You are on page 1of 9


McDonald's is the world's largest chain of hamburger fast food restaurants, serving around
68 million customers daily in 119 countries across 35,000 outlets.Headquartered in the
United States, the company was founded in in 1940 as a barbecue restaurant operated by
Richard and Maurice McDonald. In 1948, they reorganized their business as a hamburger
stand using production line principles. Businessman Ray Kroc joined the company as a
franchise agent in 1955. He subsequently purchased the chain from the McDonald brothers
and oversaw its worldwide growth.[7]
A McDonald's restaurant is operated by either a franchisee, an affiliate, or the corporation
itself. The McDonald's Corporation revenues come from the rent, royalties, and fees paid by
the franchisees, as well as sales in company-operated restaurants. In 2012, the company had
annual revenues of $27.5 billion and profits of $5.5 billion. According to a 2012 BBC report,
McDonald's is the world's second largest private employer—behind Walmart—with 1.9
million employees, 1.5 million of whom work for franchises.
McDonald's primarily sells hamburgers, cheeseburgers; chicken, french fries, breakfast items,
soft drinks, milkshakes, and desserts. In response to changing consumer tastes, the company
has expanded its menu to include salads, fish, wraps, smoothies, fruit, and seasoned fries.
Business model
McDonald's Corporation earns revenue as an investor in properties, a franchiser of
restaurants, and an operator of restaurants. Approximately 15% of McDonald's restaurants are
owned and operated by McDonald's Corporation directly. The remainder are operated by
others through a variety of franchise agreements and joint ventures.
The McDonald's Corporation's business model is slightly different from that of most other
fast-food chains. In addition to ordinary franchise fees and marketing fees, which are
calculated as a percentage of sales, McDonald's may also collect rent, which may also be
calculated on the basis of sales. As a condition of many franchise agreements, which vary by
contract, age, country, and location, the Corporation may own or lease the properties on
which McDonald's franchises are located. In most, if not all cases, the franchisee does not
own the location of its restaurants.
The United Kingdom and Ireland business model is different from the U.S, in that fewer than
30% of restaurants are franchised, with the majority under the ownership of the company.
McDonald's trains its franchisees and others at Hamburger University in Oak Brook, Illinois.

Largest fast food market share in the world. and taking two vacations annually in order to reduce risk for myocardial infarction. as well as a few other slogans for select countries and regions. potatoes.000 outlets. instead organizing the supply of food and materials to restaurants through approved third party logistics operators.S. McDonald's does not make direct sales of food or materials to franchisees. attending church services in order to have a lower blood pressure. McDonald’s is also famous by the Ronald McDonald clown. pork. to maintain their health by singing along to their favorite songs in order to relieve stress. McDonald's restaurants are operated by joint ventures of McDonald's Corporation and other. Company’s brand is the most recognized brand in fast food industry and is valued at $40 billion. As a matter of policy. . Strengths 1. McDonald's makes coolers of orange drink with its logo available for local events of all kinds. nearly one in eight workers in the U. serving 69 million consumers every day in 119 countries. radio. To date. McDonald's has used 23 different slogans in United States advertising. Brand recognition valued at $40 million.. At times. Fast Food Nation also states that McDonald's is the largest private operator of playgrounds in the U. According to Fast Food Nation by Eric Schlosser (2001). as well as the single largest purchaser of beef. and newspaper). In addition to the usual media (television. have at some time been employed by McDonald's. it has run into trouble with its campaigns.In other countries. Nonetheless. and apples.S. $2 billion advertising budget. 3. television has always played a central role in the company's advertising strategy. McDonald’s is the largest fast food restaurant chain in terms of total world sales (8%). 2. It is the second largest outlet operator with more than 34. McDonald’s spends on advertising more than the next 4 fast food restaurant chains combined. Advertising Main article: McDonald's advertising McDonald's has for decades maintained an extensive advertising campaign. sponsors sporting events ranging from Little League to the FIFA World Cup and Olympic Games. Employees are encouraged by McDonald's Corp. The selection of meats McDonald's uses varies to some extent based on the culture of the host country. McDonald's was criticized for illegally hanging banners on flag poles and blocking the bicycle path in South Korea. the company makes significant use of billboards and signage. local entities or governments.

5.4. Home meal delivery. McDonald’s offers only most popular brands in its restaurants. Low differentiation. Therefore. Mac Job and high employee turnover. 7. McDonald’s could exploit an opportunity of delivering food to home and increase its reach to customers. More than 80% of restaurants are owned by independent franchisees. 2. The business successfully targets very young children through offering playgrounds. Heinz ketchup and others. This results in lower performance and high employee turnover. McDonald’s should finish remodeling all of the restaurants and adapt the best practices in them as soon as possible. In a result. stimulating obesity and strong marketing focus on very young children. The fast food chain is operating in many diverse cultures where tastes in food are extremely different than those of US or European consumers. McDonald’s can focus more on perfecting its serving system and marketing campaigns. While demand for healthier food increases. McDonald’s is trying to seize such an opportunity and soon plans to open only vegetarian restaurant in India. Children targeting. 4. McDonald’s is no longer able to substantially differentiate itself from other fast food chains (at least not enough to gain some market share) and opts to compete by price rather than by additional features. 3. McDonald’s has redesigned its logo and restaurant design in 2006. So far. Mac Job is a low paid and a low skilled job. Unhealthy food menu. Although McDonald’s tries to introduce healthier choices in its menu. Increasing demand for healthier food. remodeled restaurants have seen 8-9% higher than average market growth. Opportunities 1. the menu is largely formed of unhealthy meals and drinks. Negative publicity. Thus ability to adapt to local tastes is one of McDonald’s strengths. Dannon Yogurt. Changing customer habits represent new needs that must be met by businesses. it has introduced some new practices. toys with its meals and advertisements. 2. the company has been successful . McDonald’s is heavily criticized for offering unhealthy food to its customers. 4. Partnership with best brands. Weaknesses 1. 3. which increases training costs and add to overall costs of McDonald’s. Changing customer habits and new customer groups. decreases McDonald’s popularity. such as: Coca Cola. Locally adapted food menus. which is often seen negatively by its employees. In addition. McDonald’s could introduce more healthy food choices in its menu and reverse its weakness into strength. Full adaptation of its new practices. Such menu offering prompts protests by organizations that fight obesity and hence. 6.

Local fast food restaurant chains. The fast food market in the developed countries is already overcrowded by so many fast food restaurant chains and this already proves to be a threat to McDonald’s as it barely grew through 2012. The profits that are sent back to US have to be converted into dollars and may be affected by the exchange introducing its McCafe. Although McDonald’s does a great job in adapting its own menu to local tastes. The business receives a part of its income from foreign operations. Trend towards healthy eating. Local fast food restaurants can often offer a more local approach to serving food and menu that exactly represents local tastes. INTERNAL ENVIRONMENT McDonalds Structure: McDonalds has a functional structure which serve many product lines in the same industry. 2. 4. the rising number of local fast food chains and their lower meal prices is a threat to McDonald’s. Due to government and various organizations attempts to fight obesity. 5. McDonald’s profit was largely affected by appreciating dollar. Their Chief Executive oversees five major areas of activity: . McExpress and McStop restaurants to meet the changing customer habits and the needs of previously untapped customer groups. Threats 1. Lawsuits against McDonald’s. In 2012. Lawsuits are expensive as they require time and money. people are becoming more conscious of eating healthy food rather than what McDonald’s has to offer in its menu. Currency fluctuations. Its chain of command is as follow: Chief Executive Operations Development Finance Marketing Human Resources McDonald's are structured along functional lines. 3. Saturated fast food markets in the developed economies. there is high probability for more expensive lawsuits to come. McDonald’s has already been sued for many times and lost quite a few lawsuits. And as McDonald’s continues to operate more or less the same way. especially when the dollar is appreciating against other currencies.

and Value (QSCV). and promoted without discrimination to race. sexual orientation. The company promotes their employees based on their relevant skill. age or disability. harassment and bullying. Convenience. McDonalds has and provides the best employees-business relationship via providing an equal opportunity employer. trained. talents. Service. . These guiding values are exhibited in all aspects of business. these functions are accomplished through the mediation of implicitly and explicitly rules that act as cultural warrants. From its Hamburger University (where managers and assistant managers are trained) to its vision statement of Quality. Employees are regarded as members of a team where everyone's opinion is valued and respected. beliefs. from social responsibility and diversity to training and policies. McDonalds corporate culture is a shared value system that forms the basis of all company decisions. hygiene and safety) Culture: McDonalds is all about corporate culture. and performance.Operations (equipment and franchising) Development (property and construction) Finance (supply chain and new product development) Marketing (sales marketing) Human Resources (customer services. In support of this McDonald's promotes and sustains a working environment. gender. and assumptions evolving from and imperfectly shared by interacting organizational members that allows them to ascribe common meanings to stimuli encountered in the organizational context. As an equal opportunity employer McDonald's ensures that employees and job applicants are selected. McDonald's vision statement creates the values by which are made all managerial and corporate decisions. The Human Resources department monitors the effectiveness of the discrimination policies at regular intervals and takes corrective action as necessary to ensure that they being complied with Employees who feel that they have been treated unfairly are encouraged to use the remedies outlined in the Company's handbooks. which is free from unlawful discrimination. interdependent symbolic system of values. A relatively enduring. McDonalds operates four Hamburger Universities in four countries. personnel.

Litter McDonald's provides trash cans outside every store all around the world. Energy All our restaurants uses low energy lampsrestaurants-whatson Resources Suppliers: Meat: from Brazil in bulks and then processed in Egypt. is achieving a continuous environmental improvement across all areas of our business. which our delivery bikes runs on. food-saladsplus Packaging For the salads containers McDonald's replaced them with a paper card base. Potato: Farm frites Vegetable: Egyptian farms Dairy: Egyptian farms Bread: Egyptian suppliers Assets: 60 restaurants . Our goal is simple. They say laughter is the best medicine and nothing makes people smile more than a Happy Meal.. saving nearly 69 tones of plastic purchased by the firm.The Ronald McDonald House charity offers thousands of sick children in approximately 48 countries hope and it inspires courage.. food-fries Waste Used cooking oil represents 10% of the restaurant total waste.ourworld-policy-hero At McDonald's we recognize our responsibilities to protect and preserve the environment for future generations to come. and is recycled into biodiesel.

EXTERNAL ENVIRONMENT Natural environment: McDonalds doesn't supply its franchises from the headquarters in fact it treats every franchise as its own operating business that will order it's supplies from the suppliers they want taking into consideration the quality assurance this could be based on the country itself or from imported goods. McDonalds has to increase its prices because it's supplies are becoming more expensive. Economical: Inflation has a very huge impact on McDonalds Egypt as prices are increasing and people have low income this leads them to spend money on cheap products. For McDonalds Egypt they order nearly 92% of their supplies from Egyptian producers whom produce the supplies in Egyptian land because Egypt is considered to be a good agriculture region for its good climate and having the Nile River. Potato: Farm frites Vegetable: Egyptian farms Dairy: Egyptian farms Bread: Egyptian suppliers Societal: Political: Taxes before 2005 were 40%.Delivery Motorcycles Office equipment Manufacturing plants Restaurant equipments Skills & Knowledge: Employees are trained on the same values and are given the required skills to achieve company's success. . after 2005 and until now it is reduced to 20% this encouraged McDonalds to expand into what it is now 60 Branches and rising.

and value. veg burgers. McDonalds sales are reduced. It has also introduced new technology to reduce costs (waste) and increase production 'efficiency'. Today there are 79 outlets in north-east India and more than 53 outlets in south-west India. after opening their outlets in various metro cities. mcdonalds in India is a 50-50 joint venture between connaught plaza restaurants and hard castle restaurants which are owned and managed by vikrambakshi and amit jitia respectively connaught plaza restaurants operates in north India whereas hard castle restaurants operates in western India. As McDonalds has a high unemployment rate it is not hard to find employees because McDonalds has a training center that trains them and candidates don't need to have special skills or certificates to work at McDonalds.g." marketing . veg pizzas. the Indian consumers avoid burgers made from beef and pork which is taboo according to their religions.The first mcdonalds restaurant was opened on october 13th at basant lok in vasant vihar. Technological: McDonalds uses new technology in cooking and preparing the food to reduce the fats and cholesterol in nutrition.The economic crises has also affected McDonalds because people are saving more and spending less and as McDonalds is not considered as a need and people have many other cheap substitutes such as Amo Hosney and Momen. beverages and deserts. so in order to evade this problem the Indian menus of mcdonalds was indianised and specifically design in such manner that it can boost its products to indian consumers. the menu includes chicken burgers. It introduces new products besides the standard menu that suits every culture for e.g. Socio-culture: As McDonalds operate in many different countries it has to take into consideration their beliefs and traditions. but. McDonalds also cares about the factors that could offend each culture for e. so that we make every customer in every restaurant smile. being the best means providing outstanding quality. the company is now trying to expand in cities like Pune and Jaipur also. a state in USA considers the red color in McDonalds logo as evil therefore McDonalds has introduced the BLUE color in the logo. cleanliness. Mcdonalds starts in India mcdonalds entered India in 1996. happy meal for childrens. in the Middle East MC Arabia and in India Mc Panton. STRATEGY ADOPTED . service. mcdonalds franchise model raymond kroc vikram bakshi amit jatia mission statement"mcdonalds vision is to be the worlds best quick service restaurant experience.

if they take children into consideration.cleanliness and value forthe money offered by the company to its customers product developing a sophisticated supplier networked operation and distribution system. the company follows all the framework of training and monitoring of its franchises to ensure that they achieve good quality service. the company came up with a completely new menu of vegetarian items like mcveggie burger and mcalootikki. the company has been able to achieve consistent product taste and quality across the nations of the world act like retailer think like a brand. targeting and positioning mcdonalds uses demographic segmentation strategy with age as the parameter. so in order to satisfy demand as per Indian preference. The remaining 85% is operated by franchises. value systems. the separation of vegetarian and non-vegetarian sections is maintained throughout the various stages. youth and the young urban family. the main target segments are children. but also protecting its long term brand reputation. . most indians religion does not allow them to consume beef or pork.the vegiterian customer-india has a huge population of vegetarians.globally mcdonalds was famous for its hamburgers which are prepared from beef and pork focuses not only on delivering sales for the immediate present.Strategy as per indian market re-engineering the menu-mcdonalds thinks according to the customers tastes. language and perception.strategies of mcdonalds business strategy franchise modle as per franchise model of mcdonald only 15% of the total number of restaurants are owned by the company. lamb and fishburgers to suite the indian diet. children are more attracted towards toys and delicious meals including todays youth prefer such places for their entertainment and the urban families select mcDonalds on various occasion like birthday party. mcdonalds came up with chicken. but. lifestyle. treat to their children etc. to satisfy this customers demand.example of veg burgers: mcveggie mcaloo tikki segmentation.