlets were open. The company suffered a massive loss first .time since their inceptions which further lead to the change in the managerial heads Technological, structural and financial assets of a company are excellent market • position which helps in the SCA. McDonalds no doubt is abundant with such aspects like structure, technology and finance. To identify and implement these assets in the proper direction towards the improvement of the company is all that is needed. After .2003 the company has really started to concentrate on its greatest advantages Most of all the greatest advantage is the vision or the dream with which the • company was started. Sustaining this dream over the years is any companies’ greatest advantage. A brand usually revolves around this vision sustaining this vision and working in lieu with it is a great SCA. McDonalds was started out to help people who

had very little time to cook or was too busy to get into a proper restaurant. The vision was to provide quick service, cheap products and quality satisfaction. Keeping this vision in mind the company which slackened a bit because of incompetent franchise holders is being weeded and new and better people are put in this place as the torch .bearers of the company sustaining and living the vision To sum it all up SCA means implementing the best value based strategy using all the advantages which are unique to the company and that which cannot be copied or replicated by other competitors. The importance of this SCA can be evident by the reply the great investment guru Warren Buffet gave when asked about how he evaluates his investment portfolio. He simply answered ‘sustainable competitive advantage’. Hence based on the dynamic integrated and intelligent human resources .can always be the only dependable and sustainable SCA Outsourcing boom or doom in today’s business environment Today everything is outsourced from employee appointment to finance and customer care. No organization is best enough to handle all kinds of work. Moreover concentrating on every detail is not possible with a big concern especially like McDonalds. But great care should be taken not to outsource the core competences of the company. General advantages of outsourcing are cheap service, knowledge of markets offshore, flexible resources, speedy operations, expansion in supplier relationship etc. most of all the company can concentrate on its core competencies and outsource rest of its operation. Recently McDonald has tested its drive through order facility. Wherein it makes sure that the order placed with the outlet is accurate. The order taken by the outsourced company is reverted back to the home restaurant. These call center has a digital camera which clicks the vehicle you drive through and the delivery man back home can integrate the order and the person who placed it using the image of the car. Outsourcing thus helps in the increase of the external suppliers and fills up the difficulties faced because of the lack of the latest technologies and .other innovations What started of as a success story with McDonalds had to face a number of risks, competitions and major set backs. What makes it still strong and ranked among the top business concerns is its core competences and the sustainable competitive advantages both internal and external. Of course keeping up with the changing times the company has also set foot in outsourcing but the point to keep in mind here is not to be driven away by this outsourcing mania. This company has started to revert back to its golden glory recently because of large scale revamping of its organizational and .structural changes being implemented

:Conclusion
No particular competitive strategy is guaranteed to achieve success at all times. Risk attitudes can change and vary by industry volatility and environmental uncertainty and several internal conditions also might be involved. Thus the “four P’s” of marketing (product, price, place and promotion) provide a good starting point for consideration of the requirements of strategy implementation in the marketing function. The mix of these marketing elements should be appropriate and the plans for .each of the elements should also be appropriate

The marketing function is consumer oriented and hence marketing decisions are based on the careful identification of consumer needs and on the design of marketing strategies to meet those needs. The distribution system brings the product or service to the place where in can best fill customer needs. Access to distribution can mean all the differences between success and failure for a new product. Because many products require support from distribution channels in the form of prompt service, rapid order processing etc the choice of distributors, wholesalers and jobbers is .extremely important Promotion is more than advertising. The location, size and nature of markets which the business strategy defines will guide promotion mix decisions and should indicate the content of promotional material as well. Pricing is a complex issue because it is related to cost, volume, trade offs etc and because it is frequently used as a competitive weapon. Pricing policy changes are likely to provoke competitor response. Using price to jockey for position can lead to price wars, which usually hurt .all participants Marketing has received increasingly greater attention in the competitive business since the early modern era. The old concept of marketing focused on the firms existing products and considered marketing to consist of selling and promotion to maximize sales at a profit. The new concept however focuses on the firms existing potential customers and seeks to earn profit through customer satisfaction with an .integrated marketing program I am a freelance writer inspirational and hard working. For me work is worship. I love to do deadline oriented jobs as it is a great test to my vitality, skill and my creativity. I have an unending passion to learn more things. I learn from my failures and drive .through success equally Article Source: http://EzineArticles.com/?expert=N._Vijayarani

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