McDonald’s Corporation


McDonald’s Corporation

Company Overview..............................................................................................3
Key Facts...............................................................................................................3
Business Description...........................................................................................4
Key Employees.....................................................................................................8
Key Employee Biographies................................................................................10
Major Products and Services............................................................................17
Revenue Analysis...............................................................................................18
SWOT Analysis...................................................................................................19
Top Competitors.................................................................................................24
Company View.....................................................................................................25
Locations and Subsidiaries...............................................................................28

McDonald’s Corporation
© MarketLine

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2% over FY2012. and the Middle East and Africa. Europe. KEY FACTS Head Office McDonald’s Corporation One McDonald’s Plaza Oak Brook Illinois 60523 USA Phone 1 630 623 3000 Fax Web Address http://www.429 restaurants in 119 countries.106 million in the financial year ended December 2013 (FY2013).mcdonalds. 2013.586 million in FY2013. which it sells through 35.000 people as of December 31. Illinois and employed about 440.8% over Revenue / turnover 28.106. The net profit was $5. The operating profit of the company was $8. Asia Pacific. an increase of 2% over FY2012.McDonald’s Corporation Company Overview COMPANY OVERVIEW McDonald's Corporation (McDonald's or 'the company') is one of the world's largest foodservice retailing chains. The company recorded revenues of $28. an increase of 1. It is headquartered in Oak Brook. McDonald's operates in the US.0 (USD Mn) Financial Year End December Employees 440.000 New York Ticker MCD McDonald’s Corporation © MarketLine Page 3 . an increase of 2. The company is primarily known for its burgers and fries.764 million in FY2013.

sundaes. McGriddles. including the real estate interest. McFlurry. McDonald's markets its products under a wide range of brand names that include Big Mac. signs.747 were licensed to developmental licensees and 3. coffee. preparing and serving a range of food products and beverages. French fries. The franchise agreements include conventional franchise arrangements as well as developmental license agreements and foreign affiliates.589 were licensed to foreign affiliates. oatmeal. and bagel sandwiches. McDonald's key product offerings include hamburgers and cheeseburgers. referred to as affiliates.100 restaurants across 19 countries in Latin America and the Caribbean. As of December 31. McMuffin. the US. desserts. Asia/Pacific. hotcakes. The company is one of the world's largest food service retailing chains.738 were company-operated and 28. seating. The company reports its revenues based on four geographic segments: Europe. At the end of FY2013. decor and maintenance. Also. For this type of franchises. The company receives a royalty based on a percentage of sales in these markets. It also offers beverages such as shakes. Other countries and corporate includes Canada and Latin America. McDonald’s Corporation © MarketLine Page 4 . McDonald's receives an initial fees as well as a royalty based on a percentage of sales. flavored tea and others. Japan was the largest affiliates market with approximately 3. in turn. McDonald's owns or secures leases for the land and building while franchisees provide a portion of initial capital in the form of equipment. McDonald's restaurants in the US and many international markets also offer a breakfast menu. Under the developmental license arrangement. and other countries and corporate. Filet-O-Fish. the company operated 35. 20.429 restaurants in 119 countries. the company owns an equity investment in some of the foreign affiliated markets. Middle East and Africa (APMEA). 2013. chicken sandwiches. The company's breakfast offerings include muffins. 4. Under the conventional franchise arrangement. The company's largest developmental license arrangement operates more than 2. chicken nuggets. licensees provide capital for the entire business.355 restaurants were franchised to conventional franchisees.691 were franchised or licensed. biscuits. out of which 6. soft serve cones and pies. contribute to the company's revenue through the payment of rent and royalties based on a percentage of sales along with minimum rent payments and initial fees.McDonald’s Corporation Business Description BUSINESS DESCRIPTION McDonald's franchises and operates McDonald's branded fast food restaurants all over the world. Of the total franchises. and McCafe among others. Chicken McNuggets. as well as corporate activities and certain investments. wraps. salads. These franchisees. although there may be geographic variations.200 McDonald's restaurants. McDonald's restaurants offer a standardized menu. soft drinks.

New York. the company bought a 33% stake in Pret A Manger. a UK sandwich chain. a distributor of milk shake mixers. McDonald's bought several other businesses like The Boston Market. in an attempt to diversify its operation. The company introduced Happy Meal. However. which operated over 100 sandwich shops in the UK. an owner operator. DreamWorks Animation and McDonald's entered into a two-year worldwide marketing and promotional relationship. invested in Redbox Automated Retail. The company went public in 1965 and its shares were listed on the New York Stock Exchange. cheeseburger. introduced Egg McMuffin as a breakfast item in 1973. Ray Kroc. which includes a toy. milk. McDonald's established its first international restaurants in Canada and Puerto Rico in 1967. Herb Peterson. to reassert its operational and marketing leadership. Also in 2005. McDonald's China introduced its first drive-thru restaurant. In 1968. McDonald’s Corporation © MarketLine Page 5 . and Donatos Pizzeria. McDonald's introduced freshly tossed salads to its menu in 1987. Jim Delligatti. Chipotle Mexican Grill. with about 800 locations in the US. introduced Big Mac. Illinois with the permission of the McDonald brothers in 1955. the restaurant was shut down for three months in early 1948 for alterations and was re-opened in late 1948 as a self-service-drive-in restaurant. In 2001. the company sold its Donatos Pizzeria division back to its founders and also decided to discontinue the development of non-McDonald's brands outside the US during the same year. In 2000. which became one of the popular branded foods in the world. By 1983. in 1979. a renter of digital video discs (DVDs) through self-service kiosks. opened the first franchised McDonald's restaurant in Des Plaines. soft drinks. potato chips and pie.800 restaurants worldwide. During the early 1990s. As part of McDonald's reorganization strategy.McDonald’s Corporation History HISTORY The history of McDonald's dates back to a hamburger restaurant in California that was opened by two brothers Dick and Mac McDonald under the name of McDonald's Bar-B-Que in 1940. the company had established presence in over 30 countries with around 7. as well as outlets in New York City. The company launched a global revitalization plan in 2003. In 1981. During the same year. coffee.The number of McDonald's restaurants grew to 100 by 1959 and 500 by 1963. In 2005. McDonald's Ventures. the company expanded its reach in Europe and Russia by opening a number of restaurants. The company introduced French fries to its menu in 1949. the company opened restaurants in Spain. The menu was reduced to nine key items that included hamburger. including at McDonald's restaurants and supermarkets. a wholly-owned subsidiary of McDonald's. Denmark and the Philippines marking the first steps of the company's international growth. one of the first franchisees.

McDonald's. limited-menu restaurants for which the land and building are generally leased). McSpicy Chicken Wrap and McSpicy Paneer Wrap in India.404 traditional restaurants and 35 satellite restaurants (small.McDonald’s Corporation History Disney entered into a cross promotional agreement with McDonald's in 2006. a private investment firm specializing in leveraged buyouts and investments. The company launched a new range of McSpicy products.6 million). In FY2012. the company enhanced its menu to improve the nutritional composition of food for children and adults. McDonald's was selected as an official sponsor of the 2010 FIFA World Cup and subsequently unveiled its online games exclusively featured on the official FIFA website. McDonald’s Corporation © MarketLine Page 6 . the company issued a voluntary recall of Shrek Forever After glassware. Later. its non-core business unit. McDonald's received approval from Office of The Trade Marks Registry on the trademark Mc (1694379). in mid-2011. along with DIC Entertainment Holdings. McDonald's introduced its new packaging featuring 24 consumers selected from its first online Global Casting Call in 2007. of which over 250 were opened in China. launched a legal action to recover amounts owed to the company by Cornerstone Overseas Investment Limited. In the beginning of 2012. During the same year. During the same time. the company introduced the McCafe Shakes in three flavors: chocolate. The company sold its stake in Chipotle Mexican Grill through public stock offering during the same year. including the hot and snappy McSpicy Chicken Burger. McDonald's opened more than 750 new restaurants in APMEA. the company opened 1. In the same year. offered at its restaurants across Latin America.700 million ($131. the company announced plans to open 180-190 company-owned restaurants in India by 2015 with an estimated investment of up to INR5. the company would offer Happy Meal toy collections and restaurant promotions in thousands of restaurants worldwide. Further in 2007. vanilla and strawberry. the company expanded its sponsorship agreement to be the official restaurant on-site at the Olympic Games through 2020. Further in 2011. In 2010. As per the multi-faceted partnership. Towards the end of 2009. in early 2009. McDonald's sold Boston Market Corporation. to affiliates of Sun Capital Partners. McDonald's offered an expansive menu with nutritional offerings through its four McDonald's Olympic restaurants. in 2011. McDonald's and Twentieth Century Fox announced their global partnership. Further in 2009. McSpicy Paneer Burger. and closed 269 traditional restaurants and 200 satellite restaurants. a related company of China Retail Management Limited. the master toy and apparel licensee for McDonald's McKids line in Asia (excluding Japan and India). During the London Olympic Games 2012. The product had higher levels of cadmium as compared to the standard level set by the Consumer Product Safety Commission (CPSC). McDonald's announced plans to set up 175 new outlets in China. During the same time.

000th restaurant in the APMEA region. This initiative was undertaken by the company to provide consumers with nutrition information. the company opened its first restaurant in Vietnam.McDonald’s Corporation History The company launched new packaging designs on all carry-out bags and fountain beverage cups with quick response (QR) codes in January 2013. This was the company’s 10. In July 2013. McDonald’s Corporation © MarketLine Page 7 . a Vietnamese businessman and the founder of Good Day Hospitality. In February 2014. McDonald's selected Henry Nguyen. as developmental licensee to open its restaurants in Vietnam.

Development and Franchising Richard Floersch Executive Vice President and Chief Senior Management Human Resources Officer Peter J. Penrose Director Non Executive Board 250348 USD Susan E. Jr. Jackson Director Non Executive Board 265348 USD Richard H. General Counsel and Secretary Senior Management Atif Rafiq Senior Vice President and Chief Digital Officer Senior Management McDonald’s Corporation © MarketLine Compensation 3599644 USD Page 8 .McDonald’s Corporation Key Employees KEY EMPLOYEES Name Job Title Board Donald Thompson President and Chief Executive Officer Executive Board 9496664 USD Andrew J. Director Non Executive Board 250348 USD Roger W. Eckert Director Non Executive Board 275348 USD Jeanne P. Bensen Senior Executive Vice President and Senior Management Chief Financial Officer Stephen J. Rogers. McMillan Director Non Executive Board 250348 USD John W. Massey Director Non Executive Board 265348 USD Cary D. Lenny Director Non Executive Board 250348 USD Walter E. McDonald's USA Gloria Santona Executive Vice President. Jr. McKenna Chairman of the Board Non Executive Board 1035348 USD Enrique Hernandez. Koziol Executive Vice President and Chief Senior Management Restaurant Officer Jim Johannesen Executive Vice President and Chief Senior Management Operations Officer. Arnold Director Non Executive Board 250339 USD Miles D. McDonald's USA Kevin L. Director Non Executive Board 275348 USD Robert A. Easterbrook Senior Executive Vice President and Senior Management Chief Brand Officer Kenneth M. Worldwide Senior Management Supply Chain. Newell Executive Vice President and Chief Senior Management Brand and Strategy Officer. Stone Director Non Executive Board 250348 USD Sheila A. White Director Non Executive Board 250348 USD Timothy J. Fenton Chief Operating Officer Senior Management 4014401 USD Jose Armario Executive Vice President.

McDonald's Latin America Senior Management McDonald’s Corporation © MarketLine Compensation Senior Management Page 9 . McDonald's Europe Senior Management 3919408 USD David L. Corporate Strategy Senior Management Jim Sappington Senior Vice President and Global Chief Information Officer Senior Management J. Kriger Senior Vice President. Consumer and Brand Strategy Deborah Wahl Senior Vice President and Chief Senior Management Marketing Officer. Gonzalez-Mendez Senior Vice President. Goare President. McDonald's USA Senior Management Edgardo Navarro President. Senior Management Sustainability and Philanthropy Erik Hess Senior Vice President. Hoffmann President.McDonald’s Corporation Key Employees Name Job Title Board Bridget Coffing Senior Vice President and Chief Communications Officer Senior Management Adam M.C. Global CSR. McDonald's APMEA Senior Management 3238956 USD Jeffrey P. Stratton President. McDonald's USA Douglas M.

community and philanthropic boards over the years and currently serves as a Trustee at Ronald McDonald House Charities. Ireland Economic Advisory Board. Thompson has been with the company for 23 years and has held various management positions during that time. he served as the President and Chief Operating Officer at McDonald's from 2010 to 2012. Jr. Thompson has been the President and Chief Executive Officer at McDonald's since 2012. Lurie Children’s Hospital of Chicago. He was appointed a Director at the company in 1991. Andrew J. Currently. McKenna also serves as the Chairman at Schwarz Supply Source. He has also been a Director at the company since 2011. Enrique Hernandez. McKenna is also the Founding Chairman of Metropolis Strategies. He served as the President. Museum of Science and Industry (Chairman Emeritus) and the University of Notre Dame (Chairman Emeritus). McKenna Board: Non Executive Board Job Title: Chairman of the Board Since: 2004 Age: 84 Mr. Mr. He serves as a Director at the Big Shoulders Fund of the Archdiocese of Chicago. Mr. McDonald's USA from 2006 to 2010. Ann and Robert H. Prior to his current role. Mr. McKenna has served on many civic. Board: Non Executive Board Job Title: Director Since: 1996 Age: 58 McDonald’s Corporation © MarketLine Page 10 . McDonald's USA from 2005 to 2006. Lyric Opera of Chicago and United Way of Metropolitan Chicago among others. Mr. McKenna has been the Chairman of the Board at McDonald's since 2004. He also serves as a Director at Skyline Corporation and Ryan Specialty Group.McDonald’s Corporation Key Employee Biographies KEY EMPLOYEE BIOGRAPHIES Donald Thompson Board: Executive Board Job Title: President and Chief Executive Officer Since: 2012 Age: 51 Mr. and as an Executive Vice President and the Chief Operations Officer.

Ms. Lenny has been a Director at McDonald's since 2005. Eckert also served as the Chief Executive Officer and Chairman of the Board at Mattel from 2000 to 2011. Jackson Board: Non Executive Board Job Title: Director Since: 1999 Age: 62 Ms. Eckert has been a Director at McDonald's since 2003. Fleischer & Lowe since 2011. Hernandez also serves as the Chairman at Nordstrom and as a Director at Chevron Corporation and Wells Fargo & Company. Jackson has been a Director at McDonald's since 1999. Currently. Jeanne P. He is the President and Chief Executive Officer at Inter-Con Security Systems. Jackson served as the President of Direct to Consumer at NIKE from 2009 to 2013. Hernandez has been a Director at McDonald's since 1996.McDonald’s Corporation Key Employee Biographies Mr. She has been the President of Product and Merchandising at NIKE since 2013. Mr. Jackson is also a Director at Kraft Foods Group. Ms. He served as the Chairman at Mattel in 2012. Eckert Board: Non Executive Board Job Title: Director Since: 2003 Age: 59 Mr. President and Chief Executive Officer at The Hershey Company from 2001 until his retirement in 2007. He has been the Operating Partner of Friedman. Richard H. She was the Chief Executive Officer at MSP Capital from 2002 to 2009. He is also a Director at ConAgra Foods and Discover Financial Services. Lenny Board: Non Executive Board Job Title: Director Since: 2005 Age: 62 Mr. Lenny served as the Chairman. Walter E. Robert A. Massey Board: Non Executive Board Job Title: Director McDonald’s Corporation © MarketLine Page 11 . he is also a Director at Amgen and Levi Strauss & Co. Mr. Currently. Mr.

Mr. Stone has been a Director at McDonald's since 1989. John W. McDonald’s Corporation © MarketLine Page 12 . Board: Non Executive Board Job Title: Director Since: 2003 Age: 56 Mr. Cary D. Rogers. He has been the Chairman and Chief Executive Officer at Ariel Investments. Massey is the President Emeritus of Morehouse College having served as its President from 1995 to 2007. Stone serves as the Chairman at Stone Tan China Holding Corporation and Stone Tan China Acquisition (Hong Kong) Company. Rogers has been a Director at McDonald's since 2003. he also serves as a Director at American Eagle Outfitters and Hyatt Hotels. Presently. Currently. He has been the President of the School of the Art Institute of Chicago since 2010. McMillan Board: Non Executive Board Job Title: Director Since: 2003 Age: 56 Mr. He has been the Chairman and Chief Executive Officer at KapStone Paper and Packaging Corporation. Roger W. Mr. he served as an Executive Vice President at Sara Lee Corporation. Massey has been a Director at McDonald's since 1998. Dr. Mr. From 2001 to 2004. since 1983. formerly Stone Arcade Acquisition Corporation. He has been the Chief Executive Officer at True Partners Consulting since 2005. Jr. and from 2000 to 2004. McMillan has been a Director at McDonald's since 2003. Stone Board: Non Executive Board Job Title: Director Since: 1989 Age: 79 Mr. which he founded.McDonald’s Corporation Key Employee Biographies Since: 1998 Age: 76 Dr. Rogers serves as a Director at Exelon Corporation and as a Trustee of Ariel Investment Trust. He was the Manager at Stone Kaplan Investments from 2004 to 2008. McMillan was the Chief Executive Officer at Sara Lee Branded Apparel. since 2005.

Ms. He has been the Chairman and Chief Executive Officer at Abbott Laboratories since 1999. Global Business Units at The Procter & Gamble Company (P&G) from 2007 until 2009. Penrose was the President at Penrose Group. White has been a Director at McDonald's since 2009. White also serves as a Director at Caterpillar. Penrose has been a Director at McDonald's since 2006. Fenton Board: Senior Management Job Title: Chief Operating Officer Since: 2012 Age: 56 McDonald’s Corporation © MarketLine Page 13 . Ms. Arnold currently serves as a Director at The Walt Disney Company. Miles D. Arnold was the Vice Chairperson at P&G Beauty and Health from 2006 to 2007 and the Vice Chairperson of P&G Beauty from 2004 to 2006. Penrose Board: Non Executive Board Job Title: Director Since: 2006 Age: 68 Ms. Susan E. White Board: Non Executive Board Job Title: Director Since: 2009 Age: 59 Mr. Prior to that. Mr. Arnold Board: Non Executive Board Job Title: Director Since: 2008 Age: 60 Ms. She previously served as the President. Ms. She was an Executive Advisor at Boston Consulting Group during 2001–08. Timothy J.McDonald’s Corporation Key Employee Biographies Sheila A. She has been the Non Executive Chairman at Jones Lang LaSalle since 2005. Arnold has been a Director at McDonald's since 2008. and has been the Operating Executive. From 2000 to 2007. Global Consumer and Retail Group at The Carlyle Group since 2013.

In 1990. he was appointed the Director for Asia Pacific and. East Division for McDonald’s USA from 2003 to 2005. Prior to that. Mr. he was the Vice President of Compensation for Kraft Foods North America. Peter J. Mr. Benson has been a Senior Executive Vice President and the Chief Financial Officer at McDonald's since 2008. from 2005 to 2012. Mr. Prior to that. Bensen Board: Senior Management Job Title: Senior Executive Vice President and Chief Financial Officer Since: 2008 Age: 51 Mr. Armario was previously Senior Vice President and International Relationship Partner for the Latin America region. Previously. the Middle East and Africa. Fenton was the Vice President and Managing Director at the Middle East Development Company. McDonald’s Latin America from 2003 to 2008. Development and Franchising at McDonald's since 2011. he served as the President of McDonald's APMEA. Richard Floersch Board: Senior Management Job Title: Executive Vice President and Chief Human Resources Officer Age: 56 Mr. he served as the Group President of McDonald's Canada and Latin America from 2008 to 2011. Fenton has been the Chief Operating Officer at McDonald's since 2012. Fenton also served as the President. Prior to that. He joined McDonald's from Kraft Foods International. Fenton began his career with McDonald's in 1973.McDonald’s Corporation Key Employee Biographies Mr. from 1992 to 1995 he served as the Managing Director for McDonald's Poland and Vice President of McDonald's Central Europe North. Floersch is an Executive Vice President and the Chief Human Resources Officer at McDonald's. Jose Armario Board: Senior Management Job Title: Executive Vice President. Mr. Floersch was the Vice President of Corporate Compensation at Philip Morris. Armario has been the Executive Vice President of Worldwide Supply Chain. He joined McDonald's in 1996 as the Director of Financial Accounting and Reporting McDonald’s Corporation © MarketLine Page 14 . Mr. and as the President. He was the Senior Vice President of Southeast Asia. He joined McDonald's in 1996 and was involved in managing the company's restaurants in Chile. Development and Franchising Since: 2011 Age: 54 Mr. Before Philip Morris. Worldwide Supply Chain. where he served as the Senior Vice President of Human Resources from 1998 to 2003.

Mr. Benson served as Vice President and Assistant Controller from 2002 to 2007. Koziol Board: Senior Management Job Title: Executive Vice President and Chief Restaurant Officer Since: 2013 Age: 54 Mr. He previously served as the Corporate Senior Vice President of Innovation and Design at the company. He also worked at Hyatt Hotels for six years where he held a variety of restaurant management and purchasing positions. Mr. he held several positions at McDonald’s. Koziol worked at Perseco for six years and was the Director of Purchasing. McDonald’s Europe. He also had assignments in the mergers and acquisitions practice and Midwest region accounting and auditing group. Mr. McDonald's USA McDonald’s Corporation © MarketLine Page 15 . including Senior Director for US Food and Packaging Supply Chain Management. Jim Johannesen Board: Senior Management Job Title: Executive Vice President and Chief Operations Officer. he served as the Chief Executive Officer at PizzaExpress and at Wagamama Limited. In 2007. Chief Executive Officer. Northern Europe. McDonald’s UK. Worldwide Quality Assurance. Easterbrook has been a Senior Executive Vice President and the Chief Brand Officer at McDonald's since 2013. Prior to joining McDonald's. Prior to that. From 1993 until 2011. Stephen J. Koziol has been an Executive Vice President and the Chief Restaurant Officer at McDonald’s since 2013. Deputy Managing Director. Mr. Kenneth M. Mr. Koziol served as the Corporate Vice President. Easterbrook Board: Senior Management Job Title: Senior Executive Vice President and Chief Brand Officer Since: 2013 Age: 46 Mr. He also served on the Supply Leadership Board and was the leader of the Quality Assurance Board. Since then. he was appointed Senior Vice President and Corporate Controller. McDonald’s UK. Mr. and Regional Vice President for the UK’s Southern region.McDonald’s Corporation Key Employee Biographies and subsequently held positions of increasing responsibility. Corporate Executive Vice President and Chief Brand Officer. Koziol joined McDonald’s in 1988 as Manager in US Purchasing. Previously. Easterbrook began with McDonald’s in 1993 as a Financial Reporting Manager in London. Prior to joining McDonald’s. Benson was a Senior Manager for Ernst & Young in Chicago. Senior Vice President and Division President. he has held various management positions in the Supply Chain department. including President.

Most recently. General Counsel and Secretary Since: 2003 Age: 63 Ms. Johannesen is an Executive Vice President and the Chief Operations Officer at McDonald's USA. Kevin L. Newell also served as the US Senior Vice President and Restaurant Support Officer for the West Division from 2009 to 2011. McDonald’s Corporation © MarketLine Page 16 . Mr. Gloria Santona Board: Senior Management Job Title: Executive Vice President. Previously. He began his career on the web in 1996 as a founding member of the Business Development and Corporate Strategy team at AOL. McDonald's USA Since: 2013 Mr. including Head of Global Product Marketing/Strategy for Yahoo! News and General Manager for Yahoo! Local. Newell has been with the company for 23 years. Santona has been Executive Vice President. Mr. Santona has been with the company for 36 years. Prior to that. Rafiq served in a number of leadership capacities for Yahoo!. She became the company’s Corporate Secretary in 1996 and has served as General Counsel since 2001.McDonald’s Corporation Key Employee Biographies Mr. Rafiq is a Senior Vice President and the Chief Digital Officer at McDonald's. Prior to that. Prior to that role. Mr. Newell has been an Executive Vice President and the Chief Brand and Strategy Officer at McDonald's since 2013. Ms. Mr. Before Amazon. Mr. Newell served as the US Vice President and General Manager of the Greater Southern Region from 2006 to 2009. he was the President of McDonald's USA's Central Division. he served as an Executive Vice President and the Global Chief Brand Officer at the company. he served as the General Manager of Kindle Direct Publishing at Atif Rafiq Board: Senior Management Job Title: Senior Vice President and Chief Digital Officer Age: 40 Mr. Mr. Johannesen served as a Senior Vice President and the Chief Support Officer at McDonald's USA. Newell Board: Senior Management Job Title: Executive Vice President and Chief Brand and Strategy Officer. Prior to his current role. General Counsel and Secretary at McDonald's since 2003. Rafiq worked at Goldman Sachs.

The company's key products include the following: Products: Hamburgers Cheeseburgers Chicken sandwiches Chicken nuggets French fries Salads Oatmeal Milk shakes Desserts and sundaes Soft serve cones Pies Soft drinks Coffee Beverages Biscuits Hotcakes Bagel sandwiches Muffins Brands: Big Mac Filet-O-Fish Chicken McNuggets McFlurry McMuffin McGriddles McCafe McDonald’s Corporation © MarketLine Page 17 .McDonald’s Corporation Major Products and Services MAJOR PRODUCTS AND SERVICES McDonald's is one of the world's largest foodservice retailing chains.

an increase of 4.106 million in FY2013. The US segment recorded revenues of $8. McDonald's generates revenues through four business segments.4% over FY2012.4% over FY2012. McDonald’s Corporation © MarketLine Page 18 . Other countries and corporate* segment recorded revenues of $1. an increase of 2% over FY2012.2% of the total revenues in FY2013).477 million in FY2013. as well as corporate activities. a decrease of 3. the US (31.478 million in FY2013.3% over FY2012.7% compared to FY2012. APMEA (23%) and other countries and corporate (5. Revenues by segment In FY2013. the Europe segment recorded revenues of $11. an increase of 1. The APMEA segment recorded revenues of $6. which are defined based on geographical presence: Europe (40. an increase of 0. *Other countries and corporate includes operations in Canada and Latin America.McDonald’s Corporation Revenue Analysis REVENUE ANALYSIS Overview The company recorded revenues of $28.300 million.3%).5%).851 million in FY2013.

The company enjoys strong brand value.429 restaurants in 119 countries have reinforced the brand identity of McDonald’s. another favorable trend to drive topline Growing presence in key Asian markets Intense competition in retail food industry Food safety and other regulations Increasing labor wages Strengths Strong brand value and market leadership McDonald's is one of the well-established global brands. The company’s 35. The company has increased its global market share. In 2013. McDonald's products are most recognized as affordable fast food products that offer good quality. the company was featured in the list of world’s most valuable brands 2013 released by a business magazine. It is the world’s largest quick-service restaurant brand. the McDonald's was ranked among the top 10 brands in the top 100 global brands list by an industry source specializing in brand services and activities. Also. The company’s brand equity can be gauged by the fact that on an average McDonald's serves nearly 70 million customers every day. McGriddle and McMuffin are reputed fast food brands with strong customer loyalty. In 2014. In addition. Strong brand recognition McDonald’s Corporation © MarketLine Page 19 . Strengths Weaknesses Strong brand value and market leadership Focus on value offerings Strong cash flows driven by the franchise business model High spending in the uncertain European markets Opportunities Threats Growing foodservice market Growing hot drinks market. both in developed and emerging markets. However. the company was ranked among top 25 brands in the world’s top 500 brands list by an industry source specializing in brand valuation. The revenues have also grown consistently and the company’s global comparable sales also witnessed a growth.McDonald’s Corporation SWOT Analysis SWOT ANALYSIS McDonald's is one of the world's largest foodservice retailing chains. Many of its products like Big Mac. intense competition in the retail food industry could erode the company’s market share and affect its profitability. which is helping it to maintain a leadership position in its market. The strong brand portfolio has enabled the company to sustain its leadership in the fast food chain industry. primarily driven by the McDonald’s brand equity. McDonald's consistently ranks among the top most brands in several brand surveys.

a two-item meal for E4. the company enhanced its value offerings in certain markets with multiple pricing tiers across its menu to appeal to a broad range of customers. a branded affordability menu in Australia. For instance. Strong cash flows driven by the franchise business model McDonald’s pioneering franchising model enables the company to keep its costs low. The value-based meal offerings ensure a constant and in some cases. increase profitability and to mitigate inflation. core. the company’s popular value offerings will be its core strength in achieving a unique brand value. The company aims to optimize its product mix by utilizing a menu with entry-point value. In FY2013. In Europe. In addition. and premium limited-time offers. lunch. the company launched the Loose Change Menu. Furthermore. the company launched the Casse-Croute. the company manages menu board prices to ensure value at all price points. In its company-operated restaurants. The company’s successful franchise model is also helping it achieve strong cash flows. such as Bubble Tea in China. The company continued to evolve its value platform across geographies during FY2013. rent and royalty income from various franchise owners ensures a stable revenue stream to the company. Weaknesses High spending in the uncertain European markets McDonald’s Corporation © MarketLine Page 20 . which is intended to offer value and variety to its customers at various price points. Previously.McDonald’s Corporation SWOT Analysis enables the company to consolidate its market share both through new restaurant openings as well as product extensions. Franchisees also have access to this strategic pricing tool. The company balanced its value initiatives with mid-tier offers. To achieve these. and dinner value platforms.1 billion.98). In the long term. McDonald’s uses a strategic pricing tool that balances price and product mix. in FY2012. the company introduced its Dollar Menu as Dollar Menu & More. McDonald’s continued to evolve its everyday value platform by including more affordable menu options and promotional offers across dayparts and price points. in France. At the same time. such as the Serious Lamb Burger and Wrap in Australia. and therefore increased sales. The substantial cash flow along with McDonald’s strong credit rating and continued access to credit provide the company with flexibility to fund capital expenditures and debt repayments. more footfall. the franchise business model. Focus on value offerings McDonald’s restaurants offer a broad menu at various price points providing value to its customers in more than 100 countries around the world. In the US. which is less capital intensive than the company-owned model is allowing the company to be a locally-relevant one. premium and promotional offerings. McDonald’s’ locally-owned and operated restaurants through its franchise model are maximizing the brand performance. the company’s cash from operations reached $7. while China focused on breakfast.50 (approximately $5.

7% in 2012 and 0. the global hot drinks market generated total revenues of $94 billion in 2012. the rapid growth in the sub-segments of the commercial foodservice segment such as restaurant and cafes is expected to further drive the growth of the global foodservice market. further spending in these markets might not result in any of the expected gains to the company. This growth is attributed to stronger economic growth in the US and the increase in demand from consumers during the year.8% in terms of revenue and approximately 5. Europe accounted for 40. strategic restaurant reimaging and expansion. registering an increase of 3.6% in terms of volume during 2013–18. The company plans to open more than 300 new restaurants and reimage nearly 400 restaurants in FY2014 in Europe. Furthermore. The growth in the foodservice market augurs well for the company. which is expected to lead the market to a value of $117. This growth is mainly attributable to growing commercial foodservice segment.7 billion by the end of 2017. Despite sluggish economic activity in the European markets. Growing hot drinks market. The GDP growth rate for the euro area is forecast to be 1% for 2014 and 1. equivalent to 57. McDonald’s Corporation © MarketLine Page 21 . it is expected to be very slow with the domestic demand continuing to witness a decline. McDonald’s has little pricing power in Europe due to the slowdown in consumer spending on informal eating out occasions.2% of the total revenues. the company has plans to increase its market share with the right mix of guest counts. According to industry sources.2 billion kilogram (kg) in 2012. despite all the initiatives. In addition. Therefore. In FY2013. The European economy has been in the midst of a prolonged economic slowdown. the global foodservice market is expected to grow at a compound annual growth rate (CAGR) of approximately 5. the economy in euro area contracted 0. The performance of the market is expected to accelerate.4% for 2015. According to the latest estimates by an international financial organization. the total foodservice industry sales are estimated to surpass $680 billion in 2014. with the largest share of revenues coming from the region. Europe is a major market. McDonald’s is one of the largest global foodservice retailers serving nearly 70 million people per day. coffee sales are the most lucrative for the global hot drinks market. Over the same period. However. the restaurant industry has witnessed consistent growth in sales in the past few years. representing a CAGR of 4. Opportunities Growing foodservice market The foodservice industry is expected to continue its steady growth in the future. coffee sales generated total revenues of $54.6% over 2013. another favorable trend to drive topline The global hot drinks market is expected to grow at a steady rate in the future. with an anticipated CAGR of 4.4% in 2013. In 2012. market consumption volumes grew at a CAGR of 2.2 billion.6% to reach 7.4% for the period spanning 2008–12. As per the MarketLine estimates.McDonald’s Corporation SWOT Analysis For McDonald’s. Although recovery is expected in the economy.7% of the market's overall value. as the increased consumer demand will lead to better revenues for the company. According to industry estimates.6% for the five-year period 2012–17. Among the hot drinks.

The retail food industry is highly competitive with respect to price and quality of food products. Therefore. Taco Bell and Burger King Worldwide in the breakfast segment as these competitors are launching breakfast items and offers. reputation. the company opened 731 new restaurants in APMEA. national. the present food safety regulations are inadequate and these organizations have McDonald’s Corporation © MarketLine Page 22 . McDonald’s announced plans to open around 800 restaurants in FY2014. the company has already embarked on aggressive expansion plans in the country. According to several organizations. new product development. Threats Intense competition in retail food industry McDonald's operates in a highly competitive retail food industry. The Wendy’s Company evolved itself into a hybrid chain between fast food and the newer fast-casual restaurants by rebranding itself with a new logo. In recent times. by 2030. The Wendy’s Company. Growing presence in key Asian markets McDonald’s has been aggressively expanding its presence in Asia. menu items and restaurant renovations. Starbucks could leverage its brand strength in coffee to attract morning customers. particularly in China. since coffee is an important breakfast item. More than 160 cities in China have population greater than one million. Burger King Worldwide. The competitors of McDonald’s include Starbucks. The company competes with international. uniforms. The increasing middle class income group and their increasing disposable income have contributed to the increase in demand for various consumer goods in the country. with about 300 expected in China.McDonald’s Corporation SWOT Analysis McDonald's offers hot and cold coffee drinks in a variety of flavors. Yum! Brands. For instance. Furthermore. and Dunkin’ Brands. In order to tap this growing market. Moreover. and attractiveness and maintenance of properties. a new legislation was passed requiring more frequent inspections of processing plants and giving the government authority to order the recall of tainted foods. Intense competition could therefore erode the company’s market share and affect its profitability. regional and local retailers of food products. the company can increase its market share in the growing hot dinks market through its product offering. Jack in the Box. the middle class population in China is expected to account for 70% of the country’s total population. In July 2009. These factors are expected to lend support to the growing demand for food products and beverages offered by McDonald’s. customer service. Food safety and other regulations The recent concerns among the public regarding food safety have led to increased regulations. In FY2013. of which 275 were opened in China. advertising levels and promotional initiatives. McDonald’s can expand the company’s presence in fast growing Asian markets and lend stability to its topline growth. By leveraging its strong brand name. restaurant location. McDonald's is also facing stiff competition from Starbucks.

2%. as well as potential criminal sanctions.95 in 2013 to $9. Of this.25 per hour in 2010. The minimum wage rate has increased in the states of Arizona (from $7.32 in 2014) in the recent past. the US Food and Drug Administration (FDA) requested a budget of $4.15 per hour since 1998. the minimum wages in Europe have been rising steadily.78 in 2013 to $8 in 2014). According to Eurostat. respectively.These regulations govern matters such as ingredients. including fines.7 billion for fiscal 2014 (October 1. taxation.93 in 2014).85 per hour in 2008. Colorado (from $7. McDonald’s Corporation © MarketLine Page 23 . which remained at $5. Florida (from $7. The company's cost structure will be negatively impacted by the rising labor wages. increased to $5. Increasing labor wages Labor wages have been increasing in the US and Europe. and distribution of food products in the US and overseas. The federal minimum wage rate in the US.19 in 2013 to $9.1 in 2014) and Washington (from $9. injunctions. many states and municipalities in the country have minimum wage rates even higher than $7. tight labor markets. Ohio (from $7.8 million would be spent on food safety regulations. the hourly labor costs in the euro area and EU28 zone increased by 1. 2014). It further increased to $6. the American Public Health Association recommended legislative changes to establish a new authority to strengthen the food safety system. In April 2013. in October 2009. government mandated increases in minimum wages and a higher proportion of full-time employees are resulting in an increase in labor costs. which may impact the business of the company.9 in 2014). in the fourth quarter of 2013. $295.95 in 2014). Similarly. increased overtime. 2013 through September 30.55 per hour in 2009 and to $7. For instance.79 in 2013 to $7. The company is subject to several food safety and other laws and regulations regarding the manufacturing. Moreover. health and safety matters. Oregon (from $8. In recent times. advertising. It could impact the margin expansion adversely and affect the company’s profitability.25 per hour due to higher cost of living. and environmental concerns.McDonald’s Corporation SWOT Analysis recommended stricter regulations. marketing.85 in 2013 to $7.8 in 2013 to $7. The company's failure or inability to comply with such requirements could subject it to civil remedies.4% and 1. recalls or seizures. Such regulations may increase the burden of specific compliances for McDonald’s and increase the related expenditure for the company.

The Wendy’s Company Dunkin’ Brands Group.McDonald’s Corporation Top Competitors TOP COMPETITORS The following companies are the major competitors of McDonald’s Corporation Starbucks Corporation Yum! Brands. Inc Burger King Worldwide. McDonald’s Corporation © MarketLine Page 24 . Inc. Inc. Jack in the Box Inc. Taco Bell Corp.

McDonald’s Corporation Company View COMPANY VIEW A statement by Donald Thompson. Service. Building on our strengths to generate enduring.8 billion in new and existing restaurants. Egg McMuffin and our World Famous Fries while broadening our appeal with new menu options in the categories where we believe the most growth opportunity exists: beef. Yes. In addition. profitable growth Our desire to ensure the McDonald’s experience consistently delivers on our trademark QSC&V —Quality. is given below.2%. while appropriately investing to meet future demand. We’re also building on the competitive advantages inherent in our business model and focusing on the drivers within our control. Global comparable sales increased 0. beverages and breakfast. some of our customer-facing initiatives didn’t generate the comparable sales lift and incremental guest visits needed to overcome external pressures in today’s highly fragmented marketplace. I remain confident in the underlying strength of our System and business model. high-quality food and beverages with the speed and convenience expected by almost 70 million daily customers in 119 countries — and we don’t take it for granted. we invested approximately $2. It’s also about our sizeable marketing presence. In 2013. We increased operating income 3%* and diluted earnings per share 4%*. Cleanliness & Value — remains a top priority. The statement has been taken from the company’s Annual Report for FY2013. We also remain committed to returning all free cash flow to shareholders. the President and Chief Executive Officer at McDonald's. To Our Valued Shareholders: It’s a privilege to serve great-tasting. excellent suppliers and talented employees — is the reason McDonald’s is the world’s largest quick-service restaurant brand. As we look forward. And. increased competitive activity and consumer price sensitivity — impacted our results. chicken. this is about our scale. Our unique business model — comprised of the best franchisees. our performance fell short of our high expectations this past year.9 billion to shareholders through dividends and share repurchases. Though McDonald’s continued to grow. Challenging conditions — including a flat or contracting informal eating out category in most of our major markets. McDonald’s Corporation © MarketLine Page 25 . We’re focusing on timeless favorites such as the Big Mac. we returned $4. for us. and Systemwide sales were up 3%*. our industry-leading cash flow and the efficiencies we’re able to capture as a result. Around the world we’re: • Balancing core classics and new menu choices. We’re addressing near-term performance by optimizing current initiatives for broader reach and better execution. It’s also the reason we continued to grow in 2013.

With more than 1.500 re-images in 2013. creating memorable experiences within and beyond our restaurants. • Keeping our restaurants contemporary. • Growing to the real market opportunity. We’re focused on what motivates them — and closely aligning our global growth priorities with the reasons they choose McDonald’s. Giving customers more reasons to choose McDonald’s. growing our business McDonald’s Corporation © MarketLine Page 26 . For example. so must we. Middle East and Africa. markets have different areas of focus based on their customers’ needs. and offering unparalleled convenience from a brand they respect and trust.” Emphasizing important elements of the service experience — like the staffing. • Ensuring we provide affordable options across our menu. and build on investments in technology to advance digital efforts within the context of our newly formed global digital strategy. We are strengthening our value platforms as we maintain an emphasis on this foundational element of our brand promise and a key driver of the customer experience. and also improves the restaurant’s overall capacity for change. Making an impact. emphasize affordability through mid-priced bundles like France’s two-item Le Casse Croute. the U. We’re drawing on deeper consumer insights to better understand their changing preferences. is focusing on breakfast by building on the advances we made in 2013 with the introduction of the delicious Egg White Delight McMuffin — while also enhancing customer service. And. scheduling and positioning of our crew — enables us to deliver at that all-important moment. share and scale best thinking across geographies is truly a testament to our unique business model. Our ability to learn. And. While our growth priorities are a global framework. in Asia/Pacific.S. we’re applying these learnings across all our actions — from restaurant execution and operations innovation to marketing and menu. more often We’re placing greater emphasis on strengthening our relationship with our customers. we’re concentrating on getting the right value platforms in place and growing brand extensions such as delivery and McCafé.McDonald’s Corporation Company View • Focused on improving customer service. As our customers evolve.400 restaurants in both established and emerging markets last year. Europe continues to strategically grow the McCafé brand. Our decentralized approach is truly an enviable local market structure that provides grass-roots knowledge to help us better execute local initiatives and programs that resonate with our customers. nearly 60% of McDonald’s restaurants now have more modern interiors and exteriors. That means serving great-tasting food and beverages. We opened more than 1. We often say that the interaction between our customers and our crew at the front counter or drive-thru is the “moment of truth.

we never forget that it’s our people who make the difference — to us as a company. we’re helping to develop globally accepted principles and criteria. Of course. Whether we’re providing a teenager with a first job or equipping a new manager with skills to run one of our 35. we advanced our commitment to sustainable sourcing. great brands like McDonald’s must lead in new ways. Even more relevant and memorable to the customers we serve. Change is our chance to get better. Working together with organizations. While change is our biggest challenge. And.000 restaurants. I’m especially proud of the advances we made last year. including the World Wildlife Fund. Leading in new ways In today’s rapidly shifting marketplace. founded by the American Heart Association and the Clinton Foundation. it’s also our greatest opportunity. as founding members of the Global Roundtable for Sustainable Beef.McDonald’s Corporation Company View Our brand and our business are inextricably linked. we’re honored to provide resources that open the doors of opportunity for learning. That’s our commitment. thank you for your support and confidence in our ongoing effort to deliver strong shareholder value. We’re grateful for your partnership and investment in our enduring brand — and we’re committed to satisfying each customer who chooses McDonald’s. and to our approximately 70 million daily customers. and committed to increase customers’ access to fruit and vegetables in 20 of our top markets. as one System. On behalf of the entire McDonald’s System. training and advancement to the estimated 1.8 million employees in our company-owned and franchised restaurants worldwide. McDonald’s Corporation © MarketLine Page 27 . We partnered with the Alliance for a Healthier Generation. The work we’re doing across the broad spectrum of social responsibility and sustainability underpins our belief that holistic and outcome-based actions can deliver the most meaningful impact for our customers and the business. because our customers are the heart and soul of who we are. We are excited about the more focused and ambitious way we’re leveraging our brand as we accelerate our growth. Stronger. including the eventual purchase of sustainable beef.

MYS McDonald’s Corporation © MarketLine Page 28 .o POL Golden Arches Restaurants Sdn. z o. Ltd. KOR McDonald's Real Estate LLP GBR Restaurantes McDonald's.A. ESP McDonald's Central Europe GmbH AUT McDonald's GmbH DEU McD APMEA Holdings Pte. Other Locations and Subsidiaries McDonald's Restaurants of Canada Limited CAN HanGook McDonald's Co. SGP McDonald's Restaurants of Ireland Limited IRL McDonald's Polska Sp. Ltd.McDonald’s Corporation Locations and Subsidiaries LOCATIONS AND SUBSIDIARIES Head Office McDonald’s Corporation One McDonald’s Plaza Oak Brook Illinois 60523 USA P:1 630 623 3000 http://www.

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