IBS Hyderabad

Academic Year – 2020

Subject: BS (Sem 3)
PROJECT REPORT ON
MISSION AND VISION OF MCDONALD

UNDER THE GUIDANCE OF

Prof Sriram Rajann

ICFAI BUSINESS SCHOOL – HYDERABAD

BY

Group-4
DEEPANSHI DHAWAN 20BSPHH01C0358
DEV MITTAL 20BSPHH01C0364
DINSHA GUPTA 20BSPHH01C0389
DIVYASHA SHANDILYA 20BSPHH01C0401
GANESH JADHAV 20BSPHH01C0424
GARAPATI GOWTHAM 20BSPHH01C0427
GARGI VAISHNAVI ROUT 20BSPHH01C0429

1|Page
INTRODUCTION
McDonald's, or McDonald's Corporation, is an American fast-food business famous for its
hamburgers. It is among one of the world's largest food chain restaurants. The company's headquarters
is originated in Oak Brook, Illinois.

In 1948, brothers Maurice ("Mac") and Richard McDonald opened the original McDonald's restaurant
in San Bernardino, California. Kroc identified a basic, efficient format that allowed his brothers to
manufacture large amounts of food at affordable rates. When he visited them in 1954 to investigate
how a little business could sell so many milk shakes be found that a standard hamburger cost 15 cents,
which was roughly half of what other competitors charged. Customers received their food fast since
hamburgers were prepared ahead of time, wrapped, and warmed under heat lamps at the self-service
station, which removed the need for servers and waitresses.

Ray Kroc, Salesmen of McDonald offered to start a franchise scheme for the McDonald brothers
because he saw great potential in their restaurant idea. He founded the first McDonald's franchise in
Des Plaines, Illinois, on April 15, 1955, and the McDonald's Corporation the following year, finally
buying out the McDonald brothers in 1961. Before the end of the decade, McDonald's would have
over 1,000 locations. The company's shares began trading publicly in 1965, owing to consistent
expansion.

The public face of McDonald's was introduced in 1963 with the launch of Ronald McDonald, and the
double arch "m" sign became the company's most enduring trademark in 1962, lasting considerably
longer than the tall yellow arches that formerly dominated the restaurant rooftops. Other iconic
McDonald's goods and emblems include the Big Mac, Egg McMuffin, Happy Meals and Chicken
McNuggets.

The company continued to grow, by reaching 10,000 restaurants by 1988, and operating in more than
additional 35,000 locations in additional 100 countries by the stating of 21 st century. In the 1990s,
growth was so rapid that it was believed that a new McDonald's opened every five hours somewhere
on this earth. It quickly became the world’s most popular family restaurant, focusing on low-cost
food, entertainment, and flavours that appealed to both children and adults.

McDonald's was involved in philanthropy. In 1974, it co-founded the Ronald McDonald House in
Philadelphia with Philadelphia Eagles football star Fred Hill, whose daughter had been diagnosed
with leukaemia. Families of those children were able to live close to the hospital where they were
being treated. More than 360 similar residences existed throughout the world by the early twenty-first
century. The McDonald House Charities, which was founded in 1987, also contributes to a variety of
other social causes.

PAST VISION AND MISSION

Mission and Vision Statement:
The mission statement defines the company's fundamental purpose, business, objectives, and strategy
for achieving those goals. The reason for an organization's existence is spelled out in its mission
statement. This statement outlines their objectives and what they hope to achieve in society. It
concentrates on the current state of the company. The question "who are we?" is posed. This should
be a statement of goals that is both realistic and attainable.
A vision statement, on the other hand, is a forward-looking expression of the organization's mission
and goals. A vision statement is more concerned with the organization's future. “Where are we
going?” it asks. This statement establishes the company's direction and shows how they want it to
develop in the future.
Because the strategy is intended to achieve the vision and thus satisfy the organization's mission, it
should flow directly from the vision. Mission and Vision Elements To provide a statement of the
company's purposes, goals, and values, statements are frequently combined. The vision and mission

2|Page
statements assist the company in determining where it wants to go. These statements are also useful in
focusing on what is being done and what should be done. The company's mission and vision
statements give it a lot of energy to achieve or set goals.

Considering the past, Creating a Future:

While acknowledging the need for change, Kroc’s found little reason to question McDonald's
underlying business mission and vision, which had served the company well for decades. He, like his
predecessor, resented the definition of McDonald's as a Beverage, preferring to see it as a diversified,
well-integrated firm with a strong focus on customers. Under his leadership, he presented the
company's previous mission and vision statement:
McDonald’s mission is -

“We are focused on delivering great tasting, high quality food to

our customers and providing a world class experience that makes
them feel welcome and valued.”

McDonald’s vision is -

“Our overall vision is for McDonald’s to become a modern,

progressive burger company delivering a contemporary customer
experience.”

Mission Statement:
The importance of food and quality as the business emphasis is highlighted in this mission statement,
although the company remains a strong effect on their food and beverage is maintained. The
following are the primary components of McDonald's corporate mission statement:
 High quality food & great tasting
 World class experience
In its mission statement, McDonald’s Corporation emphasizes becoming the favourite of their food
taste and quality. Product quality preferences are a primary driver of the company's business,
according to this factor. For example, to become such, McDonald’s develops its own supply chain and
menu recipes to satisfy consumers preferences about fast food products like burgers and fries. They
are the first who started early adoption of quality policy into the food business like QMPS and ISO
2015. Few of their quality tools really helped to enrich food quality like QMP 2- Leadership / Top
Management Commitment, QMP 4- Process Approach, QMP 5- Improvement / Continual
Improvement etc. Few methods company adopted to achieve this quality standard:
 Employee training (Quality, Service, Cleanliness & Values (QSC&V) Training)
 Management training
The components of the corporate mission statement focus on two points: becoming the world class
and becoming the high-quality food. The company develops restaurant designs and layouts to enhance
productivity and customer experience as a fast-food service business. This factor, along with menu
development, helps make the company’s restaurants and franchised locations to share the world class
experience.

3|Page
Vision Statement:
The importance modernization of business in food category emphasis is highlighted in this vision
statement, although the company remains a strong effect on their food and beverage is maintained.
The following are the primary components of McDonald's corporate vision statement:
 Become an even better McDonald's
 Modern and progressive business
Steve Easterbrook, President and CEO of McDonald's, is revamping the company's global market
strategy and intends to increase the number of franchised locations. McDonald's has been battling to
stay up with fast-casual restaurants like Five Guys and Chipotle Mexican Grill in recent years. As a
result, the fast-food giant is experimenting with new menu items to entice customers back. New
toppings and pastries were also included. This aim entails improving operational efficiency to
improve profit margins. The company's business vision does not describe the type of improvement its
vision. However, it is realistic that McDonald’s aims to implement comprehensive improvements of
its business to include various aspects, such as product development, marketing, franchising, and
human resource development.
The second type of improvement described in the corporate vision is not specified by the company.
McDonald's, on the other hand, is realistic in its goal to adopt comprehensive business changes that
encompass product development, marketing, franchising, and human resource development.
Following that, in the year 2013, the company modified its mission statement by achieving a high-
quality product and a world-class experience. By the year 2017, they had also realised to change their
vision statement, which represented a modern and advanced company.

MCDONALD’S CORPORATE MISSION STATEMENT

McDonald’s corporate mission is “to be our customers’ favourite place and way to eat and drink.”
McDonald's company assignment assertion has the subsequent essential components:

1. Customers’ favourite place to eat and drink

2. Customers’ favourite way to eat and drink.

In its mission statement, McDonald's emphasizes becoming the darling of target customers. Based on
this aspect, the corporation considers consumer choices as the primary determinant of its business. For
example, to become such a popular place, McDonald's has developed menus and recipes to meet
consumer preferences for fast food items like hamburgers and French fries. The components of the
corporate mission statement focus on two points: being the favourite place and how to be the
favourite. As a fast-food service company, the company develops the design and layout of restaurants
to optimize productivity and the customer experience. This factor and menu development help make
company restaurants and franchise establishments the most popular dining venues. MacDonald’s
marketing mix Contribute to the realization of this corporate mission, especially to influence
consumers through the promotion of the company, the brand, and the products.

McDonald’s Corporate Vision Statement

The enterprise's preceding vision statement was "Our common vision is to make McDonald's a
cutting-edge and innovative hamburger enterprise that offers consumer experience. Contemporary".
The following are the primary components of the enterprise's new corporate vision statement:

1. Move with velocity to drive profitable growth.

2. Become an even better McDonald’s.
3. Serve more customers delicious food each day around the world.

The first and third elements of McDonald's vision announcement imply that the enterprise goals to
develop and expand its enterprise. This goal requires opening more locations and improving

4|Page
operational efficiency to increase profit margins. McDonald's overall competitive strategy and growth
intensive strategy support the growth and expansion objectives outlined in this corporate vision
statement. The second component focuses on improving its services. However, McDonald's goal is to
comprehensively improve its business, including product development, marketing, franchising, and
human resource development. This is realistic. According to this company vision statement, the
company expects standard increase and development in all regions of the fast-food chain restaurant
business.

McDonald’s Corporate Vision & Corporate Mission – Recommendations:

McDonald’s mission statement satisfies many but not all the standards for growing perfect mission
statements. However, McDonald’s does now no longer consist of data approximately its target
consumers (each consumer), target markets (global), and stakeholders (personnel and others). The
enterprise can enhance its company mission via the inclusion of such extra data. This advice aims to
make the company mission statement simpler to enforce in all regions and factors of McDonald’s
business organization and its community of franchised locations.

McDonald’s vision statement is powerful in pleasing the standards for growing perfect imaginative
and prescient statements. It is likewise cantered at the destiny. Such consciousness makes the
statement strong in phrases of suitability for destiny business situations. Also, the emphasis on turning
into a fair higher McDonald’s makes the company vision statement tough and inspiring. These traits
make the enterprise’s vision satisfactory. However, an appropriate development could be to consist of
data approximately how the enterprise could make itself higher.

SWOT ANALYSIS
STRENGTHS:

 The second largest restaurant network serving customers in more than 120 countries
As of 2020, McDonald’s operates the world’s second-largest restaurant network. In total, the
company and its franchisees operate 38,695 restaurants in 119 countries.
 Delicious food
This is another strength of McDonalds. Its food is popular and very tasty. It is known for its
French fries and is one of the best tasting French fries among the food industry. People having
food at their outlet would not go out without eating its French fries.

WEAKNESSES:

 Supply Chain Interruptions

This is a strong weak point for McDonalds. Being one of the world's largest food chains is
particularly prone to consumerism. Also, it reduces product availability which is important for
performance. When any raw materials are delivered on time, the whole product will hit.
 Employee Dissatisfaction
As a result of recent international workers' rights changes and rising wage increases, many
organizations have experienced widespread dissatisfaction with workers. Workers went on
strike for several days and have demanded an increase in their salaries.

5|Page
OPPORTUNITIES:

 Digital Marketing
The current world talks about digital marketing and has directed many of the world's leading
brands to increase its market share and revenue. McDonald's also increased its competitive
advantage by devoting to digitalization.
 Focus on Asian Markets
There are great business opportunities in the Asian market. Countries like China, Singapore,
Malaysia, and other Asian countries, there is a great need for fast food in the current
generation. Asian countries have prospered over the years and have increased the purchasing
power.

THREATS:

 Competitors
The fast-food industry is growing at a rapid pace. A few competitors are Burger King,
Subway, Wendy's, etc. For McDonald’s to maintain its leading position it must increase its
marketing investment and redefine its menu regularly.
 Economic fluctuations
This is the biggest threat to McDonalds. Economic volatility in large markets can cause losses
and have an impact on the bottom line. The main markets for McDonald's economy are
Canada, the US, France, and other Western countries. When there is an economic crisis in
these markets, it affects McDonald's financial situation as well.

COMPANY POINT OF VIEW:

The corporate purpose and vision statements of McDonald's Corporation are updated to reflect
changes in the global food service industry. The company sees its corporate vision and mission
statements as essential policy and strategic management instruments for guaranteeing long-term
success as the world's largest fast food restaurant chain. The objective of a corporation and its related
operations are defined by its corporate mission statement. During this circumstance, McDonald's
mission statement positions the company as a popular preferred food service location. On the other
hand, a company's corporate vision statement outlines the company's long-term objectives.
McDonald's has a vision statement that drives it to expand and improve. McDonald's must develop
competencies to strategically manage the effects of competition and achieve business goals based on
the company's mission and vision, with major international competitors such as Burger King,
Wendy's, Subway, Starbucks, and Dunkin' Donuts, as well as smaller regional or local firms.

McDonald's Corporation improves core skills by putting its corporate purpose and vision statements
into action. This sort of strengthening is a technique for defending a business against the tremendous
force of competition. According to the Porter Five Forces analysis conducted by McDonald's
Corporation, competition is a significant force acting against the company and its business
environment. The company's mission and vision statements are a direct response to rivals' aggressive
and creative food service methods. In this way, McDonald's believes that its current purpose and
vision will be acceptable in its ever-expanding global operations, despite economic worries and
competition-related problems.

6|Page
McDonald’s Corporate Mission Statement

In its goal statement, McDonald's Corporation stresses winning the favour of target consumers.
Customers' preferences, according to this element, are a critical determinant of a company's business.
To become such a popular location, McDonald's, for example, adjusts its menu and recipes to match
consumers' tastes for fast food products like burgers and fries. The company's mission statement is
divided into two parts: becoming the preferred destination and being the preferred method. As a fast-
food service company, McDonald's creates restaurant designs and layouts to improve efficiency and
customer experience (see McDonald's Operations Management Strategy and Productivity). This
element, along with menu creation, helps the company's restaurants and franchised outlets become
popular eating and drinking destinations. The "preferred way" component of the firm's mission
statement suggests that the company aims to influence how people eat and drink. This argument
makes it difficult for businesses to successfully influence people's behaviour. McDonald's marketing
mix, often known as the 4P, helps the company achieve this goal through promoting the company, its
brand, and its products in order to influence customers.

McDonald’s Corporate Vision Statement

The first and third components of McDonald's vision statement show the company's desire to grow
and extend its operations. This aim entails growing the number of outlets and improving operational
efficiency in order to increase profit margins. McDonald's overall competitive strategy and intense
growth methods support the company's growth and expansion vision statement. The focus of the
second component is on business. The firm does not specify the sort of improvement indicated in the
corporate vision. McDonald's, on the other hand, is committed to implementing complete business
improvements that include product development, marketing, franchising, and human resource
development. If the business adopts this corporate vision statement, it may expect development and
general progress in the fast-food restaurant chain market.

BUSINESS STRATEGY FOLLOWED TO ACHIEVE MISSION AND GOALS

McDonald’s still considers the Indian market as younger market. The Company has targeted only 8%
of the Indian population because the corporate focused on the urban market where few people within
the country lived. The entry strategy of McDonald's was parted into four aspects: entry, supply chain
process, aggressive growth, and penetration.

Joint Venture

McDonald has entered India in 1993. The company had to take a position ton of cash because the
typical Indian had limited purchasing power. McDonald’s used a venture strategy to enter India. A
venture may be a strategic alliance between two or more individuals or organisation to interact during
a particular project. McDonald has entered the country through a 100% subsidiary (a company
controlled by a holding company) mentioned as MIPL (McDonald’s India Private Limited), which
formed two 50–50 ventures with two business people called Vikram Bakshi and Amit Jatia. Vikram is
of Connaught Plaza Restaurants, and Amit of Hardcastle restaurant in India. So that they were
collaborated along with Vikram to run the East and North and with Amit Jatia to run the west and
south India. In India, those two businesspersons manage the franchising company. The staff was

7|Page
trained in India, US and Indonesia to know the complexity of business. The venture strategy allowed
McDonald’s to run their business in India, and gave them better control over their activities, and
allows them to urge new abilities and expertise. The first restaurant of McDonalds was established in
New Delhi, India in 1996 then after in Mumbai mostly due to more population amongst the cities they
were targeting. Afterwards, they expanded in other towns. They charted most effective local suppliers
and distributors to run their business in India. So that now they have 270 restaurants across all over in
India.

McDonald’s Generic Strategy & Intensive Growth Strategies:

The generic strategy of the McDonalds Company explains their basic approach to developing their
business and competitive advantage. As the immense Fast-Food Chain across the earth , McDonald’s
uses its intensive growth strategies to support continued business development and expansion. The
objectives of the related strategic employed by the McDonald's mostly tells about the company’s
operational activities which shows especially in responding to economic changes and thus the actions
of the competing firms. There is market variation conditions which can impose pressure on the
business to adapt or reform its strategies. As we will see that McDonald’s both generic and intensive
growth strategies are changes consistent with the nonce to make great long-term business viability.

McDonald’s generic strategy explains the firm’s all-round business approach for competitiveness.
These intensive strategies of McDonald’s company give big opportunity to growing their business
across the worldwide Fast-Food restaurant industry.

McDonald’s Generic Strategy (Porter’s Model)

McDonald’s primary generic strategy is cost leadership. In this model, this generic strategy involves
to minimizing costs of supply products at low prices. McDonald's is the low-cost provider so that it
can offers their products that are relatively cheaper compared to competitors like Arby’s.
Nevertheless, the corporate also uses extreme broad differentiate ways as a secondary generic
strategy. This secondary generic strategy involves in the developing the business and its products
which allows them to stand in distinct from competitors. McDonald’s applies the broad differentiation
generic strategy through the McCafé products.

Vertical integration is a strategic activity, which links to McDonald’s cost-leadership generic strategy.
If we can observe McDonald’s owns facilities, In that they can produce standardized mixtures of
ingredients so it can be an example for vertical Integration and also cost minimization may be a
financial strategic objective that supports the value leadership generic strategy. In addition, thereto
product innovation is claimed to McDonald’s broad differentiation generic strategy.

McDonald’s Intensive Strategies (Intensive Growth Strategies)

Market Penetration: McDonald’s uses penetration as its primary intensive strategy for growth. In
applying this intensive strategy, McDonald’s grows by reaching more customers in markets where it
already has operations. For example, McDonald’s opens new restaurants in North America and
Europe by franchising, joint ventures or corporate ownership. A strategic objective connected to the
present intensive growth strategy is global expansion through new locations. McDonald’s generic
strategy supports this intensive growth strategy because low costs and low prices empower the firm to
simply penetrate markets.

Market Development: In its early years, McDonald has used market development as its primary
intensive strategy for growth. However, market development is now a secondary intensive growth

8|Page
strategy because McDonald’s already has restaurants in most regions round the world, except
Mongolia, some parts of the centre East and west Asia, and thus the bulk of African countries. A
strategic objective for this intensive growth strategy is to work out new locations in new markets, like
new McDonald’s restaurants in African or Middle Eastern countries where the corporate currently has
no operations. Based on its generic strategy of cost leadership, McDonald’s supports this intensive
growth strategy by using low prices to compete in new markets.

Product Development: McDonald’s uses development as its tertiary or supporting intensive strategy
for growth. In applying this intensive growth strategy, McDonald’s develops new products over time,
like new McCafé products. These new products could also be variations of existing products, or
entirely new products. The strategic objective for this intensive growth strategy is to capture more
consumers by attracting them to new products. This strategy agrees more with McDonald’s company
broad differentiation generic strategy in terms of the foremost recent products that make the company
distinct.

McDonald’s New Growth Strategy:

In 2020, McDonald’s Corporation announces a replacement growth strategy, Accelerating the Arches,
which encompasses all aspects of McDonald’s business because the leading global Omni-channel
restaurant brand. The strategy includes a refreshed purpose to feed and foster the communities
McDonald’s and its franchisees serve round the world, updated values that guide actions and
behaviours, and growth pillars that build on McDonald’s competitive advantages.

The growth pillars of this Company’s identity, MCD, rest on historic strengths and articulate areas of
further opportunity. Specifically, the corporate will determine the MCD within the following ways:

• Maximize our Marketing by investing in new, culturally relevant approaches to talk effectively the
story of brand name, food and purpose.

• decide to the Core by tapping into customer demand for the familiar, which consider serving
delicious burgers, chicken and occasional.

• Double Down on the three D’s (Digital, Delivery and Drive Thru) by leveraging competitive
strengths and building a robust digital experience growth engine that provides a fast easy experience
for our customers.

In countries round the world, we have seen customer behaviours change at an unprecedented pace
over the last several months. We believe this presents an opportunity to undertake to try to something
special as we write subsequent great chapter of McDonald’s," said McDonald’s President and Chief
officer Chris Kempczinski. "By embracing how bigger , more holistic vision for the highest of the day
, Accelerating the Arches defines how McDonald’s will deliver value to all or any or any or any or
any or any stakeholders by providing a transparent roadmap of what we will do for the various
customers, within the thousands of communities, we serve each and every day. With our new growth
strategy, we'll rest on our inherent strengths by harnessing our competitive advantages and investing
in innovations that enable us to supply fast, easy moments for our customers.

A Renewed Purpose to Drive Greater Impact

The Company is prioritizing its role and commitments to the communities it's served for quite 65
years. This year, McDonald has unveiled its refreshed purpose to feed and foster communities.
Through both actions and communications, the company is looking to make an honest greater impact

9|Page
by that concentrate on four areas that matter most to communities: responsibly sourcing quality
ingredients, driving climate action to protect the planet, connecting with communities in times of
need, and increasing consider equity by providing opportunity for restaurant crew.

This purpose translates into action through: support for farming communities; the goal of sourcing
100% of guest packaging from renewable, recycled, or certified sources by 2025; donating many
pounds of quality food from our supply chain and restaurants to neighbours in need in 2020; and
reducing barriers to employment for over 2 million people worldwide.

FINANCIAL DATA

10 | P a g e