NEPAL NEPAL COLLEGE OF MANAGEMENT Dhobighat, Lalitpur
Report on McDonald’s
Submitted by : Superi!ed by : Gi"i!h #u"g Dahal Su#a" Aryal $ru!ha %o!hi Fa&ulty o' ("ter"atio"al )u!i"e!! *em Ghimire Abi"a!h Adhi+ari o#eet Mahar#a" E-e" Shre!tha
Shri +umar Thapa
Acknowledgement
We would like to offer our sincere thanks to all the people who have devoted their precious time and effort in the course of preparing this report. We would also like to offer our gratitude to our college, Nepal College of management for incorporating the project in BBA program. We are thankful to Mr. Sujan Aral, international !usiness instructor for providing us with this opportunit and also provided us with constant help and guidance. "his project has provided with the opportunit to implement our academic knowledge into the real world and !roaden our hori#on. "hanking ou
Executive Summary
"his project was carried out to ascertain the re$uirements that are to !e fulfilled while opening a multinational compan, i.e. Mc%onald in developing countr like Nepal. "he report covers a!out the the miss missio ion, n, visi vision on and goal goal of esta esta!l !lis ishi hing ng the the fran franchi chise se of Mc%o Mc%ona nald ld in Nepa Nepal. l. "he Mc%onald&s Corporation is the world&s largest chain of ham!urger fast food restaurants, serving around '( million customers dail in ))* countries across +,--- outlets. We have performed a detail stud on the potential market in developing counties like Nepal and how Mc%onald is to cope with the other companies in the same industr like /C, etc. the SW0" SW 0" an anal als sis is pr prep epar ared ed wo woul uld d hel help p Mc Mc%on %onal ald d to co cope pe up wi with th th thee pr pres esen entt an and d fu futu ture re difficulties. the financial plans would help to accumulate the costs and the revenue generated ! the outlets outlets and mar market keting ing pla plan n wou would ld hel help p to fos foster ter and !ro !roaden aden the Nep Nepale alese se mar market ket of Mc%onald in the food industr. "hrough our project, we can conclude that the Mc%onald is one of the largest outlet in the food industr and Mc%onald has a ver immense chance of !roadening its market in the Asian countries like Nepal and Nepalese market could also !e !enefitted ! the entr of Mc%onald as it would improve the economic o!stacles which has !een a serious pro!lem in the Nepalese market.
Table of Contents 1.0 Introduction of Mcdonald’s
).-.)
1istor of Mcdonald2s
2.0 otential Market in !e"al #.0 Environmental Analysis of !e"alese market for Mc$onald’s +.-.) Strenghts +.-.3 Weakness +.-.+ "hreats +.-.4 0pportunities %.0 &usiness lan 4.-.) 5ision 4.-.3 Mission 4.-.+ es to Success 4.-.4 6oals 4.-. Strategic 0!jectives 4.-.' /inancial 7lan 4.-.'.) 7rojected, profit and loss account 8Appendi9 A: 4.-.'.3 7rojected !alance sheet 8Appendi9 B: 4.-.; Marketing 7lan 4.-.;.) %escription of market 4.-.;.3 Customer values 4.-.;.+ %istri!ution Channels 4.-.;.4 ;p2s of Mcdonald2s Marketing Model '.0 (uture lan of Mcdonald’s .-.)
1.0 Introduction of Mc$onald’s
Mc%onald&s fast food restaurant is one of the largest franchises in the =nited States as well as a!oard. "heir top menu items include> ham!urgers, cheese!urgers, McNuggets, and /rench fries. "he are also known for one of their popular desserts> the apple pie and their !reakfast sandwich> the ?gg McMuffin. "here are more than +,--- Mc%onald&s restaurants serving in ))* countries. More than ;@ of Mc%onald&s restaurants worldwide are owned and operated ! independent owners. Mc%onald&s has several ethical and social responsi!ilit policies in place throughout their solel owned and franchised companies. "hese policies include placing the customer e9perience at the core of what the do, committing to their emploees ! nurturing their talent and rewarding their achievements, maintaining high standards regarding the conduct for !usiness, and giving !ack to the communities in which the are esta!lished. isk management is imperative to Mc%onald&s. "he have a risk assessment tool that the use to determine the countr risk> which pertains to the specific countrregion the are located in industr risk> pertains to supplies produce and facilit risk> which is a com!ination of !oth countr and risk groundwork. "hese factors are all part of the risk assessment tool that is used in each of their companies to help them with risk management. Securit features in Mc%onald&s includes their securit camera sstems within the facilities to continuousl monitor all activit in and around the restaurants to ensure the safet for the workers as well as customers. Mc%onald&s use these securit cameras also in regards to workers compensation claims or lia!ilit lawsuit claims from consumers. Mc%onald&s also monitors their computer software sstems with an ACS sstem that monitors the technological factors of their !usiness.
1.0.1 istory of Mc$onald’s
0rigins
!urgers, fries and !everages, which allowed them to focus on $ualit and $uick service. roc pitched his vision of creating Mc%onald2s restaurants all over the =.S. to the !rothers. persuading !oth franchisees and suppliers to !u into his vision, working not for Mc%onald2s !ut for themselves, together with Mc%onald2s. 1e promoted the slogan, E one leg was Mc%onald2s franchisees the second, Mc%onald2s suppliers and the third, Mc%onald2s emploees. "he stool was onl as strong as the three legs that formed its foundation. Sstem /irst and foremost, roc advocated adherence to the sstem approach. So while man of Mc%onald2s most famous menu items G like the Big Mac, /iletD0D/ish and the ?gg McMuffin were created ! franchisees, the Mc%onald2s operating sstem re$uired franchisees to follow the core Mc%onald2s principles of $ualit, service, cleanliness and value. "he oots of Hualit Mc%onald2s passion for $ualit meant that ever single ingredient was tested, tasted and perfected to fit the operating sstem. As restaurants !oomed, the massive volume of orders caught the attention of suppliers. roc shared his vision of Mc%onald2s future with potential suppliers and the agreed to suppl the nascent organi#ation with product that met Mc%onald2s prescri!ed standards. As other $uick service restaurants !egan to follow, Mc%onald2s high standards rippled through the meat, produce and dair industries. Again, a roc was looking for a partnership, and he managed to create the most integrated, efficient and innovative suppl sstem in the food service industr. "hese supplier relationships have
flourished over the decades in fact, man Mc%onald2s suppliers operating toda first started !usiness with a handshake from a roc. 1am!urger =niversit
2.0 otential market in !e"al Man !elieve that Nepal is still an underDe9plored market given the potential it has. "he market is growing and chances of further e9pansion are still ver high due to the increased awareness and afforda!ilit of consumers. Based on 7urchasing 7ower 7arit 8777: Nepal2s 7er Capita
#.0 Environmental analysis of !e"alese market for Mc$onald’s
"he SW0" analsis of Mc%onald2s is illustrated as follows>
#.0.1 Strengt/s •
ne of t/e argest fast food market
Mc%onald2s is the largest fast food restaurant chain in terms of total world sales 8(@:.
&rand recognition
Compan2s !rand is the most recogni#ed !rand in fast food industr in world as well as Nepal and is valued at L4- !illion. Mc%onald2s is also famous ! the onald Mc%onald clown. •
ocally ada"ted food menus
"he local food menus which are famous in the localit are adopted to attract the customers. "hus a!ilit to adapt to local tastes is one of o ur strength. •
artners/i" wit/ 3est 3rands
We offer onl most popular !rands in its restaurants, such as> Coca Cola, ketchup and others. •
*/ildren targeting
0ur !usiness successfull targets ver oung children through offering plagrounds, tos with its meals and advertisements.
#.0.2 4eakness •
!egative "u3licity
Mc%onald2s is heavil critici#ed for offering unhealth food to its customers, stimulating o!esit and strong marketing focus on ver oung children. •
5n/ealt/y food menu
We introduce healthier choices in menu the menu is largel formed of unhealth meals and drinks. Such menu offering prompts protests ! organi#ations that fight o!esit and hence, decreases our popularit. •
ow differentiation
Mc%onald2s products are no longer a!le to su!stantiall differentiate it from other fast food chains and opt to compete ! price rather than ! additional features.
#.0.# ""ortunities •
Increasing demand for /ealt/ier food
While demand for healthier food increases, we could introduce more health food choices in our menu and reverse its weakness into strength. We are tring to sei#e such an opportunit and soon plan to open onl vegetarian restaurant in Nepal. •
ome meal delivery
We could e9ploit an opportunit of delivering food to home and increase its reach to customers. •
(ull ada"tation of its new "ractices
Mc%onald2s has redesigned its logo and restaurant design in 3--'.
*/anging customer /a3its and new customer grou"s
Changing customer ha!its represent new needs that must !e met ! !usinesses. We will focus on oungsters and office goers who are tired of the traditional fast food items.
#.0.% 6/reats •
Saturated fast food markets in t/e develo"ed economies
"he fast food market in the developed countries is alread overcrowded ! so man fast food restaurant chains and this alread proves to !e a threat to Mc%onald2s. •
6rend towards /ealt/y eating
%ue to government and various organi#ations attempts to fight o!esit, people are !ecoming more conscious of eating health food rather than what Mc%onald2s has offered in its menu. •
ocal fast food restaurant c/ains
Iocal fast food restaurants can often offer a more local approach to serving food and menu that e9actl represents local tastes. Although Mc%onald2s does a great jo! in adapting its own menu to local tastes, the rising num!er of local fast food chains and their lower meal prices is a threat to Mc%onald2s. •
*urrency fluctuations
"he !usiness receives a part of its income from foreign operations. "he profits that are sent !ack to =S have to !e converted into dollars and ma !e affected ! the e9change rates, especiall when the dollar is appreciating against other currencies.
%.0
&usiness "lan
%.0.1 7ision 8?at 1ealth, Iive 1ealth9
%.0.2 Mission E"o !e our customers& favourite place and wa to eat and drink. 0ur worldwide operations are aligned around a glo!al strateg called the 7lan to Win, which centered on an e9cep tional customer e9perience K 7eople, 7roducts, 7lace, 7rice and 7romotion. We are committed to continuousl improving our operations and enhancing our customers & e9perience2
%.0.# :eys to Success "he most important ke to success is our location.
a!ilit to e9ecute plan.
whether that is our num!ers, our emploees, our cleaning and food standards, or our commitment to customers, we will not succeed and thrive.
%.0.% ;oals 6ood food, good people and good neigh!or are the ultimate aim of Mc%onalds. Main aims are to serve good food in a friendl and fun environment, to !e a sociall responsi!le compan and provide good returns to our shareholders. "he compan aims to provide its customers with food of a high standard, $uick service and value for mone. "he also wish to !e more ecoD friendl and to serve healthier food. Some of the goals are illustrated as follows> 1. rofit maximi
Ma9imi#ing sales revenue or profit is an aim we will use in our !usiness. this helps to the success of the !usiness . "his is where the !usiness will seek out to gain and increase in their income from the customers. 2. Survival
Survival is an aim for man !usinesses. We should start out ! first aiming to sta in the !usiness ! earning enough mone from customers to meet all of the !usiness e9penses. We have an aim for making enough mone to cover its costs during the first ear or so. #. Market S/are
0ur goal is to ac$uire at least 4- @ share in the food market within a ear.We need to research other similar !usiness and find out how the make customers so, that we could promote our !usiness and can make our !usiness !etter than the competitors. %. ;rowt/
We need to make profit to grow and continue the !usiness and we also need to survive. Mc%onalds has to !e ahead of its market share in order to survive as well. 6rowth of the Mc%onald !ranches towards 7okhara, Jhamsikhel,etc i.e. tourist destination of Nepal.
%.0.' Strategic o3=ectives
). 0ur customers are the reason for our e9istence. We demonstrate our appreciation ! providing them with high $ualit food and superior service in a clean, welcoming environment, at a great value. 3. We !elieve that a team of wellDtrained individuals with diverse !ackgrounds and e9periences, working together in an environment that fosters respect and drives high levels of engagement, is essential to our continued success. +. At Mc%onald2s, we hold ourselves and conduct our !usiness to high standards of fairness, honest, and integrit. We are individuall accounta!le and collectivel responsi!le. 4. We take seriousl the responsi!ilities that come with !eing a leader. We help our customers !uild !etter communities, and leverage our si#e, scope and resources to help make the workplace a !etter place. . Mc%onald2s is a pu!licl traded compan. As such, we work to provide sustained profita!le growth for our shareholders. "his re$uires a continuous focus on our customers and the health of our sstem. '. We are a learning organi#ation that aims to anticipate and respond to changing customer, emploee and sstem needs through constant evolution and innovation.
%.0.) (inancial "lan
"he financial part is considered to !e an important determinant during the esta!lishment of new franchise !usiness proposal. "he projected financial plan will enhance the compan to develop and e9pand its !usiness. "herefore it is important for Mc%onald to focus upon the estimated financial plan to esta!lish itself in the leading position.
%.0.).1 ro=ected> "rofit and loss account ?A""endix A@ "he prime o!jective of profit and loss account is to focus upon the overall income and e9penditure of the !usiness.
%.0.).2 ro=ected 3alance s/eet ?A""endix &@ "he projected !alance sheet reflects the overall financial condition and performance of the !usiness. /rom the !alance sheet of !usiness it is o!served that the compan is reflecting a favora!le financial position from the start up of the !usiness.
A""endix A
7rojected
articulars
Amount ?,s.@
Sales
+'------
%irect Cost of Sales
------
0ther Costs of Sales
)-----
"otal Cost of Sales
)-----
;ross Margin
+-*-----
Ex"enses
7aroll
;-----
Marketing7romotion
3------
%epreciation
)------
ent
)3-----
=tilities
-----
6otal "erating Ex"enses
)33-----
7rofit Before
)(;-----
?arnings !efore ta9
3----
)(4----
Iess > "a9 8+4@:
'3;+---
!et income
1>21>++>000
A""endix &
7rojected Balance Sheet for the ear 3-)
Assets
Amount ?,s.@
*urrent Assets
Cash
------
0ther Current Assets
------
"otal Current Assets
)-------
ongterm Assets
IongDterm Assets
)------
Accumulated %epreciation "otal IongDterm Assets
6otal Assets
)-----)4------
2>%0>00>000
ia3ilities and *a"ital
Amount ?,s.@
*urrent ia3ilities
Accounts 7aa!le
)------
Current Borrowing
(-----
0ther Current Iia!ilities
)------
Su!total Current Iia!ilities
3(-----
IongDterm Iia!ilities
------
6otal ia3ilities
+-00000
aidin *a"ital
etained ?arnings
4-3+---
?arnings
)3);;---
6otal *a"ital
1)200000
6otal ia3ilities and *a"ital
2>%0>00>000
%.0.+ Marketing lan
E"he aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.F D 7eter /. %rucker
"oda2s successful companies at all levels have one thing in common that is all successful companies are> a: Strongl customer focused !: 1eavil committed to marketing
"o !e successful an organi#ation motivates everone in the organi#ation to produce superior value for their customers, leading to high levels of customer satisfaction.
%.0.+.1 $escri"tion of market As Mc%onalds has strong !rand name and is availa!le in most of the countries, it has market potential in Nepal also. /or the coming few ears we will limit ourselves in athmandu valle as out of total population of around 3;million, around million people live here. As most of the people living here are wealth enough, highl educated and !rand conscious, it is likel that the will choose products of Mc%onalds without an hesitation.
0ur Marketing Strateg is to reach the largest amount of tourist2s residents, and students for the least amount of mone.
0ur strateg will focus on three solid points> •
"o develop customer loalt
•
"o e9tend the franchise !rand locall.
•
%evelop local wordDofDmouth advertising
%.0.+.2 *ustomer values Mc%onald&s has !est Service and 5alues according to the customers.
%.0.+.# $istri3ution c/annels
Mc%onald2s has planned to enhance market penetration strategies ! inculcating few interior market promotions so to increase the market share ! attracting competitor2s clients. Secondl we will also launch few advertisement campaigns for domestic market client in Nepal. 2. Market $evelo"ment
Mc%onald2s has !een the !est e9ample of market development from last man ears in food retail industr. Market development strateg which Mc%onald2s follow is through compan e9pansion plans in new markets and new outlet events through which large num!er of clients are attracted. Mc%onald2s managers take actions like targeting promotions, opening sales offices and creating alliances with other companies.
#. ServiceBrogram $evelo"ment
Mc%onald2s has !een giving intense importance to service development programs as its main focus is over providing !est services to its clients. we have anal#ed the on hand markets and have developed the customer care strategies ! taking their feed!acks so to increase the num!er of satisfied customers.
%.0.+.% +"’s of Mc$onalds Marketing model "he marketing mi9 of Mc%onalds consists of the various elements in the marketing mi9 which forms the core of a compan2s marketing sstem and hence helps to achieve marketing o!jectives. "he marketing mi9 of Mc%onalds discusses the ;p2s of the leading !urger chain across Nepal offering the tastiest !urgers and /rench fries. •
roduct >D
Mc%onald2s places considera!le emphasis on developing a menu which customers want. Market research esta!lishes e9actl what this is. 1owever, customers2 re$uirements change over time.
"heir a!ilit to generate profits will var at different points in their ccle.
•
rice >D
"he customer2s perception of value is an important determinant of the price charged. Customers draw their own mental picture of what a product is worth. A product is more than a phsical item, it also has pschological connotations for the customer. "he danger of using low price as a marketing tool is that the customer ma feel that $ualit is !eing compromised.
•
romotion >D
"he promotions aspect of the marketing mi9 covers all tpes of marketing communication one of the methods emploed is advertising. Advertising is conducted on "5, radio, in cinema, online, using poster sites and in the press for e9ample in newspapers and maga#ines. 0ther promotional methods include sales promotions, point of sale displa, merchandising, direct mail, etc. "he skill in marketing communications is to develop a campaign which uses several of these methods in a wa that provides the most effective results.
•
lace >D
7lace, as an element of the marketing mi9, is not just a!out the phsical location or distri!ution points for products.
•
eo"le >D
"he emploees in our store will have a standard uniform and speciall focuses on friendl and prompt service to our customers.
•
rocess >D
"he food manufacturing process is completel transparent i.e. the whole process is visi!le to the customers.
•
/ysical evidence >D
We will focus on clean and hgienic interiors of our outlets and at the same time, the interiors will !e attractive and the fast food joint maintains a proper decorum at its outlets.
'.0 (uture "lan of Mc$onald’s
We outline our future of “plan to win”
We have planned to open Mc%onald2s at the heart of Nepal i.e. athmandu. service enhancements, restaurant reimaging, and menu innovation. With service, we will leverage technolog to make it easier for managers and crew to $uickl and accuratel serve the customer. "o enhance !rand perceptions and drive higher sales and returns, we will accelerate our interior and e9terior reimaging efforts around the Nepal. We will innovate at ever tier of our menu to sustain our momentum and create e9citement for our customers. We continue to achieve returns on incremental invested capital that are significantl a!ove our highDteens target, ena!ling further reinvestment in our !usiness.
'.0.1 Income statement for t/e year 201) and 201+
Cear 201)
Cear 201+
Amount ?,s.@
Amount ?,s.@
Sales
;3------
)-*------
%irect Cost of Sales
)-------
)------
0ther Costs of Sales
3-----
+-----
"otal Cost of Sales
)-3-----
)+-----
;ross Margin
')(-----
*+;-----
7aroll
)------
33-----
Marketing7romotion
4------
'------
%epreciation
3------
+------
ent
3------
3(-----
=tilities
)------
)-----
6otal "erating Ex"enses
2%000000
#'-00000
7rofit Before
+;(-----
;*-----
-----
;----
+;+-----
;)----
articulars
Ex"enses
?arnings !efore ta9 Iess> "a9 8+4@:
!et Income
)3'(3---
2>%)>1'>000
)*4+)---
#>1+>1D>000
'.0.2 &alance S/eet for t/e year 201) and 201+
Cear 201+
Cear 201-
Amount ?,s.@
Amount ?,s.@
Cash
)-------
)------
0ther Current Assets
)-------
)------
6otal *urrent Assets
3-------
+-------
+-------
4------
3------
+------
3(------
43------
%>-0>00>000
+>20>00>000
Amount ?,s@
Amount ?,s@
Accounts 7aa!le
3------
+------
Current Borrowing
++++++
-----
0ther Current Iia!ilities
3------
+------
Su3total *urrent ia3ilities
;++++++
'-----
IongDterm Iia!ilities
)-------
)------
"otal Iia!ilities
);++++++
3)-----
etained ?arnings
'-4('';
)3;()---
?arnings
34')(---
+;;)*---
6otal *a"ital
+-''''';
------
%>-0>00>000
+>20>00>000
Assets
*urrent Assets
ongterm Assets
IongDterm Assets Accumulated %epreciation "otal IongDterm Assets
6otal Assets
ia3ilities and *a"ital
*urrent ia3ilities
aidin *a"ital
6otal ia3ilities and *a"ital
).0 *onclusion
0n the !asis of entire analsis, we can now therefore conclude that !eing one of the largest companies in the world, we will continue our path of success ! keeping our consumers in regarding product selection as well as price we charge for the product. We encourage our emploees to do a good jo!, usuall promote from within, and offers several scholarships to encourage education. "hough Mc%onald&s is a centrali#ed, wait and see compan, we find was to use technological products that will increase our productivit, service, and sales. We turn around our !usiness, we will look to create more e9citement around the !rand and ensure that we !uild on our rich heritage of positivel impacting the communities we serve. We will continuousl focus on good value, convenience, low prices and fast service. We hold ourselves and conduct our !usiness to high standards of fairness, honest, and integrit. We are individuall accounta!le and collectivel responsi!le. So, along with the strengths, there are certain limitations as well which are to !e corrected in the coming das and Mc%onald2s franchise in Nepal is a positive indicator for the development of the fast food sector in Nepal as well.
+.0 ,eferences
•
•
Search ?ngine > 6oogle
ahoo
Bing
=I > 1ttp>www.mcdonalds.com
•
1ttp>www.wikipedia.com
Books > ?ntrepreneurship ! Bruce . Barringer and . %uane
-.0 Annex
