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McDonald S Global Strategy PDF
McDonald S Global Strategy PDF
Aniket Mandal(09DF005)
Arka Probha Ghosh(09DF011)
Priyadeep Mukherjee(09DF041)
Soumalya Biswas(09DF056)
McDonald’s Global Strategy
Brief History of McDonald’s
The McDonald brothers (Richard & Maurice) started off
a drive‐in restaurant in San Bernardino, California.
In 1940s, the McDonald brothers invented a revolutionary
new concept called ‘self‐service’.
McDonald’s popular products included the Big Mac,
French fries, Chicken McNuggets, Egg McMuffin, Quarter
Pounder sandwiches, hamburgers and cheeseburgers.
Employing “car hops” the McDonald brothers became the
first restaurant to offer speedy service to people while
they stayed in their cars.
The Mastermind
Ray Kroc discovers
McDonald’s [1954]
Kroc became the first
franchisee appointed
by Richard & Maurice
McDonald in San
Bernardino , California.
Beginning of the journey
In 1954, Kroc established a franchising company by the name McDonald
System Inc.
In 1961, Ray Kroc bought out the McDonald brother’s share for $2.7 million
and opened his first restaurant in Des Plaines , Illinois (near Chicago) , and the
McDonald's Corporation was created .
McDonald’s serves nearly 50 million customers each day
McDonald’s has its own Hamburger University in Illinois, and
the first batch graduated in 1961
In 1963, McDonald’s sold its one billionth hamburger
McDonald’s is listed on the New York, Frankfurt, Munich, Paris
and Tokyo stock exchanges
The clown character seen in all McDonald advertisements ,
Ronald McDonald, was created in 1963.
The first McDonald’s drive‐thru opened in Sierra Vista, Arizona
in 1975
Happy Meals were added to McDonald’s menu in 1979
McDonald’s launched McCafe in 1994.
McDonald’s launched the new worldwide Balanced Active
Lifestyles public awareness campaign in 2005
McDonald’s celebrated its 50th Anniversary on April 15, 2005
Market Proliferation
•1967 ‐ Canada & Puerto Rico (first restaurants outside the U.S.)
•1971 McDonalds really starts going global
Asia: Tokyo Ginza District (Japan)
Europe: Netherland, Munich (Germany)
•1979 ‐ Rio de Janeiro (Brazil)
•1990 ‐ China & Moscow (Russia)
•1996 – India (Delhi & Mumbai)
Brand Image
Initial Image Current Image
• Foreign brand • Friendly atmosphere
• Didn’t know what to expect • Inexpensive
• Discomforting • Quick service
• Expensive • Value for money
• Familiarity with the brand
Branding Strategies
• Single design for packaging
• Aggressive advertising
• Various promotional schemes
• Sponsorships
• Creating an over all McDonalds
experience
Distribution & Strategic Alliance
• Wal‐Mart stores in the year ‘93
• Disney in the year ’96
• Chipotle Mexican Grill in ‘98
• Aroma in ‘99
• Opened restaurants in Amoco &
Chevron Gas Station
Advertisement Strategies
• Sponsored the Atlanta Olympics,
1996 & Sydney Olympics,2000.
• Sponsored the Soccer World Cup in
France, 1998.
Branding Strategy Points in India
• Collaboration with Coke, MTV, Sony
Music.
• Co‐sponsor of various inter school
science competition.
• Scratch cards on large combo meals.
• Prizes ‐ caps, t‐shirts, CD’s, internet
cards.
• Sponsoring IPL.
Brand Fatigue
• Failure to introduce popular items on
menu.
• Inappropriate pricing strategies.
• Lack of understanding local tastes.
• Infrastructural inadequacies.
• Over estimation of demand.
• Continuous expansion caused franchisee
profit drop by 30% in 1990’s.
• Resulting to a loss $ 343.8 million in 2002.
Brand Repositioned
• Introduction of value meals.
• Introduction of healthier options.
• Analysis of Indian taste.
• Better planning strategies.
• Targeted younger as well as family crowd
• In ‘98 they introduced a new concept
named ‘Made for you.’
• Started home delivery services.
• Renovated its existing outlets.
• Introduced the world wide “Im loving it ”
campaign.
• In Japan the companies name was
changed to “Makudonaldo”.
SWOT Analysis
• Strength
– Strong brand name and image
– 42% of US hamburger business
– Overseas market
– Strong financial statement
– Economies of scale
– Market versatility
Weakness
• Declining market share
• Weak product development
• Disgruntle franchises
• Slowed revenue and income growth
Opportunities
• International expansion
• Only serving 1% of the world
population
• Growing dining‐out market
Threats
• Increasing market players
• More health conscious people
• Fast changing of food preferences
• Changing demographics
• Fluctuating foreign exchange rates
• The economy
PEST ANALYSIS
To analyze the current status of
McDonald’s corporation, we chose to use
the PEST method to evaluate the following
categories
P Political
E Economic
S Social
T Technological
Political Challenges
•Health and Safety Guidelines
The director of the obesity program for the Children's Hospital
Boston, David Ludwig, claims that "fast food consumption has
been shown to increase calorie intake, promote weight gain,
and elevate risk for diabetes"
Centre for Science in the Public Interest, a long‐time fast food
critic over issues such as caloric content, trans fats and portion
sizes
Political Challenges
• Ecological/environmental issue
– Fast food industry giants such as Wendy's, Pizza Hut, and
McDonalds are some of the largest consumers of paper
products in the US. "Every year millions of pounds of food
packaging waste litter our roadways, clog our landfills and
spoil our quality of life.
Political Challenges
• Wars and conflicts
War between countries
where the company
operates.
They have also become a
symbol of capitalism and
Americanism meaning that
they have now become the
target of terrorist group and
attack.
Economic Challenges
• McDonald’s must consider economic
challenges when expanding internationally.
Low set up costs = rapid expansion
One of the challenge for fast food industry is that to keep the
price is low for the customer.
Franchising facilitates set ups
» McDonald’s corporation provides financing assistance and
training for new franchise owners to manage cash flow
and keep businesses profitable.
Social Challenges
• The main reason is the
consumers worries had greatly
increased with health fears of
increasing obesity
• Customers now opted for more
healthier options like subway
which offered more of a variety
for health conscious customers.
Social Considerations
• To ease customers concern about health issues,
McDonald’s has made changes to the following;
•McDonalds changed its image vastly by evaluating the current
menu and making changes to it from using organic products to
revising the whole menu
entirely by offering salads and vegetarian burgers.
•McDonald’s serves a range of high‐quality foods that can fit into a
balanced diet. The accurate and accessible nutrition information
help guests make informed menu choices.
Social Considerations
• Emphasis on food safety:
McDonald's suppliers have food
safety management systems in
place, including Good
Manufacturing Practices , a
verified Hazard Analysis Critical
Control Point (HACCP) plan and
crisis management, food security
and other applicable programs
Technological Advantages
• McDonald’s has taken advantage of
technology to streamline their processes and
improve efficiency. Through technology enhancements such as Help
Desk Service, network and application
consolidation, and other technology
implementations, operations of the company
are greatly improved.
Technological Advantages
• Touch Order Allows You To Place Order At
McDonald’s Via Handset
Technological Advantages
• The customers can place their order directly
from their tables, dubbed as “Touch Order”.
It’s the first self‐ordering system in the world
Technology
Spotlight:
McDonald's tests
Speedpass
cashless payment
system
Technological Advantages
• McDonald’s has also
implemented
technology to
improve supply chain
management, and
allows customers to
access this
information to make
more informed
decisions about what
they eat.
STRATEGIES USED IN DIFFERENT
GEOGRAPHICAL LOCATIONS
India
• Locally focused menu choices (using lamb meats
instead of beef meat keeping the religious
sentiments of most Indians)
– McDonald’s in India has specific menu items
–For the vegetarian market (50% veg items)
• While offering the basic burger and fries,
McDonald’s in China also offers:
– Szechuan‐style spicy chicken wings
– Seafood Soup
– Rice
– Oriental Sauces
– Taro and Red Bean Dessert
Locally Focused Menu Choices
• Philippines – McSpaghetti noodles.
• Norway – Salmon Fillet sandwich (MacLak).
• Arab Countries – Halal menus.
• Israel – Kosher meat.
• Germany – McD Restaurants severed beer.
• France – McD Restaurants served Wine.
Increase presence in Asian countries
McDonald's has most certainly had a profound effect
on China.
– Use local food sources where possible.
» Using local sources decreases the time to market, and
also decreases the use of fuel to transport goods.
Thank You!