McDonald All Project From Net

8/8/2019 McDonald All Project From Net

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McDonalds Overview

McDonald as being ninth most valuable brand in the world which has replaced the US army as the Nations largest job

training organization &Controls the market share of more than 3 food chains taken together in America started in 1940.

McDonald's Corporation (MCD) is the world's largest chain of fast food restaurants, serving nearly 47 million customers

daily.McDonald's primarily sells hamburgers, cheeseburgers, chicken products, French fries, breakfast items, soft drinks,milkshakes and desserts. More recently, it has begun to offer salads, wraps and fruit. Many McDonald's restaurants have

included a playground for children and advertising geared toward children, and some have been redesigned in a more

'natural' style, with a particular emphasis on comfort: introducing lounge areas and fireplaces, and eliminating hard plastic

chairs and tables.

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, an affiliate, or the corporation itself. The corporations' revenues

come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants.

McDonald's revenues grew 27% over the three years

ending in 2007 to $22.8 billion, and 9% growth in operating income to $3.9 billion

II. History1954, a fifty-two-year-old milk-shake machine salesman saw a hamburger stand in San Bernardino, California, and

envisioned a massive new industry: fast food. In what should have been his golden years, Raymond Kroc, the founder and

builder of McDonald's Corporation, proved himself an industrial pioneer no less capable than Henry Ford . He

revolutionized the American restaurant industry by imposing discipline on the production of hamburgers, French fries, and

milk shakes. By developing a sophisticated operating and delivery system, he insured that the French fries customers

bought in Topeka would be the same as the ones purchased in New York City. Such consistency made McDonald's the

brand name that defined American fast food.Worlds Oldest McDonalds

This 44 year-old site is the oldest in the worldwide chain of 20,000 restaurants and the last one with red and- white striped

tile exterior. After opening in 1953, it immediately became the standard for the fast food franchises across the country. The

building and its 60- foot high neon sign with "Speedee the Chef" are eligible for listing on the National Register of HistoricPlaces.

Employees wear 50's style uniforms of paper hats, white shirts and bolo ties. The restaurant serves the original menu of

hamburgers, cheeseburgers, fries and old-fashioned milkshakes. Also available are more recent McDonald's items such as

Big Macs and Happy Meals.McDonald's reopened the facility as it was with walkup windows and outdoor seating. They alsoconstructed and addition housing a museum, gift shop, restrooms and more outdoor seating.

.McDonalds MissionMcDonald's mission is to be our customers' favorite place and way to eat with inspired

people who delight each customer with unmatched quality, service, cleanliness and

value every time ... 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.

IV.McDonalds Culture & ValueMCDONALDS VALUES


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Our values summarized in "Q.S.C. & V.". Provide good quality, services to customer. Have a cleanliness environment

when customer enjoys their meal. The value of food product makes every customer is smiling.

We place the customer experience at the core of all we do

Our customers are the reason for our existence. We demonstrate our appreciation by providing them with high quality food

and superior service, in a clean, welcoming environment, at a great value. Our goal is QSC&V for each and every

customer, each and every time.

We are committed to our people

We provide opportunity, nurture talent, develop leaders and reward achievement. We believe that a team of well-trained

individuals with diverse backgrounds and experiences, working together in an environment that fosters respect and drives

high levels of engagement, is essential to our continued success. We believe in the McDonalds System

McDonalds business model, depicted by the three-legged stool of owner/operators, suppliers, and company employees,

is our foundation, and the balance of interests among the three groups is key. We operate our business ethically

Sound ethics is good business. At McDonalds, we hold ourselves and conduct our business to high standards of fairness,

honesty, and integrity. We are individually accountable and collectively responsible. We give back to our communities

We take seriously the responsibilities that come with being a leader. We help our customers build better communities,

support Ronald McDonald House Charities, and leverage our size, scope and resources to help make the world a better

place. We grow our business profitably

McDonalds is a publicly traded company. As such, we work to provide sustained profitable growth for our shareholders.

This requires a continuing focus on our customers and the health of our system. We strive continually to improve

We are a learning organization that aims to anticipate and respond to changing customer, employee, system needsthrough constant evaluation and innovation.

1. Health professionals and consumer activists accuse McDonald's of contributing to the countryshealth issue of high cholesterol, heart attacks, diabetes, and obesity.2. The relationship between corporate level McDonald's and its franchise dealers.3. McDonalds competitors threatened market share of the company both internationally anddomestically.4. Anti-American sentiments.5. Global recession and fluctuating foreign currencies.Fast-food chain industry is expected to struggle to meet the expectations of the customers towards healthand environmental issues.

Recent economic condition impacts on consumer confidence & spending, prime real estate is competitiveness; the gradual increment in

Limited Brands operations can hamper the MCDs growth. In addition, possible tariffs from government over the imported materials, or

minor disturbance in the long supply chain of the company are a risk. 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.

VI.Five Forces AnalysisCompetition

Restaurant industry is highly competitive industry. There are many small fast food businesses in the industry who fight with each other

to improve their customer base; McDonalds is not an exception to this Since its establishment in 1940, MCD has excelled in the sector.

Nevertheless, to stay in the competition, it started with McCaf. This helped the company to stay in the business as a major fastfood


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business. Another major step came out when McDonald started Breakfast to compete with the existing business serving breakfast.

Hence, this industry is extremely competitive and the MDC should be up to date with customer taste & preferences.

Ease of EntryAlthough it is hard to enter the restaurant business, it is hard to establish a distinct brand name. There is a

high cost of entry in the market and there is \ high research and development costs. Large established companies with strong brand

identities such as McDonalds do make it more difficult to enter and succeed within the marketplace; new entrants find that they are

faced with price competition from existing chain restaurants.

SubstitutesThere are many substitutes in this industry. Since there are a wide variety of products that people canchoose, they could either be substituted by MDC Burgers, Beverages, dairy products, and others.

Strength of SuppliersPower of suppliers within the fast food industry would be relatively small, unless the main ingredient ofthe product is not readily available.

Strength of BuyersRelatively strength of buyers is low in this industry

Distinctive Notion

According to a report issued by Business Week, McDonalds holds 9th position in top 100 brand names all over the world in 2007.Having a long history of almost 69 years, it has established a sense of closeness in the customers. This is one of the major reasons for

McDonalds is being rated one of the highest retention rates among customers. It is now operating 120 & above affiliated franchises &

restaurants.

McCaf is yet another distinctive addition to McDonalds product line. I t is part of our delicious lineup of new McCaf specialty coffees.

Available at the front counter and drive-thru, McDonalds can now provide express service to espresso lovers throughout the U.S.

Nevertheless, it is also popular among youngsters. Breakfast product is another specialty under the portfolio of McDonalds. Earlier

opening times, premium coffee and a flavorful breakfast menu have accelerated our morning momentum in the U.K. and U.S., growing

sales and our market share at breakfast.

VII.Financial highlights include:

Comparable sales grew 6.9% and guest counts rose 3.1%, building on 2007 increases of 6.8% and3.8%, respectively.

System wide sales increased 11% (9% in constant currencies).

Company-operated margins improved to 17.6% and franchised margins improved to 82.3%.

Net income per share from continuing operations was $3.76, an increase of 16% after adjusting forthe impact of the 2007 Latin America transaction.

Cash provided by operations totaled $5.9 billion and capital expenditures totaled $2.1 billion.

Returned $5.8 billion to shareholders through shares repurchased and dividends paid, including a33% increase in the quarterly cash dividend to $0.50 per share for the fourth quarter

Bringing our current annual dividend rate to $2.00 per share

One year ROIIC was 38.9% and three-year ROIIC was 37.5% for 2008

Outlook for 2009

We will continue to drive success in 2009 and beyond by remaining focused on being better, not just bigger. We will do so by further

enhancing our understanding of consumers needs and wants; facilitating greater sharing and adoption of best practices and new ideas

worldwide; and leveraging a strategic approach to implementing initiatives to drive the best bottom-line impact.


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Despite challenging economic conditions, the McDonalds System is energized by our current worldwide momentum. We will continue

to build on our strength in five key areas: maintaining the balance between price and value; maximizing the benefit of available capital

by improving the relevance and contemporary feel of our existing restaurants; leveraging the equity and unique tastes of core menu

favorites like the Big Mac, the Quarter Pounder with Cheese and our world-famous French Fries; continuing our financial discipline and

evaluation of success measures to ensure these measures are driving actions that positively impact our restaurants; and furtheringoperations excellence by focusing on improved execution

VIII.PEST ANALYSISPolitical & Legal

The international operations of McDonalds are highly influenced by the individual state policiesenforced by each government.

Any changes in regulations, the imposition of additional regulations, or the enactment of any new legislation under theObama

administration that impacts employment/labor, trade, product safety, transportation/logistics, health care, tax, privacy, or environmental

issues could have an adverse impact on our financial condition and results of operations.

Economic

McDonalds has the tendency to experience hardship in instances where the economy of therespective states is hit by inflation and changes in the exchange rates.

Market leader.

Very high target market.

Low cost and more incomes.

The rate at which the economy of that particular state grows determines the purchasing power ofthe consumers in that country.

Social

Working within many social groups.

Increase employments

Technological

Advanced technology development.

Quality standards.

Environmental:

Quality packing.

Local manufacture using foreign supplies.

Legal:

Legislation for product.

Sustained logo

X. BCG matrix of McDonalds

The need for strategy in order to expand its existing product in very promising markets for McDonalds is very essential. McDonalds

along with KFC and other major fast food chains have dominated the American continent as well as elsewhere. BCG Matrix: The

market growth rate measures industry attractiveness. The underlying theory for examining market growth rate is the industry life cycle.

The BCG assumes that growth rates, life cycle stages affect a firms finances.

Placing products in the BCG matrix results in 4 categories in a portfolio of a McDonalds:


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1. Stars (=high growth, high market share)

Frequently roughly in balance on net cash flow. However if needed any attempt should be made to hold share, because the rewards will

be a cash cow if market share is kept. So, McDonalds USA is under Star position.2. Cash Cows (=low growth, high market share)

Profits and cash generation should be high, and because of the low growth,investments needed should be low. Keep profits high.3. Dogs (=low growth, low market share)

Avoid and minimize the number of dogs in a company

Beware of expensive turn around plans.4. Question Marks (= high growth, low market share)

Have the worst cash characteristics of all, because high demands and low returns due to low marketshare

McDonald All Project From Net

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