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Submitted by: Shivam Agarwal Vikrant Singh Sandeep Singh Rawat Parmindar Singh
10030141127 10030141058 10030141070 10030141093
Contents McDonald‟s Overview History Vision. Mission & Values McDonald‟s Product Line SWOT Analysis Financial Highlights McDonald‟s Past & Current Business Strategies Porter‟s Value Chain Analysis BCG Matrix of McDonald Conclusion 03 03 04 05 06 08 10 13 14 16 SICSR Page 2 .
it immediately became the standard for the fast food franchises across the country. After opening in 1953. he insured that the French fries customers bought in Topeka would be the same as the ones purchased in New York City.McDonald’s Overview McDonald as being ninth most valuable brand in the world which has replaced the US army as the Nation‟s largest job training organization &Controls the market share of more than 3 food chains taken together in America started in 1940.8 billion. cheeseburgers. and milk shakes. The corporations' revenues come from the rent. a fifty-two-year-old milk-shake machine salesman saw a hamburger stand in San Bernardino. chicken products. Such consistency made McDonald's the brand name that defined American fast food. He revolutionized the American restaurant industry by imposing discipline on the production of hamburgers. it has begun to offer salads. McDonald's Corporation (MCD) is the world's largest chain of fast food restaurants. By developing a sophisticated operating and delivery system. breakfast items. an affiliate.000 restaurants and the last one with red and. and 9% growth in operating income to $3. as well as sales in company-operated restaurants. serving nearly 47 million customers daily.white striped tile exterior. and eliminating hard plastic chairs and tables. California. proved himself an industrial pioneer no less capable than Henry Ford . Company has also expanded the McDonald's menu in recent decades to include alternative meal options like salads and snack wraps in order to capitalize on growing consumer interest in health and wellness Each McDonald's restaurant is operated by a franchisee. or the corporation itself.9 billion History 1954. and envisioned a massive new industry: fast food. McDonald's primarily sells hamburgers. French fries. soft drinks. SICSR Page 3 . In what should have been his golden years. French fries. Many McDonald's restaurants have included a playground for children and advertising geared toward children. with a particular emphasis on comfort: introducing lounge areas and fireplaces. More recently. McDonald's revenues grew 27% over the three years ending in 2007 to $22. milkshakes and desserts. Raymond Kroc. and some have been redesigned in a more 'natural' style. The building and its 60. the founder and builder of McDonald's Corporation. royalties and fees paid by the franchisees.foot high neon sign with "Speedee the Chef" are eligible for listing on the National Register of Historic Places. wraps and fruit. World’s Oldest McDonald’s This 44 year-old site is the oldest in the worldwide chain of 20.
Also available are more recent McDonald's items such as Big Macs and Happy Meals. gift shop. we invite you to be the part of this winning team and give yourself an opportunity to grow with the family of people striving to create smiles on the faces of millions of people everyday. each and every time. We believe in the McDonald’s System McDonald‟s business model. is our foundation. We demonstrate our appreciation by providing them with high quality food and superior service. depicted by the “three-legged stool” of owner/operators. fries and old-fashioned milkshakes. The restaurant serves the original menu of hamburgers. is essential to our continued success. service.Employees wear 50's style uniforms of paper hats. suppliers. The value of food product makes every customer is smiling. and the balance of interests among the three groups is key.C. cleanliness and value every time . services to customer. We place the customer experience at the core of all we do Our customers are the reason for our existence. Our goal is QSC&V for each and every customer. & V. Provide good quality. welcoming environment. cheeseburgers. nurture talent. McDonald's reopened the facility as it was with walkup windows and outdoor seating. We believe that a team of well-trained individuals with diverse backgrounds and experiences. SICSR Page 4 . McDonald’s Values Our values summarized in "Q. develop leaders and reward achievement.. They also constructed and addition housing a museum. at a great value.S. in a clean. and company employees.. working together in an environment that fosters respect and drives high levels of engagement. Have a cleanliness environment when customer enjoys their meal.". restrooms and more outdoor seating McDonald’s Vision To be the best & leading fast food providers around the globe McDonald’s Mission McDonald's mission is to be our customers' favorite place and way to eat with inspired people who delight each customer with unmatched quality. white shirts and bolo ties. We are committed to our people We provide opportunity.
We operate our business ethically Sound ethics is good business. we work to provide sustained profitable growth for our shareholders. At McDonald‟s. scope and resources to help make the world a better place. We are individually accountable and collectively responsible. We grow our business profitably McDonald‟s is a publicly traded company. support Ronald McDonald House Charities. We give back to our communities We take seriously the responsibilities that come with being a leader. This requires a continuing focus on our customers and the health of our system. and leverage our size. we hold ourselves and conduct our business to high standards of fairness. As such. We strive continually to improve We are a learning organization that aims to anticipate and respond to changing customer. honesty. employee and system needs through constant evolution and innovation McDonald Product Line SICSR Page 5 . We help our customers build better communities. and integrity.
place. SICSR Page 6 . supermarkets). price and promotion.g. Strong financial performance and position Affordable prices and high quality products Nutritional information available on packaging Strong global presence & performance in the global marketplace. McDonalds Plan to Win focuses on people. High Staff Turnover including Top management Customer losses due to fierce competition. use of trans fat & beef oil.SWOT Analysis Strength Risk diversity Large market share. Promoting ethical conduct Rigorous food safety standards Decentralized yet connected system Strong brand name. Legal actions related to health issues. Low depth and width of products Opportunities Growing health trends among consumers Joint ventures with retailers (e. products. Strong supply chain. Weakness Unhealthy food image. Specialized training for managers known as the Hamburger University. Uses HCFC-22 to make polystyrene that is contributing to ozone depletion. image and reputation.
possible tariffs from government over the imported materials. Consolidation of retailers likely. database marketing to more accurately market to its consumer target groups. SICSR Page 7 . Recent economic condition impacts on consumer confidence & spending. or minor disturbance in the long supply chain of the company are a risk. Fast-food chain industry is expected to struggle to meet the expectations of the customers towards health and environmental issues. McDonald‟s competitors threatened market share of the company both internationally and domestically. having Wifi internet links should help in attracting segments. and obesity. the gradual increment in Limited Brands operations can hamper the MCD‟s growth. The new “formats”. Also installing children‟s play-parks and its focus on educating consumers about health. It could identify likely customers (based on modeling and profiles of shoppers) and prevent brand switching Strengthen its value proposition and offering. The increasing cost of labor in other countries and decline in value of US Dollars everyday can compel the company to change its way of operation.by innovation within healthier lifestyle foods. Use of CRM. prime real estate is competitiveness. In addition. Its move into hot baguettes and healthier snacks (fruit) has supported its new positioning. Global recession and fluctuating foreign currencies. to encourage customers who visit coffee shops intoMcDonalds. diabetes. Low cost menu that will attract the customers. McCafe. so better locations for franchisees. Threats Health professionals and consumer activists accuse McDonald's of contributing to the country‟s health issue of high cholesterol. The relationship between corporate level McDonald's and its franchise dealers. Diversification and acquisition of other quick-service restaurants. Respond to social changes . Growth of the fast-food industry. fitness. Anti-American sentiments. International expansion into emerging markets of China and India. Worldwide deregulation. heart attacks.
500 2.060.725. One-year ROIIC was 38.400 1.500 1. System wide sales increased 11% (9% in constant currencies).9% and guest counts rose 3. building on 2007 increases of 6.179.500 SICSR Page 8 .939.000 3.1 billion.368.200 1.800 32.700 31.070.000 1.600 564. an increase of 16% after adjusting for the impact of the 2007 Latin America transaction.495.295.644. respectively.477.015.624. Cash provided by operations totaled $5.800 2.586.600 23.975.500 1.900 21.8% and 3. including a 33% increase in the quarterly cash dividend to $0.387.500 2.600 1.500 612.300 1.176.9 billion and capital expenditures totaled $2.8 billion to shareholders through shares repurchased and dividends paid.200 4.300 22.6% and franchised margins improved to 82.624.9% and three-year ROIIC was 37.521.000 1.900 1.500 1.100 109.697.100 1.000 591.300 Total Current Assets Long Term Investments Property Plant and Equipment Goodwill Intangible Assets Accumulated Amortization Other Assets Deferred Long Term Asset Charges Total Assets Liabilities Current Liabilities 4.8%.00 per share.025.833.5% for 2008 Balance Sheet Period Ending Assets Current Assets Cash And Cash Equivalents Short Term Investments Net Receivables Inventory Other Current Assets 30-Jun-11 31-Mar-11 31-Dec-10 30-Sep-10 2.50 per share for the fourth quarter Bringing our current annual dividend rate to $2.160.200 4.3%.100 32. Returned $5.100 31.080.100 115.317.335.Financial Highlights Comparable sales grew 6.400 1.669.013.300 111.76.800 2.600 2.355.600 188.8.131.52%.500 2.824.000 1. Company-operated margins improved to 17.900 692.710.500 22. Net income per share from continuing operations was $3.
300 5.336.900 16.400 752.880.568.386.626.500 1.143.759.100 10.254.227. .062.300 Currency in USD.900 -24.637.Accounts Payable Short/Current Long Term Debt Other Current Liabilities 2.948.548.400 78.600 14.900 - Total Liabilities Stockholders' Equity Misc Stocks Options Warrants Redeemable Preferred Stock Preferred Stock Common Stock Retained Earnings Treasury Stock Capital Surplus Other Stockholder Equity 17.800 5.453.400 1.259.000 12.516.100 11.497.165.400 1.586.900 1.048.544.320.400 8.266.200 1.737.200 13.570.700 11.700 -25.116.600 32.400 - 2.600 17.100 1.700 1.362.300 11.200 16.524.800 Total Stockholder Equity 14.108.729.530. SICSR Page 9 .219.463.400 16.341.100 1.952.200 -26.900 1.196.811.300 1.300 703.187.800 1.400 5.634.135.924.544.300 5.916.600 35.332.200 17.400 - 3.000 -27.800 11.400 11.700 16.400 - 2.800 14.254.600 33.000 17.900 - Total Current Liabilities Long Term Debt Other Liabilities Deferred Long Term Liability Charges Minority Interest Negative Goodwill 3.000 1.600 34.400 - 4.357.300 - 3.303.800 Net Tangible Assets 12.784.700 - 2.
different consumer groups in different countries may have very different tastes and/or requirements. As shown in above pie charts that around 65% of McDonald‟s restaurants and approximately 75% of its revenues are generated in the United State and Europe. Actually. McDonald‟s divided its operations into five geographical divisions. service. As Jim Skinner. their philosophy of QSC&V-quality. you will be asked to choose the country that you are interested in. So their main products are similar in most countries. to McDonald‟s.McDonald’s Business Strategies The McDonald‟s business structure is based upon a geographic structure. cleanliness and value is same for everywhere. the most important strategic approach for maintaining its leading position is to keep their major markets at the same time expanding their business into the other emerging markets. you won‟t find it‟. the vice-chairmen of McDonald‟s illustrated that „if you are looking for a command center with one push button that operate our restaurant in every corner of the world. When log on their website. McDonald‟s could not only satisfy the local consumers‟ needs in different geographical areas but also pursuing „maximum local development‟. However. Actually they produce and market slightly different types of products in different areas. and they even have different prices. affordable price and good standard hygiene. And McDonald‟s targets the similar consumer segments that need fast service. So each full functional geographic unit of McDonald‟s was required to wholly response for producing and marketing its products in that region. So. However. where they provided SICSR Page 10 . Through this regional structure.
wood-beam ceilings. McDonald‟s has boosted it sales by remodeling restaurants i. They made lots of efforts to promote their American burgers. McDonald‟s had already carried out 5 years business research and all sorts of information gathering such as the income level of the Chinese people. and Subway. In an annual consumer satisfaction survey. But before they actually started their business.service. McDonald‟s disclosed its first-ever quarterly loss. the McChicken Premiere has been added to the menu. hardwood floors. such as Burger King. including beef. brioche and more upscale sandwiches. As the consumers in different countries having different foods requirements.e. McDonald‟s has introduced new Canadian feature breakfast. All of these simply proved that McDonald‟s might no longer be competitive in the fast-food market. In Belgium. in Canada. one reason why McDonald‟s is struggling is that the consumers began to switch to its competitors. their biggest rival. high-quality foods at lower price with faster service. where customers has been resentful of the fast-food chain‟s incursion. On the other hand. For example. which are their main products. comfortable armchairs. Although McDonald‟s has been regarded as the ultimate example of standardization for the world market. their re-design of the counter. and wanted to repeat the same success in China market as they has done elsewhere. hotter. McDonald’s Current Strategies Competitor: It‟s unlikely that McDonald‟s can always be No. McDonald‟s decided to close 719 poorly performing restaurants around world. McDonald’s in China In 1990. they are not as successful as KFC. McDonald‟s has been scored dead last among fast-food restaurants since 1992. After identified this problem. Unfortunately. chicken. In the other countries the situation is the same. McDonald‟s opened their first store in shenzhen (near Hong Kong). one important issue which has once been ignored by McDonald‟s is that Chinese people are more prefer chicken dishes than beef burgers. And if McDonald‟s cannot adapt external SICSR Page 11 . McDonald‟s has tried to adapt more Chinese tastes by adding more chicken meals into their menu for attracting more customers. Wendy‟s. These companies emphasized on offering fresher. bread potatoes and milk. There are lots of reasons to explain it. McDonald‟s keep launching new products for their regional consumers. McDonald’s in France In France. the kind of foods they enjoy etc. Moreover. Actually they have successfully responded to the preferences of the local area. In the fourth quarter of 2002. chairs and desks also reflected their considerations of the height and body shape of Chinese people. and also by adding new menu items such as espresso. In this case China and France can be very good examples . in China now.1.
such as Subway‟s sandwiches. people also believe that such kinds of fast food are not good for their health. offering fantastic “happy meals” with novelty toys to them. McDonald‟s is providing more choice with respond to offer „ Happy Meal‟ to keep the children. At the same time. and will provide the best engine to encourage the whole family to come to McDonald‟s. McChicken Premiere and a zesty chicken have been introduced in the UK. Happy meal now including chicken selects. McDonald‟s has added salads and other lighter options into their menu. SICSR Page 12 . In 2003. she will also be likely to buy herself a meal too . For example. or KFC‟s mashed potato instead of fried potato. but also perfectly fitting the modern professionals‟ requirements. Moreover.The world health organization„s report presented that those food not only can cause the obesity of children. it is selling the American culture to the children – the enjoyable individual life. France. people‟s living standards have increased dramatically these years. Furthermore.the lighter options also encourage existing customers to come back more often. McDonald‟s more likely to be successfully today and in the future. McDonald‟s is differentiating itself by creating more relevant experiences such as allowing the customers to access the Internet with the wireless technology platform. one happy meal for a child only cost $ 5 but McDonald‟s can produce more new products in addition to happy meal to offer the whole family. McDonald‟s offered the McGriddles sandwiches in the US and the Canada feature breakfast. If a mother comes in. in addition to the innovative menu. as their favorite place to go . McDonald‟s is not just selling the happy meal to children. Furthermore. In order to compete. McDonald‟s has responded to this healthy trend. McDonald‟s was trying to satisfy customer‟s desire for premium products at affordable prices. and no-sugar –add fruit drink (juice and low-fat drink) and also to produce McDonald‟s coffee which appeals to adult. Meanwhile. they might be gradually diminished and even replaced by other competitors. because there is a greater variety of choices. This innovative way not only attracts the teenagers. she is not only buy the happy meal for her children. Italy and Belgium. And McDonald‟s has been regarded. There are three main reasons for McDonald‟s to focus on the children: (1) Children are one of the biggest consumers groups to McDonald‟s. People are becoming more concerned about their health issues. Healthy issues became the biggest stumbling block to the development of McDonald‟s. For example.The brand culture “happiness” is known by children. (3) By Building a brand loyalty with the children. It cannot be denied that McDonald‟s has attempted to make itself more convenience for the people. They built „happy land‟ for them. (2) McDonald‟s believe that focusing on children can build the stable business. McDonald‟s is also rebuilding and even relocating some of their restaurants to make the environment more attractive. McDonald‟s has to respond to the threat of competitors. McDonald‟s has just launched computers with games that were designed to inspire the children‟s imagination at the same time shape their personal characteristics. Social problem –healthy issue With the economic development.environment change. McDonald‟s has paid considerable attention to the children in every country. increasing sales and profits. Focus on Children No matter how different the tastes and the local needs are. Customers were switching to healthier offering. However. but also is part of the reason of causing cancer. Those products have been made to attract existing customer and develop new customers. In order to keep their market share.
Service: the support of customers after the products and services are soldto them. Outbound Logistics: the warehousing and distribution of finished goods. These primary activities are supported by: Technology development: technologies to support value-creating activities. As Per the Porter's 5 Forces analysis McDonalds deals with factors outside an industry that influence the nature of competition within it. thereby resulting in a profit margin for McDonalds.Porter Value Chain Analysis of McDonald’s The goal of these activities is to offer the customer a level of value that exceeds the cost of the activities. the forces inside the McDonalds influences the way in which the firms compete. Marketing & Sales: the identification of customer needs and the generation of sales. SICSR Page 13 . The primary value chain activities are: Inbound Logistics: the receiving and warehousing of raw materials and their distribution to manufacturing as they are required. So McDonald‟s rivalry in this competitive market is blooming. and so the industry‟s likely profitability is conducted in Porter‟s five forces model. A business has to understand the dynamics of its industries and markets in order to compete effectively in the marketplace.The value chain model is a useful analysis tool for defining a firm's corecompetencies and the activities in which it can pursue a competitive advantage as follows: Cost advantage: by better understanding costs and squeezing them out of the value-adding activities. Operations: the processes of transforming inputs into finished products and services.
The underlying theory for examining market growth rate is the industry life cycle. BCG Matrix: The market growth rate measures industry attractiveness. life cycle stages affect a firm‟s finances Placing products in the BCG matrix results in 4 categories in a portfolio of a McDonalds: SICSR Page 14 . The BCG assumes that growth rates.BCG matrix of McDonald’s The need for strategy in order to expand its existing product in very promising markets for McDonald‟s is very essential. McDonald‟s along with KFC and other major fast food chains have dominated the American continent as well as elsewhere.
Keep profits high. Beware of expensive „turn around plans‟. 4. Question Marks (= high growth. high market share) Frequently roughly in balance on net cash flow. Cash Cows (=low growth. high market share) Profits and cash generation should be high. because the rewards will be a cash cow if market share is kept. However if needed any attempt should be made to hold share. 2. McDonald‟s USA is under Star position. Stars (=high growth. low market share) Have the worst cash characteristics of all. because high demands and low returns due to low market share SICSR Page 15 . and because of the low growth. 3. investments needed should be low. low market share) Avoid and minimize the number of dogs in a company.?McDonalds Europe McDonald’s USA McDonald’s Asia Americas McDonald’s 1. So. Dogs (=low growth.
kids‟ especially senior citizen which is a completely new concept. To have more variety to choose from.e.e. MCD is willing to expand their Happy Meal choices to attract and retain customers& can also Introduction of McCafees serving premium and specialty coffees and other beverages and other products such as cakes. MCD should provide special promotions during festivals. it is clear that the company can be said to be `global‟. youth. After analyzing the marketing mix of McDonald‟s. They should increase the space for provision of birthday party areas& try to sponsor college festivals. combining elements of globalization and internationalization. By lower the supply chain cost so that it helps in cost reducing. i. McDonald‟s have achieved this through applying the maxim. `think global. Focus on gifts for all generations i. pastries etc in the existing McDonald‟s. act local‟ SICSR Page 16 . to include more deserts and more items like Pizza McPuff.Conclusion Increase its product line. It should continue to provide better and quick service.
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