INTRODUCTION
Although the realm of accounting and finance has often been viewed as dull ‘bean counting’, in today’s modern and competitive business environment, the finance department should be at a t the heart of any an y company, compan y, encompassing a variety varie ty of functions that go beyond its traditional trad itional financial financial reporting role. While it is still a priority for accountants to ensure a company’s company’s financial financial statutory accounts meet legal requirements, requirements, dynamic companies such as McDonald’s McDonald’s have shifted the focus of their accounting and finance function to additionally include the evaluation of past performance and appraisal app raisal of future opportunities, oppo rtunities, helping to ensure ens ure the ompany ma!imises its strategic capabilities.
McDonald’s McDonald’s "estaurants "estaurants #$ %imited, %imited, a wholly owned subsidiary subsidiary of the #.&. parent company, opened its first #$ restaurant in Woolwich in '()*. +here are now ',-- restaurants operating in the #$ which, despite representing only * of the total number of McDonald’s restaurants restaurants worldwide, contribute contribute ) of global profits, ma/ing the #$ a very important financial mar/et for McDonald’s shareholders.
McDonald’s McDonald’s understands understands the value of an integrated integrated accounting accounting and finance function, function, e!tending from the restaurant floor up to the board of directors. 0ach individual McDonald’s restaurant restaurant is structured structured as an independent independent business, with restaurant restaurant management responsible for its financial performance, supported by the centralised Accounting 1 2inance department.
DEPARTMENT STRUCTURE & FUNCTION
McDonald’s 2inance Department has two /ey areas of responsibility3 financial reporting and managem management ent accounti accounting. ng. Althou Although gh each of these these functio functions ns has differ different ent prioriti priorities, es, wor/ing wor/ing together ensures the best financial position for the company now and for the future.
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HOW DOES MCDONALD’S MAKE A PROFIT?
McDonald’s has two sources of profit3 5 &ales made by company6owned restaurants 5 "ental and royalty income from franchised restaurants.
RESTAURANT SALES
McDonald’s retains all of the profit earned by company6owned restaurants. An e!ample 7rofit 1 %oss &tatement for a restaurant is shown left and highlights how food and labour constitute a restaurant’s largest costs. 8n addition to variable costs, which increase or decrease depending on the level of sales, McDonald’s also incurs costs that are largely fi!ed, for e!ample utilities and advertising, advertising, which need to be paid for even before the restaurant ma/es any sales. 8ncreasing 8ncreasing sales and controlling costs are fundamental to ensuring the profit of each restaurant is either maintained maintained or increased.
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COMPANY PROFILE McDonalds is a leader in convenient foods and beverages, with revenues of about 94 billion and over i.: million employees serving the customer’s world wide. +he company consists of the snac/ business of ;everages and 2oods. 7epsio brands are available in nearly ''< countries having more than *,<-- restaurants in the world providing * hour service. =aving about ' billon customers to be served all over the world.
McDonalds’s success is the result of superior products, high standards of performance, distinctive competitive strategies and the high integrity of our people. McDonalds is continuing to e!pand and introduce new alternative beverages in the mar/et. Appro!imately >< of McDonald’s restaurant businesses world6wide are owned and operated by franchisees .All franchisees are independent, full6time operators. McDonald’s was named 0ntrepreneur’s ?umber6one franchise for '(()
@ur mission is to be the worlds premier consumer 7roducts ompany focused on convenient foods and beverages. We see/ to produce healthy financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which
we operate. And in everything we do, we strive for honesty, fairness and integrity you could now Boin our team. Creater variety and quality choices surprise and delight customers with the food and beverage they desire.
McDonald’s corp. is currently one of the most successful consumer products company in the world with annual revenues e!ceeding 94 million and has more than '.: million employees.
McDonald’s products are recognied and are most respected all around the globe. urrently, its divisions operate in all over the world in beverages, snac/ foods, and restaurants. +he corporations <
increasing success has been based on high standards of performance, mar/eting strategies, competitiveness, determination, commitment, and the personal and professional integrity of their people, products and business practices.
McDonald’s believes their success depends upon the quality and value of their products by providing a safe, whole some, economically efficient and a healthy environment for their customersE and by providing a fair return to their investors while maintaining the highest standards of integrity.
HISTORY OF McDONALDS.
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The McDonald's History - 1954 to 1955 Raymond Albert Kroc 1902-194! A "alesman
Ray Kroc mortgaged his home and invested his entire life savings to become the exclusive distributor of a five-spindled milk shake maker called the Multimixer. Hearing about the McDonald's hamburger stand in alifornia running eight Multimixers at a time! he packed up his car and headed "est. #t $as %&(. He $as ) years old. Dic# and Mac McDonald's Resta$rant! "an %ernardino! &aliornia
Ray Kroc had never seen so many people served so *uickly $hen he pulled up to take a look. +ei,ing the day! he pitched the idea of opening up several restaurants to the brothers Dick and Mac McDonald! convinced that he could sell eight of his Multimixers to each and every one. "ho could $e get to open them for us Dick McDonald said.
"ell! Kroc ans$ered! $hat about me
(here it all be)an! Des *laines! +llinois
Ray Kroc opened the Des /laines restaurant in %&. 0irst day's revenues-1233.%)4 5o longer a functioning restaurant! the Des /laines building is no$ a museum containing McDonald's memorabilia and artifacts! including the Multimixer4
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The McDonald's History - 195, to 19,
Ray Kroc At (or#
#f you've got time to lean! you've got time to clean! Ray Kroc preached to his troops. Heeding his o$n $ords! here the hairman of the 6oard cleans the parking lot of the first McDonald's franchise in Des /laines! #llinois.
Ronald McDonald! +n Any .an)$a)e He Means /$n/
7he smile kno$n around the $orld! #n his first 78 appearance in %&32 the happy clo$n $as portrayed by none other than "illard +cott.
red T$rner And Ray Kroc! Architects A Dream
Here Ray Kroc 9right: and 0red 7urner study the design $hich $ould replace the red and $hite tile buildings that had become landmarks throughout the ;.+. alled Kroc's first grill man extraordinaire! 7urner is today +enior hairman of the 6oard.
The McDonald's History - 19,5 to 193
McDonald's &omes To (all "treet
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#n %&3 McDonald's $ent public $ith the company's first offering on the stock exchange. < hundred shares of stock costing 1)!)= dollars that day $ould have multiplied into >(!23= shares today! $orth approximately 12.2 million on December 2%! )==3. #n %&? McDonald's $as added to the 2=-company Do$ @ones #ndustrial
A %i) +dea &alled /%i) Mac/
#ntroduced system$ide in %&3?! the 6ig Mac $as the brainchild of @im Delligatti! one of Ray Kroc's earliest franchisees! $ho by the late %&3=s operated a do,en stores in /ittsburgh.
The )) McM$in
#ntroduced in %&>2! the Agg McMuffin $as developed by o$ner operator Herb /eterson.
The irst Ronald McDonald Ho$se in *hiladelhia! *A
#n %&>( 0red Hill of the /hiladelphia Aagles teamed up $ith McDonald's to create Ronald McDonald House. Here the families of critically ill children have a place to call home $hile they're a$ay from home as the young patients undergo treatment for their conditions.
The Hay Meal (
+ince %&>& the Happy Meal has been making kids visits that much more special. lubs the $orld over collect Happy Meals toys and boxes.
The $t$re %e)ins 6o7
McDonald's Axpress for a $orld that can't slo$ do$n4. McDonald's is popping up in more non-traditional locations like
FACTS & FIGURES
'.:million Restaua!t e"#$%ees Sste" '()e )e)(cate) t% se*(!+ %u cust%"es
<*-million S!ac, Wa#s 'ee s%$) (! -/
*,<-Restaua!ts a%u!) t0e '%$) %11e e2te!)e) % -340%u se*(ce
'billion M%e cust%"es 'ee se*e) (! -/ t0a! (! -5
'-
''< C%u!t(es #at(c(#ate) (! %!e %1 McD%!a$)’s "%st success1u$ #%"%t(%!s e*e 6 Ou t(e4(! '(t0 Dea"W%,s’ S0(e, t0e T0()7
Level sofst r at egi cManagement The pr oduct s and ser vi ces me nt i oned abov er eflectt hr ee t ypes ofmaj or st r at egi esempl oyedbyt heor gani zat i onatvari ousl evel s.Namel yt heyar e:
Cor por at est r at egy Corporat el evelst r at egyf undament al l yi sconcerned wi t ht hesel ect i on of busi nessesi nwhi c ht hecompanyshoul dcompe t eandwi t ht hedev el opme ntand c oo r di nat i ono ft hatpor t f ol i oo fbus i ne s se s . ''
McDonal d' si s engaged i n.Mc Donal d’ s onl y deal si nt he r es t aur ant busi ness,so i t scor por at es t r at egy i s a si ngl e busi ness uni ts t r at egy ,l i kel y of g r o wt h.T omaket hi sc l e ar e r ,GE' sc or po r at es t r at e g yi sofi nt e r r e l at i ngbus i ne s s uni t s.Consumerel ect r i cs,submari nes,l ocomot i ves,l i ghtbul bset csharesome syner gi esandeachi saseparat ebusi nessuni t . Co r po r at el e v e ls t r at e g yi sc o nc e r ne dwi t h: •
Reach -de fini ngt hei s s ue st hatar ec or po r at er e s po ns i bi l i t i e s ;t he s emi g ht i ncl ude i dent i f yi ng t he over al l goal s of t he corpor at i on, t he t ypes of busi nessesi n whi c ht hecor por at i on shoul d bei nv ol v ed,and t hewayi n whi c hbusi nesseswi l lbei nt egr at edandmanaged.
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Compet i t i veCont act -defini ngwher ei nt hecorporat i on compet i t i on i st o be l ocal i z ed.Take t he case ofi nsur ance:I nt he mi d1990' s,Ae t na as a cor por at i on was cl ear l yi dent i fied wi t h i t s commer ci al and pr oper t y cas ual t yi nsur ance pr oduct s.The congl omer at e Te xt r on was not . For Te xt r on,compe t i t i oni nt hei nsur ancemar ke t st ookpl acespeci fical l yatt he busi nessuni tl ev el ,t hr ough i t ssubsi di ar y ,PaulRe v er e.( Te xt r on di v es t ed i t sel fofThePaulRever eCorporat i oni n1997. )
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Managi ng Act i vi t i es and Busi ness I nt er r el at i onshi ps - Corpor at e st r at egyseekst odeve l op syner gi esbyshari ngand coordi nat i ngst aff and ot herr esour cesacr ossbusi nessuni t s,i nvest i ngfinanci alr esour cesacr oss busi nessuni t s,and usi ngbusi nessuni t st ocompl eme ntot hercor por at e busi ness ac t i vi t i es. I gor Ansoff i nt r oduced t he concept of syner gy t o c or por a t es t r a t e gy .
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ManagementPract i ces -Corporat i onsdeci dehow busi nessuni t sar et o be gov er ned: t hr ough di r ect cor por at ei nt er v ent i on ( cent r al i z at i on) or t hr oughmor eorl essaut onomousgovernment( decent r al i zat i on)t hatr el i es onper suasi onandr ewar ds. Corporat i ons areres ponsi bl ef orcre at i ng val ue t hr ough t hei rbusi nesses.
The y do so by managi ng t hei r por t f ol i o of busi nesses, ensur i ng t hat t he '
busi nesses ar e successf ulov ert he l ongt er m,dev el opi ng busi ness uni t s,and so me t i mes ensur i ng t hat each busi nes si s co mpat i bl e wi t h ot her si n t he por t f ol i o.
Busi nessst r at egy:
A st r at egi cbusi nessuni tmaybeadi vi si on,pr oductl i ne,orot herpr ofit cent ert hatcan bepl anned i ndependent l yf r om t heot herbusi nessuni t soft he fir m.
At t he busi ness uni tl e v el ,t he s t r at egi ci ssues ar el ess about t he coor di nat i on ofoper at i ng uni t s and mor e aboutdeve l opi ng and sus t ai ni ng a comp mpet i t i veadvant agef ort hegoodsandserv i cest hatar epr oduced.
Thi s mi ght be l owcos ts t r at egy , di ffer ent i at i on, or f ocus s t r at egi es. McDonal d’ s has pur sued t wo s t r at egi essi nce2003.T o kee p up wi t hr api dl y c hangi ng consumer pr ef er ences, demo mogr aphi cs, and spendi ng pat t er ns, McDonal d' shasi nt r oduced ne wi t ems( Pr emi um Chi c ken sandwi wi c hesand t he Angus BeefBur ger )and campai gns t o cr eat e mor e heal t hy f oods ( Pr emi um Sal ads ) .Thes t r at e g yr e fle c t st hephi l o s ophyt hatno v e l t y ,asoppo se dt ol o y al t yt o t r adi t i onalpr oduc t s ,i st heke yde t e r mi mi nantofs al e si nt hef as tf oo di ndus t r y .
McDonal d’ shasal sof ocused on i ncr easi ngsal esatexi st i ngr est aur ant s i ns t ead ofopeni ng ne w ones . To do so,McDonal d' s has r emodel l ed many r est aur ant s,keptst ore sopen l onger ,andi ncr eased menu opt i ons.Nev ert hel ess, new McDonal d’ sre st aur ant sar est i l lopeni ngar oundt hewo wor l datarapi dr at et hecomp mpanypl anst oopenabout1, 000uni t si n2008,andcont i nuest ogr ow i t s r est aur antbaseby12% eachyear .
Att hebusi nessl ev el ,t hes t r at egyf or mul at i onphasedeal swi t h: '4
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pos i t i oni ngt hebus i ne s sag ai ns tr i v al s
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ant i ci pat i ng c hange si n dema mand and t ec hnol ogi es and adj us t i ng t he s t r at egyt oacc om mm modat et hem
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I nfluenci ng t he nat ur e ofcomp mpet i t i on t hr ough st r at egi c act i ons such as v er t i cali nt egr at i onandt hr oughpol i t i calact i onssuc hasl obbyi ng.
c o stl e ader s hi p,di ffer ent i at i on, Mi chaelPort eri dent i fiedt hr eeg eg ene r i cs t r a t e gi e s( s( f oc us and )t hatcan be i mpl eme ment ed att he busi nes s uni tl ev elt o cr eat ea
comp mpet i t i veadvant ageanddef endagai nstt headver seeffect soft hefiv ef o r c e s.
Functi onalLevelSt r at egy
The f unct i onall eveloft he organi zat i on i st he l eveloft he oper at i ng di v i s i o nsandde par t me nt s .Thes t r at e g i ci s s ue satt hef unc t i o nall e v e lar er e l at e d t o busi ness pr ocesse s and t he val ue chai n. Funct i onal l ev el s t r at egi es i n mar ke t i ng, finance, oper at i ons, human r esour ces, and R&D i nvol v e t he 8(s(%!
dev el opmentand coor di nat i on ofr es our cest hr ough whi ch busi nes s uni tl ev el st r at egi escanbeexecut edeffic ffici ent l yandeffect i vel y .
M(ss(%! Func t i o naluni t so fan o r g ani z a t i o n ar ei nv o l v e di n hi g he rl e v e ls t r a t e g i e s bypr ovi di ngi nputi nt ot hebusi n essuni tl e v elandcor por at el ev els t r at egy ,suc h O9:ect(*es aspr ovi di ngi nf orma mat i on on r esour cesandcapabi l i t i eson whi cht hehi gherl evel st r at egi es can be based. On Once t he hi gher l ev el s t r at egy i s dev el oped, t he f unct i onaluni t st r ansl at ei ti nt odG%a$s i scr et eact i onpl anst hateach depart mentor di vi si on mustaccomp mpl i shf ort hest r at egyt osucceed.
8a$ue KEYSTEPSTOWARDSSTRATEGI C PLANNI NG
State+(es Thepr epar at i onofas t r at eg i cpl ani samul t is t eppr ocesscov er i ngVi si on, Mi ssi on,Obj ect i ves,Val ues,Goal s,St r at egi esandPr ogramm mmes. '*
P%+a""es
Vi si onSt at ement " Mc D Do o nal d' sv i s i o ni st obet hewo r l d' sbe s tqui c ks e r v i c er e s t aur ante x pe r i e nc e . Bei ngt hebestmeanspr ovi di ngout st andi ngqual i t y ,servi ce,cl eanl i ness,& v al ue,sot hatwemakee v er ycus t ome ri ne v er yr es t aur antsmi l e. "
Mi si on s t at em me ent
Bet hebestem mp pl oye rf orourpeopl ei neachcomm mmuni t yar oundt hewor l d
Del i veroper at i onalexcel l encet oourcust ome mer si neachofourr est aur ant s;
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hi e v eendur i ngpr ofit abl egr owt hbyexpandi ngt hebr andandl e v er agi ng Ac t hes t r engt hsoft heMcDonal d' ssys t em t hr oughi nnovat i onand t echnol ogy .
Obj ect i ves
I n a busi nes swhen a numberofbr ai nsar ewor ki ngt oge t her ,t her ear e al waysdi ffer entvi ewson acert ai naspect ,t her ef oreai msandobj ect i vesareused t o hel pt hem f ocus on onevi e w on t he aspectwhi c h ei t hers ee ms r i ghtori s r i ght . Ai ms& Obj ect i v eshel p an or gani z at i on gr ow;i ti sused asagui del i ne,a pl an & goal .Whatt heor gani z at i on i sheadi ngf or& how i ti sheadi ngt her e& wher ei ti sheadi ng?Al lt heanswer sf ort heseques t i onsar eanswer edbyAi ms& Obj e c t i v e s .
nObj ect i ves TheMai ofaBusi nessar e:
Sal es –Sal esr ev enuei st het ot alamountofmoneyacompanyhasear nedby pr o v i di ngt he i rs e r vi c eors e l l i ngt he i rs t oc k.
Gr owt h –Ani ncr easei nt heBusi nesscapaci t yt opr oducemor est ockorpr ovi de be t t erorgr eat erser vi ce.
Pr ofit –Resi dualval uegai nedf r om busi nessoper at i onsaf t ercut t i ngout expensessuchasst ockcostet c.
Cust omerSat i sf acti on –Pr o vi di ngse r v i c et oc us t ome r st ot he i rs a t i s f ac t i on l e v e ls uc hashy gi e ni c al l yc l e anpl ac eorhi g hqual i t yf ood.
SM A R T ':
Bef oreabusi nesscansetobj ect i vesi ti si mport antt hatt heyf ol l ow t heSMART cr i t er i a. •Speci fic–Det ai l edandExact •Measur abl e–Targ et sshoul dbemeasur abl e • chi ev abl e–Somet hi ngt hatcanbeachi ev ed A •Re al i s t i c–Tar g e t smus tber e a l i s t i c ,s ot hatt he ycanbeme t
T • i meSpeci fic–Thatcanbeachi ev edbyadeadl i ne
Ai ms& Obj ect i vesofMcDonal d’ s’–“i t ’ swhatIeatandwhatIdo…I ’ m l ovi n’i t ”
Mc Do nal dso bj e c t i v e sar et or e v e r s et hede c l i neo fs al e s ,t oc ont i nue st ayi ngaheadoft hecompet i t i oni nt hef astf oodi ndust ryandt ofindnew st r at egi est hatwoul dhel pt heres t aur antsuccessf ul l ycompet ei nt heafier cel y compet i t i vemarket .
Goal
McDonal ds go al i n l ai d our i n t hei r second Wor l dwi de Cor por at e Responsi bi l i t y Reporti st o communi cat eourpr ogressand di r ect i on r el at ed t o t hemo s tr e l e v antandmat e r i alc o r po r at er e s po ns i bi l i t y-r e l at e das pe c t soft he i r busi ness.Tot hatend,t her epor ti ss t r uct ur edaccor di ngt oke yel ement sofour busi nesss t r at egy-t he“ Pl ant oWi n. ”
ThePl an i sagl obalal i gnme ntar oundfiv edr i v er sofexcept i onalcus t omer experi ence,al lbegi nni ngwi t ht hel et t erP.Theyhavef ocusedon t hr eeoft hefive Ps:Pr oduct s,Peopl eandPl ace.( Ther emai ni ngt woar ePr i ceandPr omot i on. )
Val ues ')
Wepl acet hecust omerexper i enceatt hecor eofal lwedo: Ourcus t omer s ar et he r eas on f orourexi s t ence.We demons t r at e ourappr eci at i on by pr ovi di ng t hem wi t h hi gh qual i t yf ood and super i or ser vi ce,i n a cl ean,wel comi ngenvi r onment ,atagr eatval ue.Ourgoali s QSC&Vf oreac h& ev er yc us t omer ,eac h& ev er yt i me.
Wear ecommi t t edt oourpeopl e Wepr ovi deopport uni t y ,nurt ur et al ent ,devel op l eader sandr eward achi ev ement . We bel i ev et hat a t eam of wel l t r ai ned i ndi vi dual s wi t h di ver sebackgroundsandexper i ences,wor ki ngt oget heri nan envi r onment t hatf ost er sr espectand dri veshi gh l evel sofengagement ,i sessent i alt o ourcont i nuedsucc es s.
el i evei nt heMcDonal d’ sSyst em Web McDonal d’ s busi nessmodel ,depi ct ed by t he “ t hr eel egged st ool ”of owner /oper at or s,suppl i er s,andcompanyempl oyee s,i sourf oundat i on,and t hebal anceofi nt er est samongt het hr eegroupsi skey .
per at eourbusi nesset hi cal l y Weo Sound et hi csi sgood busi ness .AtMcDonal d’ s,wehol d our se l ve s and conductourbusi nes st o hi gh st andar ds off ai r nes s,hones t y ,and i nt e gr i t y .Wear ei ndi v i dual l yac c ount abl eandc ol l e c t i v e l yr e s pons i bl e .
i vebackt oourcommuni t i es Weg Wet akeseri ousl yt heresponsi bi l i t i est hatcomewi t hbei ngal eader . We hel p our cus t ome r s bui l d be t t er communi t i es, suppor t Ronal d McDonal d HouseChari t i es,andl ev er ageoursi z e,scopeandr esour cest o hel pmaket hewor l dabet t erpl ace.
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r ow ourbusi nesspr ofit abl y Weg
McDonal d’ si s a publ i cl yt r aded c ompany .As suc h,we wor kt o pr ovi desust ai ned pr ofit abl egr owt hf oroursharehol der s.Thi sr equi r esa cont i nui ngf ocusonourcust omer sandt heheal t hofoursys t em.
t r i vecont i nual l yt oi mpr ove Wes
Wear eal earni ngor gani zat i on t hatai mst oant i ci pat eandr espond t oc hangi ng cus t omer ,e mpl oy ee and sys t em needs t hr ough const ant evol ut i onandi nnovat i on.
Strategy
" McDonal ds posse ss esa hi ghl y vi si bl e and popul arbr and i mage ar ound t hewor l d.Thefirm hasgr own t obec omeoneoft hemos tpopul arf ood br and name si nt he wor l d,wi t h cont i nuous i ncr eases i n exposur ei n ne w mar ket s,suchasAsi aandEur ope,amongs tot her s.
Al t hough McDonal dshasbeen i ne xi s t encei n Nor t h Amer i ca f or manydecades,t hei ncr easi ngpopul ari t yi nnew mar ket shasposi t i onedt hefir m f or cont i nued gr owt h i n mar ke t shar e and cus t omer buyi ng power . The McDonal dsst r at egymapencompassesf ourkeyper spect i ve s:
1)Fi nanc i al ; 2)Cust omer ; 3)I nt e r nalPr oc e ss ; '(
4)Le ar ni ng .
Theseper spect i v eshav ee v ol v edov ert i mei nt oawel l definedvi si on f ort hecorpor at i on,whi ch i st obecomet hemostposi t i vedi ni ngexper i encei n t heworl d( " McDonal ds" ) . "
Keyst epst owar dsbusi nessst r at egi es Ascan oft hei nt er nalandext er nalenvi r onment sf ormsan i mport antpartof t he st r at egi c pl anni ng pr ocess.Envi r onment alf act orsi nt ernal l y affect i ng t he fir m can becl assi fiedasSt r engt hsorWeaknesse sandt hoseext er nal l yaffect i ng t ot hefirm canbecl assi fiedasOpport uni t i esandThr eat s.Thi si sr ef er r edt oas
SWOTAnal ysi s.
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Strengths
Gl obalbrand
McDonal d’ shasawel l est abl i shedgl obalbr andt hatappeal st oal l agegr oupsand cus t omerse gment s.I n 2005,McDonal d’ spl ace d ni nt hi n t he t op 100 gl obalbr ands r anki ng ofBusi ness Week mag az i ne and I nt er br and,abr andi ngconsul t ancy .
St r ongoperati onalcapabi l i t i es
McDonal d’ s has st r ong oper at i onalcapabi l i t i es whi ch al l ow i tt o pr ovi dehi gh qual i t ypr oduct sandcust omerservi ceacr ossi t sr est aur ant s. Thecompanyhasawor l dcl asssuppl y c hai n and s t andar di z ed pr ocesses t o del i verpr oduct s ofuni f orm qual i t y across r est aur ant s,r egar dl ess of t hei rl ocat i on or nat ur e of oper at i on ( companyowned or f r anchi see oper at ed) .Thecompanyandi t spart ner spur chasef ood andr el at edi t ems f r om anappr ovedgroupofsuppl i er s.
Successf uli t ems
Someofi t spr oduct ss uc hasBi gMac,andChi c kenMcNugg e t sand hav ebec omebr andsi nt hei rown r i ght .St r ongbr anddr awscust omer st o t he company’ sr es t aur ant s and pr ov i des i t wi t h ar ec ogni z ed ’ br and cur r ency’i nnew market s.
Qual i t yPr oduct s
McDonal dsi st hesymbolofqual i t ywi t hr espectt oi t sofferi ng.
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Weakness
Weakr evenuegr owt h
Low r ev enuegr owt hsugge st st hatt hec ompanyhasnotbee nabl et o expand cus t omer t r affic at e xi s t i ng r es t aur ant st hanks mai nl yt ot he mat ur at i onandsat ur at i onofi t skeymar ket s.
Weakpr oductdevel opment
McDonal ds f aces a s t r ong compet i t i on and i t s weak pr oduct dev el opmentcr eat espr obl em.
Opport uni t i es
Expansi on
McDonal dsi sservi ngonl yi nf ew ci t i esofPaki st an.Ther ei sal ar ge mar ketf orMcDonal dsst i l lt oserve.Furt hermorei thasf ew out l et swi t hi n ci t i esi n whi ch i ti scurr ent l yservi ng,soMcDonal dsal sohasopport uni t y t oex pandwi t hi nc i t i e s .
Fr anchi seeoperat edres t aur ant s McDonal d’ si nt endst osel laboutcompanyoper at edr es t aur ant si n t hePaki st an t of r anchi sees.Theoper at i ngmargi n off r anchi seeoper at ed r est aur ant si shi ghert han t hatofcompanyoper at edr est aur ant s.
Thesal eofcompany oper at edr es t aur ant st of r anc hi seesi sl i kel yt o i nc r e as et heov e r al lpr o fit abi l i t yo fMc Do nal d’ sPaki s t an’ sbus i ne s s .
Gr owi ngdi ni ngoutmar ket
Ast hel i f es t yl et r endsofconsume r sar ec hangi ng,t hedi ni ng out mar keti sgr owi ng,t hatwoul dser veasanopport uni t yf ort heMcDonal ds
Thr eat s
I nt ensecompet i t i on
McDonal d’ sr est aur ant sf acei nt ensecompet i t i on f r om i nt ernat i onal , nat i onal ,r egi onal and l ocal r et ai l er s of f ood pr oduct s. The company compet eson t hebasi s ofpri ce,conveni ence,ser vi ceand qual i t y off ood pr oduct s.
The company’ s compe t i t i on i ncl udes r es t aur ant s, qui c k ser vi ce eat i ng es t abl i shment s, pi z z a par l or s, coffee shops, st r ee t ve ndor s, conveni encef oodst ores,del i cat essensandsupermarket s.
Gr owi ngheal t hconsci ousness
Ast heeducat i on l e v eli n Paki s t an hasi ncr eased i nl as tf e w year s, heal t h consci ousness has al so i ncr eas ed . A gr owi ng consci ousness of heal t hmat t er scoul dr educeMcDonal d’ sr ev enues
I ncr easedSal esTax
Sal est ax has i ncr ease d whi ch r es ul t si nt he i ncr ease d cust omer pri cesandr educedsal esl evel .
St r at egi cManagementPr ocess 4
The s t r at egi c manageme ntpr ocess ofMcDonal ds i s made up off our e l e me nt s :s i t uat i o n anal y s i s ,s t r at e g yf o r mul at i o n,s t r at e g yi mpl e me nt at i o n,and st r at egyeval uat i on.Theseel ement sar est epst hatar eperf ormed,i norder ,when dev el opi ng a new st r at egi c management pl an.Exi s t i ng busi nes ses t hat have al r eady devel oped a st r at egi c managementpl an wi l lr evi si tt hesest eps as t he nee dari se s,i nor dert omakenec ess aryc hangesandi mpr ove ment s
Si t uati onAnal ysi s
I nt er n a li Si t uat onanal ysi si st hefir stst epi nt hest r at egi cmanagementpr ocess. A ss e s s me n t T h e s i t uat i o nanal ysi spr ovi dest hei nf or mat i onnecessar yt ocr eat eacompany mi ssi onst at ement .Si t uat i onanal ysi si nvol ves" scanni ngandeval uat i ngt he o r g ani z a t i o nalc o nt e x t ,t hee x t e r nale nv i r o nme nt ,andt heo r g ani z a t i o nal envi r onment " .Thi sanal ysi scanbeper f ormedusi ngsever alt echni ques. Obser vat i onandcommuni cat i onar et wov er ye ffec t i vemet hods.
Strategy
Strategy
Strategy
Formul at i on
I mpl ement at i on
Cont r ol
Tobegi nt hi spr ocess,org ani zat i onsshoul dobser vet hei nt er nalcompany
envi r onment .Thi si ncl udesempl oyeei nt er act i onwi t hot herempl oyees,empl oyee i nt er act i onwi t hmanagement ,manageri nt er act i onwi t hot hermanager s,and managementi nt er act i onwi t hshar ehol der s.I naddi t i on,di scussi ons,i nt ervi ews, andsurv eysc anbeusedt oanal yzet hei nt er nalenvi r onment .
Envi r onment al Anal yr s i s O g a ni zat i onsal soneedt oanal yzet heext er nalenvi r onment .Thi swoul d i nc l udec us t o me r s ,s uppl i e r s ,c r e di t o r s ,andc ompe t i t o r s .Se v e r a lq ue s t i o nsc an beaskedwhi c hmayhel panal yz et hee xt er nalenvi r onme nt .Whati st he r el at i onshi pbet weent hecompanyandi t scust omer s?Whati st her el at i onshi p be t weent hecompanyandi t ssuppl i er s?Doest hecompanyhav eagoodr appor t wi t hi t scr edi t or s?I st hecompanyac t i v el yt r yi ngt oi ncr easet hev al ueoft he busi nessf ori t sshar ehol der s?Whoi st hecompe t i t i on?Whatadv ant agesdo *
compet i t or shaveo ve rt hecompany?
St r at egyFormul at i on
St r at egyf ormul at i oni nvol vesdesi gni nganddevel opi ngt hecompany s t r at e g i e s .De t e r mi ni ngc ompanys t r e ng t hsai dsi nt hef o r mul at i o no fs t r at e g i e s . St r at e g yf o r mul at i o ni sge ne r a l l ybr o ke ndo wni nt ot hr e eor g ani z a t i o nall e v e l s : o pe r a t i o nal ,c o mpe t i t i v e ,andc or po r at e .
Oper at i onalst r at egi esar eshort t erm andareassoci at edwi t ht hevari ous oper at i onaldepar t ment soft hecompany ,suchashumanr esour ce s,finance , market i ng,andpr oduct i on.Thesest r at egi esar edepart mentspeci fic.For exampl e,humanr esour cest r at egi eswoul dbeconcer nedwi t ht heactofhi r i ng andt r ai ni ngempl oyeeswi t ht hegoalofi ncr easi nghuman capi t al .
Compet i t i vest r at egi esar et hoseassoci at edwi t hmet hodsofcompet i ngi na c e r t ai nbus i ne s sori ndus t r y .Kno wl e dg eofc ompe t i t o r si sr e qui r e di no r de rt o f ormul at eacompet i t i ves t r at egy .Thecompanymustl earnwhoi t scompet i t ors areandhow t heyoper at e,aswel lasi dent i f yt hest r engt hsandweaknessesof t hecompet i t i on.Wi t ht hi si nf ormat i on,t hecompanycandeve l opast r at egyt o gai nacompet i t i veadvant ageovert hesecompet i t ors.
Corporat est r at egi esar el ongt erm andar eassoci at edwi t h" deci di ngt he o pt i malmi xofbus i ne s s e sandt heov e r al ldi r e c t i o no ft heor g ani z a t i o n"( Co ul t e r , 2005,p.216) .Oper at i ngasasol ebusi nessoroper at i ngasabusi nesswi t h s e v e r aldi v i s i onsar ebo t hpar toft hec or por a t es t r a t e gy .
St r at egyI mpl ement at i on
St r at e g yi mpl e me nt at i o ni nv o l v e sput t i ngt hes t r at e g yi nt opr ac t i c e .Thi s i ncl udesdevel opi ngst eps,met hods,andpr ocedur est oexecut et hest r at egy.I t <
al soi ncl udesdet er mi ni ngwhi chst r at egi esshoul dbei mpl ement edfir st .The s t r at e g i e ss ho ul dbepr i o r i t i z e dbas e do nt hes e r i o us ne s sofunde r l y i ngi s s ue s . Thecompanyshoul dfir s tf ocusont hewor s tpr obl ems ,t henmov eont ot he ot herpr obl emsoncet hosehavebee naddr ess ed.
" Theappr oachest oi mpl ement i ngt hevari ousst r at egi esshoul dbe consi der edast hest r at egi esar ef ormul at ed” .Thecompanyshoul dconsi derhow t hest r at egi eswi l lbeputi nt oeffectatt hesamet i met hatt heyar ebei ng cr eat ed.Forexampl e,whi l edevel opi ngt hehumanr esour cesst r at egyi nvol vi ng empl oyeet r ai ni ng,t hi ngst hatmustbeconsi der edi ncl udehow t het r ai ni ngwi l l bedel i v er ed,whent het r ai ni ngwi l lt akepl ace,andhow t hecos toft r ai ni ngwi l l becov er ed.
St r at egyEval uati on
St r at egyeval uat i oni nvol ves" exami ni nghow t hest r at egyhasbeen i mpl ement edaswel last heout comesoft hest r at egy” .Thi si ncl udesdet er mi ni ng whe t herdeadl i neshav ebeenme t ,whe t hert hei mpl eme nt at i ons t epsand pr ocessesar ewor ki ngcorr ect l y ,andwhet hert heexpect edr esul t shavebeen ac hi e v e d.
I fi ti sde t e r mi ne dt hatde adl i ne sar eno tbe i ngme t ,pr o ce s s e sar eno t wor ki ng,orr esul t sar enoti nl i newi t ht heact ualgoal ,t hent hes t r at egycan andshoul dbemodi fiedorr ef or mul at ed.
Bot hmanagementandempl oye esar ei nvol vedi nst r at egyev al uat i on, becauseeac hi sabl et ovi e wt hei mpl eme nt eds t r at egyf r om di ffer ent per spect i ve s.Anempl oyeemayr ecogni zeapr obl em i naspeci fici mpl ement at i on st ept hatmanagementwoul dnotbeabl et oi dent i f y .
:
Thes t r at egye v al uat i onshoul di ncl udec hal l engi ngme t r i csandt i me t abl es t hatar ea chi e v abl e .I fi ti si mpos s i bl et oac hi e v et heme t r i c sandt i me t abl e s , t he nt hee xpe c t a t i onsar eunr e al i s t i candt hes t r a t e gyi sce r t ai nt of ai l .
Concl usi on
Thest r at egi cmanagementpr ocessi sacont i nuouspr ocess." As pe r f o r manc er e s ul t so ro ut c o me sar er e al i z e d-atanyl e v e lo ft heor g ani z a t i o norgani zat i onalmember sassesst hei mpl i cat i onsandadj ustt hest r at egi esas needed" .I naddi t i on,ast hecompanygrowsandchanges,sowi l lt hevari ous s t r a t e gi e s .Exi s t i ngs t r at e gi e swi l lc hang eandne ws t r a t e gi e swi l lbede v e l ope d. Thi si sal lpar toft hecont i nuouspr ocessofi mpr ovi ngt hebusi nessi naneffor t t osucc ee dandr eac hcompanygoal s.
BCG Mat r i x
The need f or st r at egy i n or dert o expand i t s exi st i ng pr oducti n ve ry pr omi si ngmar ket sf orMcDonal d’ si sver yess ent i al .McDonal d’ sal ongwi t h KFC andot hermaj orf astf oodchai nshavedomi nat edt heAmer i can cont i nentaswel l asel se wher e.BCG Mat r i x:
Themar ke tgr owt hr at eme asur esi ndus t r yat t r act i v eness.Theunder l yi ng t heory f orexami ni ng mar ketgr owt hr at ei st he i ndust ry l i f e cyc l e.The BCG assumest hatgr owt hr at es,l i f ecycl est agesaffectafirm’ sfinances.
)
Pl aci ng pr oduct si nt heBCG mat r i xr esul t si n 4 cat egori esi n a port f ol i o ofa McDonal ds:
ar s( =hi ghgr owt h,hi ghmar ketshar e) 1.St
o
Fr equent l yr oughl yi n bal anceon ne tcas h flow.Howev eri fnee ded any at t emptshoul dbemadet ohol dshar e,bec auset her ewar dswi l lbeacash cow i fmarketsharei skept .So,McDonal d’ sUSAi sunderSt arposi t i on.
hCows( =l ow gr owt h,hi ghmar ketshar e) 2.Cas
o
Pr ofit s and cas h ge ner at i on shoul d be hi gh, and bec ause oft he l ow gr owt h,i nve st ment sneededshoul dbel ow.Keeppr ofit shi gh.
>
=l ow gr owt wt h,l ow mar kets har e) 3.Dogs(
Av oi dandmi ni mi z et henumberofdogsi nacompany .
o
o
Bewareofexpensi ve‘ t ur naroundpl ans’ .
4.Ques t i on Mar ks( =hi ghgr owt wt h,l ow mar ketshar e) o
Havet hewo wor stcash charact er i st i csofal l ,becausehi gh dema mandsandl ow r et ur nsduet ol ow mar ketshar e
GE Mat r i x Gr owt h mat r i xTheGE GE Mat r i xi samodelt oper f or m busi nes spor t f ol i oanal ys i s on t heSt r at egi cBusi nessUni t sofacorpor at i on.TheGe Gener alEl ect r oni csofUSA wi t h t he suppor t of consul t i ng fir m Mc ki nse y and Co. de v el oped a mo r e comp mpl i cat edmat r i xasat echni queofport f ol i oanal ysi s.TheGE GE busi nessscr een canbeshownwi t ht hehel poft hef ol l owi ngdi agram: m:
(
McDonal ddon’ thaveGE mat r i x
7sMCKI NSEY’ sMATRI RI X
Mcki nseydev el opedanew f r ame mewor kt obet t err epre sentt hechal l engesof Serv i cesMarket i ng and f oranal ysi sand i mpr ovi ng or gani zat i on’ s effect i veness i . e.t he7Smodelwhi chcanbeshownwi t ht hehel poft hef ol l owi ngdi agram: m:
Mostofusgr ew upl earni ngabout' t he4Ps'oft hema market i ngmi mi x:pr oduct , pr i ce,pl ace,pr omo mot i on.Andt hi smo modelst i l lwor kswh whent hef ocusi son pr oduct mar ke t i ng.Howev ermo mos tde v el oped ec onomi mi eshav e mov ed on,wi t h an e v er -
vi cema mar ket i ng. i ncr easi ngf ocusonservi cebusi nesses,andt her ef oreser 4-
To be t t er r epr esent t he c hal l enges of ser vi ce mar ke t i ng, McKi nse y dev el oped a ne w f r ame me wor k f or anal yz i ng and i mpr ov i ng or gani z at i onal effect i ve ness ,t he7Smodel :
HardSs' : The3Ssacr osst het opoft hemodelar edescr i bedas'
•Strategy: Thedi r ect i onandscopeoft hecomp mpanyove rt hel ongt er m.
•Structure: Thebasi cor gani zat i on oft hecompany ,i t sdepart ment s,r eport i ng l i ne s,ar e asofe xpe r t i s e,andr e s pons i bi l i t y( andho wt he yi nt e r r e l at e ) .
ems ms: •Syst Forma mal& i nf orma malpr ocedur est hatgoverneverydayact i vi t y ,coveri ng ev er yt hi ngf r om manageme menti nf or mat i onsys t em ms s,t hr ought ot hesys t em ms satt he poi ntofcont actwi t ht hecust ome mer( r et ai lsyst ems ms,cal lcent r esyst ems ms,onl i ne s y s t e ms ms ,e t c ) .
The 4Ss acr oss t he bot t om oft he mo delar el ess t angi bl e,mor e cul t ur ali n
Sof tSs' nat ur e,andwer et er med' byMc McKi nse y:
l l s : •Ski Thecapabi l i t i es& comp mpet enci est hatexi stwi t hi nt hecomp mpany .Whati t doesbest .
ed val ues:Theval •Shar uesand bel i ef soft hecomp mpany .Ul t i mat el yt heygui de emp mpl oyeest owar ds' val ued'behavi our .
aff:t •St heCom mp pany’ speopl er es our ce sand how t heyar edev el oped,t r ai ned, andmo mot i vat ed.
4'
yl e: •St Thel eader shi p appr oachoft opmanagementandt hecompany' sov er al l oper at i ngappr oach.
I ncombi nat i on t heypr ovi deanot hereffect i vef r amewor kf oranal yzi ngt he or gani zat i on & i t s act i vi t i es.I n a mar ket i ngl ed company t heycan beused t o e xpl or et he e xt ent t o whi c ht he co mpany i s wor ki ng co her ent l yt owar ds a di st i nct i ve& mot i vat i ngpl acei nt hemi ndofconsumer .
Or gani zat i onalChar t
4
44
Suppl yChai n Ourgrowt h pl anf ort henextt hr eeyear si smoreaf unct i on ofget t i ngour l ogi st i csandcol dchai nri ghtr at hert hangoi ngt of aroff pl aces. “
-Ami tJet i a,managi ngdi r ect or ,McDonal d' sI ndi a,MumbaiJoi ntVent ur e,
Suppl y cha i n a i
Overvi ew
Suppl i er s
Local Col d Sour ci ng chain Suppl yChai n
Manuf act ur i ng
Di s t r i but or s
Re t a i l e r s
Suppl i er s
Cus t omer s
St r at egi esofMcDonal ds Fol l owi ngaret hes t r at egi esadopt edbyMcDonal ds
I nt ernati onalGr owt h McDonal ds has expanded t oi nt er nat i onalmar ket si nt he f aceof i ncr easi ng r egul at i ons i n t he Uni t ed St at es and domes t i c mar ke t sat ur at i on. They i ni t i al l y ent er ed i nt er nat i onal market s by l eve r agi ng s t andar di z ed pr oduct offer i ngs , cl ean and bri ght envi r onment s, and Ame r i canbr andequi t y . 4*
Howev er ,r ecentyear shavesee nMcDonal dsadaptt ol ocalr egi onsby r emodel i ng i t sr et ai lspace whi l e changi ng t he pr oductl i ne t o appealt o l ocalt ast es.Whi l et he st r at egy has pai d off wel li nt he shortt er m and McDonal dshasr eal i z edt hatt heymus tadaptt oeach count r yt heyent er , t he i rt ac t i c so fbo t hc at e r i ngt ol o calt as t e sand c hang i ngt her e s t aur ant ’ s desi gn and appeal i s di l ut i ng br and equi t y . Thi s wi l l have di sast r ous conse quencesi nt hel ongt er m.
USMar ketSat ur at i on –Sl ow Expansi on
Focuson SameStor eSal esGr owt handI mpr ovi ngDel i ver yOut l et s
ForwardI nt egr at i on
Abusi nesss t r at egyt hati nv ol v esaf or m ofv er t i cali nt egr at i onwher eby ac t i v i t i e s ar ee x pande dt oi nc l ude c ont r o lo ft he di r e c tdi s t r i but i o no fi t s pr oduct s.
Di st r i but i on t hr oughFr anchi sees
Backwar dI nt egr at i on
Acqui r i ngowner shi p ofone ' ssuppl ychai n,usual l yi nt hehopeofr educi ng s uppl i e rpower andt husr educi ngi nputc o s t s.
4<
LocalSour ci ng,Col dChai n,Suppl i ers
Mar ketpenet r at i on & Devel opment
Mar ketpenet r at i on occur swhenacompanyent er s/penet r at esa mar ket wi t h cur r ent pr oduct s.The bes t way t o achi ev et hi si s by g ai ni ngc ompe t i t o r s 'c us t o me r s( par to ft he i rmar ke ts har e ) .
Ot her ways i ncl ude at t r act i ng nonuse r s ofyour pr oduct or convi nci ng cur r ent cl i ent st o use mor e ofyour pr oduct /servi ce ( by adver t i si nget c) .Ansoff devel opedt hePr oduct Mar ketGr owt h Mat r i xt o hel pfir msr ecogni sei ft her ewasanyadvant ageofent er i ngamarket .
McDel i ver y
New Pr oductDevel opment
Pr oductdeve l opmenti st hepr ocessofdesi gni ng,cr eat i ng,and mar ket i ngan i deaorpr oduct .Thepr oductcan ei t herbeonet hati s new t ot hemar ket pl aceoronet hati snew t oyourpart i cul arc ompany , or ,an exi st i ngpr oductt hathasbeeni mpr oved.
I n manyi ns t ance sa pr oductwi l lbe l abel ed ne w and i mpr ov ed when
subs t ant i al
c hanges
Al ooTi kki ,Sal ad
4:
hav e
been
made.
Re*(e' %1 t0e $(teatue;4
oncept for this survey have been developed after studying previous surveys on consumer satisfaction at
different sectors such as ;an/ing sector,online share
trading. 2ollowing websites can be referred3 Research conducted by Bain & Company found that an increase of 5% in customer retention can increase profits by 25% to 95%. The same study found that it costs six to seven times more to gain a ne customer than to !eep an existing one. "dditiona# researches has shon that$
%1 t0e( cust%"es e*e = eas.<
Source: Bain & Company
Source – Mark Stevens, Author
Source: International Customer Service Association 4)
%1 cust%"es st%# )%(!+ 9us(!ess '(t0 a c%"#a! 9ecause %1 #%% se*(ce. Yet => %1 )(ssat(s1(e) cust%"es '%u$) c%!t(!ue t% )% 9us(!ess '(t0 a c%"#a! (1 t0e( #%9$e" 'as s%$*e) Bu(c,$ a!) sat(s1act%($.<
Source - Mark Stevens, Author T'%4t0()s % 55> %1 cust%"es )% !%t 1ee$ *a$ue) 9 t0%se se*(!+ t0e".
Source - Mark Stevens, Author International Customer Service Association Customer atisfaction in the 'ndian Ban!ing ector conducted at ''( Banga#ore$
+his study, conducted among five 8ndian ban/s, aimed at identifying customer satisfaction variables which lead to relationship building, and developing a conceptual framewor/ of relationship mar/eting practices in 8ndian ban/s by capturing the perspectives of customers with respect to their satisfaction with various services. 8t also sought to identify whether demographics have a role to play in customer satisfaction. A questionnaire designed from literature review and in6depth interviews a
were utilised to arrive at the ': variables which determined the satisfaction of <<< customers of the five ban/s
. .
Conc#usion
"eporting on the different satisfaction levels of the customers, the findings suggest that while private ban/s have been able to attract the younger customers with higher educational levels, who are comfortable with multi channel ban/ing, the customers of the national ban/ are older and more satisfied with the traditional facilities. +he results from this study could provide managerial lessons on assessment of strengths and improvement of services and in evolving a research strategy that will benefit the management of ban/s.
4>
+he study revealed that levels of customer satisfaction were on average - per cent higher in restaurants that employ staff aged :- and over. Widely recognised as one the largest providers of first time Bobs in the #$, McDonalds also has a strong core of older wor/ers, with around two6fifths of restaurants employing staff aged :- and over.
" study on customer satisfaction toards on#ine share trading ith specia# reference to Coimbatore city.
+he study has revealed the nature of the share investors, share bro/ing firms and investment atmosphere in oimbatore.8ts good to note that the younger generation is more involved in on6line share trading.F Men are more into this investment mode.F 7ost graduate investors are found to be more in this study.F 7eople in the beginning of their earning life seem to be more involved in on6line share trading.F Married men and women have found on6line share trading as a source for e!tra income.F 2riends have been the maBor inducing factor towards on6line share trading. Most of the respondents access the internet at the stoc/ bro/ers office and they access it on all business days.
@nly less than 'G4rd of the investors are professionals oimbatoreans show equal consideration towards the trading sites. +he investors of the Manchester of &outh 8ndia are interested in getting more information about the stoc/ prices etc.<- of the on6line share trading respondents here rate the infrastructure facility in this town as average. MaBority of the respondents grade the ban/ associated activities of their on6 line trading site as Cood
4(
"merican customer satisfaction index shos drop in customer satisfaction at (cdona#ds)a study conducted in 2*+*
According to the latest A&8, which was founded at the #niversity of Michigan’s "oss &chool of ;usiness and is produced by A&8 %%, McDonald’s satisfaction score fell from )- out of '-- in --(, to :) in -'-. Despite posting industry6beating same6store sales for years, McDonalds saw a *.46 percent drop in its customer satisfaction score in -'-, as measured by the American ustomer &atisfaction 8nde!.
ANALIYSIS ON MCDONALDS AS A SMALL SCALE
McDonald’s is one of the leading restaurant chains in the world, touching the lives of people everyday. +he long Bourney of the burger brand started in '(*-, when two brothers, Dic/ and Mac McDonald opened the first McDonald’s restaurant in &an ;ernardino, alifornia. 8nitially, they owned a hotdog stand, but after establishing the restaurant they served around < items, which were mostly barbequed. 8t became a popular and profitable teen hangout. 8n '(*>, the brothers closed and reopened the restaurant to sell only hamburgers, mil/sha/es and 2rench fries.
As per the information of the McDonald’s history, the maBor revenue came from hamburgers, which were sold at a nominal price of '< cents. +he restaurant gradually became famous and the McDonald brothers begin franchising their restaurant in the year '(<4. +he first franchise was ta/en by ?eil 2o! and under itE the second Mc Donald’s restaurant was opened in 2resno, alifornia. 8t was the first to introduce the Colden Arch design. +he third and fourth restaurants were opened in &aginaw, Michigan and Downey, alifornia, respectively.
*-
+he business began in '(*-, with a restaurant opened by siblings Dic/ and Mac McDonald in &an ;ernardino, alifornia. +heir introduction of the H&peedee &ervice &ystemH in '(*> established the principles of the modern fast6food restaurant. +he original mascot of McDonalds was a man with a chefs hat on top of a hamburger shaped head whose name was H&peedee.H &peedee was eventually replaced with "onald McDonald in '(:4.
+he present corporation dates its founding to the opening of a franchised restaurant by "ay $roc, in Des 7laines, 8llinois on April '<, '(<< , the ninth McDonalds restaurant overall. $roc later purchased the McDonald brothers equity in the company and led its worldwide e!pansion and the company became listed on the public stoc/ mar/ets in '(:<. $roc was also noted for aggressive business practices, compelling the McDonalds brothers to leave the fast food industry. +he McDonalds brothers and $roc feuded over control of the business, as documented in both $rocs autobiography and in the McDonald brothers autobiography. +he site of the McDonald brothers original restaurant is now a monument.
With the e!pansion of McDonalds into many international mar/ets, the company has become a symbol of globaliation and the spread of the American way of life. 8ts prominence has also made it a frequent topic of public debates about obesity, corporate ethics and consumer responsibility.
MD@?A%D& 8ndia 7vt %td IM87%J, the wholly6owned subsidiary of the #&6based fast6food giant, McDonalds orporation, is li/ely to put on hold its earlier declared e!pansion plan of opening >- restaurants in 8ndia by --4.
McDonald’s has '4 restaurants in 8ndia of which )( are in ?orth 1 0ast 8ndia and <4 in West 1 &outh 8ndia.
/ estaua!ts (! N%t0 & East I!)(a; '(t0
(! De$0(
*'
←
←
-- (! Utta Pa)es0 K ?oida I
Chaiabad I*J, Mathura I'J I=ighway and Drive +hruJ, $anpur IJ, Meerut IJ, D0="AD#? I*J, Agra I'J, Allahabad I'J, Laranasi IJ
←
@@ (! Haa!a 6 2aridabad I4J, Manesar I'J I=ighway and Drive 6 +hruJ, Curgaon I
$arnal I'J I=ighway and Drive 6 +hruJ, 7anipat I'J ←
/ (! Pu!:a9 6 handigarh IJ, %udhiana IJ, Doraha I'J I=ighway and Drive 6 +hruJ,
alandhar I'J, 7atarsi I'J I=ighway and Drive 6 +hruJ ←
(! Ra:ast0a! 4 aipur I4J
←
@ (! Uttaa!c0a$ 6 Dehradun I'J
←
@ (! West e!+a$ K $ol/ata I'J
←
@ (! H("ac0a$ Pa)es0 6 abli I'J.
= Restaua!ts (! West & S%ut0 I!)(a 3
- (! Ma0aas0ta K Mumbai I4J, 7une I>J, ?asi/ I'J
←
/ (! Gu:aat K Ahmedabad I*J, Ladodara IJ, &urat I'J
←
/ (! Ka!ata,a K ;angaloreI)J
←
3 (! A!)0a Pa)es0 K =yderabad I*J, (! Ma)0a Pa)es0 K 8ndore I4J
@5
+he first McDonalds restaurant opened on @ct. '4, at ;asant %o/, Lasant Lihar, ?ew Delhi. 8t was also the first McDonalds restaurant in the world not serving beef on its menu
@/
+he first Drive 6 +hru restaurant at ?oida I#7J
+he first disabled friendly store at ?oida I#7J @
+he first Mall location restaurant at Ansal 7laa I?ew DelhiJ
-
+he first highway restaurant at Mathura I#7J
-@
+he first thematic restaurant at onnaught 7lace I?ew DelhiJ *
+he first restaurant in a food court at 4s, %aBpat ?agar I?ew DelhiJ
--
+he first restaurant at the Delhi Metro &tation at 8nter &tate ;us +erminus
+he first annual fundraiser in association with @";8& and Dr. &hroffs harity 0ye =ospital.IDelhiJ +he first Dessert $ios/ 6 2aridabad I=aryanaJ
- -43
8ndigenous products li/e McAloo +i//i, McLeggie and 7ia Mc7uff e!ported to Middle 0ast countries
-3 -5
McDonalds Delivery &ervice IMcDelivery+M J introduced in ?ew Delhi McDelivery on ;icycles flagged off at handni how/ IDelhiJ6 another first initiative by McDonalds
8ndia
'--th McDonalds "estaurant in 8ndia
'- Near Anniversary -/
+he first "estaurant opened in the 0astern "egion at 7ar/ &treet, $ol/ata IWest ;engalJ +he first "estaurant opened at Airport.IDomestic Airport, ?ew DelhiJ
Customer Segmentation and Market Analysis
•
CUSTOMER SEGMENTATION
There is no single way to segment a market. Diferent segmentation variables have to be tried, to nd the variables that most accurately reect the market’s structure (who willwill not buy!.
*4
The segmentation o" #cDonald outlets and its $roducts is base on demogra$hic segmentation, geogra$hic segmentation, and $sychogra$hic. •
Demographi Segmentation! %&t is based on age, se', "amily sie, marital status, &ncome, occu$ation, education, religion, race, )ationality*.+
The marketers have done segmentation on demogra$hic basis. #ost o" the deals ofer in #cDonald are according to normal "amily sie o" "our or ve, it is economically reasonable "or u$$er middle class and also "or u$$er class "amilies. esides these deals it also ofers diferent meals t "or youngsters, students, "or small $arties and celebrations* •
Geographi segmentation “State or regional, population density (rural-suburbanUrban), community size (under 5k, 5-10k, 10-
20kper s! "m), climate, distance #rom a point$ There are at least -,/// #cDonald can be "ound in 0/ countries and territories around the world serving nearly 12 million customers each day. &n 3akistan, on geogra$hic bases marketers have targeted big cities. 4s in 5ahore, 6arachi, &slamabad, 3indi, #ultan etc. The taste and 7uality is according to the $eo$le o" region in which it is ofered. They have more then one outlet in single city, like in 5ahore. 3eo$le o" diferent areas in a city can get the same 7uality and $rice "rom diferent sales outlets.
•
"syhographi segmentation O8egmentation on the basis o" the market’s
"no%ledge o#, attitude to, or opinion o# a $roduct.+
**
The oferings are according to the li"estyle and social classes o" $eo$le. 5ike in 5ahore, there is trend o" eating out, so it is best match "or their style. There is wide band o" their loyal customers.
•
MAR#ET ANA$%SIS %4sk an e'$erienced marketer what will determine the success or "ailure o" a $romotion and they’ll o"ten 7uote an age old industry rule9 :/; audience, 0/ ; ofer, /; creativity.
8ince 0//- #cDonald is $racticing two ty$es o" strategies to maintain with ra$id change comes in consumer $re"erence as well as co$ing with changes in demogra$hic and s$ending styles. &n >nited 8tates they e'$and their business introducing $roduct variety and renovation in the already o$ened restaurant instead o" o$ening new restaurant. ?hereas in 4sia they e'$and their business by e'$loring new markets. They ofer the host country’s culture rather im$osing their home country’s culture there, this is the main business strategy that makes it one o" the most success"ul international "ast "ood chains. Their market in 4sia as well as in 3akistan is growing ra$idly. &n 3akistan they are o$ening their outlets in more cities, due to increase in demands.
•
Competitor Analysis
The emergence o" "ood chain has $ressured industry $artici$ants to continually add "eatures and cut $rices. 4lthough #cDonald’s is a market *<
leader in its "ood and beverages industry but it is now "acing tough com$etition "rom the new entrants. &t has to continuously u$date the business strategies to com$ete with young new comers.
@ollowing are the maAor #cDonald’s hamburger’s Bom$etitors,
•
,-C
&n the late =C/s, 6@B was stabilied in the >8 and the owners turned their "ocus to international markets. y =:, 6@B had established 0,21/ "ranchises and
C//
com$anyowned
restaurants
in2E
countries.
3e$siBo ac7uired 6@B in =EC along with 3ia Fut and Taco ell shortly a"ter. Today 6@B is severing about E million customers globally.
They have more
than ,/// restaurants in more than E/ countries around the world. 6@B is biggest com$etitor o" #cDonald in chain o" "ast "ood.
•
"i&&a 'ut
3e$siBo decided to s$in of two restaurants into an inde$endent, $ublicly held com$any called Tricon Global Hestaurants, &nc.
Then in 0//0 Tricon ac7uired
5ong Iohn 8ilver and 4J? 4ll4merican @ood Hestaurants where they, shortly a"ter, changed their Tricon name to KumL rands, &nc. 4lthough as com$ared to #cDonald’s it has more number o" "ranchised restaurants but revenues are low due to #cDonald’s big sie.
*:
•
%UM()rands
K>#Lbrands &ncludes 6@B, Taco ell, 3ia Fut, and 5ong Iohn 8ilver’s 4merican @ood Hestaurants. Bhina market is dominated by K>#L brands. &t serves as a biggest com$etitor while entering into the china market. ?hile #cDonald’s run its business under one ag. K>#L Fas s$lits its resources into variety o" brands generating high revenue. •
S*OT Analysis
8?
•
Strengths
y strength we mean internal $otential o" com$any. ?hile evaluating strengths o" #cDonald’s we will deal with com$any’s micro environment. #cDonald’s micro environment is consisting o" the "ollowing elements.
12/-
&mage 'ull lling ustomer*s +pectation &nno.ation uman esource Satis#action
Image #cDonald’s is the "astest growing "ood chain o" the world. &t is a number brand o" the hal" o" the world. &t has created a $ositive strong image in its customer minds. Bustomers are amused by their cleanings, high s$eed service delivery and customer "riendly attitude. +ull ,lling Customer-s E.petation 4nother greatest strength o" #cDonald’s is its $roduct value. To "ulll customers e'$ectation when they walk in their "ranchise becomes their strongest marketing element in 3akistan. *)
Inno/ation #cDonald’s kee$s on bringing innovation with 7uality in its $roducts. 3eo$le get used to o" e'$eriencing new taste and variety 'uman Resoure Satis0ation They give im$ortance to the em$loyees’ satis"action. They believe that to build
strong
em$loyeecustomer relationshi$
they have to kee$ their
em$loyee satised and ha$$y with diferent incentives other than $ay roll.
*eakness y weakness we mean $revailing internal system weakness o" the com$any and negative "actors in environment that afect badly the com$any’s core business. a .er eposure b ustomer trends c +ternal +n.ironment
O/er E.posure 3eo$le o" 3akistan always want something new or that is diferent "rom others. ut in #cDonald’s scenario, you can nd its outlets everywhere in in big cities o" 3akistan. This over e'$osure may become boring "or certain class o" $eo$le in 3akistan. This over e'$osure induce customer to move on to something new which is not as crowdie as #cDonald’s. #cDonald’s has lost the element o" uni7ueness by o$ening so much "ranchise. Customer trends Bustomer
trends
changes
ra$idly.
when
customer
sees
no
"urther
advancement or innovation in com$any’s $roduct they move on to some other brand. *>
E.ternal En/ironment Threats and o$$ortunities $revail in any com$any’s e'ternal environment. @ollowing diagram shows that com$any’s e'ternal environment •
3ec4nology tec4nology %orks as a benc4mark #or organization
•
success 6olitics7 politics plays .ital role in e8ecting organization repute 9a%7 e.ery organization need to %ork under state regulation, no
•
one can %ork beyond t4e legal boundaries o# business limited by state legal aut4ority Threats ?ith so much "ranchise dealers a threat o" bond colla$se e'ist. 4nother threat would be lack o" growth o$$ortunities available. 4s the market is very saturated so it is hard to grow more with the same $roduct line. 4nother concern can be a treat which is o" health conscious $eo$le who thinks #cDonald’s $roducts make them "atty. Opportunities! There are a lot o" une'$lored market niche available in 3akistan. 4ll they need to do $ro$er marketing o" their $roduct. Marlier they used kids as their brand ambassadors. They should e'$and their target market by targeting health conscious adults, men and women.
Marketing o)1eti/es Some o# t4e marketing ob:ecti.es are as #ollo%s7 •
•
To make reasonable $rot. #cDonald’s main obAective is to $rovide 7ualityoriented "ood and high customer satis"action.
•
To make at least 0/; $rot every year and kee$ on im$roving the sales and $ercentage o" $rot in $receding/ years.
•
#cDonalds has a wide distribution network retailer and @ranchise system through out many countries. *(
GENERA$ MAR#ETING STRATEG%
TARGET MAR#ET
emographic -actor 3 •
;ge < #rom 1=-50 >ears
•
Social lass < ?iddle, Upper middle @ Upper lass
•
&ncome < s 10,000A- and abo.e
•
Bender < ?ale and 'emale
•
Geographi 0ator :
Bountry N 3akistan
Bity N 6arachi, 5ahore, &slamabad etc.
3o$ulation N
•
"syhologial 0ator 9
3ro"ession Books, Fotel #anagers, Delivery 8ervices.
•
MAR#ETING STRATEG% <-
The marketing mi' is the combination o" $rice, $roduct, $romotion and $lace that success"ully markets a $roduct to "ocus o" #cDonalds.
23 "rodut! 3rice must match the customersO idea o" what the $roduct is worth. The im$ortant thing to remember when ofering menu items to $otential customers is that there is a huge amount o" choice available to those $otential customers with regard to how and where they s$end their money. There"ore #cDonald’s $laces considerable em$hasis on develo$ing a menu which customers want.
#cDonald’s has introduced new $roducts and $hased out old ones over time, and will continue to do so. Bare is taken not to adversely afect the sales o" an e'isting o$tion by introducing a new o$tion which will cannibalie its sales. 8ome o" #cDonald’s o$tions are growing in $o$ularity while arguably the ig #ac is at the Pmaturity’ stage.
43 "rie! Bustomers draw their own mental $icture o" what a $roduct is worth. 4 $roduct is more than a $hysical itemQ it also has $sychological connotations "or the customer. The danger o" using low $rice as a marketing tool is that the customer may "eel that a low $rice is indicative o" com$romised 7uality. This means also the $rot margin has been reduced without increasing the sales.ut the 3rice o" #cDonalds is high enough that a $erson "eels "ree to $urchase the 7uality by $aying e'tra as goodwill. 53 "romotions! The $romotions as$ect o" the marketing mi' covers all ty$es o" marketing communications.
<'
"ROMOTIONA$ O67ECTI8ES •
3o use pus4 strategy
•
3o en4ance t4e brand name and proceeds sales
•
3o de.elop a positi.e image o# company
•
3o design a promotional campaign in suc4 e8ecti.e manner so t4at consumer can s%itc4 o.er to use our brand #rom t4eir present brand
"ROMOTIONA$ STRATEG%!
"romotional De/ie!
?ebsites.
Maga&ines!
The Dawn, The )ews J 8unday #againes.
Out Door Media!
8cotch $rint, $oint o" $urchase and banners "or
introductory $hase, ill boards etc.
"ROMOTIONA$ INCENTI8ES!
Consumer Distri)utor
Deals o" minimum costs #ore sales commission will be given to "ranchise.
DOOR9TO9DOOR SE$$ING! &t is com$ulsory "or all the "ranchises o" #cDonalds that they must give the "ree home delivery o" their $roduct with minimum time. <
That’s ?hy #cDonald and his some com$etitors have now large com$etition among services along with the $rimary obAective o" "ast "ood selling.
"rodut Strategy Analy&ing Current 6usiness "rodut "ort0olio
6CG Matri.! Growth share matri' which is a $lanning method used "or $ort"olio and com$any’s
strategic
business evaluation.
8trategic
business units
are
classied as stars, cash cows, 7uestion marks or dogs. #cDonald’s as a single business unit was a star that has high growth rate along with high market share, but now it has turned into cash cows. Bash cows is that strategic business unit in which has low growth rate and but it is enAoying high business share or $roduct. #cDonald’s Ringer urger is an established "ast "ood unit that now needs less investment to garb its market share as com$ared to other emerging business units. Relati/e Share
H(+0
L%'
P t e 4 , i g a 0 " 1 % 0 t ' % G % o 9
<4
Cash Cow
Dog
McDonald’s Qinger ;urger
"rodut Conept and 'istory Ringer burger was rst introduced in Cth century in 5atin 4merica. 5ater on it established as a common "ood in >84. 4nd now as every country has its uni7ue "ood like 3akistan has %Hoti, $ulse, Hice etc.+ same as >84 has inger burger as their common "ood and #cDonalds introduced it in =C/s and now cashing it in diferent $arts o" world. +eatures: +untions: ; 6ene,ts The immense growth o" #cDonald’s makes it loose the 7uality o" HJD and 7uality maintenance de$artment. )ow they should develo$ a $roduct 7uality research and develo$ment to grab more market share. 8ome benets o" this burger are that
8t has perfect calories that a normal person should get in a day. 8.e. ':-- calories.
8t is enough large to fulfill the need of a person in hunger with vegetables n chic/en.
+he McDonald’s core competencies which ma/e it stand ahead among its competitors in industry36
MDonald-s "lay Area! #cDonald’s introduced the "un $lay area "or kids, till now no com$etitor o$erate a $lay area u$ to its standards "rodut 8ariety! #cDonald’s kee$s on changing a bringing innovation in to burger, salads, desserts, drinks and sandwiches variety. <*
+astest Deli/ery! #cDonald’s run the "astest delivery system worldwide
'appy Meals 0or Children! A toy with every ha$$y meal is their uni7ue "eatures and attracts the children
the most. Target Market
Bhildren
3arents o" 8mall Bhildren
Teens
usiness 3eo$le (@ree ?i@i in some restaurants!
Estimated annual Sales! Estimated pro,ta)ility! Market Gro>th Rate! #cDonaldOs Bor$oration re$orted a 0-; increase in $rot "or the "ourth 7uarter, on strong global com$arable sales growth driven by higher demand. #cDonaldOs net income "or the 7uarter was S.00 billion, u$ 0-; "rom S/.== billion in the same 7uarter last year. <<
•
Competition
4lthough #cDonaldOs is the clear leader o" the "ast "ood industry in terms o" revenues generated and restaurants established, it "aces com$etition "rom other "ast "ood chains, which are introducing new $roducts themselves. #aAor direct com$etitors in the (hamburgerbased! "ast "ood industry include9 urger 6ing Foldings is the second largest hamburger "ast "ood chain. 4lthough more o" urger 6ing’s restaurants are "ranchised than #cDonald’s restaurants, urger 6ing @ranchise revenues trail behind that o" its com$etitor, mainly due to the #cDonald’s sie advantage. ?endyOs is the third largest hamburger "ast "ood chain. &t has a lower o$erating margin that #cDonald’s, so it is likely to be more negatively im$acted during a recession. KumL rands run 6entucky @ried Bhicken, Taco ell, 3ia Fut, 5ong Iohn 8ilver’s, and 4J? 4ll4merican @ood Hestaurants. Burrently, KumL rands are dominating the Bhina market, $osing a challenge to #cDonaldOs attem$ts to enter the market. ?hile #cDonald’s Bor$oration "ocuses on its agshi$ brand, KumL s$lits its resources among a wide variety o" restaurants. <:
Geographial Sope ?ith over -0,/// locations in over / countries, #cDonald’s ()K8M9 #BD! is the worldOs largest "ast "ood restaurant chain. #cDonaldOs o$erates its own restaurants and "ranchises its brand to local business$eo$le (about :/; o" the worldOs #cDonaldOs restaurants are "ranchised. The com$any e'$erienced a dramatic turnaround in 0//-, driven by a two$ronged strategy. &n the >.8., #cDonaldOs "ocused on increasing sales at e'isting locations by renovating stores, e'$anding menu o$tions and e'tending store hours. &nternationally, #cDonaldOs e'$anded aggressively, o$ting to "ranchise rather than o$erate its new locations, $roviding new income with little overhead. oth strategies have $aid dividends des$ite its sie, sales have grown by a third since 0//-. Domestically, #cDonaldOs continues to $er"orm well des$ite a $ullback in consumer s$ending and is even beneting as consumers trade down "rom more e'$ensive eating o$tions. 4t the same time, international o$erations are driving $rot growth. 4 growing global middle class, $articularly in emerging markets like Bhina, &ndia, and 5atin 4merica, re$resents a massive o$$ortunity "or #cDonaldOs. #cDonaldOs aggressive eforts to e'$and its global $resence most notably at the 0//E eiAing 8ummer
McDonald's +nternational Re8en$es eo)rahic Re)ion
*ercent o Total Re8en$es
;+
2C?E
0rance! Fermany! ;K
)%C&E
Rest of Aurope
%(C%=E
?C%%E
Rest of
Consumer )uying proess! <)
#cDonald’s creates a "rame work in $eo$les mind that #cDonald’s is a $lace to get s$eedy and 7uality "ood to suce the instant hunger. They scanned through their $re"erences and select #cDonald’s as a medium to suce their need 34ey 4a.e t4ree options to get t4e desired product
Go in the nearby restaurant and order your meal eat thereL
Take
away your meal home by drive through o$tion
Ball and get your meal home delivered, with the "astest delivery system ever ofered.
•
ompetiti.e 6roducts
There are many $roducts as a com$etitor o" #cDonald’s inger burger, Aust like 6@B also a well established brand $roviding a healthy burger with a com$etitive $rice.
•
Cirect ompetitors
Direct com$etitors o" #cDonalds are 6@B, burger king, yum burgers etc.
O9:ect(*e %1 t0e Stu) ✔+o ✔
study the problems faced by the customers in variety in product.
+o analye the self service.
✔+o study
the e!pectation of consumer in McDonald’s
✔+o measure ✔+o obtain ✔+o study
quantities offered in the product
suggestions for improvements in the product.
the mar/eting strategy adopted by Mc Donald
<>
RESEARCH METHODOLOGY;4
@.Reseac0 )es(+!
"esearch Design is a systematic planning, organiing 1 e!ecuting a research proBect within specified time limit 1 resource allocation. After deciding the basic aspects of research proBect, e!ample6 formulating research problem,obBectives of research, data requirement, sample design 1 before the commencement of wor/ of research proBect, the researcher has to prepare research design. +he research wor/ will be conducted as per the research design prepared. 8t is logical 1 systematic outline of research proBect prepared for directing, guiding 1 controlling a research wor/. <(
+his research is EPLORATORY in nature as it deals in e!ploring customer satisfaction. -. Data c%$$ect(%! "et0%);4
Data is collected mainly through two methods. +hey are as follows36 i. 7rimary Data ii. &econdary Data
a P("a )ata;4
7rimary data constitute first hand information which is collected for the first time in order to solve research problem. ✔ 8t is the data collected from primary sources which are original sources. ✔ 8t is fresh data collected for the first time directly from the respondents. ✔ 7rimary data is important as it gives reliable, factual first hand information for information purpose. ✔ "esearcher collects primary data as per the need of his research proBect and from the source or the source collected from internet ✔
✔ 8t ✔
is a created data. 8t is also time consuming and costly data.
✔7rimary
different methods such as mail survey, personal interviews,
observation or e!perimentation ✔
Data collection instruments are to be designed according to the needs
of investigation. ✔
7rimary data is the original data collected by the researcher from
respondents through ✔
7rimary data are collected for detailed information on certain aspects of
research proBect.
✔
Data collection was done through customer survey.
9 Sec%!)a )ata;4 :-
✔
&econdary data are ne!t to primary data.
✔
+his data is already collected and complied for someone other than the
researcher himself. ✔
8t is readily available in complied form.
✔
&uch data may be in the form of statistical statements or tables or
reports and so on. ✔&uch ✔A
data is available in published or unpublished form.
researcher may use secondary data as the Osole sourceR of information
for his research study. ✔
&econdary data are available easily, quic/ly and economically.
. Sa"#$(!+ tec0!(Bue;4
+he technique used for sampling is the a!)%" % #%9a9($(t sa"#$(!+ 7robability sampling is a process of sample selection in which elements are chosen by chance methods such as flipping coins, drawing number of balls from an urn or through tables of random numbers. 3. P$ace %1 eseac0;4
+he universe ta/en for the research is DEHRADUN4
=. A!a$s(s t%%$ ;4
+he statistical tools for analysis used in this report are bar graphs,pie charts etc. +he tools used for conducting consumers survey Juest(%!!a(e su*e. +he whole report has been prepared by using M(c%s%1t %11(ce -/
5. Sa"#$e s(e ;4 :'
We have ta/en the sample sie as '--
6rand Strategy 6rand! 4 name, term, sign, symbol, or design, or a combination o" these, intended to identi"y the goods or services o" one seller or grou$ o" sellers and to diferentiate them "rom those com$etitors. *hat is )rand? &t’s who you are...and what you stand "or. Importane! 4 strong brand is a heart and soul o" an organiation. we have a very strong e'am$le here9 &" we take two dishes o" #cDonalds and give it to a same $erson to eat. 4nd one is in #cDonalds $acking and other is sim$le $acking. 4"ter eating both dishes he will "eel that #cDonalds dish was better than the other in taste. &t is Aust due to brand name. :
$ogo o0 MDonalds!
&t creates a clear identity in t4e consumer mind &t also determines a set o# associations and #eelings
6rand name seletion! #cDonalds brand name is short and sim$le, easy to s$ell, no negative imagery which is im$ortant "or making good im$act.
6randing Strategy! #cDonalds use the line e'tension and brand e'tension strategies. 4s we have e'am$le o" line e'tension, when #cDonalds introduces a new dish or deal "or their customers.
4nd e'am$le o" brand e'tension, when #cDonalds
introduces something new, such as icecream.
"riing 6rice is t4e only one elements in marketing mi t4at produce re.enue, all ot4er elements represent cost ;ccording to epert D*1E price impro.ements generates a 125E prot impro.ements$ MDonald onentrates 0ators: >hen setting prie! #cDonald concentrate on value based $ricing, they set the $rices o" their deals with buyer $erce$tions, they create beat image o" their brand then set $rices. they also using the value adding $rices, by attaching a diferentiate "eatures and services. There are two main ty$es o" setting $rice. 1-skimming 2-6enetration :4
#cDonalds use the skimming strategy, because it $roduces the good 7uality that su$$ort high $rices. Integrated Marketing Communiation plan
29Ad/ertising Ati/ity! #cDonalds advertises through $rint media in 3akistan and also use mass media in some other countries and also $ay high cost "or mass media advertising. #cDonaldOs s$end over two billion d #cDonaldOs argue that their advertising is no worse than anyone elseOs and that they hold to all the advertising codes in each country. 49Sales promotion ati/ity! #cDonalds use sales $romotion activity by giving some toys "or children along their s$ecial $ackage deals. 4nd sometimes they also ofer, buy one get one "ree. ?hich is very attractive "or consumer and it is a tool "or them by which they enhance their sales ratio. 59E/ents ati/ity! Time to time #cDonalds held’s events activity in which they have stalls o" their dishes. Mvents activities like consorts, basant "estivals.
Distri)ution strategy The aim is to discuss #cDonaldOs distribution channel and the way in which this "ast"ood restaurant chain gets its $roducts to the market. &n the theory o" the #arketing #i', $lace (distribution! determines where the $roduct will be sold and how it will get there. &n "act, as noted on www.mcdonalds.com, #cDonaldOs is the leading global "oodservice retailer, with more than -/,/// local restaurants serving nearly 2C million $eo$le each day in 0 diferent countries. 4$$ro'imately E/ $ercent o" all #cDonaldOs restaurants worldwide are owned and o$erated by inde$endent "ranchisers.
ANALIYSIS ON MCDONALDS CORPORATION AT INTERNATIONAL LE8EL.
:*
McDonalds 8nternational through its wholly owned subsidiary McDonalds 8ndia entered into two Ls, one with onnaught 7laa "estaurants 7vt. %td. in the ?orthern 1 0astern region and another with =ard astle "estaurants 7vt. %td. in the Western 1 &outhern region
McDonalds restaurants are found in ''( countries and territories around the world and serve nearly *) million customers each day. McDonalds operates over 4',--- restaurants worldwide, employing more than '.< million people. +he company also operates other restaurant brands, such as 7iles afS, and has a minority sta/e in 7ret a Manger . +he company owned a maBority sta/e in hipotle Me!ican Crill until completing its divestment in @ctober --:. #ntil December --4, it also owned Donatos 7ia. @n August ), --), McDonalds sold ;oston Mar/et to &un apital 7artners.
Most standalone McDonalds restaurants offer both counter service and drive6through service, with indoor and sometimes outdoor seating. Drive6+hru, Auto6Mac, 7ay and Drive, or McDrive as it is /nown in many countries, often has separate stations for placing, paying for, and pic/ing up orders, though the latter two steps are frequently combinedE it was first introduced in Ariona in '()<, following the lead of other fast6food chains. 8n some countries HMcDriveH locations near highways offer no counter service or seating. 8n contrast, locations in high6density city neighborhoods often omit drive6through service. +here are also a few locations, located mostly in downtown districts, that offer Wal/6+hru service in place of Drive6+hru. 0specially themed restaurants also e!ist, such as the H&olid Cold McDonalds,H a '(<-s roc/6and6roll themed restaurant. 8n Lictoria, ;ritish olumbia, there is also a McDonalds with a * carat I'--J gold chandelier and similar light fi!tures.
0ach McDonalds restaurant is operated by a franchisee, an affiliate, or the corporation itself. +he corporations revenues come from the rent, royalties and fees paid by the franchisees, as :<
well as sales in company6operated restaurants. McDonalds revenues grew ) over the three years ending in --) to 9.> billion, and ( growth in operating income to 94.( billion.
2ull year --> highlights included3 •
Clobal comparable sales increase of :.(, including #.&. *.-, 0urope >.<, and AsiaG7acific, Middle 0ast and Africa (.-
•
Crowth in McDonald’s combined operating margin of 4- basis points to ).*, after adBusting for the impact of the --) %atin America transaction
•
@perating income increases in the #.&. >, 0urope 4 I') in constant currenciesJ and AsiaG7acific, Middle 0ast and Africa 44 I> in constant currenciesJ
•
0arnings per share from continuing operations of 94.):, an increase of ': I'* in constant currenciesJ, after adBusting for the impact of the --) %atin America transaction
"eturn of 9<.> billion to shareholders through shares repurchased and dividends paid, including a 44 increase in the quarterly cash dividend to 9-.<- per share for the fourth quarter K bringing our current annual dividend rate to 9.-- per share 8ndividual franchise arrangements generally include a lease and a license and provide for payment of initial fees, as well as continuing rent and royalties to the ompany based upon a percent of sales with minimum rent payments that parallel the ompany’s underlying leases and escalations Ion properties that are leasedJ. McDonald’s franchisees are granted the right to operate a restaurant using the McDonald’s &ystem and, in most cases, the use of a restaurant facility, generally for a period of - years. 2ranchisees pay related occupancy costs including property ta!es, insurance and maintenance. 8n addition, in certain mar/ets outside the #.&., franchisees pay a refundable, non interest6bearing security deposit. 2oreign affiliates and developmental licensees pay a royalty to the ompany based upon a percent of sales, as well as initial fees. +he results of operations of restaurant businesses purchased and sold in
::
transactions with franchisees, affiliates and others were not material to the consolidated financial statements for periods prior to purchase and sale.
McD%!a$)s I!)(a Cu$tua$$ Se!s(t(*e
McDonalds worldwide is well /nown for the high degree of respect for the local customs and culture. McDonald’s has developed a menu especially for 8ndia with vegetarian selections to suit 8ndian tastes and preferences. $eeping in line with this, McD%!a$)s )%es !%t %11e a! 9ee1 % #%, (te"s (! I!)(a . 8n the last decade it has introduced some vegetarian and non6vegetarian
:)
products with local flavours that have appealed to the 8ndian palate. +here have been continuous efforts
to
enhance
variety
in
the
menu
by
developing
more
such
products.
McDonalds has also re6engineered its operations repeatedly in its '' years in 8ndia to address the special requirements of a vegetarian menu. Legetable products are '-- vegetarian, i.e. •
+hey are prepared separately, using dedicated equipment and utensils.
•
@nly pure vegetarian oil is used as a coo/ing medium.
•
heese and sauces are completely vegetarian and egg less.
•
&eparation of vegetarian and non6vegetarian food products is maintained throughout the various stages of procurement, coo/ing and serving.
CHAPTER;43 ANALIYSIS ON MCDONALDS ON PRODUTI8ITY & JUALITY.
:>
+he site of the first McDonalds to be franchised by "ay $roc is now a museum in Des 7laines, 8llinois. +he building is a reproduction of the original, which was the ninth McDonalds restaurant.
+o accommodate the current trend for high quality coffee and the popularity of coffee shops in general, McDonalds introduced McafSs. +he McafS concept is a cafS6style accompaniment to McDonalds restaurants. McafS is a concept of McDonalds Australia, starting with Melbourne in '((4. +oday, most McDonalds in Australia have McafSs located within the e!isting McDonalds restaurant. 8n +asmania there are McafSs in every store, with the rest of the :(
states quic/ly following suit. After upgrading to the new McafS loo/ and feel, some Australian stores have noticed up to a :- increase in sales. As of the end of --4 there were over :-McafSs worldwide.
&ome locations are connected to gas stationsGconvenience stores, while others called McDonalds 0!press have limited seating andGor menu or may be located in a shopping mall. @ther McDonalds are located in Wal6Mart stores. Mc&top is a location targeted at truc/ers and travelers which may have services found at truc/ stops. McDonalds announced on May , --> that, in the #.&. and anada, it will be introducing coo/ing oil for its 2rench fries that contain no trans fats. +he company will use canola6based oil with corn and soy oils by years end for its ba/ed items, pies and coo/ies. 8n a bid to tap into growing consumer interest in the provenance of food, the fast6food chain recently switched its supplier of both coffee beans and mil/ . #$ chief e!ecutive &teve 0asterbroo/ said3 H;ritish consumers are increasingly interested in the quality, sourcing andethics of the food and drin/ they buyH. McDonalds coffee is now brewed from beans ta/en from stoc/s that have been certified by the "ainforest Alliance, a conservation group. &imilarly, mil/ supplies used for its hot drin/s and mil/sha/es have been switched to organic sources which could account for < of the #$s organic mil/ output. +he company has also e!panded the McDonalds menu in recent decades to include alternative meal options, such as salads and snac/ wraps, in order to capitalie on growing consumer interest in health and wellness. McDonalds predominantly sells hamburgers, various types of chic/en sandwiches and products, 2rench fries, soft drin/s, brea/fast items, and desserts. 8n most mar/ets, McDonalds offers salads and vegetarian items, wraps and other localied fare. +his local deviation from the standard menu is a characteristic for which the chain is particularly /nown, and one which is employed either to continue by regional food taboos Isuch as the religious prohibition of beef consumption in 8ndiaJ or to ma/e available foods with which the regional mar/et is more familiar Isuch as the sale of Mc "ice in 8ndonesiaJ. +here have been continuous efforts to enhance variety in the menu by developing more such products. )-
McDonalds has also re6engineered its operations repeatedly in its '' years in 8ndia to address the special requirements of a vegetarian menu. Legetable products are '-- vegetarian, +hey are prepared separately, using dedicated equipment and utensils. @nly pure vegetarian oil is used as a coo/ing medium. heese and sauces are completely vegetarian and egg less. &eparation of vegetarian and non6vegetarian food products is maintained throughout the various stages of procurement, coo/ing and serving.
M%st Res#ecte) C%"#a! 1% 1%u c%!secut(*e
←
eas -4-/ (! t0e F%%) Se*(ces sect% 9 us(!ess'%$) M%st Wa!te) a!) %1 t0e Yea A'a) - &
←
-3 9 Fa!c0(s(!+ H%$)(!+s I!)(a Lt). Reta($e %1 t0e Yea A'a) 1% cate(!+ se*(ces
←
-34-5 at t0e I"a+es Reta($ A'a)s. ←
T0e M%st Pe1ee) Fast F%%) Out$et -5 & -/ 9 A'aa C%!su"e A'a) 0%ste) 9 CNC.
←
Sta Reta($e 4 T0e C%!su"e Wa F%%) Se*(ces Reta($e %1 t0e Yea -5 & -/ 9 Fa!c0(se I!)(a
)'
←
A"(t C%#%ate E2ce$$e!ce A'a)4(! -/ & -
McDonalds 8ndia 6 A decade of quality service 2or its unparalleled benchmar/s established in the T&" sector McDonald’s 8ndia has been bestowed with many prestigious awards. +o name a few3
ANALIYSIS ON MCDONALDS AD8ERTISEMENT AND PUILE RELATIONS.
)
@ver the years, McDonalds has developed +L advertising campaigns that have become, li/e McDonalds, a part of our lives and culture. McDonalds commercials have focused not only on product, but rather on the overall McDonalds e!perience, portraying warmth and a real slice of every day life. +his HimageH or HreputationH advertising has become a trademar/ of the company and created many memorable television moments and themes, including36
McDonalds is Nour $ind of 7lace I'(:)J Nou Deserve a ;rea/ +oday I'()'J We Do it All for Nou I'()- 1 '(>'J ?obody Ma/es Nour Day %i/e McDonalds an I'(>'J McDonalds and Nou I'(>4J 8ts a Cood +ime for the Creat +aste of McDonalds I'(>*J Cood +ime, Creat +aste, +hats Why +his is My 7lace I'(>>J )4
2ood, 2ol/s and 2un I'((-J McDonalds +oday I'(('J What Nou Want is What Nou Cet I'((J =ave you =ad your ;rea/ +odayP I'((
McDonalds has for decades maintained an e!tensive advertising campaign. 8n addition to the usual media
Itelevision,
radio,
and
newspaperJ,
the
company
ma/es
significant
use
of
billboardsIoutdoors, on which large advertisements or notices are posted.J and signage, sponsors sporting events from ranging from %ittle %eague to the @lympic Cames, and ma/es coolers of orange drin/ with their logo available for local events of all /inds. ?onetheless, television has always played a central role in the companys advertising strategy.
EMPLOYEE ENEFIT PLANS
+he ompany’s 7rofit &haring and &avings 7lan for #.&.6based employees includes a *-'I/J feature, a leveraged employee stoc/ ownership I0&@7J feature, and a discretionary employer profit sharing match. +he *-'I/J feature allows participants to ma/e pre6ta! contributions that are partly matched from shares released under the 0&@7. +he 7rofit &haring and &avings 7lan also provides for a discretionary employer profit sharing match at the end of the year for those eligible participants who have contributed to the *-'I/J feature. All contributions and related earnings can be invested in several investment alternatives as well as McDonald’s common stoc/ in accordance with each participant’s elections. 7articipants’ contributions to the *-'I/J feature and the )*
discretionary employer match are limited to - investment in McDonald’s common stoc/. +he ompany also maintains certain supplemental benefit t plans that allow participants to IiJ ma/e ta!6deferred contributions and IiiJ receive ompany6provided allocations that cannot be made under the 7rofit &haring and &avings 7lan because of 8nternal "evenue &ervice limitations. +he investment alternatives and returns are based on certain mar/et6rate investment alternatives under the 7rofit &haring and &avings 7lan. +otal liabilities were 9*'<.4 million at December 4', --) and 94)>.: million at December 4', --: and were included in other long6term liabilities in the onsolidated balance sheet. +he ompany has entered into derivative contracts to hedge mar/et6driven changes in certain of the liabilities. At December 4', --), derivatives with a fair value of 9'--.> million inde!ed to the ompany’s stoc/ as well as an investment totalling 9>.- million inde!ed to certain mar/et indices were included in miscellaneous other assets in the onsolidated balance sheet. All changes in liabilities for these nonqualified plans and in the fair value of the derivatives are recorded in selling, general 1 administrative e!penses. hanges in fair value of the derivatives inde!ed to the ompany’s stoc/ are recorded in the income statement because the contracts provide the counterparty with a choice to settle in cash or shares. +otal #.&. costs for the 7rofit &haring and &avings 7lan, including nonqualified benefits and related hedging activities, were Iin millionsJ3 --)K9<).:E --:K9:-.'E --.-. ertain subsidiaries outside the #.&. also offer profit sharing, stoc/ purchase or other similar benefit plans. +otal plan costs outside the #.&. were Iin millionsJ3 --)K 9:.)E --:K9:(.>E --
)<
REASON TO WORK WITH MCDONALDS
←
Fast4tac, Caee P%+ess(%!
←
Y%u!+ E!e+et(c & F$e2(9$e E!*(%!"e!t
←
E2ce$$e!t $ea!(!+ P%te!t(a$
←
D(+!(t %1 La9%u
←
W%$) c$ass Ta(!(!+ Sste"s
←
G$%9a$ E2#%sue
←
G%%) e!e1(ts
):
. DATA ANALYSIS ;4 GENDER;4 MA%0& *)
20MA%0& <4 #?D0" ': ': K < <64< A;@L0 4<
AGE GROUP;4
' '> ) (
1) ;F+ >U +F+ F&S&3+C ?cCG;9CSH
•
/E - non .isitors
•
IJE -.isitors
))
•
ANALYSIS ;4 "a:%(t %1 t0e sa"#$e se+"e!t *(s(t McD%!a$)s 9ecause (t (s t0e %!$ 9a!) a*(a$a9$e (! "a,et
2) K;3 ?;"+S >U 6;3G&L+ ?cCG;9CSH
• • • • •
0E - print media ad.ertisements 20E - electronic media /0E - %ord o# mout4 communication J0E - brand name
;G;9>S&S 7- ma:ority o# .isitors #ollo% brand name as t4ey #eel t4at !uality is mentained and it also ser.es as status symbol ) K '3+G C >U F&S&3 ?cCG;9CSH
)>
• • • •
2JE 11E IE 2/E
- once in a %eek -#e% days a %eek - once in a mont4 - #e% days a mont4
ANALYSIS ;4 )ata a!a$s(s s0%'s t0at "a:%(t %1 *(s(t%s *(s(t %! "%!t0$ 9as(s. Ma:% *(s(t%s ae 1%" "())$e c$ass s%c(et a!) s% (t (s )(11(cu$t t% susta(! "%e 1eBue!t *(s(ts
/) K;3 &S >U ?;&G 6U6S+ ' F&S&3&GB ?cCG;9CSH
)(
• • • •
1E -doing some %ork 2E - %aiting 1IE- c4atting M/E - eating
ANALYSIS ;4 t0e )ata s0%'s t0at "a:% #u#%se %1 *(s(t%s (s eat(!+
5) K> C >U 6+'+ F&S&3&GB ?cCG;9CSH
• • • •
1=E IE 2E 1JE
-
good ser.ice good !uality reasonale price good taste
ANALYSIS ;4 )ata s0%'s #e%#$e #e1e McD%!a$)s )ue t% +%%) Bua$(t. S(!ce c%!su"es 'a!t "a2("u" etu! 1% t0e( "%!e Bua$(t (s "%st #%"(s(!+ )%"a(! 'ee "a2("u" etu! ca! 9e ee#e) C! >U
9&"+ F&S&3&GB ?cCG;9CS ;9GBK&3-
>-
• • • •
1ME-B&9 AN> '&+GC 5/E-'&+GCS 22E- ';?&9> 2E- ;9G+
ANALYSIS ;4 MAORITY PEOPLE 8ISIT WITH FRIENDS. I! I!)(a! s%c(et %!e 0as t% "e!ta(! t0e )ec%u" %1 s%c(a$ 9e0a*(%u '0e! '(t0 1a"($ '0($e a"%!+ 1(e!)s %!e (s 1ee %1 c%!sta(!s t0us "a:% #e%#$e #e1e c%"#a! %1 1(e!)s.
M) ?cCG;9CS SU9C &?6F+ &3S-
•
21E - 'C
•
1=E - S+F&+
•
21E - 6&+
>'
•
JE - 9;3&G
•
;G;9>S&S 7- ?;O&3> ' F&S&3S 3&G" 3;3 ?CG;9CS SU9C &?6F+ 3+& 9;3&GS 34is because in C+;CUG, outlets are opened at central points %4ic4 may be #ar o# #rom many places
=) K ?U S;3&S'&+C ;+ >U K&3 3+ F;+&3> ' ?+;9S S+F+CH
• • • • •
E - F+> C&SS;3&S'&+C JE - C&SS;3&S'&+C 0E - G+U3;9 51E- S;3&S'&+C 10 E - F+> S;3&S'&+C
;G;9>S&S 7- ma:or segment o# people appear satised %it4 .ariety o# meal ser.ed 34is is because t4e consumers #eel t4at t4eir money is e8eciantly .alued in terms o# ser.ices pro.ided I)K ?U S;3&S'&+C ;+ >U K&3 3+ 6&+ ' 3+ ?+;9S S+F+CH
>
;G;9>S&S < ?;O S+B?+G3 ' 3+ 6+69+ ;66+; 3 N+ S;3&S'&+C K&3 3+ 6&+S ' 3+ ?+;9S S+F+C &tems like ?; ;99U 3&""&, ?;6U''S etc are !uite economical and good enoug4 to satis#y 4unger pangs
10) K ?U S;3&S'&+C S+F&+ ' ?cCG;9CSH
• • •
ME- F+> C&SS;3&S'&+C 5E - C&SS;3&S'&+C 2ME - G+U3;9
>4
;+
>U
K&3
3+
• •
/=E - S;3&S'&+C 1E - F+> S;3&S'&+C
;G;9>S&S7 ?;O S+B?+G3 S;3&S'&+C K&3 3+ S+F&+
;66+;+C
3
N+
11) K ?U S;3&S'&+C ;+ >U K&3 3+ PU;9&3> ' 3+ ?+;9S S+F+CH
• • • • •
1; UMHK D&884T&8@&MD 2; D&884T&8@&MD 2; )M>TH45 1; 84T&8@&MD 00; UMHK 84T&8@&MD
;G;9>S&S7 ?;O S+B?+G3 ;66+;S 3 N+ S;3&S'&+C K&3 3+ PU;9&3> ' 3+ ?+;9S S+F+C
12) K ?U S;3&S'&+C ;+ 9+;G9&G+SS ' 3+ +S3;UG3H
>*
>U
K&3
3+
• • • • •
5E- F+> C&SS;3&S'&+C /E - C&SS;3&S'&+C 1/E - G+U3;9 51E - S;3&S'&+C 22E - F+> S;3&S'&+C
ANALYSIS ; MAOR SEGMENT APPEARS TO E SATISFIED WITH CLEANLINESS OF THE RESTRAUNT.
1) K ?U S;3&S'&+C ;+ >U K&3 3+ S+9' S+F&+ ;3 3+ +S3;UG3H
><
• • • • •
5E- F+> C&SS;3&S'&+C /E - C&SS;3&S'&+C 1/E - G+U3;9 51E - S;3&S'&+C 22E - F+> S;3&S'&+C
;G;9>S&S 7 ?;O S+B?+G3 ;66+;S 3 N+ S;3&S'&+C K&3 3+ S+9' S+F&+ ;3 3+ +S3;UG334is is because younger generation pre#er more in#ormal ambiance rat4er t4an a sop4isticated en.ironment 1/) K ?U S;3&S'&+C ;?N&+G+ ' ?cCG;9CSH
>:
;+
>U
K&3
3+
• • • • •
1E- F+> C&SS;3&S'&+C =E - C&SS;3&S'&+C 0E - G+U3;9 /ME - S;3&S'&+d 10E - F+> S;3&S'&+C
ANALYSIS; MAOR SEGMENT APPEARS TO E SATISFIED WITH THE AMIENCE OF THE RESTRAUNT 9ecause (t e!teta(!s t0e $(*e$(!ess %1 %ut0
15) K ?U S;3&S'&+C ;+ >U K&3 3+ '+&GC9&G+SS ' 3+ +?69>++SH
>)
• • • • •
2E- F+> C&SS;3&S'&+C 10E - C&SS;3&S'&+C 2ME - G+U3;9 /ME - S;3&S'&+C 1/E - F+> S;3&S'&+C
ANALYSIS4 MAOR SEGMENT APPEARS TO E SATISFIED WITH THE FREINDLINESS OF THE EMPLOYEES C! ;+
>U S;3&S'&+C K&3 3+ 6CU3S S+F+C ;3 ?cCG;9CS &G ?6;&SG 3 3+ H
>>
• • • • •
1E- F+> C&SS;3&S'&+C IE - C&SS;3&S'&+C 1IE- G+U3;9 50E - S;3&S'&+C 1ME - F+> S;3&S'&+C
ANALYSIS;4 MAOR SEGMENT APPEARS TO E SATISFIED WITH THE THE PRODUCTS SER8ED AT MCDONALDS. T0(s (s 9ecause t0e ease$ sat(s1 t0e !ee) %1 s!ac,s at ec%!%"(ca$ #(ces
1M) K ?U S;3&S'&+C ;+ >U K&3 3+ F+;99 6+'?;G+ ' ?cCG;9CSH
• • • • •
1E- F+> C&SS;3&S'&+C JE - C&SS;3&S'&+C 1E- G+U3;9 5ME - S;3&S'&+C 1IE - F+> S;3&S'&+C
ANALYSIS;4 MAOR SEGMENT OF THE PEOPLE APPERARS TO E SATISFIED WITH THE O8ERALL PERFORMANCE OF McDONALDS.
>(
CHAPTER;45 ANALIYSIS ON 8ALUATION OF TA OF MCDONALDS CORPORATION.
+he ompany records a valuation allowance to reduce its deferred ta! assets if it is more li/ely than not that some portion or all of the deferred assets will not be realied. While the ompany has considered future ta!able income and ongoing prudent and feasible ta! strategies, including the sale of appreciated assets, in assessing the need for the valuation allowance, if these estimates and assumptions change in the future, the ompany may be required to adBust its valuation (-
allowance. +his could result in a charge to, or an increase in, income in the period such determination is made. 8n addition, the ompany operates within multiple ta!ing Burisdictions and is subBect to audit in these Burisdictions. +he ompany records accruals for the estimated outcomes of these audits, and the accruals may change in the future due to new developments in each matter. During --), the ompany recorded a 94': million benefit as a result of the completion of an 8"& e!amination of the ompany’s --46--* #.&. ta! returns. During --<, the ompany recorded a 9')( million benefit due to the completion of an 8"& e!amination of the ompany’s ---6-- #.&. ta! returns. +he ompany’s --<6--: #.&. ta! returns are under audit and the completion is e!pected in late --> or early --(. Deferred #.&. income ta!es have not been recorded for temporary differences totalling 9:.) billion related to investments in certain foreign subsidiaries and corporate Boint ventures. +he temporary differences consist primarily of undistributed earnings that are considered permanently invested in operations outside the #.&. 8f management’s intentions change in the future, deferred ta!es may need to be provided.
;A%A?0 &=00+ @2 MD@?A%D& -'*6'<
PERI OD ENDI NG 30Jun12
31Mar 13
31Dec14
30Sep15
2, 1 42 , 100
2, 43 8, 4 00
2, 1 36, 40 0
4 , 282 , 7 00
-
-
-
-
Asset s Cur r entAsset s CashAndCash Equi v al e nt s Shor tT er m
('
Li abi l i t i es Cur r e ntLi abi l i t i es Account s 2 , 120 , 9 00 I nvest ment s Payabl e NetRecei vabl es 784, 600 Shor t / Cur r e nt I nvent or y 1, 05 5, 500 2 88 , 2 00 Ot herCur r ent 3 79 , 2 00 LongTe r m Debt Ot herCur r ent Asset s T ot a lCur r ent Li abi l i t i es T ot a lCur r ent Asset s LongTer m Li abi l i t i es
2, 4 51 , 0 00
2 , 739 , 0 00
4 , 1 22, 1 00
848, 000
904, 200
812, 500
14 3, 70 0 6 13 , 5 00 44 9, 3 00
14 9, 000 1 7, 7 00 43 5, 7 00
14 4, 50 0 4 54 , 2 00 59 6, 0 00
1, 020, 500 4, 3 61 , 400
-
251, 400 3, 6 25, 30 0
3 , 429 , 6 00 1, 0 60 , 100
3, 0 64 , 5 00 1, 06 4, 4 00
3 , 008 , 1 00 4 , 5 76, 3 00 1, 0 36, 20 0 1 , 032 , 3 00
8, 199, 900
8, 416, 500
LongTer m Debt7, 885, 500 I nvest ment s Ot herLi a bi l i t i e s1 , 652 , 5 00 Pr ope r t yPl a nt 2 0, 1 06 , 6 00 Def er r edLong andEqui pment Ter m Li abi l i t y 9 41 , 6 00 Goodwi l l 2, 19 8, 300 I nt a ngi bl eAsse t sChar ges Accumul at ed Mi nor i t yI nt er e stNe ga t i v e Amor t i z a t i on
Ot herAsset s 1, 268, 500 Goodwi l l Def er r edLong T ot a lLi abi l i t i es 1 3, 90 9, 200
3, 87 9, 4 00
5 , 835 , 7 00
8, 569, 400
1, 4 71 , 0 00 1 , 074 , 9 00 1 , 1 54, 3 00 2 0, 9 75 , 2 00 2 0, 8 45 , 7 00 2 0, 5 26 , 2 00
9 71 , 1 00 2, 25 4, 30 0
1 , 0 66 , 0 00 1 , 0 02 , 9 00 2, 20 9, 20 0 2, 156, 10 0
-
-
-
-
1, 300, 200
1 3, 70 6, 50 0
-
-
1, 307, 400
1 3, 56 5, 500
-
-
1, 278, 900
1 5, 302 , 90 0
Ter m Asset St oc khol de r s 'Equi t y Mi scSt ocks Char ges Tot alAsset s Opt i ons
28, 994, 900 -
-
-
29, 473, 500
-
29, 023, 800 -
30, 829, 200
-
-
-
Pr e f e r r e dSt oc k-
-
-
-
CommonSt ock 16, 600
16, 600
16, 600
16, 600
2 6, 59 2, 50 0
25, 84 5, 600
2 4, 585 , 70 0
War r ant s Redee mabl e Pr e f e r r e dSt oc k
Ret ai ned 2 5, 88 1, 200 Ear ni ngs Tr eas ur ySt ock ( 14, 832 , 700 ) ( 14, 371 , 900 ) ( 13, 552 , 200 ) ( 11, 858 , 500) Ca pi t a lSur pl us 3 , 9 57 , 0 00
3 , 7 31 , 3 00
Ot her
( 2 01, 50 0)
St ockhol der Equi t y
6 3, 6 00
(
3 , 4 45 , 0 00
3 , 2 28 , 2 00
( 296, 700)
( 445, 700)
CHAPTER;4/
ANALIYSIS ON MCDONALDS IMPORT4 EPORT.
+he business is managed as distinct geographic segments. &ignificant reportable segments include the #nited &tates I#.&.J, 0urope, and AsiaG7acific, Middle 0ast and Africa IA7M0AJ. 8n addition, throughout this report we present O@ther ountries 1 orporateR that includes operations in anada and %atin America, as well as orporate activities and certain investments. +he #.&., 0urope and A7M0A segments account for 4<, 4( and ': of total revenues, respectively. 2rance, Cermany and the #nited $ingdom I#.$.J, collectively, account for appro!imately :- of 0urope’s revenuesE and Australia, hina and apan a <-6owned affiliate accounted for under the equity methodJ, collectively, account for over <- of A7M0A’s revenues. +hese si! mar/ets along with the #.&. and anada are referred to as OmaBor mar/etsR throughout this report and comprise over )- of total revenues. +he ompany continues to focus its management and financial resources on the McDonald’s restaurant business as we believe the opportunities for long6term growth remain signifi cant. Accordingly, during the third quarter --), the ompany sold its investment in ;oston Mar/et. 8n --:, the ompany disposed of its investment in hipotle Me!ican Crill IhipotleJ via public stoc/ offerings and a ta!6free e!change for McDonald’s common stoc/. As a result of the disposals during
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--) and --:, both ;oston Mar/et’s and hipotle’s results of operations and transaction gains have been reflected as discontinued operations for all periods presented. 8n analying business trends, management considers a variety of performance and financial measures including comparable sales growth, &ystem wide sales growth, restaurant margins and returns.
5 onstant currency results e!clude the effects of foreign currency translation and are calculated by translating current year results at prior year average e!change rates. Management reviews and analyes business results in constant currencies and bases certain compensation plans on these results because we believe they better represent the underlying business trends.
5 omparable sales are a /ey performance indicator used within the retail industry and are indicative of acceptance of the ompany’s initiatives as well as local economic and consumer trends. 8ncreases or decreases in comparable sales represent the percent change in constant currency sales from the same period in the prior year for all restaurants in operation at least thirteen months, including those temporarily closed. &ome of the reasons restaurants may be temporarily closed include road construction, reimaging or remodelling, rebuilding, and natural disasters. McDonald’s reports on a calendar basis and therefore the comparability of the same month, quarter and year with the corresponding period of the prior year will be impacted by the mi! of days. +he number of wee/days, wee/end days and timing of holidays in a given timeframe can have a positive or negative impact on comparable sales. +he ompany refers to this impact as the calendar shiftGtrading day adBustment. +his impact varies geographically due to consumer spending patterns and has the greatest impact on monthly comparable sales. +ypically, the annual impact is minimal, with the e!ception of leap years. 5 &ystem wide sales include sales at all restaurants, whether operated by the ompany, by franchisees or by affiliates. While sales by franchisees and affiliates are not recorded as revenues
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by the ompany, management believes the information is important in understanding the ompany’s financial performance because it is the basis on which the ompany calculates and records franchised and affiliated revenues and is indicative of the financial health of our franchisee base.
RESEARCH
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