Professional Documents
Culture Documents
Strategy of McDonals
Strategy of McDonals
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Some Interesting Facts
About McDonalds
Currently McDonald's serves
around 69 million people
worldwide everyday.
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Some Interesting Facts
About McDonalds
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Some Interesting Facts
About McDonalds
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McDonalds-Mission Statement
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Main Rivals
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Financial Analysis
Revenue
Net income
30,000.00
6,000.00
25,000.00
5,000.00
20,000.00
4,000.00
15,000.00
3,000.00
10,000.00
2,000.00
5,000.00
1,000.00
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- 2009-12 2010-12 2011-12 2012-12 2013-12 TTM
2009-12 2010-12 2011-12 2012-12 2013-12 TTM
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Financial Analysis
Profitability 2009-12 2010-12 2011-12 2012-12 2013-12 TTM
Tax Rate % 29.84 29.34 31.32 32.36 31.92 31.92
Net Margin % 20.01 20.55 20.38 19.82 19.87 19.87
Asset Turnover (Average) 0.78 0.77 0.83 0.81 0.78 0.78
Return on Assets % 15.51 15.9 16.94 15.98 15.51 15.51
Financial Leverage (Average) 2.15 2.19 2.29 2.31 2.29 2.34
Return on Equity % 33.2 34.51 37.92 36.82 35.69 35.69
Return on Invested Capital % 17.5 18.24 19.48 18.33 17.71 17.71
Interest Coverage 14.71 16.53 17.26 16.64 16.72 16.72
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McDonalds-Profitability with the
Retailing Industry
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McDonalds In Competitive
advantage(Cost)
Worldwide Domestic International
Company Rank Sales ($M) Units Unit Total
McDonald’s 1 89,941 14,098 19,412 33,510
KFC (Yum
Brands) 3 21,300 4,780 12,621 17,401
Burger King 5 14,975 7,500 5,012 12,512
Pizza Hut (Yum
Brands) 6 12,626 7,600 6,147 13,747
Wendy’s 18 6,004 6,772 3,020 9,792
Dunkin’ Donuts
(Dunkin Brands) 18 6,004 6,792 3,020 9,792
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McDonald's – Competitive
advantage(Differentiate)
Mc Café Attract new market segments
Variety of drinks
Satisfy hunger
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McDonald's–Key Success Factor
Customer Range
A key factor in the success of McDonald’s
is its ability to appeal to a wide range of
customers. For example, in June 1976
McDonald’s introduced a breakfast menu
to capture more customers
Nutrition
On the organization’s website,
McDonald’s states that part of its success
is due to its commitment to the well-
being of customers. In 2004, McDonald’s
established a global advisory council to
provide expert guidance on nutrition and
well-being. company name
McDonald's–Key Success Factor
Availability
Affordability
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Environmental Analysis
Porters Five Forces analysis
Micro Environmental analysis
Internal Environment
Strength
weakness
External Environment
Opportunities
Theatres
Macro Environment Analysis
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McDonald's –Five Forces
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McDonald's –Five Forces
Threat of Competition HIGH
Very similar products in the Fast Food industry
High Competitors Advertising Capabilities
Location of outlets are close
EX: KFC, Chick-fil-A, Burger King,Sturbacks.
Threat of New Entrance Moderate
Easy to enter, low setup cost
Lack of ability to compete with MCD( cost efficiency,
customer awareness)
Threat of Substitutes Moderate
Substitutable food
Irreplaceable image
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McDonald's –Five Forces
Power of Suppliers LOW
Worlds largest restaurant chain in sales
High bargaining power over its suppliers(volume)
Most of them owe MCD for their own existence
Low power of suppliers—Lower the cost of raw
materials and High competitive price
Power of Buyers LOW
Less chances of switching, high brand image through
differentiation and uniqueness
Attractive price
Buyer don’t have bargaining power(Low volume)
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McDonald's –SWOT Analysis
Internal Analysis
Strength
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Adapts to local markets
Socially responsible with charities
Safety and quality food
Weakness
Management's failure to see
trends that do not fit
High employee turnovers
Price competition
Controlling quality with franchised company name
operations
McDonald's –SWOT Analysis
External Analysis
Opportunities
Upscale restaurant
Organic foods for the health conscious
Going green
Expanding to new parts of the globe
Threats
Sued for unhealthy food many times
Health concerns
Competitors
Contamination risks
Geopolitical issues affect
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McDonald's –External Factor
Evaluation matrix( EFE )
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McDonald's –Macro environments
PESTEL Analysis
Political (Mild Threat (-1))
• Government regulations over wage
• Government regulation on labeling/packaging
Economic (Moderate Opportunity (+2))
• Inflation, Recession
• Exchange rate
• U.S. housing market crash/EU financial crisis
Social (Moderate Threat (-2))
• Employment opportunities
• Health conscious trends
• Norms , cultural practice
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McDonald's –Macro environments
PESTEL Analysis
Technological (Significant Opportunity (+5))
• Improvement by advanced technology, Social media outlets for
consumer
• Increasing comfort levels with technology
Environmental (Opportunity (+3))
• Forced not to harm the environment
• Lobbying for use of environmentally friendly material
Legal (Major Threat (-4))
• Advertisement regulations
• Health lawsuits
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Strategically Analysis
Generic Building Block
Corporate Level Strategies
Business Level Strategies
Functional Level Strategies
Criticism and Recommendation
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McDonalds-The Generic Building
Blocks of Competitive Advantage
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Corporate Level Strategies (Globalization)
McDonald’s currently operates over 32000 stores
worldwide in 120 countries.
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Corporate Level Strategies (Branding)
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Corporate Level Strategies (Branding)
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Business Level Strategies (Target Market)
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Business Level Strategies (Marketing)
$3.05 $3.50
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Functional Level Strategies
Efficiency, Innovation and Renovation
Outdoor Kisds
New Look Zone
Efficiency
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Functional Level Strategies
Norms and Cultural Practice
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Functional Level Strategies
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Criticism and Recommendation
-Ecological damage
-Selling unhealthy food, McDonalds=junk food?
-Contributing to suffering and exploitation of livestock.
-Speculating Business Practice
-Low Risk Mitigation strategies
-New Innovative menus
-Bigger ranged sectors
-More diversification and Acquisition
-Better service and employment (operational improvement)
-Better Corporate level/management level involvement
-More focus on subcontinent. company name
Thanks!
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