Business Name: McDonald’s

Back in 1954, a man named Ray Kroc discovered a small burger restaurant in
California, and wrote the first page of our history. From humble
beginnings as a small restaurant, we're proud to have become one of the
world's leading food service brands with more than 36,000 restaurants in
more than 100 countries.

Business Market Vision:

McDonald's aims to maintain its position as a dominant player in the global fast-food market. We
strive to continuously innovate our menu, offer personalized dining experiences through technology,
and expand our presence in emerging markets, ensuring that customers worldwide can enjoy our
iconic meals.
Country Market Vision:
In each country where we operate, we envision being the top-choice fast-food restaurant for local
consumers. We are committed to tailoring our menu to accommodate regional tastes while upholding
the highest standards of food quality and service.
Regional Market Vision:
In regions such as Asia-Pacific, Europe, the Americas, and Africa, we aim to be the preferred dining
destination for families, individuals, and communities alike. We will expand our presence in under-
served regions and continually adapt to evolving consumer preferences.
World Market Vision:
On a global scale, McDonald's seeks to lead the quick-service restaurant industry in terms of
sustainability and social responsibility. We will reduce our environmental footprint, source ingredients
responsibly, and actively engage in initiatives that address global challenges like climate change,
hunger, and social inequality. Our goal is not only to serve great food but also to contribute positively
to a better world.

Business Plan for McDonald's:

Executive Summary:
 A concise overview of the business plan, including the company's mission, vision, and
strategic goals.
The Company franchises and operates McDonald’s restaurants, which serve a locally relevant menu of
quality food and beverages in communities across more than 100 countries. Of the 40,275 McDonald's
restaurants at year-end 2022, approximately 95% were franchised.
PURPOSE, MISSION AND VALUES
Through its size and scale, McDonald's embraces and prioritizes its role and commitment to the
communities in which it operates through its purpose to feed and foster communities, and its mission
to make delicious feel-good moments for everyone. The Company is guided by fivecore values that
define who we are and how we run our business across the three-legged stool of McDonald’s
franchisees, suppliers, and employees:
1. Serve – We put our customers and people first;
2. Inclusion – We open our doors to everyone;
3. Integrity – We do the right thing;
4. Community – We are good neighbors; and
5. Family – We get better together. The Company believes that its people, all around the world, set it
apart and bring these values to life on a daily basis.

Company Description:
 Detailed information about McDonald's, including its history, current operations, and
organizational structure.
History:
McDonald's was founded in 1940 in San Bernardino, California, by the McDonald brothers, Richard
and Maurice. Ray Kroc, a milkshake machine salesman, joined them in 1955 and helped turn the
restaurant into a global phenomenon through franchising. Since then, McDonald's has expanded to
over 100 countries, offering a diverse menu and embracing technology while addressing sustainability
challenges. Today, it operates over 39,000 restaurants worldwide, serving millions of customers daily.

Current Operations:
1. Global Presence: McDonald's operates in more than 100 countries and serves millions of
customers daily. It has over 39,000 restaurants worldwide, with a mix of company-owned and
franchised locations. The majority of McDonald's restaurants are now owned and operated by
independent franchisees.
2. Menu: McDonald's menu varies by region to accommodate local tastes and cultural preferences
while maintaining core items like the Big Mac, Quarter Pounder, and Chicken McNuggets. They also
offer breakfast items, salads, desserts, and a range of beverages.
3. Technology and Innovation: McDonald's has embraced technology, introducing self-order kiosks,
mobile ordering, and delivery services in many locations. These initiatives aim to enhance customer
convenience and streamline operations.
4. Sustainability: McDonald's has made commitments to sustainability, including goals to source all
of its packaging from renewable, recycled, or certified sources by 2025 and reduce greenhouse gas
emissions from its restaurants and offices by 36% by 2030.

Organizational Structure:
McDonald's has a hierarchical organizational structure that includes:

1. Board of Directors: The board is responsible for overseeing the company's strategic direction and
major decisions.
2. Corporate Leadership: The executive leadership team, led by the CEO, manages the day-to-day
operations and strategic initiatives.
3. Franchisees: A significant portion of McDonald's restaurants are owned and operated by
independent franchisees who pay fees and royalties to the corporation. Franchisees are responsible for
the day-to-day management of their restaurants.
4. Divisions and Regions: McDonald's is organized into divisions and regions, each with its own
management structure to oversee operations in specific geographic areas.
5. Functional Departments: The company has various functional departments, including marketing,
operations, finance, human resources, and supply chain management, each responsible for specific
aspects of the business.
Market Analysis:
 An analysis of the global fast-food industry, market trends, competition, and target customer
segments.
McDonald’s restaurants compete with international, national, regional and local retailers of traditional,
fast casual and other food service competitors. The Company measures its competitive position within
the informal eating out ("IEO") segment, which is inclusive of the Company's primary competition of
quick-service restaurants, but also includes 100% home delivery/takeaway providers, street stalls or
kiosks, cafés, specialist coffee shops, self-service cafeterias and juice/smoothie bars. The Company
competes among quick-service restaurants primarily on the basis of price, convenience, service,
experience, menu variety and product quality.
Competition:
 Burger King: Known for its flame-grilled burgers and competitive menu items, Burger King
is one of the closest competitors to McDonald's.
 KFC (Kentucky Fried Chicken): Specializing in fried chicken, KFC competes for a share of
the fast-food market with its unique chicken offerings.
 Subway: Subway focuses on customizable sandwiches and fresh ingredients, offering an
alternative to traditional burger-focused fast food.
 Taco Bell: Taco Bell offers Mexican-inspired fast food, including tacos, burritos, and other
menu items, targeting a younger demographic.
 Wendy's: Wendy's distinguishes itself with fresh, never-frozen beef and a range of menu
items, including square-shaped burgers.
 Starbucks: Although primarily a coffee chain, Starbucks also competes in the fast-food space
with its food offerings, including sandwiches and pastries.

Target Customer Segments:

 Families: McDonald's has historically targeted families with children through its Happy Meal
offerings and playgrounds in some locations.
 Teens and Young Adults: McDonald's attracts teenagers and young adults looking for
affordable, convenient options with late-night hours.
 Health-Conscious Consumers: McDonald's caters to health-conscious consumers with
salads, fruit options, and grilled items.
 Busy Professionals: People seeking quick meals during work hours or while on the go often
choose fast-food options, and McDonald's aims to provide speedy service.
 Value Seekers: McDonald's has a strong value menu, appealing to price-conscious customers.
 Diverse Tastes: McDonald's tries to cater to a diverse customer base by offering a mix of
international and regional menu item
Products and Services:
 Description of McDonald's menu offerings, including any new products or services in
development.
McDonald’s restaurants offer a substantially uniform menu, although there are geographic variations
to suit local consumer preferences and tastes. McDonald’s menu features hamburgers and
cheeseburgers, the Big Mac, the Quarter Pounder with Cheese, the Filet-O-Fish, the McChicken and
other chicken sandwiches, Chicken McNuggets, World Famous Fries, salads, shakes, McFlurry frozen
desserts, sundaes, soft serve cones, bakery items, soft drinks, coffee, McCafé beverages and other
beverages. McDonald’s restaurants in the U.S. and many international markets offer a full or limited
breakfast menu. Breakfast offerings may include breakfast sandwiches, such as the Egg McMuffin,
Sausage McMuffin with Egg and McGriddles, biscuit and bagel sandwiches, oatmeal, hash browns,
breakfast burritos and hotcakes. In addition to these menu items, restaurants sell a variety of other
products during limited-time promotions. Taste, quality, choice, value and nutrition are important to
customers, and the Company is continuously evolving its menu to meet its customers' needs, including
testing new products on an ongoing basis.

Marketing and Sales Strategy:

 A plan for marketing McDonald's products and services, including advertising, promotions,
and sales channels.
McDonald’s global brand is well known. Marketing, promotional and public relations activities are
designed with customers in mind and are focused on promoting the McDonald’s brand and
differentiating the Company from its competitors. Marketing and promotional efforts focus on value,
quality, food taste, menu choice, nutrition, convenience, cultural relevance and the customer
experience.
 1. Market Research:
 Conduct market research to understand customer preferences, demographics, and trends.
 Analyze the competitive landscape to identify strengths and weaknesses relative to
competitors.
 2. Target Audience:
 Identify and segment the target audience based on demographics, psychographics, and
behavior.
 Tailor marketing strategies to resonate with specific customer segments, including families,
young adults, and health-conscious consumers.
 3. Advertising:
 Utilize a mix of traditional and digital advertising channels, including TV, radio, social media,
online display ads, and search engine marketing.
 Develop creative and compelling ad campaigns that highlight McDonald's unique selling
points, such as convenience, affordability, and menu variety.
 4. Promotions:
  Offer regular promotions and limited-time offers to create a sense of urgency and encourage
repeat visits.
 Leverage loyalty programs, such as McDonald's app rewards, to incentivize customer
engagement.
 5. Sales Channels:
 Optimize the restaurant experience, focusing on speed, accuracy, and cleanliness.
 Invest in technology, including mobile ordering, self-service kiosks, and delivery partnerships,
to enhance convenience.
 Expand delivery options through third-party delivery services like Uber Eats and DoorDash.
Operations Plan:
 Details about the company's operational processes, supply chain, and distribution.
Distribution Channel
The most prominent place McDonald’s products can be found are at its restaurants. Other places
where the company uses to sell its products are:

Kiosks
Postmates website and app
McDonald’s mobile app
Hence, the company is using the selective distribution channel maintaining a push-and-pull marketing
communication (Meyer 2015).

Where to sell? Online? Shops?

McDonald's primarily sells its products through physical restaurants located around the world. These
physical locations are the core of McDonald's business, providing dine-in, takeout, and drive-thru
services. However, McDonald's has also expanded its sales channels to include online ordering and
delivery services:

 Online Ordering: McDonald's offers online ordering through its official website and mobile
app. Customers can browse the menu, customize their orders, and pay online for a contactless
ordering experience.
 Delivery Services: McDonald's partners with third-party delivery platforms like Uber Eats,
DoorDash, Grubhub, and others to provide home delivery services. Customers can place
orders through these apps or websites for doorstep delivery.

 Supply Chains

McDonald’s business model is based on the “Three-legged stool” model (Figure 4) created by Ray
Kroc (Pfeifferová 2012). In order for McDonald’s to manage its suppliers and franchisees, the Three-
legged stool business model ensures that McDonald’s, suppliers and franchisees (represented by one
leg of the stool) all work together. Furthermore, the fast food giant implements the 5 Vested
Outsourcing rules which is mutually successful to McDonald’s and its suppliers (Kling et al 2012).
The rules are:

 Rule 1: Focus on outcomes, not transactions

 Rule 2: Focus on the what, not the how
 Rule 3: Agree on clearly defined & measurable outcomes
 Rule 4: Pricing model/incentives for cost/service trade-offs
 Rule 5: Govern for insight, not oversight
 Figure 4: Suppliers,
franchiser and franchisee in the three-legged stool model (Source: Fristedt 2012)
Partners internationally or locally
A Beef Supplier, Lopez Foods
 Lopez Foods provides McDonald’s U.S. Supply Chain with USDA-inspected beef used to make the
patties served in restaurants.
A Meat & Fish Supplier, Keystone Foods
 Keystone Foods provides many ingredients, like some of the chicken for our Chicken McNuggets®.

A Fish Supplier, Kenny Longaker

 Kenny casts a wide net to bring the best of the sea to McDonald’s.

A Potato Farmer, Frank Martinez

 Frank’s Russet Burbank potatoes are used to make World Famous Fries®.

A Potato Farmer, Jenn Bunger

 Jenn works alongside her family to harvest quality potatoes.

A Potato Farmer, 100 Circle Farms

 100 Circle Farms assesses quality based on the potatoes’ uniformity.

An Apple Farmer, Mike Dietrich

 Mike’s family-owned orchard hand-picks apples at their peak of ripeness.

A Lettuce Farmer, Dirk Giannini

 Dirk’s family farm offers a variety of lettuce from tender to spicy.

A Coffee Supplier, Gaviña Gourmet Coffee

 Gaviña Gourmet Coffee is expertly made by a master-blender before it arrives in your McCafé®
beverage.

A Dairy Supplier, Hildebrandt Farms

 Hildebrandt Farms provides wholesome milk at McDonald’s locations throughout Illinois and
Wisconsin.

A Dairy Supplier, Milking R Dairy

 Milking R Dairy provides milk for soft serve ice cream in McDonald’s locations across the state of
Florida.

Management and Leadership:

 Information about the management team, their roles, and their qualifications.
 Mcdonald’s organizational structure is designed in a way that ensures effective and efficient
operations across all its locations. The company follows a hierarchical structure, which means that
decision-making power flows from the top down. At the top of the hierarchy is the CEO who is
responsible for the overall strategy and direction of the company.
The next level is made up of senior executives who oversee different functions such as marketing,
operations, finance, and human resources. These executives are responsible for implementing the
CEO’s strategy and ensuring that each function is performing optimally.
Below the senior executives are the regional managers who oversee operations in different regions
of the world. They are responsible for ensuring that each location in their region is meeting its
targets and following standard operating procedures.
At the bottom of the hierarchy are the restaurant managers who oversee the day-to-day
operations of individual locations. They are responsible for managing staff, ensuring customer
satisfaction, and meeting financial targets.
Another key component of McDonald’s organizational structure is its franchise system. Over 90%
of McDonald’s locations are owned by independent franchisees who are responsible for managing
their own locations. However, they must follow strict guidelines set by McDonald’s corporate,
including menu items, pricing, and marketing campaigns.

What is McDonald’s cost leadership strategy?

You’re probably familiar with McDonald’s cost leadership strategy. But do you know what it is?
In a nutshell, McDonald’s’ cost leadership strategy is about offering a cheaper menu option than its
competitors. It doesn’t mean they’re skimping on quality—far from it.
What it does mean is that they’re able to keep their prices low by streamlining their production process
and keeping things like advertising and labor costs down, which is their main competitive advantage.

Cost control is key to a cost-leadership strategy, which enables a company to earn above-average
returns. McDonald’s is the king of fast food because they know how to run a lean operation and keep
its costs down.
According to McDonald’s cost leadership strategy, over 761,000 people work for McDonald’s in the
US. More than 64% of these individuals are over 20 years old, and the majority only make $7.25 per
hour.

Financial Plan:
The financial plan is a critical component, consisting of:
Income Statement: Projected revenues, expenses, and profitability over a specific period.
 Balance Sheet: A snapshot of the company's financial position at a specific point in time.
McDonald's has a total shareholder equity of $-5.0B and total debt of $35.8B, which brings its debt-to-
equity ratio to -716.1%. Its total assets and total liabilities are $50.4B and $55.4B respectively.
McDonald's's EBIT is $11.1B making its interest coverage ratio 9.4. It has cash and short-term
investments of $1.6B.
 Cash Flow Statement: Projections of cash inflows and outflows.

Financial Projections: Future financial forecasts, including revenue growth, cost

controls, and profit margins.
McDonald's is forecasted to grow earnings and revenue by 6.8% and 6.4% per annum respectively.
EPS is expected to grow by 8.9%. Return on equity is forecast to be 89.8% in 3 years.
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