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1 ENTREPRENEURSHIP PROJECT PROJECT REPORT ON FRANCISING OF MCDONALD’S

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Page 1: Entrepreneurship m com a

1

ENTREPRENEURSHIP PROJECT

PROJECT REPORT ON

FRANCISING OF

MCDONALDrsquoS

2

INDEX SL NO TITLE PAGE NO

1

MCDONALDrsquoS

an Introduction

3-4

2

History of Mcdonald rsquos amp Key Landmarks - McDonaldrsquos

India Journey

5-9

3

Goals and Objectives Mission Statement amp Awards 10-11

4 Corporate Social Responsibility 12

5 McDonaldrsquos International amp Business model 13-14

6 Marketing Mix 15-17

7 SWOT Analysis 18-19

8 McDonaldrsquos Role in the Indian Economic Growth amp Consolidated Balance Sheet of McDonaldrsquos

20-24

9 People hellip McDonaldrsquos 1 Resource in India amp The McDonaldrsquos Promise

25-27

10 McDonaldrsquos Indiahellip Culturally Sensitive amp McDonaldrsquos Cold Chain in India

28-30

11 Questionnaire amp Survey Analysis

31-32

3

12 The Top Five Reasons Why McDonaldrsquos is so Popular

33

13 Findings 34

14 Conclusion

35

15 Bibliography 36

MCDONALDrsquoS

AN INTRODUCTION

McDonalds Corporation (NYSE MCD) is the worlds largest chain

of hamburger fast food restaurants serving around 68 million customers daily in

119 countries

Headquartered in the United States the company began in 1940 as a barbecue

restaurant operated by Richard and Maurice McDonald in 1948 they

reorganized their business as a hamburger stand using production

line principles Businessman Ray Kroc joined the company as a franchise

agent in 1955 Ray Kroc subsequently purchased the chain from the McDonald

brothers and oversaw its worldwide growth

A McDonalds restaurant is operated either by a franchisee or an affiliate or the corporation itself The corporations revenues come from the rent royalties

and fees paid by the franchisees as well as sales in company-operated restaurants

4

McDonalds revenues grew 27 percent over the three years ending in 2007 to

$228 billion and 9 percent growth in operating income to $39 billion McDonalds primarily sells hamburgers cheese burgers chicken French

fries breakfast items soft drinks milkshakes and desserts In response to changing consumer tastes the company has expanded its menu to

include salads wraps smoothes and fruits

An exterior view of the worlds largest McDonalds restaurant built on 2012

London Olympics site

In July 2011 McDonalds announced that their largest restaurant in the world

will be built on the 2012 London Olympics site The restaurant will contain over 1500 seats and is half the length of an American Football field Over 470

staff will be employed serving on average (during the 2012 Olympics) 100000 portions of fries 50000 Big Macs and 30000 Milkshakes This restaurant will

overshadow the current largest McDonalds in the world in Moscow Russia In January 2012 the company announced revenue for 2011 reached an all-time

high of $27 billion and that 2400 restaurants would be updated and 1300 new ones opened worldwide

5

History of McDonalds

The McDonalds restaurant concept was introduced in San Bernardino

California by Dick and Mac McDonald of Manchester New Hampshire It was

modified and expanded by their business partner Ray Kroc of Oak Park

Illinois who later bought out the business interests of the McDonald brothers in

the concept and went on to found McDonalds Corporation

McDonalds is the leading global foodservice retailer with more than 32000

local restaurants serving more than 58 million people in around 130 countries

each day 70 percent of our restaurants worldwide are owned and operated by

independent local businessmen and businesswomen

In India the brand is managed by two business entities

Connaught Plaza Restaurants Private Limited led by Mr Vikram Bakshi

JV Partner and Managing Director North amp East India

Hardcastle Restaurants Private Limited led by Ms Smita Jatia Managing

Director South amp West India

McDonalds philosophy of QSCV (Quality Service Cleanliness and Value) is

the guiding force behind its service to the customers in India Following its

philosophy of being sensitive to local food and cultural preferences India was

the first country in the McDonalds system where it served non-beef and non-

pork products More than 70 percent of the menu in India has been locally

developed with complete segregation of vegetarian and non-vegetarian products

right from the food processing plants to the point of serving the customers

McDonalds commitment to its Indian customers is evident even in development

6

of special sauces that use local spices and chillies The mayonnaise and all other

sauces are egg-less McDonalds also pioneered the establishment of Cold Chain

across India which helps maintain freshness and nutrition in every product

McDonalds regular scrumptious menu includes wide range of products like McAloo Tikki Filet-O-Fish Spicy Range Chicken McGrill McVeggie Veg Pizza McPuff Chicken Mcnuggetsreg Fries Wraps an assortment of Sundaes

Soft Serve and refreshing beverages such as Ice Tea amp Cold Coffee with outstanding service in a vibrant and lively ambience for which McDonalds is

known worldwide

McDonalds had further reinforced the branded affordability mantra via the introduction of the Happy Price Menu which starts at Rs 25 only

McAloo Tikki Veg Surprise and Pizza McPuff developed in India are now being exported to the countries in the Middle East

McDonaldrsquos introduced Cokersquos Georgia Gold range of hot beverages which was developed especially for the Indian market in 2002

As a leader in QSR segment (Quick Service Restaurant) McDonaldrsquos has

pioneered various industry benchmark practices over the past decade of serving Indian customers including new concepts such ashellip

Oil Alliances in India by inking with petroleum giants BPCL and HPCL

The two such alliances with BPCL outlets are in Mathura (2000) (UP) and Doraha (2002) (Punjab)

Novel menu formats such as an Express Model with a limited menu and Kiosks with a variety of dessert offerings

Home Delivery (McDeliverytrade) Providing even more convenience to

our customers In Oct 2006 McDelivery on bicycle at Chandni Chowk was launched and in March lsquo07 an all India single delivery number (66

000 666) was introduced

First Drive Thru Restaurant at NOIDA (UP) in 1997

First Restaurant with operational Kitchen at Delhi Domestic

Keeping pace with the customer evolving needs McDonalds also functions on models that drive convenience and create unique differentiation like

McDelivery Drive thru Breakfast Menu high ways and extended hours (Currently available in select cities)

At present there are 300 McDonalds restaurants in India

The strong foundation that Ray Kroc built continues today with McDonalds

7

vision and commitment for its internal as well as external customers Since then it has evolved into a value driven brand and recognizes that affordability of its

products is an attractive proposition for its customers along with taste McDonalds continues to strengthen it business model and progress with

customers evolving needs

Key Landmarks - McDonaldrsquos India Journey

1996 hellipthe first McDonaldrsquos restaurant opened on Oct 13 at Basant Lok

Vasant Vihar New Delhi It was also the first McDonaldrsquos restaurant in the

world not serving beef on its menu

1997hellip

the first Drive ndashThru restaurant at Noida (UP)

the first disabled friendly store at Noida (UP)

1999hellipthe first Mall location restaurant at Ansal Plaza (New Delhi)

2000hellipthe first highway restaurant at Mathura (UP)

2001hellipthe first thematic restaurant at Connaught Place (New Delhi)

2002hellip

The first restaurant in a food court at 3Crsquos Lajpat Nagar (New Delhi)

The first restaurant at the Delhi Metro Station at Inter State Bus Terminus

The first fundraiser in association with ORBIS and Dr Shroffrsquos Charity

Eye hospital(Delhi)

2003 The first Dessert Kiosk ndash Faridabad (Haryana)

2004hellip McDonaldrsquos Delivery Service (McDelivery) introduced in New Delhi

2003-04hellip Indigenous products like McAloo Tikki McVeggie and Pizza

McPuff exported to Middle East countries

8

2006

McDelivery on Bicycles flagged off at Chandni Chowk (Delhi)- another

first initiative by McDonaldrsquos India

100th McDonaldrsquos Restaurant in India

10th Year Anniversary

2007

The first McDonaldrsquos open in Eastern Region at Park Street Kolkata

The first restaurant opened at Airport (Domestic Airport New Delhi)

The first MFY restaurant opened at Greater Noida Uttar Pradesh

2008hellip

The First restaurant to start extended hours procedure at Cyber Greens

Gurgaon and Saket New Delhi

The first restaurant to start Breakfast Menu at Janpath New Delhi

2009hellipThe first McDonaldrsquos Restaurant opens at Old Delhi Railway Station

2010hellipThe first reimaged new look restaurant opened at Ambiance mall

Vasant Kunj 6

2011hellip

McDonaldrsquos introduces premium products in it is menu ndash McSpicy range

of products

McDonaldrsquos introduces Mcflurry (premium desserts) in Oreo and

chocolate crispy flavors

McDonaldrsquos introduces Wi-Fi across DelhiNCR region

McDonaldrsquos currently has 235 restaurants in India

The Northern Region has 110 restaurants ndash

sect Delhi ndash 40

sect Haryana - 15

Faridabad ndash3 Manesar ndash 2 (Highway and Drive - Thru) Gurgaon ndash7

Karnal ndash 1 (Highway and Drive - Thru) Panipat -1 Ambala -1

9

sect Rajasthan -6

Jaipur ndash 3 Jodhpur ndash 1 Kota -1 Udaipur - 1

sect Uttaranchal -1

Dehradun ndash 1

sect Uttar Pradesh ndash29

Noida ndash 5 Greater Noida ndash 1 Ghaziabad ndash 7 Mathura ndash 1 (Highway and

Drive - Thru) Kanpur ndash 2 Meerut ndash 2 Lucknow ndash5 Agra ndash 1 Allahabad

ndash 1 Varanasi -2 Gajraula ndash 1 (Highway amp Drive Thru) Khatauli -

1(Highway and Drive thru)

sect Punjab ndash 13

Chandigarh ndash 2 Ludhiana ndash 2 Doraha ndash 1 (Highway and Drive - Thru)

Jalandhar ndash 2 Patarsi ndash 1 (Highway and Drive - Thru) Dasuya (Highway

and Drive Thru) ndash 1 Amritsar -1 Patiala -1 Zirakpur-2

sect West Bengal-3

Kolkata- 3

sect Himachal Pradesh -1

Jabli-1

sect Madhya Pradesh -2

Gwalior ndash 1 Bhopal -1

----------------------------------------------

The Western Region has 125 restaurants across the following states and cities ndash

Maharashtra - Mumbai Pune Nasik Kolhapur ndash

Gujarat - Ahmedabad Vododara Surat Indore Vapi

Madhya Pradesh ndash Indore

Andhra Pradesh - Hyderabad

Karnataka - Bangalore

Tamil Nadu - Chennai

10

GOALS AND OBJECTIVES

1 McDonaldrsquos vision is to be the worldrsquos best quick service restaurants

experience

2 McDonalds is committed to maintaining and developing the best food

products in the quick service restaurant market

3 In order to deliver this the company has made a number of commitments to

food safety and nutrition

4 Lead the Quick Service Restaurant market by a program of site development

and profitable restaurant openings and by attracting new customers Increasing

sales through promotions will enable them to continue their program of

expansion

5 McDonalds have an objective to continual enhance and improve their menu

This will better satisfy their customers and give customers more reason to visit

Many ideas for new items on the menu come from the franchisees responding to

customer demand Consumer tastes change over time and McDonalds has to

respond to these changes

MISSION STATEMENT

McDonalds vision is to be the worlds best quick service restaurant experience

Being the best means providing outstanding quality service cleanliness and

value so that we make every customer in every restaurant smile

11

AWARDS

McDonaldrsquos India has received many prestigious awards for its service and

performance including

The lsquoMost Respected Companyrsquo for four consecutive years (2003-2006)

in the Food Services sector by Businessworld

The lsquoMost Preferred Fast Food Outletrsquo 2006 amp 2007 by Awaaz

Consumer Award hosted by CNBC

Star Retailer ndash the lsquoConsumer Way Food Services Retailerrsquo of the

Year 2006 amp 2007 2008 by Franchise India

lsquoRetailer of the Yearrsquo Award for catering services (2004-2006) at the

Images Retail Awards

The lsquoAmity Corporate Excellence Awardrsquo ndashin 2007 amp 2008

The lsquoMost Wanted Brand of the Yearrsquo Award 2003 amp 2004 by

Franchising Holdings India Ltd

The lsquoMost Admired F amp B Retailer of the Year QSRs Foreign

Originrsquo ndash The Golden Spoon Awards by Images Retail

The Company with the Best Corporate Conscience ndash 2008 by Business

amp Economy

lsquoValue for Moneyrsquo brand ndash 2010 by Pitch Magazine

The most trusted family restaurant brand in the country award in

2010 by Readerrsquos Digest

12

Corporate Social Responsibility

Being responsible is at the core of everything that we do at McDonaldstrade It is

a deep-rooted value and a tradition that dates back to our founder Ray Kroc It is also one of our top business priorities

We believe that our continuing success depends on our stakeholders trust in

each and every aspect of our business be it the quality and safety of the food we serve in the way we do our business the way we connect and make the difference in the communities we operate being sensitive to environment and

being sustainable

1 We are committed to doing what is right

2 We are committed to be a good neighbour and partner in the community

3 We are committed to conducting our business ethically and with complete transparency

4 We are committed to treating our entire internal and external stakeholders with respect and dignity

13

McDonaldrsquos International

McDonaldrsquos has over 32000 local restaurants in more than 100 countries

70 percent of our restaurants worldwide are owned and operated by

independent local businessmen and businesswomen

McDonaldrsquos serves nearly 50 million customers each day

McDonaldrsquos first franchised restaurant opened at Des Plaines Illinois in

1955 by the founder Ray Kroc

McDonaldrsquos has its own Hamburger University in Illinois and the first

batch graduated in 1961

12 classes offered at Hamburger University are college accredited

In 1963 McDonaldrsquos sold its one billionth hamburger

McDonaldrsquos is listed on the New York Frankfurt Munich Paris and

Tokyo stock exchanges

McDonaldrsquos aired its first network TV advertisement ldquoMcDonaldrsquos -

Where Quality Starts Fresh Everydayrdquo in 1965

The first McDonaldrsquos Drive-Thru opened in Sierra Vista Arizona in 1975

14

Happy Meals were added to McDonaldrsquos menu in 1979

McDonaldrsquos launched the new worldwide Balanced Active Lifestyles

public awareness campaign in 2005

McDonaldrsquos celebrated its 50th Anniversary on April 15 2005

Business model

McDonalds Corporation earns revenue as an investor in properties

a franchiser of restaurants and an operator of restaurants Approximately 15 of McDonalds restaurants are owned and

operated by McDonalds Corporation directly The remainder are operated by others through a variety of franchise agreements and

joint ventures

The McDonalds Corporations business model is slightly different

from that of most other fast-food chains In addition to ordinary franchise fees and marketing fees which are calculated as

a percentage of sales McDonalds may also collect rent which may also be calculated on the basis of sales

As a condition of many franchise agreements which vary by

contract age country and location the Corporation may own or lease the properties on which McDonalds franchises are located In most if not all cases the franchisee does not own the location of its

restaurants

The United Kingdom and Ireland business model is different than the US in that fewer than 30 of restaurants are franchised with

the majority under the ownership of the company McDonalds trains its franchisees and others at Hamburger Univers ity in Oak

Brook Illino is

In other countries McDonalds restaurants are operated by joint

ventures of McDonalds Corporation and other local entities or governments

15

As a matter of policy McDonalds does not make direct sales of food or materials to franchisees instead organizing the supply of

food and materials to restaurants through approved third party logistics operators

According to Fast Food Nation by Eric Schlosser nearly one in

eight workers in the US have at some time been employed by McDonalds It also states that McDonalds is the largest private

operator of playgrounds in the US as well as the single largest purchaser of beef pork potatoes and apples The selection of

meats McDonalds uses varies with the culture of the host country

MARKETING MIX

The marketing mix of a company consists of the various elements as follows

which form the core of a companyrsquos marketing system and hence helps to

achieve marketing objectives The marketing mix of McDonaldrsquos is as follows-

The McDonald plains its marketing by simple keeping 4Ps in mind

Product

Price

Promotion

Place

Product - McDonaldrsquos places considerable emphasis on developing a menu

which customers want Market research establishes exactly what this is However customersrsquo requirements change over time In order to meet these

changes McDonaldrsquos has introduced new products and phased out old ones and will continue to do so Care is taken not to adversely affect the sales of one choice by introducing a new choice which will cannibalise sales from the

existing one (trade off) McDonaldrsquos knows that items on its menu will vary in popularity Their ability to generate profits will vary at different points in their

cycle In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian

The happy meal for the children is a great seller among others

Price-The customerrsquos 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 physical item it also has psychological

connotations for the customer The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised It is

16

important when deciding on price to be fully aware of the brand and its integrity

In India McDonalds classifies its products into 2 categories namely the branded

affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and

the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price

perceptions

Promotion- The promotions aspect of the marketing mix covers all types of

marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and

in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct

mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that

provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be

supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item

At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart

from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos

Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the

management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities

making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers

17

Other than the main four elements mentioned above there are a few other

elements too in the marketing mix which are as follows-

People -The employees in McDonaldrsquos have a standard uniform and

McDonaldrsquos specially focuses on friendly and prompt service to its customers

from their employees

Process -The food manufacturing process at McDonaldrsquos is completely

transparent ie the whole process is visible to the customers In fact the fast

food joint allows its customers to view and judge the hygienic standards at

McDonaldrsquos by allowing them to enter the area where the process takes place

The customers are invited to check the ingredients used in food

Physical evidence - McDonalds focuses on clean and hygienic interiors of

is outlets and at the same time the interiors are attractive and the fast food joint

maintains a proper decorum at its joints

18

SWOT ANALYSIS

Strengths

McDonaldrsquos holds a very strong brand name worldwide

They have large partnerships with other companies that provide them

with their desired products this increases the goodwill of the company

McDonaldrsquos is one of the most reputed firms who are socially

responsible

Loyal employees amp management amp customer are their biggest strength

19

McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind

while providing food to different countries

Clean environment and play areas for children where they can enjoy their

time

Weakness

The weakness that hits the list of employee turnover rate Every year

many of their employees are fired out of the restaurant

McDonalds mostly advertises products and food items that targets

children

Health conscious people often complain that they do not provide us with

the organic and healthy food This becomes their weakness when they get in the complaints

They also face quality issue at times This affects the business as they are

running the outlet worldwide if one franchise gets affected others also

get a bad name

Opportunities

It can open up online services for their customers so that they can easily

order their desired meals sitting at home

Discounts given on every food item may help them gain more customers

They can go for a joint venture with the retailers they work with

They can introduce healthy hamburgers and healthy drinks for the people who are health conscious

20

In order to be environment friendly they can use packing material which

can be recycled later or material that does not create pollution

Threats

Emerging competition of similar outlets is becoming a problem for McDonalds

Health issue also becomes a problem when it comes to food

As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies

Recession in any country would definitely affect the whole outlet

worldwide

People facing heart problems and obesity accuse McDonalds for not

providing them with the healthy food

They have a threat of local food outlets in different countries

McDonalds is operating in a fully fledged economy where competition is

increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession

McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local

Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government

regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled

Indian businesses to grow by improving their ability to compete in todays international markets

21

Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in

predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first

restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept

has today been adopted by various Indian and International players to deliver quality produce to consumers

For instance Cremica Industries worked with another McDonalds supplier

from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to

McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with

farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water

consumption better seeds amp agricultural management practices which result in greater yields

In some cases these Indian suppliers had the technology - but no market for the

products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk

casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to

restaurants across India

McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations

COMPANYrsquoS FINANCIAL INFORMATION

Company Name McDonalds Corporation

Ticker Symbol MCD

Web Address wwwmcdonaldscom

CEO Mr Donald Thompson

No of Employees 420000

Common Issue Type CS

Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other

22

goods from numerous independent suppliers

Industry Information LEISURE - Restaurants

Price Day Change Bid Ask Open High Low Volume

8718 -002 - - 8743 8743 8676 3658828

Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range

875267 10040 039 527 253 164 35 10222 - 8331

KEY FIGURES (Latest Twelve Months - LTM)

Yesterdays Close 8706 $

PE Ratio - LTM 164

Market Capitalisation 875267 mil

Latest Shares Outstanding 10040 mil

Earnings pS (EPS) 527 $

Dividend pS (DPS) 253 cent

Dividend Yield 35

Dividend Payout Ratio 48

Revenue per Employee 64300 $

Effective Tax Rate 313

Float 10153 mil

Float as of Shares Outstanding 999

Foreign Sales 18478 mil

Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue

910

Research amp Devlopment (RampD) as of Revenue

000

Gross Profit Margin 447

EBITDA Margin 356

Pre-Tax Profit Margin 291

Assets Turnover 08

Return on Assets (ROA) 161

Return on Equity (ROE) 392

Return on Capital Invested (ROCI) 204 Current Ratio 10

Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096

LT DebtTotal Capital 480

Working Capital pS 006 $

Cash pS 217 $

Book-Value pS 1383 $

Balance Sheet (at a glance) in Millions

DIVIDEND INFO

Dividend Declared Date 09202012

Dividend Ex-Date 11282012

Dividend Record Date 12022012

Dividend Pay Date 12162012

Dividend Amount 770

Type of Payment Cash Payment

Dividend Rate 308

Current Dividend Yield 35

5-Y Average Dividend Yield 31

Payout Ratio 480

5-Y Average Payout Ratio 530

Share price performance previous 3 years

Share price performance intraday

23

Tangible Book-Value pS 1110 $

Cash Flow pS 689 $

Free Cash Flow pS 125 $

KEY FIGURES (LTM) Price info PriceBook Ratio 630

PriceTangible Book Ratio 785 PriceCash Flow 126

PriceFree Cash Flow 699

PE as of Industry Group 420

PE as of Sector Segment 770

PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol

1 Week - - - 00 101 54041 66217

4 Weeks 8743 8331 8474 27 101 57129 856929

13 Weeks 9416 8331 9102 -44 98 61288 3554700

26 Weeks 9416 8331 8775 -08 93 59419 7189758

52 Weeks 10222 8331 9803 -112 79 59272 14521666

YTD 10222 8331 - -132 77 59774 13807695

Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)

8661 8631 8825 8931 9174 039 031

GROWTH RATES 5-Year

Growh Rsup2 of 5-Year Growth

3-Year

Growth

Revenue 381 776 666

Income 2017 811 978

Dividend 1536 947 1016

Capital Spending 697 NA 1052

RampD 000 NA 000

Normalized Inc 1158 NA 979

CHANGES YTD vs

Last YTD

Curr Qtr vs

Qtr 1-Yr ago

Annual vs

Last Annual

Revenue 21 -02 122

Earnings -14 -35 113

EPS 10 -14 151

EPS $ 004 -002 069

SOLVENCY RATIOS

SHORT-TERM SOLVENCY RATIOS

(LIQUIDITY)

Net Working Capital Ratio 271

Current Ratio 13

Quick Ratio (Acid Test) 10

Liquidity Ratio (Cash) 067

Receivables Turnover 215

Average Collection Period 17

Working CapitalEquity 62

Working Capital pS 088

Cash-Flow pS 677

Free Cash-Flow pS 209

24

FINANCIAL STRUCTURE RATIOS

Altmans Z-Score Ratio 485

Financial Leverage Ratio (AssetsEquity) 23

Debt Ratio 564

Total DebtEquity (Gearing Ratio) 087

LT DebtEquity 084

LT DebtCapital Invested 569

LT DebtTotal Liabilities 652

Interest Cover 173

InterestCapital Invested 167

25

People hellip McDonaldrsquos 1 Resource in India

26

McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs

around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in

1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with

McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)

The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive

training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course

(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the

Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University

27

The McDonaldrsquos Promise

QUALITY SERVICE CLEANLINESS amp VALUE

When asked to explain McDonalds success founder Ray Kroc used to say We

take the hamburger business more seriously than anyone else

Kroc was a perfectionist From the day he opened his first restaurant he vowed

to give his customers high quality products served quickly --and with a smile

in a clean and pleasant environment and all at a fair price Quality Service

Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds

business

QUALITY

McDonalds India serves only the highest quality products The attention to food

quality started long before the first restaurant opened McDonalds India has

established close relationships with local suppliers who provide McDonalds

with the highest quality freshest ingredients to make its products

All suppliers adhere to Indian government regulations on food health and

hygiene while continuously maintaining McDonalds own recognized standards

McDonalds has established an extensive cold chain distribution system in

India to ensure that the products which arrive at the restaurant from suppliers

all over India are absolutely fresh In the restaurants products and supplies are

used on a first-in first-out basis to ensure freshness All McDonalds products

are prepared using modern state-of-the-art cooking equipment to ensure quality

and safety

SERVICE

McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos

which sets its restaurants apart from others At McDonalds the customer

always comes first Every employee strives to provide 100 percent customer

satisfaction -- for every customer -- every visit This includes friendly and

attentive service accuracy in order taking and anticipation of customers needs

-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun

and youthful spirit we will proudly serve an exceptional McDonaldrsquos

eating experience that makes all people feel special and makes them smile ndash

every customer every timerdquo

28

CLEANLINESS

McDonalds restaurants provide a clean comfortable environment especially

suited for families McDonalds stringent cleaning standards ensure that all

tables seating highchairs and trays are sanitized several times each hour The

attention to cleanliness extends from the lobby to the kitchen to the sidewalk

and immediate areas outside the restaurant

In addition to urging customers to dispose of their litter properly and offering a

number of trash bins (both inside and outside the restaurants) for their

convenience McDonalds Litter Patrols walk around the restaurants several

times each day picking up litter -- even if it isnt from McDonalds

Restaurant managers walk through the dining areas each hour to ensure that it

is clean and well stocked All restaurants provide a variety of comfortable

seating arrangements to accommodate anyone -- from a single individual to a

large family The environment is warm inviting and well lit

VALUE

McDonalds menu is priced at a value that the largest segment of Indian

consumers can afford McDonalds does not sacrifice quality for value -- rather

McDonalds leverages economies of scale to minimize costs while maximizing

value to customers

McDonalds definition of value is broader than most restaurants of its kind -- it

is more than price Value at McDonalds is the sum of the total McDonalds

experience quality food fast friendly service a clean and pleasant

environment and products priced at very affordable prices for the largest

segment of Indian consumers possible That is value at McDonalds

29

McDonaldrsquos Indiahellip Culturally Sensitive

Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much

that is consistent with other McDonaldrsquos restaurants around the world such as

the quality of the food and the attention to service

The dedication to local cultures is not new for McDonaldrsquos For the past 50

years McDonaldrsquos has opened restaurants in more than 120 distinctly different

countries and cultures With guidance from its local partners McDonaldrsquos is

able to adapt- where necessary-its menu and restaurant operations to

complement existing eating-out options McDonaldrsquos local owners understand

what their customers want perhaps more importantly what is acceptable within

local customs and values

There is much too that is very different- such as the first beef-less and pork-

less menu in the world and special product formulations to cater to Indian

culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos

India says ldquoWe know the Indian culture because we were born in it

inherited its richness and respect it greatly It is the respect for this culture

and the sentiments of many of our customersrsquo that we do not serve any

beef and pork items in our restaurantsrdquo

McDonaldrsquos commitment to its Indian customers is evident even in

development of special sauces that use local spices and chillies The

mayonnaise and all other sauces are egg-less

In India vegetarianism is in many cases more than a lifestyle choice Many

people are vegetarians due to religious reasons and in some cases even the

vegetarian product that has come into contact with a non-vegetarian product is

unacceptable Hence McDonaldrsquos India has also changed its operations to

address the special requirements of our vegetarian customers by having

processes that ensure that a physical separation of veg and non-veg products is

maintained right from farm to the customer Vegetable products are prepared

separately using dedicated equipment and utensils Also in India McDonaldrsquos

uses only vegetable oil as a medium for cooking

30

McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash

lsquoto be driven by the leadership of local ownersrsquo This commitment has translated

into enduring benefits to the businesses at the grass root level in the areas of

introduction of new crops new agricultural practices and food processing methods

and procedures

McDonalds unique cold chain on which the QSR major has spent more than six

years setting up in India has brought about a veritable revolution immensely

benefiting the farmers at one end and enabling customers at retail counters get the

highest quality food products absolutely fresh and at great value

Setting up this extensive cold chain distribution system has involved the transfer of

state-of-the-art food processing technology by McDonalds and its international

suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain

From Field to -2⁰C in 90 Minutes

Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be

grown during the winter months but with McDonalds expertise in the area of

agriculture they are now able to grow this crop through the year

Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room

to remove field heat a large cold room and a refrigerated van for transportation where

the temperature and the relative humidity of the crop is maintained between 1ordm C and

4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room

within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling

to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at

the farms itself ensuring no delay between harvesting pre-cooling packaging and

cold storage

Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd

Flavour and Freshness locked in at - 35degC

Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable

range of products is another important player in this cold chain This includes hi-tech

refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C

This is vital to ensure that the frozen food retains it freshness for a long time and the

cold chain is maintained The frozen product is immediately moved to cold storage

rooms

31

Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes

McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for

quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk

coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -

thus maintaining the cold chain

All leading to the Consumer

McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The

DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity

of the products throughout the entire cold chain

Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the

McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C

as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state

All these suppliers share McDonalds commitment and dedication to satisfying

customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently

each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental

effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn

more

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 2: Entrepreneurship m com a

2

INDEX SL NO TITLE PAGE NO

1

MCDONALDrsquoS

an Introduction

3-4

2

History of Mcdonald rsquos amp Key Landmarks - McDonaldrsquos

India Journey

5-9

3

Goals and Objectives Mission Statement amp Awards 10-11

4 Corporate Social Responsibility 12

5 McDonaldrsquos International amp Business model 13-14

6 Marketing Mix 15-17

7 SWOT Analysis 18-19

8 McDonaldrsquos Role in the Indian Economic Growth amp Consolidated Balance Sheet of McDonaldrsquos

20-24

9 People hellip McDonaldrsquos 1 Resource in India amp The McDonaldrsquos Promise

25-27

10 McDonaldrsquos Indiahellip Culturally Sensitive amp McDonaldrsquos Cold Chain in India

28-30

11 Questionnaire amp Survey Analysis

31-32

3

12 The Top Five Reasons Why McDonaldrsquos is so Popular

33

13 Findings 34

14 Conclusion

35

15 Bibliography 36

MCDONALDrsquoS

AN INTRODUCTION

McDonalds Corporation (NYSE MCD) is the worlds largest chain

of hamburger fast food restaurants serving around 68 million customers daily in

119 countries

Headquartered in the United States the company began in 1940 as a barbecue

restaurant operated by Richard and Maurice McDonald in 1948 they

reorganized their business as a hamburger stand using production

line principles Businessman Ray Kroc joined the company as a franchise

agent in 1955 Ray Kroc subsequently purchased the chain from the McDonald

brothers and oversaw its worldwide growth

A McDonalds restaurant is operated either by a franchisee or an affiliate or the corporation itself The corporations revenues come from the rent royalties

and fees paid by the franchisees as well as sales in company-operated restaurants

4

McDonalds revenues grew 27 percent over the three years ending in 2007 to

$228 billion and 9 percent growth in operating income to $39 billion McDonalds primarily sells hamburgers cheese burgers chicken French

fries breakfast items soft drinks milkshakes and desserts In response to changing consumer tastes the company has expanded its menu to

include salads wraps smoothes and fruits

An exterior view of the worlds largest McDonalds restaurant built on 2012

London Olympics site

In July 2011 McDonalds announced that their largest restaurant in the world

will be built on the 2012 London Olympics site The restaurant will contain over 1500 seats and is half the length of an American Football field Over 470

staff will be employed serving on average (during the 2012 Olympics) 100000 portions of fries 50000 Big Macs and 30000 Milkshakes This restaurant will

overshadow the current largest McDonalds in the world in Moscow Russia In January 2012 the company announced revenue for 2011 reached an all-time

high of $27 billion and that 2400 restaurants would be updated and 1300 new ones opened worldwide

5

History of McDonalds

The McDonalds restaurant concept was introduced in San Bernardino

California by Dick and Mac McDonald of Manchester New Hampshire It was

modified and expanded by their business partner Ray Kroc of Oak Park

Illinois who later bought out the business interests of the McDonald brothers in

the concept and went on to found McDonalds Corporation

McDonalds is the leading global foodservice retailer with more than 32000

local restaurants serving more than 58 million people in around 130 countries

each day 70 percent of our restaurants worldwide are owned and operated by

independent local businessmen and businesswomen

In India the brand is managed by two business entities

Connaught Plaza Restaurants Private Limited led by Mr Vikram Bakshi

JV Partner and Managing Director North amp East India

Hardcastle Restaurants Private Limited led by Ms Smita Jatia Managing

Director South amp West India

McDonalds philosophy of QSCV (Quality Service Cleanliness and Value) is

the guiding force behind its service to the customers in India Following its

philosophy of being sensitive to local food and cultural preferences India was

the first country in the McDonalds system where it served non-beef and non-

pork products More than 70 percent of the menu in India has been locally

developed with complete segregation of vegetarian and non-vegetarian products

right from the food processing plants to the point of serving the customers

McDonalds commitment to its Indian customers is evident even in development

6

of special sauces that use local spices and chillies The mayonnaise and all other

sauces are egg-less McDonalds also pioneered the establishment of Cold Chain

across India which helps maintain freshness and nutrition in every product

McDonalds regular scrumptious menu includes wide range of products like McAloo Tikki Filet-O-Fish Spicy Range Chicken McGrill McVeggie Veg Pizza McPuff Chicken Mcnuggetsreg Fries Wraps an assortment of Sundaes

Soft Serve and refreshing beverages such as Ice Tea amp Cold Coffee with outstanding service in a vibrant and lively ambience for which McDonalds is

known worldwide

McDonalds had further reinforced the branded affordability mantra via the introduction of the Happy Price Menu which starts at Rs 25 only

McAloo Tikki Veg Surprise and Pizza McPuff developed in India are now being exported to the countries in the Middle East

McDonaldrsquos introduced Cokersquos Georgia Gold range of hot beverages which was developed especially for the Indian market in 2002

As a leader in QSR segment (Quick Service Restaurant) McDonaldrsquos has

pioneered various industry benchmark practices over the past decade of serving Indian customers including new concepts such ashellip

Oil Alliances in India by inking with petroleum giants BPCL and HPCL

The two such alliances with BPCL outlets are in Mathura (2000) (UP) and Doraha (2002) (Punjab)

Novel menu formats such as an Express Model with a limited menu and Kiosks with a variety of dessert offerings

Home Delivery (McDeliverytrade) Providing even more convenience to

our customers In Oct 2006 McDelivery on bicycle at Chandni Chowk was launched and in March lsquo07 an all India single delivery number (66

000 666) was introduced

First Drive Thru Restaurant at NOIDA (UP) in 1997

First Restaurant with operational Kitchen at Delhi Domestic

Keeping pace with the customer evolving needs McDonalds also functions on models that drive convenience and create unique differentiation like

McDelivery Drive thru Breakfast Menu high ways and extended hours (Currently available in select cities)

At present there are 300 McDonalds restaurants in India

The strong foundation that Ray Kroc built continues today with McDonalds

7

vision and commitment for its internal as well as external customers Since then it has evolved into a value driven brand and recognizes that affordability of its

products is an attractive proposition for its customers along with taste McDonalds continues to strengthen it business model and progress with

customers evolving needs

Key Landmarks - McDonaldrsquos India Journey

1996 hellipthe first McDonaldrsquos restaurant opened on Oct 13 at Basant Lok

Vasant Vihar New Delhi It was also the first McDonaldrsquos restaurant in the

world not serving beef on its menu

1997hellip

the first Drive ndashThru restaurant at Noida (UP)

the first disabled friendly store at Noida (UP)

1999hellipthe first Mall location restaurant at Ansal Plaza (New Delhi)

2000hellipthe first highway restaurant at Mathura (UP)

2001hellipthe first thematic restaurant at Connaught Place (New Delhi)

2002hellip

The first restaurant in a food court at 3Crsquos Lajpat Nagar (New Delhi)

The first restaurant at the Delhi Metro Station at Inter State Bus Terminus

The first fundraiser in association with ORBIS and Dr Shroffrsquos Charity

Eye hospital(Delhi)

2003 The first Dessert Kiosk ndash Faridabad (Haryana)

2004hellip McDonaldrsquos Delivery Service (McDelivery) introduced in New Delhi

2003-04hellip Indigenous products like McAloo Tikki McVeggie and Pizza

McPuff exported to Middle East countries

8

2006

McDelivery on Bicycles flagged off at Chandni Chowk (Delhi)- another

first initiative by McDonaldrsquos India

100th McDonaldrsquos Restaurant in India

10th Year Anniversary

2007

The first McDonaldrsquos open in Eastern Region at Park Street Kolkata

The first restaurant opened at Airport (Domestic Airport New Delhi)

The first MFY restaurant opened at Greater Noida Uttar Pradesh

2008hellip

The First restaurant to start extended hours procedure at Cyber Greens

Gurgaon and Saket New Delhi

The first restaurant to start Breakfast Menu at Janpath New Delhi

2009hellipThe first McDonaldrsquos Restaurant opens at Old Delhi Railway Station

2010hellipThe first reimaged new look restaurant opened at Ambiance mall

Vasant Kunj 6

2011hellip

McDonaldrsquos introduces premium products in it is menu ndash McSpicy range

of products

McDonaldrsquos introduces Mcflurry (premium desserts) in Oreo and

chocolate crispy flavors

McDonaldrsquos introduces Wi-Fi across DelhiNCR region

McDonaldrsquos currently has 235 restaurants in India

The Northern Region has 110 restaurants ndash

sect Delhi ndash 40

sect Haryana - 15

Faridabad ndash3 Manesar ndash 2 (Highway and Drive - Thru) Gurgaon ndash7

Karnal ndash 1 (Highway and Drive - Thru) Panipat -1 Ambala -1

9

sect Rajasthan -6

Jaipur ndash 3 Jodhpur ndash 1 Kota -1 Udaipur - 1

sect Uttaranchal -1

Dehradun ndash 1

sect Uttar Pradesh ndash29

Noida ndash 5 Greater Noida ndash 1 Ghaziabad ndash 7 Mathura ndash 1 (Highway and

Drive - Thru) Kanpur ndash 2 Meerut ndash 2 Lucknow ndash5 Agra ndash 1 Allahabad

ndash 1 Varanasi -2 Gajraula ndash 1 (Highway amp Drive Thru) Khatauli -

1(Highway and Drive thru)

sect Punjab ndash 13

Chandigarh ndash 2 Ludhiana ndash 2 Doraha ndash 1 (Highway and Drive - Thru)

Jalandhar ndash 2 Patarsi ndash 1 (Highway and Drive - Thru) Dasuya (Highway

and Drive Thru) ndash 1 Amritsar -1 Patiala -1 Zirakpur-2

sect West Bengal-3

Kolkata- 3

sect Himachal Pradesh -1

Jabli-1

sect Madhya Pradesh -2

Gwalior ndash 1 Bhopal -1

----------------------------------------------

The Western Region has 125 restaurants across the following states and cities ndash

Maharashtra - Mumbai Pune Nasik Kolhapur ndash

Gujarat - Ahmedabad Vododara Surat Indore Vapi

Madhya Pradesh ndash Indore

Andhra Pradesh - Hyderabad

Karnataka - Bangalore

Tamil Nadu - Chennai

10

GOALS AND OBJECTIVES

1 McDonaldrsquos vision is to be the worldrsquos best quick service restaurants

experience

2 McDonalds is committed to maintaining and developing the best food

products in the quick service restaurant market

3 In order to deliver this the company has made a number of commitments to

food safety and nutrition

4 Lead the Quick Service Restaurant market by a program of site development

and profitable restaurant openings and by attracting new customers Increasing

sales through promotions will enable them to continue their program of

expansion

5 McDonalds have an objective to continual enhance and improve their menu

This will better satisfy their customers and give customers more reason to visit

Many ideas for new items on the menu come from the franchisees responding to

customer demand Consumer tastes change over time and McDonalds has to

respond to these changes

MISSION STATEMENT

McDonalds vision is to be the worlds best quick service restaurant experience

Being the best means providing outstanding quality service cleanliness and

value so that we make every customer in every restaurant smile

11

AWARDS

McDonaldrsquos India has received many prestigious awards for its service and

performance including

The lsquoMost Respected Companyrsquo for four consecutive years (2003-2006)

in the Food Services sector by Businessworld

The lsquoMost Preferred Fast Food Outletrsquo 2006 amp 2007 by Awaaz

Consumer Award hosted by CNBC

Star Retailer ndash the lsquoConsumer Way Food Services Retailerrsquo of the

Year 2006 amp 2007 2008 by Franchise India

lsquoRetailer of the Yearrsquo Award for catering services (2004-2006) at the

Images Retail Awards

The lsquoAmity Corporate Excellence Awardrsquo ndashin 2007 amp 2008

The lsquoMost Wanted Brand of the Yearrsquo Award 2003 amp 2004 by

Franchising Holdings India Ltd

The lsquoMost Admired F amp B Retailer of the Year QSRs Foreign

Originrsquo ndash The Golden Spoon Awards by Images Retail

The Company with the Best Corporate Conscience ndash 2008 by Business

amp Economy

lsquoValue for Moneyrsquo brand ndash 2010 by Pitch Magazine

The most trusted family restaurant brand in the country award in

2010 by Readerrsquos Digest

12

Corporate Social Responsibility

Being responsible is at the core of everything that we do at McDonaldstrade It is

a deep-rooted value and a tradition that dates back to our founder Ray Kroc It is also one of our top business priorities

We believe that our continuing success depends on our stakeholders trust in

each and every aspect of our business be it the quality and safety of the food we serve in the way we do our business the way we connect and make the difference in the communities we operate being sensitive to environment and

being sustainable

1 We are committed to doing what is right

2 We are committed to be a good neighbour and partner in the community

3 We are committed to conducting our business ethically and with complete transparency

4 We are committed to treating our entire internal and external stakeholders with respect and dignity

13

McDonaldrsquos International

McDonaldrsquos has over 32000 local restaurants in more than 100 countries

70 percent of our restaurants worldwide are owned and operated by

independent local businessmen and businesswomen

McDonaldrsquos serves nearly 50 million customers each day

McDonaldrsquos first franchised restaurant opened at Des Plaines Illinois in

1955 by the founder Ray Kroc

McDonaldrsquos has its own Hamburger University in Illinois and the first

batch graduated in 1961

12 classes offered at Hamburger University are college accredited

In 1963 McDonaldrsquos sold its one billionth hamburger

McDonaldrsquos is listed on the New York Frankfurt Munich Paris and

Tokyo stock exchanges

McDonaldrsquos aired its first network TV advertisement ldquoMcDonaldrsquos -

Where Quality Starts Fresh Everydayrdquo in 1965

The first McDonaldrsquos Drive-Thru opened in Sierra Vista Arizona in 1975

14

Happy Meals were added to McDonaldrsquos menu in 1979

McDonaldrsquos launched the new worldwide Balanced Active Lifestyles

public awareness campaign in 2005

McDonaldrsquos celebrated its 50th Anniversary on April 15 2005

Business model

McDonalds Corporation earns revenue as an investor in properties

a franchiser of restaurants and an operator of restaurants Approximately 15 of McDonalds restaurants are owned and

operated by McDonalds Corporation directly The remainder are operated by others through a variety of franchise agreements and

joint ventures

The McDonalds Corporations business model is slightly different

from that of most other fast-food chains In addition to ordinary franchise fees and marketing fees which are calculated as

a percentage of sales McDonalds may also collect rent which may also be calculated on the basis of sales

As a condition of many franchise agreements which vary by

contract age country and location the Corporation may own or lease the properties on which McDonalds franchises are located In most if not all cases the franchisee does not own the location of its

restaurants

The United Kingdom and Ireland business model is different than the US in that fewer than 30 of restaurants are franchised with

the majority under the ownership of the company McDonalds trains its franchisees and others at Hamburger Univers ity in Oak

Brook Illino is

In other countries McDonalds restaurants are operated by joint

ventures of McDonalds Corporation and other local entities or governments

15

As a matter of policy McDonalds does not make direct sales of food or materials to franchisees instead organizing the supply of

food and materials to restaurants through approved third party logistics operators

According to Fast Food Nation by Eric Schlosser nearly one in

eight workers in the US have at some time been employed by McDonalds It also states that McDonalds is the largest private

operator of playgrounds in the US as well as the single largest purchaser of beef pork potatoes and apples The selection of

meats McDonalds uses varies with the culture of the host country

MARKETING MIX

The marketing mix of a company consists of the various elements as follows

which form the core of a companyrsquos marketing system and hence helps to

achieve marketing objectives The marketing mix of McDonaldrsquos is as follows-

The McDonald plains its marketing by simple keeping 4Ps in mind

Product

Price

Promotion

Place

Product - McDonaldrsquos places considerable emphasis on developing a menu

which customers want Market research establishes exactly what this is However customersrsquo requirements change over time In order to meet these

changes McDonaldrsquos has introduced new products and phased out old ones and will continue to do so Care is taken not to adversely affect the sales of one choice by introducing a new choice which will cannibalise sales from the

existing one (trade off) McDonaldrsquos knows that items on its menu will vary in popularity Their ability to generate profits will vary at different points in their

cycle In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian

The happy meal for the children is a great seller among others

Price-The customerrsquos 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 physical item it also has psychological

connotations for the customer The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised It is

16

important when deciding on price to be fully aware of the brand and its integrity

In India McDonalds classifies its products into 2 categories namely the branded

affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and

the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price

perceptions

Promotion- The promotions aspect of the marketing mix covers all types of

marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and

in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct

mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that

provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be

supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item

At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart

from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos

Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the

management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities

making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers

17

Other than the main four elements mentioned above there are a few other

elements too in the marketing mix which are as follows-

People -The employees in McDonaldrsquos have a standard uniform and

McDonaldrsquos specially focuses on friendly and prompt service to its customers

from their employees

Process -The food manufacturing process at McDonaldrsquos is completely

transparent ie the whole process is visible to the customers In fact the fast

food joint allows its customers to view and judge the hygienic standards at

McDonaldrsquos by allowing them to enter the area where the process takes place

The customers are invited to check the ingredients used in food

Physical evidence - McDonalds focuses on clean and hygienic interiors of

is outlets and at the same time the interiors are attractive and the fast food joint

maintains a proper decorum at its joints

18

SWOT ANALYSIS

Strengths

McDonaldrsquos holds a very strong brand name worldwide

They have large partnerships with other companies that provide them

with their desired products this increases the goodwill of the company

McDonaldrsquos is one of the most reputed firms who are socially

responsible

Loyal employees amp management amp customer are their biggest strength

19

McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind

while providing food to different countries

Clean environment and play areas for children where they can enjoy their

time

Weakness

The weakness that hits the list of employee turnover rate Every year

many of their employees are fired out of the restaurant

McDonalds mostly advertises products and food items that targets

children

Health conscious people often complain that they do not provide us with

the organic and healthy food This becomes their weakness when they get in the complaints

They also face quality issue at times This affects the business as they are

running the outlet worldwide if one franchise gets affected others also

get a bad name

Opportunities

It can open up online services for their customers so that they can easily

order their desired meals sitting at home

Discounts given on every food item may help them gain more customers

They can go for a joint venture with the retailers they work with

They can introduce healthy hamburgers and healthy drinks for the people who are health conscious

20

In order to be environment friendly they can use packing material which

can be recycled later or material that does not create pollution

Threats

Emerging competition of similar outlets is becoming a problem for McDonalds

Health issue also becomes a problem when it comes to food

As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies

Recession in any country would definitely affect the whole outlet

worldwide

People facing heart problems and obesity accuse McDonalds for not

providing them with the healthy food

They have a threat of local food outlets in different countries

McDonalds is operating in a fully fledged economy where competition is

increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession

McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local

Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government

regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled

Indian businesses to grow by improving their ability to compete in todays international markets

21

Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in

predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first

restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept

has today been adopted by various Indian and International players to deliver quality produce to consumers

For instance Cremica Industries worked with another McDonalds supplier

from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to

McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with

farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water

consumption better seeds amp agricultural management practices which result in greater yields

In some cases these Indian suppliers had the technology - but no market for the

products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk

casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to

restaurants across India

McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations

COMPANYrsquoS FINANCIAL INFORMATION

Company Name McDonalds Corporation

Ticker Symbol MCD

Web Address wwwmcdonaldscom

CEO Mr Donald Thompson

No of Employees 420000

Common Issue Type CS

Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other

22

goods from numerous independent suppliers

Industry Information LEISURE - Restaurants

Price Day Change Bid Ask Open High Low Volume

8718 -002 - - 8743 8743 8676 3658828

Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range

875267 10040 039 527 253 164 35 10222 - 8331

KEY FIGURES (Latest Twelve Months - LTM)

Yesterdays Close 8706 $

PE Ratio - LTM 164

Market Capitalisation 875267 mil

Latest Shares Outstanding 10040 mil

Earnings pS (EPS) 527 $

Dividend pS (DPS) 253 cent

Dividend Yield 35

Dividend Payout Ratio 48

Revenue per Employee 64300 $

Effective Tax Rate 313

Float 10153 mil

Float as of Shares Outstanding 999

Foreign Sales 18478 mil

Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue

910

Research amp Devlopment (RampD) as of Revenue

000

Gross Profit Margin 447

EBITDA Margin 356

Pre-Tax Profit Margin 291

Assets Turnover 08

Return on Assets (ROA) 161

Return on Equity (ROE) 392

Return on Capital Invested (ROCI) 204 Current Ratio 10

Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096

LT DebtTotal Capital 480

Working Capital pS 006 $

Cash pS 217 $

Book-Value pS 1383 $

Balance Sheet (at a glance) in Millions

DIVIDEND INFO

Dividend Declared Date 09202012

Dividend Ex-Date 11282012

Dividend Record Date 12022012

Dividend Pay Date 12162012

Dividend Amount 770

Type of Payment Cash Payment

Dividend Rate 308

Current Dividend Yield 35

5-Y Average Dividend Yield 31

Payout Ratio 480

5-Y Average Payout Ratio 530

Share price performance previous 3 years

Share price performance intraday

23

Tangible Book-Value pS 1110 $

Cash Flow pS 689 $

Free Cash Flow pS 125 $

KEY FIGURES (LTM) Price info PriceBook Ratio 630

PriceTangible Book Ratio 785 PriceCash Flow 126

PriceFree Cash Flow 699

PE as of Industry Group 420

PE as of Sector Segment 770

PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol

1 Week - - - 00 101 54041 66217

4 Weeks 8743 8331 8474 27 101 57129 856929

13 Weeks 9416 8331 9102 -44 98 61288 3554700

26 Weeks 9416 8331 8775 -08 93 59419 7189758

52 Weeks 10222 8331 9803 -112 79 59272 14521666

YTD 10222 8331 - -132 77 59774 13807695

Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)

8661 8631 8825 8931 9174 039 031

GROWTH RATES 5-Year

Growh Rsup2 of 5-Year Growth

3-Year

Growth

Revenue 381 776 666

Income 2017 811 978

Dividend 1536 947 1016

Capital Spending 697 NA 1052

RampD 000 NA 000

Normalized Inc 1158 NA 979

CHANGES YTD vs

Last YTD

Curr Qtr vs

Qtr 1-Yr ago

Annual vs

Last Annual

Revenue 21 -02 122

Earnings -14 -35 113

EPS 10 -14 151

EPS $ 004 -002 069

SOLVENCY RATIOS

SHORT-TERM SOLVENCY RATIOS

(LIQUIDITY)

Net Working Capital Ratio 271

Current Ratio 13

Quick Ratio (Acid Test) 10

Liquidity Ratio (Cash) 067

Receivables Turnover 215

Average Collection Period 17

Working CapitalEquity 62

Working Capital pS 088

Cash-Flow pS 677

Free Cash-Flow pS 209

24

FINANCIAL STRUCTURE RATIOS

Altmans Z-Score Ratio 485

Financial Leverage Ratio (AssetsEquity) 23

Debt Ratio 564

Total DebtEquity (Gearing Ratio) 087

LT DebtEquity 084

LT DebtCapital Invested 569

LT DebtTotal Liabilities 652

Interest Cover 173

InterestCapital Invested 167

25

People hellip McDonaldrsquos 1 Resource in India

26

McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs

around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in

1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with

McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)

The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive

training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course

(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the

Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University

27

The McDonaldrsquos Promise

QUALITY SERVICE CLEANLINESS amp VALUE

When asked to explain McDonalds success founder Ray Kroc used to say We

take the hamburger business more seriously than anyone else

Kroc was a perfectionist From the day he opened his first restaurant he vowed

to give his customers high quality products served quickly --and with a smile

in a clean and pleasant environment and all at a fair price Quality Service

Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds

business

QUALITY

McDonalds India serves only the highest quality products The attention to food

quality started long before the first restaurant opened McDonalds India has

established close relationships with local suppliers who provide McDonalds

with the highest quality freshest ingredients to make its products

All suppliers adhere to Indian government regulations on food health and

hygiene while continuously maintaining McDonalds own recognized standards

McDonalds has established an extensive cold chain distribution system in

India to ensure that the products which arrive at the restaurant from suppliers

all over India are absolutely fresh In the restaurants products and supplies are

used on a first-in first-out basis to ensure freshness All McDonalds products

are prepared using modern state-of-the-art cooking equipment to ensure quality

and safety

SERVICE

McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos

which sets its restaurants apart from others At McDonalds the customer

always comes first Every employee strives to provide 100 percent customer

satisfaction -- for every customer -- every visit This includes friendly and

attentive service accuracy in order taking and anticipation of customers needs

-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun

and youthful spirit we will proudly serve an exceptional McDonaldrsquos

eating experience that makes all people feel special and makes them smile ndash

every customer every timerdquo

28

CLEANLINESS

McDonalds restaurants provide a clean comfortable environment especially

suited for families McDonalds stringent cleaning standards ensure that all

tables seating highchairs and trays are sanitized several times each hour The

attention to cleanliness extends from the lobby to the kitchen to the sidewalk

and immediate areas outside the restaurant

In addition to urging customers to dispose of their litter properly and offering a

number of trash bins (both inside and outside the restaurants) for their

convenience McDonalds Litter Patrols walk around the restaurants several

times each day picking up litter -- even if it isnt from McDonalds

Restaurant managers walk through the dining areas each hour to ensure that it

is clean and well stocked All restaurants provide a variety of comfortable

seating arrangements to accommodate anyone -- from a single individual to a

large family The environment is warm inviting and well lit

VALUE

McDonalds menu is priced at a value that the largest segment of Indian

consumers can afford McDonalds does not sacrifice quality for value -- rather

McDonalds leverages economies of scale to minimize costs while maximizing

value to customers

McDonalds definition of value is broader than most restaurants of its kind -- it

is more than price Value at McDonalds is the sum of the total McDonalds

experience quality food fast friendly service a clean and pleasant

environment and products priced at very affordable prices for the largest

segment of Indian consumers possible That is value at McDonalds

29

McDonaldrsquos Indiahellip Culturally Sensitive

Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much

that is consistent with other McDonaldrsquos restaurants around the world such as

the quality of the food and the attention to service

The dedication to local cultures is not new for McDonaldrsquos For the past 50

years McDonaldrsquos has opened restaurants in more than 120 distinctly different

countries and cultures With guidance from its local partners McDonaldrsquos is

able to adapt- where necessary-its menu and restaurant operations to

complement existing eating-out options McDonaldrsquos local owners understand

what their customers want perhaps more importantly what is acceptable within

local customs and values

There is much too that is very different- such as the first beef-less and pork-

less menu in the world and special product formulations to cater to Indian

culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos

India says ldquoWe know the Indian culture because we were born in it

inherited its richness and respect it greatly It is the respect for this culture

and the sentiments of many of our customersrsquo that we do not serve any

beef and pork items in our restaurantsrdquo

McDonaldrsquos commitment to its Indian customers is evident even in

development of special sauces that use local spices and chillies The

mayonnaise and all other sauces are egg-less

In India vegetarianism is in many cases more than a lifestyle choice Many

people are vegetarians due to religious reasons and in some cases even the

vegetarian product that has come into contact with a non-vegetarian product is

unacceptable Hence McDonaldrsquos India has also changed its operations to

address the special requirements of our vegetarian customers by having

processes that ensure that a physical separation of veg and non-veg products is

maintained right from farm to the customer Vegetable products are prepared

separately using dedicated equipment and utensils Also in India McDonaldrsquos

uses only vegetable oil as a medium for cooking

30

McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash

lsquoto be driven by the leadership of local ownersrsquo This commitment has translated

into enduring benefits to the businesses at the grass root level in the areas of

introduction of new crops new agricultural practices and food processing methods

and procedures

McDonalds unique cold chain on which the QSR major has spent more than six

years setting up in India has brought about a veritable revolution immensely

benefiting the farmers at one end and enabling customers at retail counters get the

highest quality food products absolutely fresh and at great value

Setting up this extensive cold chain distribution system has involved the transfer of

state-of-the-art food processing technology by McDonalds and its international

suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain

From Field to -2⁰C in 90 Minutes

Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be

grown during the winter months but with McDonalds expertise in the area of

agriculture they are now able to grow this crop through the year

Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room

to remove field heat a large cold room and a refrigerated van for transportation where

the temperature and the relative humidity of the crop is maintained between 1ordm C and

4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room

within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling

to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at

the farms itself ensuring no delay between harvesting pre-cooling packaging and

cold storage

Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd

Flavour and Freshness locked in at - 35degC

Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable

range of products is another important player in this cold chain This includes hi-tech

refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C

This is vital to ensure that the frozen food retains it freshness for a long time and the

cold chain is maintained The frozen product is immediately moved to cold storage

rooms

31

Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes

McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for

quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk

coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -

thus maintaining the cold chain

All leading to the Consumer

McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The

DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity

of the products throughout the entire cold chain

Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the

McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C

as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state

All these suppliers share McDonalds commitment and dedication to satisfying

customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently

each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental

effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn

more

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 3: Entrepreneurship m com a

3

12 The Top Five Reasons Why McDonaldrsquos is so Popular

33

13 Findings 34

14 Conclusion

35

15 Bibliography 36

MCDONALDrsquoS

AN INTRODUCTION

McDonalds Corporation (NYSE MCD) is the worlds largest chain

of hamburger fast food restaurants serving around 68 million customers daily in

119 countries

Headquartered in the United States the company began in 1940 as a barbecue

restaurant operated by Richard and Maurice McDonald in 1948 they

reorganized their business as a hamburger stand using production

line principles Businessman Ray Kroc joined the company as a franchise

agent in 1955 Ray Kroc subsequently purchased the chain from the McDonald

brothers and oversaw its worldwide growth

A McDonalds restaurant is operated either by a franchisee or an affiliate or the corporation itself The corporations revenues come from the rent royalties

and fees paid by the franchisees as well as sales in company-operated restaurants

4

McDonalds revenues grew 27 percent over the three years ending in 2007 to

$228 billion and 9 percent growth in operating income to $39 billion McDonalds primarily sells hamburgers cheese burgers chicken French

fries breakfast items soft drinks milkshakes and desserts In response to changing consumer tastes the company has expanded its menu to

include salads wraps smoothes and fruits

An exterior view of the worlds largest McDonalds restaurant built on 2012

London Olympics site

In July 2011 McDonalds announced that their largest restaurant in the world

will be built on the 2012 London Olympics site The restaurant will contain over 1500 seats and is half the length of an American Football field Over 470

staff will be employed serving on average (during the 2012 Olympics) 100000 portions of fries 50000 Big Macs and 30000 Milkshakes This restaurant will

overshadow the current largest McDonalds in the world in Moscow Russia In January 2012 the company announced revenue for 2011 reached an all-time

high of $27 billion and that 2400 restaurants would be updated and 1300 new ones opened worldwide

5

History of McDonalds

The McDonalds restaurant concept was introduced in San Bernardino

California by Dick and Mac McDonald of Manchester New Hampshire It was

modified and expanded by their business partner Ray Kroc of Oak Park

Illinois who later bought out the business interests of the McDonald brothers in

the concept and went on to found McDonalds Corporation

McDonalds is the leading global foodservice retailer with more than 32000

local restaurants serving more than 58 million people in around 130 countries

each day 70 percent of our restaurants worldwide are owned and operated by

independent local businessmen and businesswomen

In India the brand is managed by two business entities

Connaught Plaza Restaurants Private Limited led by Mr Vikram Bakshi

JV Partner and Managing Director North amp East India

Hardcastle Restaurants Private Limited led by Ms Smita Jatia Managing

Director South amp West India

McDonalds philosophy of QSCV (Quality Service Cleanliness and Value) is

the guiding force behind its service to the customers in India Following its

philosophy of being sensitive to local food and cultural preferences India was

the first country in the McDonalds system where it served non-beef and non-

pork products More than 70 percent of the menu in India has been locally

developed with complete segregation of vegetarian and non-vegetarian products

right from the food processing plants to the point of serving the customers

McDonalds commitment to its Indian customers is evident even in development

6

of special sauces that use local spices and chillies The mayonnaise and all other

sauces are egg-less McDonalds also pioneered the establishment of Cold Chain

across India which helps maintain freshness and nutrition in every product

McDonalds regular scrumptious menu includes wide range of products like McAloo Tikki Filet-O-Fish Spicy Range Chicken McGrill McVeggie Veg Pizza McPuff Chicken Mcnuggetsreg Fries Wraps an assortment of Sundaes

Soft Serve and refreshing beverages such as Ice Tea amp Cold Coffee with outstanding service in a vibrant and lively ambience for which McDonalds is

known worldwide

McDonalds had further reinforced the branded affordability mantra via the introduction of the Happy Price Menu which starts at Rs 25 only

McAloo Tikki Veg Surprise and Pizza McPuff developed in India are now being exported to the countries in the Middle East

McDonaldrsquos introduced Cokersquos Georgia Gold range of hot beverages which was developed especially for the Indian market in 2002

As a leader in QSR segment (Quick Service Restaurant) McDonaldrsquos has

pioneered various industry benchmark practices over the past decade of serving Indian customers including new concepts such ashellip

Oil Alliances in India by inking with petroleum giants BPCL and HPCL

The two such alliances with BPCL outlets are in Mathura (2000) (UP) and Doraha (2002) (Punjab)

Novel menu formats such as an Express Model with a limited menu and Kiosks with a variety of dessert offerings

Home Delivery (McDeliverytrade) Providing even more convenience to

our customers In Oct 2006 McDelivery on bicycle at Chandni Chowk was launched and in March lsquo07 an all India single delivery number (66

000 666) was introduced

First Drive Thru Restaurant at NOIDA (UP) in 1997

First Restaurant with operational Kitchen at Delhi Domestic

Keeping pace with the customer evolving needs McDonalds also functions on models that drive convenience and create unique differentiation like

McDelivery Drive thru Breakfast Menu high ways and extended hours (Currently available in select cities)

At present there are 300 McDonalds restaurants in India

The strong foundation that Ray Kroc built continues today with McDonalds

7

vision and commitment for its internal as well as external customers Since then it has evolved into a value driven brand and recognizes that affordability of its

products is an attractive proposition for its customers along with taste McDonalds continues to strengthen it business model and progress with

customers evolving needs

Key Landmarks - McDonaldrsquos India Journey

1996 hellipthe first McDonaldrsquos restaurant opened on Oct 13 at Basant Lok

Vasant Vihar New Delhi It was also the first McDonaldrsquos restaurant in the

world not serving beef on its menu

1997hellip

the first Drive ndashThru restaurant at Noida (UP)

the first disabled friendly store at Noida (UP)

1999hellipthe first Mall location restaurant at Ansal Plaza (New Delhi)

2000hellipthe first highway restaurant at Mathura (UP)

2001hellipthe first thematic restaurant at Connaught Place (New Delhi)

2002hellip

The first restaurant in a food court at 3Crsquos Lajpat Nagar (New Delhi)

The first restaurant at the Delhi Metro Station at Inter State Bus Terminus

The first fundraiser in association with ORBIS and Dr Shroffrsquos Charity

Eye hospital(Delhi)

2003 The first Dessert Kiosk ndash Faridabad (Haryana)

2004hellip McDonaldrsquos Delivery Service (McDelivery) introduced in New Delhi

2003-04hellip Indigenous products like McAloo Tikki McVeggie and Pizza

McPuff exported to Middle East countries

8

2006

McDelivery on Bicycles flagged off at Chandni Chowk (Delhi)- another

first initiative by McDonaldrsquos India

100th McDonaldrsquos Restaurant in India

10th Year Anniversary

2007

The first McDonaldrsquos open in Eastern Region at Park Street Kolkata

The first restaurant opened at Airport (Domestic Airport New Delhi)

The first MFY restaurant opened at Greater Noida Uttar Pradesh

2008hellip

The First restaurant to start extended hours procedure at Cyber Greens

Gurgaon and Saket New Delhi

The first restaurant to start Breakfast Menu at Janpath New Delhi

2009hellipThe first McDonaldrsquos Restaurant opens at Old Delhi Railway Station

2010hellipThe first reimaged new look restaurant opened at Ambiance mall

Vasant Kunj 6

2011hellip

McDonaldrsquos introduces premium products in it is menu ndash McSpicy range

of products

McDonaldrsquos introduces Mcflurry (premium desserts) in Oreo and

chocolate crispy flavors

McDonaldrsquos introduces Wi-Fi across DelhiNCR region

McDonaldrsquos currently has 235 restaurants in India

The Northern Region has 110 restaurants ndash

sect Delhi ndash 40

sect Haryana - 15

Faridabad ndash3 Manesar ndash 2 (Highway and Drive - Thru) Gurgaon ndash7

Karnal ndash 1 (Highway and Drive - Thru) Panipat -1 Ambala -1

9

sect Rajasthan -6

Jaipur ndash 3 Jodhpur ndash 1 Kota -1 Udaipur - 1

sect Uttaranchal -1

Dehradun ndash 1

sect Uttar Pradesh ndash29

Noida ndash 5 Greater Noida ndash 1 Ghaziabad ndash 7 Mathura ndash 1 (Highway and

Drive - Thru) Kanpur ndash 2 Meerut ndash 2 Lucknow ndash5 Agra ndash 1 Allahabad

ndash 1 Varanasi -2 Gajraula ndash 1 (Highway amp Drive Thru) Khatauli -

1(Highway and Drive thru)

sect Punjab ndash 13

Chandigarh ndash 2 Ludhiana ndash 2 Doraha ndash 1 (Highway and Drive - Thru)

Jalandhar ndash 2 Patarsi ndash 1 (Highway and Drive - Thru) Dasuya (Highway

and Drive Thru) ndash 1 Amritsar -1 Patiala -1 Zirakpur-2

sect West Bengal-3

Kolkata- 3

sect Himachal Pradesh -1

Jabli-1

sect Madhya Pradesh -2

Gwalior ndash 1 Bhopal -1

----------------------------------------------

The Western Region has 125 restaurants across the following states and cities ndash

Maharashtra - Mumbai Pune Nasik Kolhapur ndash

Gujarat - Ahmedabad Vododara Surat Indore Vapi

Madhya Pradesh ndash Indore

Andhra Pradesh - Hyderabad

Karnataka - Bangalore

Tamil Nadu - Chennai

10

GOALS AND OBJECTIVES

1 McDonaldrsquos vision is to be the worldrsquos best quick service restaurants

experience

2 McDonalds is committed to maintaining and developing the best food

products in the quick service restaurant market

3 In order to deliver this the company has made a number of commitments to

food safety and nutrition

4 Lead the Quick Service Restaurant market by a program of site development

and profitable restaurant openings and by attracting new customers Increasing

sales through promotions will enable them to continue their program of

expansion

5 McDonalds have an objective to continual enhance and improve their menu

This will better satisfy their customers and give customers more reason to visit

Many ideas for new items on the menu come from the franchisees responding to

customer demand Consumer tastes change over time and McDonalds has to

respond to these changes

MISSION STATEMENT

McDonalds vision is to be the worlds best quick service restaurant experience

Being the best means providing outstanding quality service cleanliness and

value so that we make every customer in every restaurant smile

11

AWARDS

McDonaldrsquos India has received many prestigious awards for its service and

performance including

The lsquoMost Respected Companyrsquo for four consecutive years (2003-2006)

in the Food Services sector by Businessworld

The lsquoMost Preferred Fast Food Outletrsquo 2006 amp 2007 by Awaaz

Consumer Award hosted by CNBC

Star Retailer ndash the lsquoConsumer Way Food Services Retailerrsquo of the

Year 2006 amp 2007 2008 by Franchise India

lsquoRetailer of the Yearrsquo Award for catering services (2004-2006) at the

Images Retail Awards

The lsquoAmity Corporate Excellence Awardrsquo ndashin 2007 amp 2008

The lsquoMost Wanted Brand of the Yearrsquo Award 2003 amp 2004 by

Franchising Holdings India Ltd

The lsquoMost Admired F amp B Retailer of the Year QSRs Foreign

Originrsquo ndash The Golden Spoon Awards by Images Retail

The Company with the Best Corporate Conscience ndash 2008 by Business

amp Economy

lsquoValue for Moneyrsquo brand ndash 2010 by Pitch Magazine

The most trusted family restaurant brand in the country award in

2010 by Readerrsquos Digest

12

Corporate Social Responsibility

Being responsible is at the core of everything that we do at McDonaldstrade It is

a deep-rooted value and a tradition that dates back to our founder Ray Kroc It is also one of our top business priorities

We believe that our continuing success depends on our stakeholders trust in

each and every aspect of our business be it the quality and safety of the food we serve in the way we do our business the way we connect and make the difference in the communities we operate being sensitive to environment and

being sustainable

1 We are committed to doing what is right

2 We are committed to be a good neighbour and partner in the community

3 We are committed to conducting our business ethically and with complete transparency

4 We are committed to treating our entire internal and external stakeholders with respect and dignity

13

McDonaldrsquos International

McDonaldrsquos has over 32000 local restaurants in more than 100 countries

70 percent of our restaurants worldwide are owned and operated by

independent local businessmen and businesswomen

McDonaldrsquos serves nearly 50 million customers each day

McDonaldrsquos first franchised restaurant opened at Des Plaines Illinois in

1955 by the founder Ray Kroc

McDonaldrsquos has its own Hamburger University in Illinois and the first

batch graduated in 1961

12 classes offered at Hamburger University are college accredited

In 1963 McDonaldrsquos sold its one billionth hamburger

McDonaldrsquos is listed on the New York Frankfurt Munich Paris and

Tokyo stock exchanges

McDonaldrsquos aired its first network TV advertisement ldquoMcDonaldrsquos -

Where Quality Starts Fresh Everydayrdquo in 1965

The first McDonaldrsquos Drive-Thru opened in Sierra Vista Arizona in 1975

14

Happy Meals were added to McDonaldrsquos menu in 1979

McDonaldrsquos launched the new worldwide Balanced Active Lifestyles

public awareness campaign in 2005

McDonaldrsquos celebrated its 50th Anniversary on April 15 2005

Business model

McDonalds Corporation earns revenue as an investor in properties

a franchiser of restaurants and an operator of restaurants Approximately 15 of McDonalds restaurants are owned and

operated by McDonalds Corporation directly The remainder are operated by others through a variety of franchise agreements and

joint ventures

The McDonalds Corporations business model is slightly different

from that of most other fast-food chains In addition to ordinary franchise fees and marketing fees which are calculated as

a percentage of sales McDonalds may also collect rent which may also be calculated on the basis of sales

As a condition of many franchise agreements which vary by

contract age country and location the Corporation may own or lease the properties on which McDonalds franchises are located In most if not all cases the franchisee does not own the location of its

restaurants

The United Kingdom and Ireland business model is different than the US in that fewer than 30 of restaurants are franchised with

the majority under the ownership of the company McDonalds trains its franchisees and others at Hamburger Univers ity in Oak

Brook Illino is

In other countries McDonalds restaurants are operated by joint

ventures of McDonalds Corporation and other local entities or governments

15

As a matter of policy McDonalds does not make direct sales of food or materials to franchisees instead organizing the supply of

food and materials to restaurants through approved third party logistics operators

According to Fast Food Nation by Eric Schlosser nearly one in

eight workers in the US have at some time been employed by McDonalds It also states that McDonalds is the largest private

operator of playgrounds in the US as well as the single largest purchaser of beef pork potatoes and apples The selection of

meats McDonalds uses varies with the culture of the host country

MARKETING MIX

The marketing mix of a company consists of the various elements as follows

which form the core of a companyrsquos marketing system and hence helps to

achieve marketing objectives The marketing mix of McDonaldrsquos is as follows-

The McDonald plains its marketing by simple keeping 4Ps in mind

Product

Price

Promotion

Place

Product - McDonaldrsquos places considerable emphasis on developing a menu

which customers want Market research establishes exactly what this is However customersrsquo requirements change over time In order to meet these

changes McDonaldrsquos has introduced new products and phased out old ones and will continue to do so Care is taken not to adversely affect the sales of one choice by introducing a new choice which will cannibalise sales from the

existing one (trade off) McDonaldrsquos knows that items on its menu will vary in popularity Their ability to generate profits will vary at different points in their

cycle In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian

The happy meal for the children is a great seller among others

Price-The customerrsquos 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 physical item it also has psychological

connotations for the customer The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised It is

16

important when deciding on price to be fully aware of the brand and its integrity

In India McDonalds classifies its products into 2 categories namely the branded

affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and

the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price

perceptions

Promotion- The promotions aspect of the marketing mix covers all types of

marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and

in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct

mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that

provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be

supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item

At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart

from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos

Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the

management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities

making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers

17

Other than the main four elements mentioned above there are a few other

elements too in the marketing mix which are as follows-

People -The employees in McDonaldrsquos have a standard uniform and

McDonaldrsquos specially focuses on friendly and prompt service to its customers

from their employees

Process -The food manufacturing process at McDonaldrsquos is completely

transparent ie the whole process is visible to the customers In fact the fast

food joint allows its customers to view and judge the hygienic standards at

McDonaldrsquos by allowing them to enter the area where the process takes place

The customers are invited to check the ingredients used in food

Physical evidence - McDonalds focuses on clean and hygienic interiors of

is outlets and at the same time the interiors are attractive and the fast food joint

maintains a proper decorum at its joints

18

SWOT ANALYSIS

Strengths

McDonaldrsquos holds a very strong brand name worldwide

They have large partnerships with other companies that provide them

with their desired products this increases the goodwill of the company

McDonaldrsquos is one of the most reputed firms who are socially

responsible

Loyal employees amp management amp customer are their biggest strength

19

McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind

while providing food to different countries

Clean environment and play areas for children where they can enjoy their

time

Weakness

The weakness that hits the list of employee turnover rate Every year

many of their employees are fired out of the restaurant

McDonalds mostly advertises products and food items that targets

children

Health conscious people often complain that they do not provide us with

the organic and healthy food This becomes their weakness when they get in the complaints

They also face quality issue at times This affects the business as they are

running the outlet worldwide if one franchise gets affected others also

get a bad name

Opportunities

It can open up online services for their customers so that they can easily

order their desired meals sitting at home

Discounts given on every food item may help them gain more customers

They can go for a joint venture with the retailers they work with

They can introduce healthy hamburgers and healthy drinks for the people who are health conscious

20

In order to be environment friendly they can use packing material which

can be recycled later or material that does not create pollution

Threats

Emerging competition of similar outlets is becoming a problem for McDonalds

Health issue also becomes a problem when it comes to food

As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies

Recession in any country would definitely affect the whole outlet

worldwide

People facing heart problems and obesity accuse McDonalds for not

providing them with the healthy food

They have a threat of local food outlets in different countries

McDonalds is operating in a fully fledged economy where competition is

increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession

McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local

Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government

regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled

Indian businesses to grow by improving their ability to compete in todays international markets

21

Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in

predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first

restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept

has today been adopted by various Indian and International players to deliver quality produce to consumers

For instance Cremica Industries worked with another McDonalds supplier

from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to

McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with

farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water

consumption better seeds amp agricultural management practices which result in greater yields

In some cases these Indian suppliers had the technology - but no market for the

products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk

casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to

restaurants across India

McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations

COMPANYrsquoS FINANCIAL INFORMATION

Company Name McDonalds Corporation

Ticker Symbol MCD

Web Address wwwmcdonaldscom

CEO Mr Donald Thompson

No of Employees 420000

Common Issue Type CS

Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other

22

goods from numerous independent suppliers

Industry Information LEISURE - Restaurants

Price Day Change Bid Ask Open High Low Volume

8718 -002 - - 8743 8743 8676 3658828

Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range

875267 10040 039 527 253 164 35 10222 - 8331

KEY FIGURES (Latest Twelve Months - LTM)

Yesterdays Close 8706 $

PE Ratio - LTM 164

Market Capitalisation 875267 mil

Latest Shares Outstanding 10040 mil

Earnings pS (EPS) 527 $

Dividend pS (DPS) 253 cent

Dividend Yield 35

Dividend Payout Ratio 48

Revenue per Employee 64300 $

Effective Tax Rate 313

Float 10153 mil

Float as of Shares Outstanding 999

Foreign Sales 18478 mil

Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue

910

Research amp Devlopment (RampD) as of Revenue

000

Gross Profit Margin 447

EBITDA Margin 356

Pre-Tax Profit Margin 291

Assets Turnover 08

Return on Assets (ROA) 161

Return on Equity (ROE) 392

Return on Capital Invested (ROCI) 204 Current Ratio 10

Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096

LT DebtTotal Capital 480

Working Capital pS 006 $

Cash pS 217 $

Book-Value pS 1383 $

Balance Sheet (at a glance) in Millions

DIVIDEND INFO

Dividend Declared Date 09202012

Dividend Ex-Date 11282012

Dividend Record Date 12022012

Dividend Pay Date 12162012

Dividend Amount 770

Type of Payment Cash Payment

Dividend Rate 308

Current Dividend Yield 35

5-Y Average Dividend Yield 31

Payout Ratio 480

5-Y Average Payout Ratio 530

Share price performance previous 3 years

Share price performance intraday

23

Tangible Book-Value pS 1110 $

Cash Flow pS 689 $

Free Cash Flow pS 125 $

KEY FIGURES (LTM) Price info PriceBook Ratio 630

PriceTangible Book Ratio 785 PriceCash Flow 126

PriceFree Cash Flow 699

PE as of Industry Group 420

PE as of Sector Segment 770

PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol

1 Week - - - 00 101 54041 66217

4 Weeks 8743 8331 8474 27 101 57129 856929

13 Weeks 9416 8331 9102 -44 98 61288 3554700

26 Weeks 9416 8331 8775 -08 93 59419 7189758

52 Weeks 10222 8331 9803 -112 79 59272 14521666

YTD 10222 8331 - -132 77 59774 13807695

Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)

8661 8631 8825 8931 9174 039 031

GROWTH RATES 5-Year

Growh Rsup2 of 5-Year Growth

3-Year

Growth

Revenue 381 776 666

Income 2017 811 978

Dividend 1536 947 1016

Capital Spending 697 NA 1052

RampD 000 NA 000

Normalized Inc 1158 NA 979

CHANGES YTD vs

Last YTD

Curr Qtr vs

Qtr 1-Yr ago

Annual vs

Last Annual

Revenue 21 -02 122

Earnings -14 -35 113

EPS 10 -14 151

EPS $ 004 -002 069

SOLVENCY RATIOS

SHORT-TERM SOLVENCY RATIOS

(LIQUIDITY)

Net Working Capital Ratio 271

Current Ratio 13

Quick Ratio (Acid Test) 10

Liquidity Ratio (Cash) 067

Receivables Turnover 215

Average Collection Period 17

Working CapitalEquity 62

Working Capital pS 088

Cash-Flow pS 677

Free Cash-Flow pS 209

24

FINANCIAL STRUCTURE RATIOS

Altmans Z-Score Ratio 485

Financial Leverage Ratio (AssetsEquity) 23

Debt Ratio 564

Total DebtEquity (Gearing Ratio) 087

LT DebtEquity 084

LT DebtCapital Invested 569

LT DebtTotal Liabilities 652

Interest Cover 173

InterestCapital Invested 167

25

People hellip McDonaldrsquos 1 Resource in India

26

McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs

around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in

1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with

McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)

The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive

training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course

(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the

Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University

27

The McDonaldrsquos Promise

QUALITY SERVICE CLEANLINESS amp VALUE

When asked to explain McDonalds success founder Ray Kroc used to say We

take the hamburger business more seriously than anyone else

Kroc was a perfectionist From the day he opened his first restaurant he vowed

to give his customers high quality products served quickly --and with a smile

in a clean and pleasant environment and all at a fair price Quality Service

Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds

business

QUALITY

McDonalds India serves only the highest quality products The attention to food

quality started long before the first restaurant opened McDonalds India has

established close relationships with local suppliers who provide McDonalds

with the highest quality freshest ingredients to make its products

All suppliers adhere to Indian government regulations on food health and

hygiene while continuously maintaining McDonalds own recognized standards

McDonalds has established an extensive cold chain distribution system in

India to ensure that the products which arrive at the restaurant from suppliers

all over India are absolutely fresh In the restaurants products and supplies are

used on a first-in first-out basis to ensure freshness All McDonalds products

are prepared using modern state-of-the-art cooking equipment to ensure quality

and safety

SERVICE

McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos

which sets its restaurants apart from others At McDonalds the customer

always comes first Every employee strives to provide 100 percent customer

satisfaction -- for every customer -- every visit This includes friendly and

attentive service accuracy in order taking and anticipation of customers needs

-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun

and youthful spirit we will proudly serve an exceptional McDonaldrsquos

eating experience that makes all people feel special and makes them smile ndash

every customer every timerdquo

28

CLEANLINESS

McDonalds restaurants provide a clean comfortable environment especially

suited for families McDonalds stringent cleaning standards ensure that all

tables seating highchairs and trays are sanitized several times each hour The

attention to cleanliness extends from the lobby to the kitchen to the sidewalk

and immediate areas outside the restaurant

In addition to urging customers to dispose of their litter properly and offering a

number of trash bins (both inside and outside the restaurants) for their

convenience McDonalds Litter Patrols walk around the restaurants several

times each day picking up litter -- even if it isnt from McDonalds

Restaurant managers walk through the dining areas each hour to ensure that it

is clean and well stocked All restaurants provide a variety of comfortable

seating arrangements to accommodate anyone -- from a single individual to a

large family The environment is warm inviting and well lit

VALUE

McDonalds menu is priced at a value that the largest segment of Indian

consumers can afford McDonalds does not sacrifice quality for value -- rather

McDonalds leverages economies of scale to minimize costs while maximizing

value to customers

McDonalds definition of value is broader than most restaurants of its kind -- it

is more than price Value at McDonalds is the sum of the total McDonalds

experience quality food fast friendly service a clean and pleasant

environment and products priced at very affordable prices for the largest

segment of Indian consumers possible That is value at McDonalds

29

McDonaldrsquos Indiahellip Culturally Sensitive

Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much

that is consistent with other McDonaldrsquos restaurants around the world such as

the quality of the food and the attention to service

The dedication to local cultures is not new for McDonaldrsquos For the past 50

years McDonaldrsquos has opened restaurants in more than 120 distinctly different

countries and cultures With guidance from its local partners McDonaldrsquos is

able to adapt- where necessary-its menu and restaurant operations to

complement existing eating-out options McDonaldrsquos local owners understand

what their customers want perhaps more importantly what is acceptable within

local customs and values

There is much too that is very different- such as the first beef-less and pork-

less menu in the world and special product formulations to cater to Indian

culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos

India says ldquoWe know the Indian culture because we were born in it

inherited its richness and respect it greatly It is the respect for this culture

and the sentiments of many of our customersrsquo that we do not serve any

beef and pork items in our restaurantsrdquo

McDonaldrsquos commitment to its Indian customers is evident even in

development of special sauces that use local spices and chillies The

mayonnaise and all other sauces are egg-less

In India vegetarianism is in many cases more than a lifestyle choice Many

people are vegetarians due to religious reasons and in some cases even the

vegetarian product that has come into contact with a non-vegetarian product is

unacceptable Hence McDonaldrsquos India has also changed its operations to

address the special requirements of our vegetarian customers by having

processes that ensure that a physical separation of veg and non-veg products is

maintained right from farm to the customer Vegetable products are prepared

separately using dedicated equipment and utensils Also in India McDonaldrsquos

uses only vegetable oil as a medium for cooking

30

McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash

lsquoto be driven by the leadership of local ownersrsquo This commitment has translated

into enduring benefits to the businesses at the grass root level in the areas of

introduction of new crops new agricultural practices and food processing methods

and procedures

McDonalds unique cold chain on which the QSR major has spent more than six

years setting up in India has brought about a veritable revolution immensely

benefiting the farmers at one end and enabling customers at retail counters get the

highest quality food products absolutely fresh and at great value

Setting up this extensive cold chain distribution system has involved the transfer of

state-of-the-art food processing technology by McDonalds and its international

suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain

From Field to -2⁰C in 90 Minutes

Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be

grown during the winter months but with McDonalds expertise in the area of

agriculture they are now able to grow this crop through the year

Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room

to remove field heat a large cold room and a refrigerated van for transportation where

the temperature and the relative humidity of the crop is maintained between 1ordm C and

4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room

within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling

to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at

the farms itself ensuring no delay between harvesting pre-cooling packaging and

cold storage

Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd

Flavour and Freshness locked in at - 35degC

Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable

range of products is another important player in this cold chain This includes hi-tech

refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C

This is vital to ensure that the frozen food retains it freshness for a long time and the

cold chain is maintained The frozen product is immediately moved to cold storage

rooms

31

Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes

McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for

quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk

coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -

thus maintaining the cold chain

All leading to the Consumer

McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The

DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity

of the products throughout the entire cold chain

Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the

McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C

as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state

All these suppliers share McDonalds commitment and dedication to satisfying

customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently

each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental

effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn

more

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 4: Entrepreneurship m com a

4

McDonalds revenues grew 27 percent over the three years ending in 2007 to

$228 billion and 9 percent growth in operating income to $39 billion McDonalds primarily sells hamburgers cheese burgers chicken French

fries breakfast items soft drinks milkshakes and desserts In response to changing consumer tastes the company has expanded its menu to

include salads wraps smoothes and fruits

An exterior view of the worlds largest McDonalds restaurant built on 2012

London Olympics site

In July 2011 McDonalds announced that their largest restaurant in the world

will be built on the 2012 London Olympics site The restaurant will contain over 1500 seats and is half the length of an American Football field Over 470

staff will be employed serving on average (during the 2012 Olympics) 100000 portions of fries 50000 Big Macs and 30000 Milkshakes This restaurant will

overshadow the current largest McDonalds in the world in Moscow Russia In January 2012 the company announced revenue for 2011 reached an all-time

high of $27 billion and that 2400 restaurants would be updated and 1300 new ones opened worldwide

5

History of McDonalds

The McDonalds restaurant concept was introduced in San Bernardino

California by Dick and Mac McDonald of Manchester New Hampshire It was

modified and expanded by their business partner Ray Kroc of Oak Park

Illinois who later bought out the business interests of the McDonald brothers in

the concept and went on to found McDonalds Corporation

McDonalds is the leading global foodservice retailer with more than 32000

local restaurants serving more than 58 million people in around 130 countries

each day 70 percent of our restaurants worldwide are owned and operated by

independent local businessmen and businesswomen

In India the brand is managed by two business entities

Connaught Plaza Restaurants Private Limited led by Mr Vikram Bakshi

JV Partner and Managing Director North amp East India

Hardcastle Restaurants Private Limited led by Ms Smita Jatia Managing

Director South amp West India

McDonalds philosophy of QSCV (Quality Service Cleanliness and Value) is

the guiding force behind its service to the customers in India Following its

philosophy of being sensitive to local food and cultural preferences India was

the first country in the McDonalds system where it served non-beef and non-

pork products More than 70 percent of the menu in India has been locally

developed with complete segregation of vegetarian and non-vegetarian products

right from the food processing plants to the point of serving the customers

McDonalds commitment to its Indian customers is evident even in development

6

of special sauces that use local spices and chillies The mayonnaise and all other

sauces are egg-less McDonalds also pioneered the establishment of Cold Chain

across India which helps maintain freshness and nutrition in every product

McDonalds regular scrumptious menu includes wide range of products like McAloo Tikki Filet-O-Fish Spicy Range Chicken McGrill McVeggie Veg Pizza McPuff Chicken Mcnuggetsreg Fries Wraps an assortment of Sundaes

Soft Serve and refreshing beverages such as Ice Tea amp Cold Coffee with outstanding service in a vibrant and lively ambience for which McDonalds is

known worldwide

McDonalds had further reinforced the branded affordability mantra via the introduction of the Happy Price Menu which starts at Rs 25 only

McAloo Tikki Veg Surprise and Pizza McPuff developed in India are now being exported to the countries in the Middle East

McDonaldrsquos introduced Cokersquos Georgia Gold range of hot beverages which was developed especially for the Indian market in 2002

As a leader in QSR segment (Quick Service Restaurant) McDonaldrsquos has

pioneered various industry benchmark practices over the past decade of serving Indian customers including new concepts such ashellip

Oil Alliances in India by inking with petroleum giants BPCL and HPCL

The two such alliances with BPCL outlets are in Mathura (2000) (UP) and Doraha (2002) (Punjab)

Novel menu formats such as an Express Model with a limited menu and Kiosks with a variety of dessert offerings

Home Delivery (McDeliverytrade) Providing even more convenience to

our customers In Oct 2006 McDelivery on bicycle at Chandni Chowk was launched and in March lsquo07 an all India single delivery number (66

000 666) was introduced

First Drive Thru Restaurant at NOIDA (UP) in 1997

First Restaurant with operational Kitchen at Delhi Domestic

Keeping pace with the customer evolving needs McDonalds also functions on models that drive convenience and create unique differentiation like

McDelivery Drive thru Breakfast Menu high ways and extended hours (Currently available in select cities)

At present there are 300 McDonalds restaurants in India

The strong foundation that Ray Kroc built continues today with McDonalds

7

vision and commitment for its internal as well as external customers Since then it has evolved into a value driven brand and recognizes that affordability of its

products is an attractive proposition for its customers along with taste McDonalds continues to strengthen it business model and progress with

customers evolving needs

Key Landmarks - McDonaldrsquos India Journey

1996 hellipthe first McDonaldrsquos restaurant opened on Oct 13 at Basant Lok

Vasant Vihar New Delhi It was also the first McDonaldrsquos restaurant in the

world not serving beef on its menu

1997hellip

the first Drive ndashThru restaurant at Noida (UP)

the first disabled friendly store at Noida (UP)

1999hellipthe first Mall location restaurant at Ansal Plaza (New Delhi)

2000hellipthe first highway restaurant at Mathura (UP)

2001hellipthe first thematic restaurant at Connaught Place (New Delhi)

2002hellip

The first restaurant in a food court at 3Crsquos Lajpat Nagar (New Delhi)

The first restaurant at the Delhi Metro Station at Inter State Bus Terminus

The first fundraiser in association with ORBIS and Dr Shroffrsquos Charity

Eye hospital(Delhi)

2003 The first Dessert Kiosk ndash Faridabad (Haryana)

2004hellip McDonaldrsquos Delivery Service (McDelivery) introduced in New Delhi

2003-04hellip Indigenous products like McAloo Tikki McVeggie and Pizza

McPuff exported to Middle East countries

8

2006

McDelivery on Bicycles flagged off at Chandni Chowk (Delhi)- another

first initiative by McDonaldrsquos India

100th McDonaldrsquos Restaurant in India

10th Year Anniversary

2007

The first McDonaldrsquos open in Eastern Region at Park Street Kolkata

The first restaurant opened at Airport (Domestic Airport New Delhi)

The first MFY restaurant opened at Greater Noida Uttar Pradesh

2008hellip

The First restaurant to start extended hours procedure at Cyber Greens

Gurgaon and Saket New Delhi

The first restaurant to start Breakfast Menu at Janpath New Delhi

2009hellipThe first McDonaldrsquos Restaurant opens at Old Delhi Railway Station

2010hellipThe first reimaged new look restaurant opened at Ambiance mall

Vasant Kunj 6

2011hellip

McDonaldrsquos introduces premium products in it is menu ndash McSpicy range

of products

McDonaldrsquos introduces Mcflurry (premium desserts) in Oreo and

chocolate crispy flavors

McDonaldrsquos introduces Wi-Fi across DelhiNCR region

McDonaldrsquos currently has 235 restaurants in India

The Northern Region has 110 restaurants ndash

sect Delhi ndash 40

sect Haryana - 15

Faridabad ndash3 Manesar ndash 2 (Highway and Drive - Thru) Gurgaon ndash7

Karnal ndash 1 (Highway and Drive - Thru) Panipat -1 Ambala -1

9

sect Rajasthan -6

Jaipur ndash 3 Jodhpur ndash 1 Kota -1 Udaipur - 1

sect Uttaranchal -1

Dehradun ndash 1

sect Uttar Pradesh ndash29

Noida ndash 5 Greater Noida ndash 1 Ghaziabad ndash 7 Mathura ndash 1 (Highway and

Drive - Thru) Kanpur ndash 2 Meerut ndash 2 Lucknow ndash5 Agra ndash 1 Allahabad

ndash 1 Varanasi -2 Gajraula ndash 1 (Highway amp Drive Thru) Khatauli -

1(Highway and Drive thru)

sect Punjab ndash 13

Chandigarh ndash 2 Ludhiana ndash 2 Doraha ndash 1 (Highway and Drive - Thru)

Jalandhar ndash 2 Patarsi ndash 1 (Highway and Drive - Thru) Dasuya (Highway

and Drive Thru) ndash 1 Amritsar -1 Patiala -1 Zirakpur-2

sect West Bengal-3

Kolkata- 3

sect Himachal Pradesh -1

Jabli-1

sect Madhya Pradesh -2

Gwalior ndash 1 Bhopal -1

----------------------------------------------

The Western Region has 125 restaurants across the following states and cities ndash

Maharashtra - Mumbai Pune Nasik Kolhapur ndash

Gujarat - Ahmedabad Vododara Surat Indore Vapi

Madhya Pradesh ndash Indore

Andhra Pradesh - Hyderabad

Karnataka - Bangalore

Tamil Nadu - Chennai

10

GOALS AND OBJECTIVES

1 McDonaldrsquos vision is to be the worldrsquos best quick service restaurants

experience

2 McDonalds is committed to maintaining and developing the best food

products in the quick service restaurant market

3 In order to deliver this the company has made a number of commitments to

food safety and nutrition

4 Lead the Quick Service Restaurant market by a program of site development

and profitable restaurant openings and by attracting new customers Increasing

sales through promotions will enable them to continue their program of

expansion

5 McDonalds have an objective to continual enhance and improve their menu

This will better satisfy their customers and give customers more reason to visit

Many ideas for new items on the menu come from the franchisees responding to

customer demand Consumer tastes change over time and McDonalds has to

respond to these changes

MISSION STATEMENT

McDonalds vision is to be the worlds best quick service restaurant experience

Being the best means providing outstanding quality service cleanliness and

value so that we make every customer in every restaurant smile

11

AWARDS

McDonaldrsquos India has received many prestigious awards for its service and

performance including

The lsquoMost Respected Companyrsquo for four consecutive years (2003-2006)

in the Food Services sector by Businessworld

The lsquoMost Preferred Fast Food Outletrsquo 2006 amp 2007 by Awaaz

Consumer Award hosted by CNBC

Star Retailer ndash the lsquoConsumer Way Food Services Retailerrsquo of the

Year 2006 amp 2007 2008 by Franchise India

lsquoRetailer of the Yearrsquo Award for catering services (2004-2006) at the

Images Retail Awards

The lsquoAmity Corporate Excellence Awardrsquo ndashin 2007 amp 2008

The lsquoMost Wanted Brand of the Yearrsquo Award 2003 amp 2004 by

Franchising Holdings India Ltd

The lsquoMost Admired F amp B Retailer of the Year QSRs Foreign

Originrsquo ndash The Golden Spoon Awards by Images Retail

The Company with the Best Corporate Conscience ndash 2008 by Business

amp Economy

lsquoValue for Moneyrsquo brand ndash 2010 by Pitch Magazine

The most trusted family restaurant brand in the country award in

2010 by Readerrsquos Digest

12

Corporate Social Responsibility

Being responsible is at the core of everything that we do at McDonaldstrade It is

a deep-rooted value and a tradition that dates back to our founder Ray Kroc It is also one of our top business priorities

We believe that our continuing success depends on our stakeholders trust in

each and every aspect of our business be it the quality and safety of the food we serve in the way we do our business the way we connect and make the difference in the communities we operate being sensitive to environment and

being sustainable

1 We are committed to doing what is right

2 We are committed to be a good neighbour and partner in the community

3 We are committed to conducting our business ethically and with complete transparency

4 We are committed to treating our entire internal and external stakeholders with respect and dignity

13

McDonaldrsquos International

McDonaldrsquos has over 32000 local restaurants in more than 100 countries

70 percent of our restaurants worldwide are owned and operated by

independent local businessmen and businesswomen

McDonaldrsquos serves nearly 50 million customers each day

McDonaldrsquos first franchised restaurant opened at Des Plaines Illinois in

1955 by the founder Ray Kroc

McDonaldrsquos has its own Hamburger University in Illinois and the first

batch graduated in 1961

12 classes offered at Hamburger University are college accredited

In 1963 McDonaldrsquos sold its one billionth hamburger

McDonaldrsquos is listed on the New York Frankfurt Munich Paris and

Tokyo stock exchanges

McDonaldrsquos aired its first network TV advertisement ldquoMcDonaldrsquos -

Where Quality Starts Fresh Everydayrdquo in 1965

The first McDonaldrsquos Drive-Thru opened in Sierra Vista Arizona in 1975

14

Happy Meals were added to McDonaldrsquos menu in 1979

McDonaldrsquos launched the new worldwide Balanced Active Lifestyles

public awareness campaign in 2005

McDonaldrsquos celebrated its 50th Anniversary on April 15 2005

Business model

McDonalds Corporation earns revenue as an investor in properties

a franchiser of restaurants and an operator of restaurants Approximately 15 of McDonalds restaurants are owned and

operated by McDonalds Corporation directly The remainder are operated by others through a variety of franchise agreements and

joint ventures

The McDonalds Corporations business model is slightly different

from that of most other fast-food chains In addition to ordinary franchise fees and marketing fees which are calculated as

a percentage of sales McDonalds may also collect rent which may also be calculated on the basis of sales

As a condition of many franchise agreements which vary by

contract age country and location the Corporation may own or lease the properties on which McDonalds franchises are located In most if not all cases the franchisee does not own the location of its

restaurants

The United Kingdom and Ireland business model is different than the US in that fewer than 30 of restaurants are franchised with

the majority under the ownership of the company McDonalds trains its franchisees and others at Hamburger Univers ity in Oak

Brook Illino is

In other countries McDonalds restaurants are operated by joint

ventures of McDonalds Corporation and other local entities or governments

15

As a matter of policy McDonalds does not make direct sales of food or materials to franchisees instead organizing the supply of

food and materials to restaurants through approved third party logistics operators

According to Fast Food Nation by Eric Schlosser nearly one in

eight workers in the US have at some time been employed by McDonalds It also states that McDonalds is the largest private

operator of playgrounds in the US as well as the single largest purchaser of beef pork potatoes and apples The selection of

meats McDonalds uses varies with the culture of the host country

MARKETING MIX

The marketing mix of a company consists of the various elements as follows

which form the core of a companyrsquos marketing system and hence helps to

achieve marketing objectives The marketing mix of McDonaldrsquos is as follows-

The McDonald plains its marketing by simple keeping 4Ps in mind

Product

Price

Promotion

Place

Product - McDonaldrsquos places considerable emphasis on developing a menu

which customers want Market research establishes exactly what this is However customersrsquo requirements change over time In order to meet these

changes McDonaldrsquos has introduced new products and phased out old ones and will continue to do so Care is taken not to adversely affect the sales of one choice by introducing a new choice which will cannibalise sales from the

existing one (trade off) McDonaldrsquos knows that items on its menu will vary in popularity Their ability to generate profits will vary at different points in their

cycle In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian

The happy meal for the children is a great seller among others

Price-The customerrsquos 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 physical item it also has psychological

connotations for the customer The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised It is

16

important when deciding on price to be fully aware of the brand and its integrity

In India McDonalds classifies its products into 2 categories namely the branded

affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and

the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price

perceptions

Promotion- The promotions aspect of the marketing mix covers all types of

marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and

in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct

mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that

provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be

supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item

At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart

from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos

Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the

management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities

making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers

17

Other than the main four elements mentioned above there are a few other

elements too in the marketing mix which are as follows-

People -The employees in McDonaldrsquos have a standard uniform and

McDonaldrsquos specially focuses on friendly and prompt service to its customers

from their employees

Process -The food manufacturing process at McDonaldrsquos is completely

transparent ie the whole process is visible to the customers In fact the fast

food joint allows its customers to view and judge the hygienic standards at

McDonaldrsquos by allowing them to enter the area where the process takes place

The customers are invited to check the ingredients used in food

Physical evidence - McDonalds focuses on clean and hygienic interiors of

is outlets and at the same time the interiors are attractive and the fast food joint

maintains a proper decorum at its joints

18

SWOT ANALYSIS

Strengths

McDonaldrsquos holds a very strong brand name worldwide

They have large partnerships with other companies that provide them

with their desired products this increases the goodwill of the company

McDonaldrsquos is one of the most reputed firms who are socially

responsible

Loyal employees amp management amp customer are their biggest strength

19

McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind

while providing food to different countries

Clean environment and play areas for children where they can enjoy their

time

Weakness

The weakness that hits the list of employee turnover rate Every year

many of their employees are fired out of the restaurant

McDonalds mostly advertises products and food items that targets

children

Health conscious people often complain that they do not provide us with

the organic and healthy food This becomes their weakness when they get in the complaints

They also face quality issue at times This affects the business as they are

running the outlet worldwide if one franchise gets affected others also

get a bad name

Opportunities

It can open up online services for their customers so that they can easily

order their desired meals sitting at home

Discounts given on every food item may help them gain more customers

They can go for a joint venture with the retailers they work with

They can introduce healthy hamburgers and healthy drinks for the people who are health conscious

20

In order to be environment friendly they can use packing material which

can be recycled later or material that does not create pollution

Threats

Emerging competition of similar outlets is becoming a problem for McDonalds

Health issue also becomes a problem when it comes to food

As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies

Recession in any country would definitely affect the whole outlet

worldwide

People facing heart problems and obesity accuse McDonalds for not

providing them with the healthy food

They have a threat of local food outlets in different countries

McDonalds is operating in a fully fledged economy where competition is

increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession

McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local

Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government

regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled

Indian businesses to grow by improving their ability to compete in todays international markets

21

Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in

predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first

restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept

has today been adopted by various Indian and International players to deliver quality produce to consumers

For instance Cremica Industries worked with another McDonalds supplier

from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to

McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with

farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water

consumption better seeds amp agricultural management practices which result in greater yields

In some cases these Indian suppliers had the technology - but no market for the

products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk

casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to

restaurants across India

McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations

COMPANYrsquoS FINANCIAL INFORMATION

Company Name McDonalds Corporation

Ticker Symbol MCD

Web Address wwwmcdonaldscom

CEO Mr Donald Thompson

No of Employees 420000

Common Issue Type CS

Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other

22

goods from numerous independent suppliers

Industry Information LEISURE - Restaurants

Price Day Change Bid Ask Open High Low Volume

8718 -002 - - 8743 8743 8676 3658828

Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range

875267 10040 039 527 253 164 35 10222 - 8331

KEY FIGURES (Latest Twelve Months - LTM)

Yesterdays Close 8706 $

PE Ratio - LTM 164

Market Capitalisation 875267 mil

Latest Shares Outstanding 10040 mil

Earnings pS (EPS) 527 $

Dividend pS (DPS) 253 cent

Dividend Yield 35

Dividend Payout Ratio 48

Revenue per Employee 64300 $

Effective Tax Rate 313

Float 10153 mil

Float as of Shares Outstanding 999

Foreign Sales 18478 mil

Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue

910

Research amp Devlopment (RampD) as of Revenue

000

Gross Profit Margin 447

EBITDA Margin 356

Pre-Tax Profit Margin 291

Assets Turnover 08

Return on Assets (ROA) 161

Return on Equity (ROE) 392

Return on Capital Invested (ROCI) 204 Current Ratio 10

Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096

LT DebtTotal Capital 480

Working Capital pS 006 $

Cash pS 217 $

Book-Value pS 1383 $

Balance Sheet (at a glance) in Millions

DIVIDEND INFO

Dividend Declared Date 09202012

Dividend Ex-Date 11282012

Dividend Record Date 12022012

Dividend Pay Date 12162012

Dividend Amount 770

Type of Payment Cash Payment

Dividend Rate 308

Current Dividend Yield 35

5-Y Average Dividend Yield 31

Payout Ratio 480

5-Y Average Payout Ratio 530

Share price performance previous 3 years

Share price performance intraday

23

Tangible Book-Value pS 1110 $

Cash Flow pS 689 $

Free Cash Flow pS 125 $

KEY FIGURES (LTM) Price info PriceBook Ratio 630

PriceTangible Book Ratio 785 PriceCash Flow 126

PriceFree Cash Flow 699

PE as of Industry Group 420

PE as of Sector Segment 770

PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol

1 Week - - - 00 101 54041 66217

4 Weeks 8743 8331 8474 27 101 57129 856929

13 Weeks 9416 8331 9102 -44 98 61288 3554700

26 Weeks 9416 8331 8775 -08 93 59419 7189758

52 Weeks 10222 8331 9803 -112 79 59272 14521666

YTD 10222 8331 - -132 77 59774 13807695

Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)

8661 8631 8825 8931 9174 039 031

GROWTH RATES 5-Year

Growh Rsup2 of 5-Year Growth

3-Year

Growth

Revenue 381 776 666

Income 2017 811 978

Dividend 1536 947 1016

Capital Spending 697 NA 1052

RampD 000 NA 000

Normalized Inc 1158 NA 979

CHANGES YTD vs

Last YTD

Curr Qtr vs

Qtr 1-Yr ago

Annual vs

Last Annual

Revenue 21 -02 122

Earnings -14 -35 113

EPS 10 -14 151

EPS $ 004 -002 069

SOLVENCY RATIOS

SHORT-TERM SOLVENCY RATIOS

(LIQUIDITY)

Net Working Capital Ratio 271

Current Ratio 13

Quick Ratio (Acid Test) 10

Liquidity Ratio (Cash) 067

Receivables Turnover 215

Average Collection Period 17

Working CapitalEquity 62

Working Capital pS 088

Cash-Flow pS 677

Free Cash-Flow pS 209

24

FINANCIAL STRUCTURE RATIOS

Altmans Z-Score Ratio 485

Financial Leverage Ratio (AssetsEquity) 23

Debt Ratio 564

Total DebtEquity (Gearing Ratio) 087

LT DebtEquity 084

LT DebtCapital Invested 569

LT DebtTotal Liabilities 652

Interest Cover 173

InterestCapital Invested 167

25

People hellip McDonaldrsquos 1 Resource in India

26

McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs

around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in

1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with

McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)

The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive

training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course

(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the

Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University

27

The McDonaldrsquos Promise

QUALITY SERVICE CLEANLINESS amp VALUE

When asked to explain McDonalds success founder Ray Kroc used to say We

take the hamburger business more seriously than anyone else

Kroc was a perfectionist From the day he opened his first restaurant he vowed

to give his customers high quality products served quickly --and with a smile

in a clean and pleasant environment and all at a fair price Quality Service

Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds

business

QUALITY

McDonalds India serves only the highest quality products The attention to food

quality started long before the first restaurant opened McDonalds India has

established close relationships with local suppliers who provide McDonalds

with the highest quality freshest ingredients to make its products

All suppliers adhere to Indian government regulations on food health and

hygiene while continuously maintaining McDonalds own recognized standards

McDonalds has established an extensive cold chain distribution system in

India to ensure that the products which arrive at the restaurant from suppliers

all over India are absolutely fresh In the restaurants products and supplies are

used on a first-in first-out basis to ensure freshness All McDonalds products

are prepared using modern state-of-the-art cooking equipment to ensure quality

and safety

SERVICE

McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos

which sets its restaurants apart from others At McDonalds the customer

always comes first Every employee strives to provide 100 percent customer

satisfaction -- for every customer -- every visit This includes friendly and

attentive service accuracy in order taking and anticipation of customers needs

-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun

and youthful spirit we will proudly serve an exceptional McDonaldrsquos

eating experience that makes all people feel special and makes them smile ndash

every customer every timerdquo

28

CLEANLINESS

McDonalds restaurants provide a clean comfortable environment especially

suited for families McDonalds stringent cleaning standards ensure that all

tables seating highchairs and trays are sanitized several times each hour The

attention to cleanliness extends from the lobby to the kitchen to the sidewalk

and immediate areas outside the restaurant

In addition to urging customers to dispose of their litter properly and offering a

number of trash bins (both inside and outside the restaurants) for their

convenience McDonalds Litter Patrols walk around the restaurants several

times each day picking up litter -- even if it isnt from McDonalds

Restaurant managers walk through the dining areas each hour to ensure that it

is clean and well stocked All restaurants provide a variety of comfortable

seating arrangements to accommodate anyone -- from a single individual to a

large family The environment is warm inviting and well lit

VALUE

McDonalds menu is priced at a value that the largest segment of Indian

consumers can afford McDonalds does not sacrifice quality for value -- rather

McDonalds leverages economies of scale to minimize costs while maximizing

value to customers

McDonalds definition of value is broader than most restaurants of its kind -- it

is more than price Value at McDonalds is the sum of the total McDonalds

experience quality food fast friendly service a clean and pleasant

environment and products priced at very affordable prices for the largest

segment of Indian consumers possible That is value at McDonalds

29

McDonaldrsquos Indiahellip Culturally Sensitive

Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much

that is consistent with other McDonaldrsquos restaurants around the world such as

the quality of the food and the attention to service

The dedication to local cultures is not new for McDonaldrsquos For the past 50

years McDonaldrsquos has opened restaurants in more than 120 distinctly different

countries and cultures With guidance from its local partners McDonaldrsquos is

able to adapt- where necessary-its menu and restaurant operations to

complement existing eating-out options McDonaldrsquos local owners understand

what their customers want perhaps more importantly what is acceptable within

local customs and values

There is much too that is very different- such as the first beef-less and pork-

less menu in the world and special product formulations to cater to Indian

culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos

India says ldquoWe know the Indian culture because we were born in it

inherited its richness and respect it greatly It is the respect for this culture

and the sentiments of many of our customersrsquo that we do not serve any

beef and pork items in our restaurantsrdquo

McDonaldrsquos commitment to its Indian customers is evident even in

development of special sauces that use local spices and chillies The

mayonnaise and all other sauces are egg-less

In India vegetarianism is in many cases more than a lifestyle choice Many

people are vegetarians due to religious reasons and in some cases even the

vegetarian product that has come into contact with a non-vegetarian product is

unacceptable Hence McDonaldrsquos India has also changed its operations to

address the special requirements of our vegetarian customers by having

processes that ensure that a physical separation of veg and non-veg products is

maintained right from farm to the customer Vegetable products are prepared

separately using dedicated equipment and utensils Also in India McDonaldrsquos

uses only vegetable oil as a medium for cooking

30

McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash

lsquoto be driven by the leadership of local ownersrsquo This commitment has translated

into enduring benefits to the businesses at the grass root level in the areas of

introduction of new crops new agricultural practices and food processing methods

and procedures

McDonalds unique cold chain on which the QSR major has spent more than six

years setting up in India has brought about a veritable revolution immensely

benefiting the farmers at one end and enabling customers at retail counters get the

highest quality food products absolutely fresh and at great value

Setting up this extensive cold chain distribution system has involved the transfer of

state-of-the-art food processing technology by McDonalds and its international

suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain

From Field to -2⁰C in 90 Minutes

Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be

grown during the winter months but with McDonalds expertise in the area of

agriculture they are now able to grow this crop through the year

Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room

to remove field heat a large cold room and a refrigerated van for transportation where

the temperature and the relative humidity of the crop is maintained between 1ordm C and

4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room

within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling

to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at

the farms itself ensuring no delay between harvesting pre-cooling packaging and

cold storage

Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd

Flavour and Freshness locked in at - 35degC

Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable

range of products is another important player in this cold chain This includes hi-tech

refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C

This is vital to ensure that the frozen food retains it freshness for a long time and the

cold chain is maintained The frozen product is immediately moved to cold storage

rooms

31

Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes

McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for

quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk

coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -

thus maintaining the cold chain

All leading to the Consumer

McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The

DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity

of the products throughout the entire cold chain

Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the

McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C

as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state

All these suppliers share McDonalds commitment and dedication to satisfying

customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently

each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental

effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn

more

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 5: Entrepreneurship m com a

5

History of McDonalds

The McDonalds restaurant concept was introduced in San Bernardino

California by Dick and Mac McDonald of Manchester New Hampshire It was

modified and expanded by their business partner Ray Kroc of Oak Park

Illinois who later bought out the business interests of the McDonald brothers in

the concept and went on to found McDonalds Corporation

McDonalds is the leading global foodservice retailer with more than 32000

local restaurants serving more than 58 million people in around 130 countries

each day 70 percent of our restaurants worldwide are owned and operated by

independent local businessmen and businesswomen

In India the brand is managed by two business entities

Connaught Plaza Restaurants Private Limited led by Mr Vikram Bakshi

JV Partner and Managing Director North amp East India

Hardcastle Restaurants Private Limited led by Ms Smita Jatia Managing

Director South amp West India

McDonalds philosophy of QSCV (Quality Service Cleanliness and Value) is

the guiding force behind its service to the customers in India Following its

philosophy of being sensitive to local food and cultural preferences India was

the first country in the McDonalds system where it served non-beef and non-

pork products More than 70 percent of the menu in India has been locally

developed with complete segregation of vegetarian and non-vegetarian products

right from the food processing plants to the point of serving the customers

McDonalds commitment to its Indian customers is evident even in development

6

of special sauces that use local spices and chillies The mayonnaise and all other

sauces are egg-less McDonalds also pioneered the establishment of Cold Chain

across India which helps maintain freshness and nutrition in every product

McDonalds regular scrumptious menu includes wide range of products like McAloo Tikki Filet-O-Fish Spicy Range Chicken McGrill McVeggie Veg Pizza McPuff Chicken Mcnuggetsreg Fries Wraps an assortment of Sundaes

Soft Serve and refreshing beverages such as Ice Tea amp Cold Coffee with outstanding service in a vibrant and lively ambience for which McDonalds is

known worldwide

McDonalds had further reinforced the branded affordability mantra via the introduction of the Happy Price Menu which starts at Rs 25 only

McAloo Tikki Veg Surprise and Pizza McPuff developed in India are now being exported to the countries in the Middle East

McDonaldrsquos introduced Cokersquos Georgia Gold range of hot beverages which was developed especially for the Indian market in 2002

As a leader in QSR segment (Quick Service Restaurant) McDonaldrsquos has

pioneered various industry benchmark practices over the past decade of serving Indian customers including new concepts such ashellip

Oil Alliances in India by inking with petroleum giants BPCL and HPCL

The two such alliances with BPCL outlets are in Mathura (2000) (UP) and Doraha (2002) (Punjab)

Novel menu formats such as an Express Model with a limited menu and Kiosks with a variety of dessert offerings

Home Delivery (McDeliverytrade) Providing even more convenience to

our customers In Oct 2006 McDelivery on bicycle at Chandni Chowk was launched and in March lsquo07 an all India single delivery number (66

000 666) was introduced

First Drive Thru Restaurant at NOIDA (UP) in 1997

First Restaurant with operational Kitchen at Delhi Domestic

Keeping pace with the customer evolving needs McDonalds also functions on models that drive convenience and create unique differentiation like

McDelivery Drive thru Breakfast Menu high ways and extended hours (Currently available in select cities)

At present there are 300 McDonalds restaurants in India

The strong foundation that Ray Kroc built continues today with McDonalds

7

vision and commitment for its internal as well as external customers Since then it has evolved into a value driven brand and recognizes that affordability of its

products is an attractive proposition for its customers along with taste McDonalds continues to strengthen it business model and progress with

customers evolving needs

Key Landmarks - McDonaldrsquos India Journey

1996 hellipthe first McDonaldrsquos restaurant opened on Oct 13 at Basant Lok

Vasant Vihar New Delhi It was also the first McDonaldrsquos restaurant in the

world not serving beef on its menu

1997hellip

the first Drive ndashThru restaurant at Noida (UP)

the first disabled friendly store at Noida (UP)

1999hellipthe first Mall location restaurant at Ansal Plaza (New Delhi)

2000hellipthe first highway restaurant at Mathura (UP)

2001hellipthe first thematic restaurant at Connaught Place (New Delhi)

2002hellip

The first restaurant in a food court at 3Crsquos Lajpat Nagar (New Delhi)

The first restaurant at the Delhi Metro Station at Inter State Bus Terminus

The first fundraiser in association with ORBIS and Dr Shroffrsquos Charity

Eye hospital(Delhi)

2003 The first Dessert Kiosk ndash Faridabad (Haryana)

2004hellip McDonaldrsquos Delivery Service (McDelivery) introduced in New Delhi

2003-04hellip Indigenous products like McAloo Tikki McVeggie and Pizza

McPuff exported to Middle East countries

8

2006

McDelivery on Bicycles flagged off at Chandni Chowk (Delhi)- another

first initiative by McDonaldrsquos India

100th McDonaldrsquos Restaurant in India

10th Year Anniversary

2007

The first McDonaldrsquos open in Eastern Region at Park Street Kolkata

The first restaurant opened at Airport (Domestic Airport New Delhi)

The first MFY restaurant opened at Greater Noida Uttar Pradesh

2008hellip

The First restaurant to start extended hours procedure at Cyber Greens

Gurgaon and Saket New Delhi

The first restaurant to start Breakfast Menu at Janpath New Delhi

2009hellipThe first McDonaldrsquos Restaurant opens at Old Delhi Railway Station

2010hellipThe first reimaged new look restaurant opened at Ambiance mall

Vasant Kunj 6

2011hellip

McDonaldrsquos introduces premium products in it is menu ndash McSpicy range

of products

McDonaldrsquos introduces Mcflurry (premium desserts) in Oreo and

chocolate crispy flavors

McDonaldrsquos introduces Wi-Fi across DelhiNCR region

McDonaldrsquos currently has 235 restaurants in India

The Northern Region has 110 restaurants ndash

sect Delhi ndash 40

sect Haryana - 15

Faridabad ndash3 Manesar ndash 2 (Highway and Drive - Thru) Gurgaon ndash7

Karnal ndash 1 (Highway and Drive - Thru) Panipat -1 Ambala -1

9

sect Rajasthan -6

Jaipur ndash 3 Jodhpur ndash 1 Kota -1 Udaipur - 1

sect Uttaranchal -1

Dehradun ndash 1

sect Uttar Pradesh ndash29

Noida ndash 5 Greater Noida ndash 1 Ghaziabad ndash 7 Mathura ndash 1 (Highway and

Drive - Thru) Kanpur ndash 2 Meerut ndash 2 Lucknow ndash5 Agra ndash 1 Allahabad

ndash 1 Varanasi -2 Gajraula ndash 1 (Highway amp Drive Thru) Khatauli -

1(Highway and Drive thru)

sect Punjab ndash 13

Chandigarh ndash 2 Ludhiana ndash 2 Doraha ndash 1 (Highway and Drive - Thru)

Jalandhar ndash 2 Patarsi ndash 1 (Highway and Drive - Thru) Dasuya (Highway

and Drive Thru) ndash 1 Amritsar -1 Patiala -1 Zirakpur-2

sect West Bengal-3

Kolkata- 3

sect Himachal Pradesh -1

Jabli-1

sect Madhya Pradesh -2

Gwalior ndash 1 Bhopal -1

----------------------------------------------

The Western Region has 125 restaurants across the following states and cities ndash

Maharashtra - Mumbai Pune Nasik Kolhapur ndash

Gujarat - Ahmedabad Vododara Surat Indore Vapi

Madhya Pradesh ndash Indore

Andhra Pradesh - Hyderabad

Karnataka - Bangalore

Tamil Nadu - Chennai

10

GOALS AND OBJECTIVES

1 McDonaldrsquos vision is to be the worldrsquos best quick service restaurants

experience

2 McDonalds is committed to maintaining and developing the best food

products in the quick service restaurant market

3 In order to deliver this the company has made a number of commitments to

food safety and nutrition

4 Lead the Quick Service Restaurant market by a program of site development

and profitable restaurant openings and by attracting new customers Increasing

sales through promotions will enable them to continue their program of

expansion

5 McDonalds have an objective to continual enhance and improve their menu

This will better satisfy their customers and give customers more reason to visit

Many ideas for new items on the menu come from the franchisees responding to

customer demand Consumer tastes change over time and McDonalds has to

respond to these changes

MISSION STATEMENT

McDonalds vision is to be the worlds best quick service restaurant experience

Being the best means providing outstanding quality service cleanliness and

value so that we make every customer in every restaurant smile

11

AWARDS

McDonaldrsquos India has received many prestigious awards for its service and

performance including

The lsquoMost Respected Companyrsquo for four consecutive years (2003-2006)

in the Food Services sector by Businessworld

The lsquoMost Preferred Fast Food Outletrsquo 2006 amp 2007 by Awaaz

Consumer Award hosted by CNBC

Star Retailer ndash the lsquoConsumer Way Food Services Retailerrsquo of the

Year 2006 amp 2007 2008 by Franchise India

lsquoRetailer of the Yearrsquo Award for catering services (2004-2006) at the

Images Retail Awards

The lsquoAmity Corporate Excellence Awardrsquo ndashin 2007 amp 2008

The lsquoMost Wanted Brand of the Yearrsquo Award 2003 amp 2004 by

Franchising Holdings India Ltd

The lsquoMost Admired F amp B Retailer of the Year QSRs Foreign

Originrsquo ndash The Golden Spoon Awards by Images Retail

The Company with the Best Corporate Conscience ndash 2008 by Business

amp Economy

lsquoValue for Moneyrsquo brand ndash 2010 by Pitch Magazine

The most trusted family restaurant brand in the country award in

2010 by Readerrsquos Digest

12

Corporate Social Responsibility

Being responsible is at the core of everything that we do at McDonaldstrade It is

a deep-rooted value and a tradition that dates back to our founder Ray Kroc It is also one of our top business priorities

We believe that our continuing success depends on our stakeholders trust in

each and every aspect of our business be it the quality and safety of the food we serve in the way we do our business the way we connect and make the difference in the communities we operate being sensitive to environment and

being sustainable

1 We are committed to doing what is right

2 We are committed to be a good neighbour and partner in the community

3 We are committed to conducting our business ethically and with complete transparency

4 We are committed to treating our entire internal and external stakeholders with respect and dignity

13

McDonaldrsquos International

McDonaldrsquos has over 32000 local restaurants in more than 100 countries

70 percent of our restaurants worldwide are owned and operated by

independent local businessmen and businesswomen

McDonaldrsquos serves nearly 50 million customers each day

McDonaldrsquos first franchised restaurant opened at Des Plaines Illinois in

1955 by the founder Ray Kroc

McDonaldrsquos has its own Hamburger University in Illinois and the first

batch graduated in 1961

12 classes offered at Hamburger University are college accredited

In 1963 McDonaldrsquos sold its one billionth hamburger

McDonaldrsquos is listed on the New York Frankfurt Munich Paris and

Tokyo stock exchanges

McDonaldrsquos aired its first network TV advertisement ldquoMcDonaldrsquos -

Where Quality Starts Fresh Everydayrdquo in 1965

The first McDonaldrsquos Drive-Thru opened in Sierra Vista Arizona in 1975

14

Happy Meals were added to McDonaldrsquos menu in 1979

McDonaldrsquos launched the new worldwide Balanced Active Lifestyles

public awareness campaign in 2005

McDonaldrsquos celebrated its 50th Anniversary on April 15 2005

Business model

McDonalds Corporation earns revenue as an investor in properties

a franchiser of restaurants and an operator of restaurants Approximately 15 of McDonalds restaurants are owned and

operated by McDonalds Corporation directly The remainder are operated by others through a variety of franchise agreements and

joint ventures

The McDonalds Corporations business model is slightly different

from that of most other fast-food chains In addition to ordinary franchise fees and marketing fees which are calculated as

a percentage of sales McDonalds may also collect rent which may also be calculated on the basis of sales

As a condition of many franchise agreements which vary by

contract age country and location the Corporation may own or lease the properties on which McDonalds franchises are located In most if not all cases the franchisee does not own the location of its

restaurants

The United Kingdom and Ireland business model is different than the US in that fewer than 30 of restaurants are franchised with

the majority under the ownership of the company McDonalds trains its franchisees and others at Hamburger Univers ity in Oak

Brook Illino is

In other countries McDonalds restaurants are operated by joint

ventures of McDonalds Corporation and other local entities or governments

15

As a matter of policy McDonalds does not make direct sales of food or materials to franchisees instead organizing the supply of

food and materials to restaurants through approved third party logistics operators

According to Fast Food Nation by Eric Schlosser nearly one in

eight workers in the US have at some time been employed by McDonalds It also states that McDonalds is the largest private

operator of playgrounds in the US as well as the single largest purchaser of beef pork potatoes and apples The selection of

meats McDonalds uses varies with the culture of the host country

MARKETING MIX

The marketing mix of a company consists of the various elements as follows

which form the core of a companyrsquos marketing system and hence helps to

achieve marketing objectives The marketing mix of McDonaldrsquos is as follows-

The McDonald plains its marketing by simple keeping 4Ps in mind

Product

Price

Promotion

Place

Product - McDonaldrsquos places considerable emphasis on developing a menu

which customers want Market research establishes exactly what this is However customersrsquo requirements change over time In order to meet these

changes McDonaldrsquos has introduced new products and phased out old ones and will continue to do so Care is taken not to adversely affect the sales of one choice by introducing a new choice which will cannibalise sales from the

existing one (trade off) McDonaldrsquos knows that items on its menu will vary in popularity Their ability to generate profits will vary at different points in their

cycle In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian

The happy meal for the children is a great seller among others

Price-The customerrsquos 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 physical item it also has psychological

connotations for the customer The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised It is

16

important when deciding on price to be fully aware of the brand and its integrity

In India McDonalds classifies its products into 2 categories namely the branded

affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and

the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price

perceptions

Promotion- The promotions aspect of the marketing mix covers all types of

marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and

in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct

mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that

provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be

supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item

At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart

from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos

Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the

management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities

making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers

17

Other than the main four elements mentioned above there are a few other

elements too in the marketing mix which are as follows-

People -The employees in McDonaldrsquos have a standard uniform and

McDonaldrsquos specially focuses on friendly and prompt service to its customers

from their employees

Process -The food manufacturing process at McDonaldrsquos is completely

transparent ie the whole process is visible to the customers In fact the fast

food joint allows its customers to view and judge the hygienic standards at

McDonaldrsquos by allowing them to enter the area where the process takes place

The customers are invited to check the ingredients used in food

Physical evidence - McDonalds focuses on clean and hygienic interiors of

is outlets and at the same time the interiors are attractive and the fast food joint

maintains a proper decorum at its joints

18

SWOT ANALYSIS

Strengths

McDonaldrsquos holds a very strong brand name worldwide

They have large partnerships with other companies that provide them

with their desired products this increases the goodwill of the company

McDonaldrsquos is one of the most reputed firms who are socially

responsible

Loyal employees amp management amp customer are their biggest strength

19

McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind

while providing food to different countries

Clean environment and play areas for children where they can enjoy their

time

Weakness

The weakness that hits the list of employee turnover rate Every year

many of their employees are fired out of the restaurant

McDonalds mostly advertises products and food items that targets

children

Health conscious people often complain that they do not provide us with

the organic and healthy food This becomes their weakness when they get in the complaints

They also face quality issue at times This affects the business as they are

running the outlet worldwide if one franchise gets affected others also

get a bad name

Opportunities

It can open up online services for their customers so that they can easily

order their desired meals sitting at home

Discounts given on every food item may help them gain more customers

They can go for a joint venture with the retailers they work with

They can introduce healthy hamburgers and healthy drinks for the people who are health conscious

20

In order to be environment friendly they can use packing material which

can be recycled later or material that does not create pollution

Threats

Emerging competition of similar outlets is becoming a problem for McDonalds

Health issue also becomes a problem when it comes to food

As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies

Recession in any country would definitely affect the whole outlet

worldwide

People facing heart problems and obesity accuse McDonalds for not

providing them with the healthy food

They have a threat of local food outlets in different countries

McDonalds is operating in a fully fledged economy where competition is

increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession

McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local

Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government

regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled

Indian businesses to grow by improving their ability to compete in todays international markets

21

Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in

predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first

restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept

has today been adopted by various Indian and International players to deliver quality produce to consumers

For instance Cremica Industries worked with another McDonalds supplier

from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to

McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with

farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water

consumption better seeds amp agricultural management practices which result in greater yields

In some cases these Indian suppliers had the technology - but no market for the

products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk

casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to

restaurants across India

McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations

COMPANYrsquoS FINANCIAL INFORMATION

Company Name McDonalds Corporation

Ticker Symbol MCD

Web Address wwwmcdonaldscom

CEO Mr Donald Thompson

No of Employees 420000

Common Issue Type CS

Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other

22

goods from numerous independent suppliers

Industry Information LEISURE - Restaurants

Price Day Change Bid Ask Open High Low Volume

8718 -002 - - 8743 8743 8676 3658828

Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range

875267 10040 039 527 253 164 35 10222 - 8331

KEY FIGURES (Latest Twelve Months - LTM)

Yesterdays Close 8706 $

PE Ratio - LTM 164

Market Capitalisation 875267 mil

Latest Shares Outstanding 10040 mil

Earnings pS (EPS) 527 $

Dividend pS (DPS) 253 cent

Dividend Yield 35

Dividend Payout Ratio 48

Revenue per Employee 64300 $

Effective Tax Rate 313

Float 10153 mil

Float as of Shares Outstanding 999

Foreign Sales 18478 mil

Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue

910

Research amp Devlopment (RampD) as of Revenue

000

Gross Profit Margin 447

EBITDA Margin 356

Pre-Tax Profit Margin 291

Assets Turnover 08

Return on Assets (ROA) 161

Return on Equity (ROE) 392

Return on Capital Invested (ROCI) 204 Current Ratio 10

Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096

LT DebtTotal Capital 480

Working Capital pS 006 $

Cash pS 217 $

Book-Value pS 1383 $

Balance Sheet (at a glance) in Millions

DIVIDEND INFO

Dividend Declared Date 09202012

Dividend Ex-Date 11282012

Dividend Record Date 12022012

Dividend Pay Date 12162012

Dividend Amount 770

Type of Payment Cash Payment

Dividend Rate 308

Current Dividend Yield 35

5-Y Average Dividend Yield 31

Payout Ratio 480

5-Y Average Payout Ratio 530

Share price performance previous 3 years

Share price performance intraday

23

Tangible Book-Value pS 1110 $

Cash Flow pS 689 $

Free Cash Flow pS 125 $

KEY FIGURES (LTM) Price info PriceBook Ratio 630

PriceTangible Book Ratio 785 PriceCash Flow 126

PriceFree Cash Flow 699

PE as of Industry Group 420

PE as of Sector Segment 770

PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol

1 Week - - - 00 101 54041 66217

4 Weeks 8743 8331 8474 27 101 57129 856929

13 Weeks 9416 8331 9102 -44 98 61288 3554700

26 Weeks 9416 8331 8775 -08 93 59419 7189758

52 Weeks 10222 8331 9803 -112 79 59272 14521666

YTD 10222 8331 - -132 77 59774 13807695

Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)

8661 8631 8825 8931 9174 039 031

GROWTH RATES 5-Year

Growh Rsup2 of 5-Year Growth

3-Year

Growth

Revenue 381 776 666

Income 2017 811 978

Dividend 1536 947 1016

Capital Spending 697 NA 1052

RampD 000 NA 000

Normalized Inc 1158 NA 979

CHANGES YTD vs

Last YTD

Curr Qtr vs

Qtr 1-Yr ago

Annual vs

Last Annual

Revenue 21 -02 122

Earnings -14 -35 113

EPS 10 -14 151

EPS $ 004 -002 069

SOLVENCY RATIOS

SHORT-TERM SOLVENCY RATIOS

(LIQUIDITY)

Net Working Capital Ratio 271

Current Ratio 13

Quick Ratio (Acid Test) 10

Liquidity Ratio (Cash) 067

Receivables Turnover 215

Average Collection Period 17

Working CapitalEquity 62

Working Capital pS 088

Cash-Flow pS 677

Free Cash-Flow pS 209

24

FINANCIAL STRUCTURE RATIOS

Altmans Z-Score Ratio 485

Financial Leverage Ratio (AssetsEquity) 23

Debt Ratio 564

Total DebtEquity (Gearing Ratio) 087

LT DebtEquity 084

LT DebtCapital Invested 569

LT DebtTotal Liabilities 652

Interest Cover 173

InterestCapital Invested 167

25

People hellip McDonaldrsquos 1 Resource in India

26

McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs

around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in

1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with

McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)

The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive

training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course

(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the

Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University

27

The McDonaldrsquos Promise

QUALITY SERVICE CLEANLINESS amp VALUE

When asked to explain McDonalds success founder Ray Kroc used to say We

take the hamburger business more seriously than anyone else

Kroc was a perfectionist From the day he opened his first restaurant he vowed

to give his customers high quality products served quickly --and with a smile

in a clean and pleasant environment and all at a fair price Quality Service

Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds

business

QUALITY

McDonalds India serves only the highest quality products The attention to food

quality started long before the first restaurant opened McDonalds India has

established close relationships with local suppliers who provide McDonalds

with the highest quality freshest ingredients to make its products

All suppliers adhere to Indian government regulations on food health and

hygiene while continuously maintaining McDonalds own recognized standards

McDonalds has established an extensive cold chain distribution system in

India to ensure that the products which arrive at the restaurant from suppliers

all over India are absolutely fresh In the restaurants products and supplies are

used on a first-in first-out basis to ensure freshness All McDonalds products

are prepared using modern state-of-the-art cooking equipment to ensure quality

and safety

SERVICE

McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos

which sets its restaurants apart from others At McDonalds the customer

always comes first Every employee strives to provide 100 percent customer

satisfaction -- for every customer -- every visit This includes friendly and

attentive service accuracy in order taking and anticipation of customers needs

-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun

and youthful spirit we will proudly serve an exceptional McDonaldrsquos

eating experience that makes all people feel special and makes them smile ndash

every customer every timerdquo

28

CLEANLINESS

McDonalds restaurants provide a clean comfortable environment especially

suited for families McDonalds stringent cleaning standards ensure that all

tables seating highchairs and trays are sanitized several times each hour The

attention to cleanliness extends from the lobby to the kitchen to the sidewalk

and immediate areas outside the restaurant

In addition to urging customers to dispose of their litter properly and offering a

number of trash bins (both inside and outside the restaurants) for their

convenience McDonalds Litter Patrols walk around the restaurants several

times each day picking up litter -- even if it isnt from McDonalds

Restaurant managers walk through the dining areas each hour to ensure that it

is clean and well stocked All restaurants provide a variety of comfortable

seating arrangements to accommodate anyone -- from a single individual to a

large family The environment is warm inviting and well lit

VALUE

McDonalds menu is priced at a value that the largest segment of Indian

consumers can afford McDonalds does not sacrifice quality for value -- rather

McDonalds leverages economies of scale to minimize costs while maximizing

value to customers

McDonalds definition of value is broader than most restaurants of its kind -- it

is more than price Value at McDonalds is the sum of the total McDonalds

experience quality food fast friendly service a clean and pleasant

environment and products priced at very affordable prices for the largest

segment of Indian consumers possible That is value at McDonalds

29

McDonaldrsquos Indiahellip Culturally Sensitive

Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much

that is consistent with other McDonaldrsquos restaurants around the world such as

the quality of the food and the attention to service

The dedication to local cultures is not new for McDonaldrsquos For the past 50

years McDonaldrsquos has opened restaurants in more than 120 distinctly different

countries and cultures With guidance from its local partners McDonaldrsquos is

able to adapt- where necessary-its menu and restaurant operations to

complement existing eating-out options McDonaldrsquos local owners understand

what their customers want perhaps more importantly what is acceptable within

local customs and values

There is much too that is very different- such as the first beef-less and pork-

less menu in the world and special product formulations to cater to Indian

culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos

India says ldquoWe know the Indian culture because we were born in it

inherited its richness and respect it greatly It is the respect for this culture

and the sentiments of many of our customersrsquo that we do not serve any

beef and pork items in our restaurantsrdquo

McDonaldrsquos commitment to its Indian customers is evident even in

development of special sauces that use local spices and chillies The

mayonnaise and all other sauces are egg-less

In India vegetarianism is in many cases more than a lifestyle choice Many

people are vegetarians due to religious reasons and in some cases even the

vegetarian product that has come into contact with a non-vegetarian product is

unacceptable Hence McDonaldrsquos India has also changed its operations to

address the special requirements of our vegetarian customers by having

processes that ensure that a physical separation of veg and non-veg products is

maintained right from farm to the customer Vegetable products are prepared

separately using dedicated equipment and utensils Also in India McDonaldrsquos

uses only vegetable oil as a medium for cooking

30

McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash

lsquoto be driven by the leadership of local ownersrsquo This commitment has translated

into enduring benefits to the businesses at the grass root level in the areas of

introduction of new crops new agricultural practices and food processing methods

and procedures

McDonalds unique cold chain on which the QSR major has spent more than six

years setting up in India has brought about a veritable revolution immensely

benefiting the farmers at one end and enabling customers at retail counters get the

highest quality food products absolutely fresh and at great value

Setting up this extensive cold chain distribution system has involved the transfer of

state-of-the-art food processing technology by McDonalds and its international

suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain

From Field to -2⁰C in 90 Minutes

Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be

grown during the winter months but with McDonalds expertise in the area of

agriculture they are now able to grow this crop through the year

Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room

to remove field heat a large cold room and a refrigerated van for transportation where

the temperature and the relative humidity of the crop is maintained between 1ordm C and

4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room

within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling

to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at

the farms itself ensuring no delay between harvesting pre-cooling packaging and

cold storage

Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd

Flavour and Freshness locked in at - 35degC

Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable

range of products is another important player in this cold chain This includes hi-tech

refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C

This is vital to ensure that the frozen food retains it freshness for a long time and the

cold chain is maintained The frozen product is immediately moved to cold storage

rooms

31

Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes

McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for

quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk

coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -

thus maintaining the cold chain

All leading to the Consumer

McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The

DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity

of the products throughout the entire cold chain

Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the

McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C

as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state

All these suppliers share McDonalds commitment and dedication to satisfying

customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently

each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental

effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn

more

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 6: Entrepreneurship m com a

6

of special sauces that use local spices and chillies The mayonnaise and all other

sauces are egg-less McDonalds also pioneered the establishment of Cold Chain

across India which helps maintain freshness and nutrition in every product

McDonalds regular scrumptious menu includes wide range of products like McAloo Tikki Filet-O-Fish Spicy Range Chicken McGrill McVeggie Veg Pizza McPuff Chicken Mcnuggetsreg Fries Wraps an assortment of Sundaes

Soft Serve and refreshing beverages such as Ice Tea amp Cold Coffee with outstanding service in a vibrant and lively ambience for which McDonalds is

known worldwide

McDonalds had further reinforced the branded affordability mantra via the introduction of the Happy Price Menu which starts at Rs 25 only

McAloo Tikki Veg Surprise and Pizza McPuff developed in India are now being exported to the countries in the Middle East

McDonaldrsquos introduced Cokersquos Georgia Gold range of hot beverages which was developed especially for the Indian market in 2002

As a leader in QSR segment (Quick Service Restaurant) McDonaldrsquos has

pioneered various industry benchmark practices over the past decade of serving Indian customers including new concepts such ashellip

Oil Alliances in India by inking with petroleum giants BPCL and HPCL

The two such alliances with BPCL outlets are in Mathura (2000) (UP) and Doraha (2002) (Punjab)

Novel menu formats such as an Express Model with a limited menu and Kiosks with a variety of dessert offerings

Home Delivery (McDeliverytrade) Providing even more convenience to

our customers In Oct 2006 McDelivery on bicycle at Chandni Chowk was launched and in March lsquo07 an all India single delivery number (66

000 666) was introduced

First Drive Thru Restaurant at NOIDA (UP) in 1997

First Restaurant with operational Kitchen at Delhi Domestic

Keeping pace with the customer evolving needs McDonalds also functions on models that drive convenience and create unique differentiation like

McDelivery Drive thru Breakfast Menu high ways and extended hours (Currently available in select cities)

At present there are 300 McDonalds restaurants in India

The strong foundation that Ray Kroc built continues today with McDonalds

7

vision and commitment for its internal as well as external customers Since then it has evolved into a value driven brand and recognizes that affordability of its

products is an attractive proposition for its customers along with taste McDonalds continues to strengthen it business model and progress with

customers evolving needs

Key Landmarks - McDonaldrsquos India Journey

1996 hellipthe first McDonaldrsquos restaurant opened on Oct 13 at Basant Lok

Vasant Vihar New Delhi It was also the first McDonaldrsquos restaurant in the

world not serving beef on its menu

1997hellip

the first Drive ndashThru restaurant at Noida (UP)

the first disabled friendly store at Noida (UP)

1999hellipthe first Mall location restaurant at Ansal Plaza (New Delhi)

2000hellipthe first highway restaurant at Mathura (UP)

2001hellipthe first thematic restaurant at Connaught Place (New Delhi)

2002hellip

The first restaurant in a food court at 3Crsquos Lajpat Nagar (New Delhi)

The first restaurant at the Delhi Metro Station at Inter State Bus Terminus

The first fundraiser in association with ORBIS and Dr Shroffrsquos Charity

Eye hospital(Delhi)

2003 The first Dessert Kiosk ndash Faridabad (Haryana)

2004hellip McDonaldrsquos Delivery Service (McDelivery) introduced in New Delhi

2003-04hellip Indigenous products like McAloo Tikki McVeggie and Pizza

McPuff exported to Middle East countries

8

2006

McDelivery on Bicycles flagged off at Chandni Chowk (Delhi)- another

first initiative by McDonaldrsquos India

100th McDonaldrsquos Restaurant in India

10th Year Anniversary

2007

The first McDonaldrsquos open in Eastern Region at Park Street Kolkata

The first restaurant opened at Airport (Domestic Airport New Delhi)

The first MFY restaurant opened at Greater Noida Uttar Pradesh

2008hellip

The First restaurant to start extended hours procedure at Cyber Greens

Gurgaon and Saket New Delhi

The first restaurant to start Breakfast Menu at Janpath New Delhi

2009hellipThe first McDonaldrsquos Restaurant opens at Old Delhi Railway Station

2010hellipThe first reimaged new look restaurant opened at Ambiance mall

Vasant Kunj 6

2011hellip

McDonaldrsquos introduces premium products in it is menu ndash McSpicy range

of products

McDonaldrsquos introduces Mcflurry (premium desserts) in Oreo and

chocolate crispy flavors

McDonaldrsquos introduces Wi-Fi across DelhiNCR region

McDonaldrsquos currently has 235 restaurants in India

The Northern Region has 110 restaurants ndash

sect Delhi ndash 40

sect Haryana - 15

Faridabad ndash3 Manesar ndash 2 (Highway and Drive - Thru) Gurgaon ndash7

Karnal ndash 1 (Highway and Drive - Thru) Panipat -1 Ambala -1

9

sect Rajasthan -6

Jaipur ndash 3 Jodhpur ndash 1 Kota -1 Udaipur - 1

sect Uttaranchal -1

Dehradun ndash 1

sect Uttar Pradesh ndash29

Noida ndash 5 Greater Noida ndash 1 Ghaziabad ndash 7 Mathura ndash 1 (Highway and

Drive - Thru) Kanpur ndash 2 Meerut ndash 2 Lucknow ndash5 Agra ndash 1 Allahabad

ndash 1 Varanasi -2 Gajraula ndash 1 (Highway amp Drive Thru) Khatauli -

1(Highway and Drive thru)

sect Punjab ndash 13

Chandigarh ndash 2 Ludhiana ndash 2 Doraha ndash 1 (Highway and Drive - Thru)

Jalandhar ndash 2 Patarsi ndash 1 (Highway and Drive - Thru) Dasuya (Highway

and Drive Thru) ndash 1 Amritsar -1 Patiala -1 Zirakpur-2

sect West Bengal-3

Kolkata- 3

sect Himachal Pradesh -1

Jabli-1

sect Madhya Pradesh -2

Gwalior ndash 1 Bhopal -1

----------------------------------------------

The Western Region has 125 restaurants across the following states and cities ndash

Maharashtra - Mumbai Pune Nasik Kolhapur ndash

Gujarat - Ahmedabad Vododara Surat Indore Vapi

Madhya Pradesh ndash Indore

Andhra Pradesh - Hyderabad

Karnataka - Bangalore

Tamil Nadu - Chennai

10

GOALS AND OBJECTIVES

1 McDonaldrsquos vision is to be the worldrsquos best quick service restaurants

experience

2 McDonalds is committed to maintaining and developing the best food

products in the quick service restaurant market

3 In order to deliver this the company has made a number of commitments to

food safety and nutrition

4 Lead the Quick Service Restaurant market by a program of site development

and profitable restaurant openings and by attracting new customers Increasing

sales through promotions will enable them to continue their program of

expansion

5 McDonalds have an objective to continual enhance and improve their menu

This will better satisfy their customers and give customers more reason to visit

Many ideas for new items on the menu come from the franchisees responding to

customer demand Consumer tastes change over time and McDonalds has to

respond to these changes

MISSION STATEMENT

McDonalds vision is to be the worlds best quick service restaurant experience

Being the best means providing outstanding quality service cleanliness and

value so that we make every customer in every restaurant smile

11

AWARDS

McDonaldrsquos India has received many prestigious awards for its service and

performance including

The lsquoMost Respected Companyrsquo for four consecutive years (2003-2006)

in the Food Services sector by Businessworld

The lsquoMost Preferred Fast Food Outletrsquo 2006 amp 2007 by Awaaz

Consumer Award hosted by CNBC

Star Retailer ndash the lsquoConsumer Way Food Services Retailerrsquo of the

Year 2006 amp 2007 2008 by Franchise India

lsquoRetailer of the Yearrsquo Award for catering services (2004-2006) at the

Images Retail Awards

The lsquoAmity Corporate Excellence Awardrsquo ndashin 2007 amp 2008

The lsquoMost Wanted Brand of the Yearrsquo Award 2003 amp 2004 by

Franchising Holdings India Ltd

The lsquoMost Admired F amp B Retailer of the Year QSRs Foreign

Originrsquo ndash The Golden Spoon Awards by Images Retail

The Company with the Best Corporate Conscience ndash 2008 by Business

amp Economy

lsquoValue for Moneyrsquo brand ndash 2010 by Pitch Magazine

The most trusted family restaurant brand in the country award in

2010 by Readerrsquos Digest

12

Corporate Social Responsibility

Being responsible is at the core of everything that we do at McDonaldstrade It is

a deep-rooted value and a tradition that dates back to our founder Ray Kroc It is also one of our top business priorities

We believe that our continuing success depends on our stakeholders trust in

each and every aspect of our business be it the quality and safety of the food we serve in the way we do our business the way we connect and make the difference in the communities we operate being sensitive to environment and

being sustainable

1 We are committed to doing what is right

2 We are committed to be a good neighbour and partner in the community

3 We are committed to conducting our business ethically and with complete transparency

4 We are committed to treating our entire internal and external stakeholders with respect and dignity

13

McDonaldrsquos International

McDonaldrsquos has over 32000 local restaurants in more than 100 countries

70 percent of our restaurants worldwide are owned and operated by

independent local businessmen and businesswomen

McDonaldrsquos serves nearly 50 million customers each day

McDonaldrsquos first franchised restaurant opened at Des Plaines Illinois in

1955 by the founder Ray Kroc

McDonaldrsquos has its own Hamburger University in Illinois and the first

batch graduated in 1961

12 classes offered at Hamburger University are college accredited

In 1963 McDonaldrsquos sold its one billionth hamburger

McDonaldrsquos is listed on the New York Frankfurt Munich Paris and

Tokyo stock exchanges

McDonaldrsquos aired its first network TV advertisement ldquoMcDonaldrsquos -

Where Quality Starts Fresh Everydayrdquo in 1965

The first McDonaldrsquos Drive-Thru opened in Sierra Vista Arizona in 1975

14

Happy Meals were added to McDonaldrsquos menu in 1979

McDonaldrsquos launched the new worldwide Balanced Active Lifestyles

public awareness campaign in 2005

McDonaldrsquos celebrated its 50th Anniversary on April 15 2005

Business model

McDonalds Corporation earns revenue as an investor in properties

a franchiser of restaurants and an operator of restaurants Approximately 15 of McDonalds restaurants are owned and

operated by McDonalds Corporation directly The remainder are operated by others through a variety of franchise agreements and

joint ventures

The McDonalds Corporations business model is slightly different

from that of most other fast-food chains In addition to ordinary franchise fees and marketing fees which are calculated as

a percentage of sales McDonalds may also collect rent which may also be calculated on the basis of sales

As a condition of many franchise agreements which vary by

contract age country and location the Corporation may own or lease the properties on which McDonalds franchises are located In most if not all cases the franchisee does not own the location of its

restaurants

The United Kingdom and Ireland business model is different than the US in that fewer than 30 of restaurants are franchised with

the majority under the ownership of the company McDonalds trains its franchisees and others at Hamburger Univers ity in Oak

Brook Illino is

In other countries McDonalds restaurants are operated by joint

ventures of McDonalds Corporation and other local entities or governments

15

As a matter of policy McDonalds does not make direct sales of food or materials to franchisees instead organizing the supply of

food and materials to restaurants through approved third party logistics operators

According to Fast Food Nation by Eric Schlosser nearly one in

eight workers in the US have at some time been employed by McDonalds It also states that McDonalds is the largest private

operator of playgrounds in the US as well as the single largest purchaser of beef pork potatoes and apples The selection of

meats McDonalds uses varies with the culture of the host country

MARKETING MIX

The marketing mix of a company consists of the various elements as follows

which form the core of a companyrsquos marketing system and hence helps to

achieve marketing objectives The marketing mix of McDonaldrsquos is as follows-

The McDonald plains its marketing by simple keeping 4Ps in mind

Product

Price

Promotion

Place

Product - McDonaldrsquos places considerable emphasis on developing a menu

which customers want Market research establishes exactly what this is However customersrsquo requirements change over time In order to meet these

changes McDonaldrsquos has introduced new products and phased out old ones and will continue to do so Care is taken not to adversely affect the sales of one choice by introducing a new choice which will cannibalise sales from the

existing one (trade off) McDonaldrsquos knows that items on its menu will vary in popularity Their ability to generate profits will vary at different points in their

cycle In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian

The happy meal for the children is a great seller among others

Price-The customerrsquos 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 physical item it also has psychological

connotations for the customer The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised It is

16

important when deciding on price to be fully aware of the brand and its integrity

In India McDonalds classifies its products into 2 categories namely the branded

affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and

the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price

perceptions

Promotion- The promotions aspect of the marketing mix covers all types of

marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and

in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct

mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that

provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be

supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item

At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart

from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos

Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the

management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities

making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers

17

Other than the main four elements mentioned above there are a few other

elements too in the marketing mix which are as follows-

People -The employees in McDonaldrsquos have a standard uniform and

McDonaldrsquos specially focuses on friendly and prompt service to its customers

from their employees

Process -The food manufacturing process at McDonaldrsquos is completely

transparent ie the whole process is visible to the customers In fact the fast

food joint allows its customers to view and judge the hygienic standards at

McDonaldrsquos by allowing them to enter the area where the process takes place

The customers are invited to check the ingredients used in food

Physical evidence - McDonalds focuses on clean and hygienic interiors of

is outlets and at the same time the interiors are attractive and the fast food joint

maintains a proper decorum at its joints

18

SWOT ANALYSIS

Strengths

McDonaldrsquos holds a very strong brand name worldwide

They have large partnerships with other companies that provide them

with their desired products this increases the goodwill of the company

McDonaldrsquos is one of the most reputed firms who are socially

responsible

Loyal employees amp management amp customer are their biggest strength

19

McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind

while providing food to different countries

Clean environment and play areas for children where they can enjoy their

time

Weakness

The weakness that hits the list of employee turnover rate Every year

many of their employees are fired out of the restaurant

McDonalds mostly advertises products and food items that targets

children

Health conscious people often complain that they do not provide us with

the organic and healthy food This becomes their weakness when they get in the complaints

They also face quality issue at times This affects the business as they are

running the outlet worldwide if one franchise gets affected others also

get a bad name

Opportunities

It can open up online services for their customers so that they can easily

order their desired meals sitting at home

Discounts given on every food item may help them gain more customers

They can go for a joint venture with the retailers they work with

They can introduce healthy hamburgers and healthy drinks for the people who are health conscious

20

In order to be environment friendly they can use packing material which

can be recycled later or material that does not create pollution

Threats

Emerging competition of similar outlets is becoming a problem for McDonalds

Health issue also becomes a problem when it comes to food

As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies

Recession in any country would definitely affect the whole outlet

worldwide

People facing heart problems and obesity accuse McDonalds for not

providing them with the healthy food

They have a threat of local food outlets in different countries

McDonalds is operating in a fully fledged economy where competition is

increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession

McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local

Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government

regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled

Indian businesses to grow by improving their ability to compete in todays international markets

21

Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in

predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first

restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept

has today been adopted by various Indian and International players to deliver quality produce to consumers

For instance Cremica Industries worked with another McDonalds supplier

from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to

McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with

farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water

consumption better seeds amp agricultural management practices which result in greater yields

In some cases these Indian suppliers had the technology - but no market for the

products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk

casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to

restaurants across India

McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations

COMPANYrsquoS FINANCIAL INFORMATION

Company Name McDonalds Corporation

Ticker Symbol MCD

Web Address wwwmcdonaldscom

CEO Mr Donald Thompson

No of Employees 420000

Common Issue Type CS

Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other

22

goods from numerous independent suppliers

Industry Information LEISURE - Restaurants

Price Day Change Bid Ask Open High Low Volume

8718 -002 - - 8743 8743 8676 3658828

Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range

875267 10040 039 527 253 164 35 10222 - 8331

KEY FIGURES (Latest Twelve Months - LTM)

Yesterdays Close 8706 $

PE Ratio - LTM 164

Market Capitalisation 875267 mil

Latest Shares Outstanding 10040 mil

Earnings pS (EPS) 527 $

Dividend pS (DPS) 253 cent

Dividend Yield 35

Dividend Payout Ratio 48

Revenue per Employee 64300 $

Effective Tax Rate 313

Float 10153 mil

Float as of Shares Outstanding 999

Foreign Sales 18478 mil

Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue

910

Research amp Devlopment (RampD) as of Revenue

000

Gross Profit Margin 447

EBITDA Margin 356

Pre-Tax Profit Margin 291

Assets Turnover 08

Return on Assets (ROA) 161

Return on Equity (ROE) 392

Return on Capital Invested (ROCI) 204 Current Ratio 10

Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096

LT DebtTotal Capital 480

Working Capital pS 006 $

Cash pS 217 $

Book-Value pS 1383 $

Balance Sheet (at a glance) in Millions

DIVIDEND INFO

Dividend Declared Date 09202012

Dividend Ex-Date 11282012

Dividend Record Date 12022012

Dividend Pay Date 12162012

Dividend Amount 770

Type of Payment Cash Payment

Dividend Rate 308

Current Dividend Yield 35

5-Y Average Dividend Yield 31

Payout Ratio 480

5-Y Average Payout Ratio 530

Share price performance previous 3 years

Share price performance intraday

23

Tangible Book-Value pS 1110 $

Cash Flow pS 689 $

Free Cash Flow pS 125 $

KEY FIGURES (LTM) Price info PriceBook Ratio 630

PriceTangible Book Ratio 785 PriceCash Flow 126

PriceFree Cash Flow 699

PE as of Industry Group 420

PE as of Sector Segment 770

PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol

1 Week - - - 00 101 54041 66217

4 Weeks 8743 8331 8474 27 101 57129 856929

13 Weeks 9416 8331 9102 -44 98 61288 3554700

26 Weeks 9416 8331 8775 -08 93 59419 7189758

52 Weeks 10222 8331 9803 -112 79 59272 14521666

YTD 10222 8331 - -132 77 59774 13807695

Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)

8661 8631 8825 8931 9174 039 031

GROWTH RATES 5-Year

Growh Rsup2 of 5-Year Growth

3-Year

Growth

Revenue 381 776 666

Income 2017 811 978

Dividend 1536 947 1016

Capital Spending 697 NA 1052

RampD 000 NA 000

Normalized Inc 1158 NA 979

CHANGES YTD vs

Last YTD

Curr Qtr vs

Qtr 1-Yr ago

Annual vs

Last Annual

Revenue 21 -02 122

Earnings -14 -35 113

EPS 10 -14 151

EPS $ 004 -002 069

SOLVENCY RATIOS

SHORT-TERM SOLVENCY RATIOS

(LIQUIDITY)

Net Working Capital Ratio 271

Current Ratio 13

Quick Ratio (Acid Test) 10

Liquidity Ratio (Cash) 067

Receivables Turnover 215

Average Collection Period 17

Working CapitalEquity 62

Working Capital pS 088

Cash-Flow pS 677

Free Cash-Flow pS 209

24

FINANCIAL STRUCTURE RATIOS

Altmans Z-Score Ratio 485

Financial Leverage Ratio (AssetsEquity) 23

Debt Ratio 564

Total DebtEquity (Gearing Ratio) 087

LT DebtEquity 084

LT DebtCapital Invested 569

LT DebtTotal Liabilities 652

Interest Cover 173

InterestCapital Invested 167

25

People hellip McDonaldrsquos 1 Resource in India

26

McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs

around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in

1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with

McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)

The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive

training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course

(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the

Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University

27

The McDonaldrsquos Promise

QUALITY SERVICE CLEANLINESS amp VALUE

When asked to explain McDonalds success founder Ray Kroc used to say We

take the hamburger business more seriously than anyone else

Kroc was a perfectionist From the day he opened his first restaurant he vowed

to give his customers high quality products served quickly --and with a smile

in a clean and pleasant environment and all at a fair price Quality Service

Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds

business

QUALITY

McDonalds India serves only the highest quality products The attention to food

quality started long before the first restaurant opened McDonalds India has

established close relationships with local suppliers who provide McDonalds

with the highest quality freshest ingredients to make its products

All suppliers adhere to Indian government regulations on food health and

hygiene while continuously maintaining McDonalds own recognized standards

McDonalds has established an extensive cold chain distribution system in

India to ensure that the products which arrive at the restaurant from suppliers

all over India are absolutely fresh In the restaurants products and supplies are

used on a first-in first-out basis to ensure freshness All McDonalds products

are prepared using modern state-of-the-art cooking equipment to ensure quality

and safety

SERVICE

McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos

which sets its restaurants apart from others At McDonalds the customer

always comes first Every employee strives to provide 100 percent customer

satisfaction -- for every customer -- every visit This includes friendly and

attentive service accuracy in order taking and anticipation of customers needs

-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun

and youthful spirit we will proudly serve an exceptional McDonaldrsquos

eating experience that makes all people feel special and makes them smile ndash

every customer every timerdquo

28

CLEANLINESS

McDonalds restaurants provide a clean comfortable environment especially

suited for families McDonalds stringent cleaning standards ensure that all

tables seating highchairs and trays are sanitized several times each hour The

attention to cleanliness extends from the lobby to the kitchen to the sidewalk

and immediate areas outside the restaurant

In addition to urging customers to dispose of their litter properly and offering a

number of trash bins (both inside and outside the restaurants) for their

convenience McDonalds Litter Patrols walk around the restaurants several

times each day picking up litter -- even if it isnt from McDonalds

Restaurant managers walk through the dining areas each hour to ensure that it

is clean and well stocked All restaurants provide a variety of comfortable

seating arrangements to accommodate anyone -- from a single individual to a

large family The environment is warm inviting and well lit

VALUE

McDonalds menu is priced at a value that the largest segment of Indian

consumers can afford McDonalds does not sacrifice quality for value -- rather

McDonalds leverages economies of scale to minimize costs while maximizing

value to customers

McDonalds definition of value is broader than most restaurants of its kind -- it

is more than price Value at McDonalds is the sum of the total McDonalds

experience quality food fast friendly service a clean and pleasant

environment and products priced at very affordable prices for the largest

segment of Indian consumers possible That is value at McDonalds

29

McDonaldrsquos Indiahellip Culturally Sensitive

Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much

that is consistent with other McDonaldrsquos restaurants around the world such as

the quality of the food and the attention to service

The dedication to local cultures is not new for McDonaldrsquos For the past 50

years McDonaldrsquos has opened restaurants in more than 120 distinctly different

countries and cultures With guidance from its local partners McDonaldrsquos is

able to adapt- where necessary-its menu and restaurant operations to

complement existing eating-out options McDonaldrsquos local owners understand

what their customers want perhaps more importantly what is acceptable within

local customs and values

There is much too that is very different- such as the first beef-less and pork-

less menu in the world and special product formulations to cater to Indian

culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos

India says ldquoWe know the Indian culture because we were born in it

inherited its richness and respect it greatly It is the respect for this culture

and the sentiments of many of our customersrsquo that we do not serve any

beef and pork items in our restaurantsrdquo

McDonaldrsquos commitment to its Indian customers is evident even in

development of special sauces that use local spices and chillies The

mayonnaise and all other sauces are egg-less

In India vegetarianism is in many cases more than a lifestyle choice Many

people are vegetarians due to religious reasons and in some cases even the

vegetarian product that has come into contact with a non-vegetarian product is

unacceptable Hence McDonaldrsquos India has also changed its operations to

address the special requirements of our vegetarian customers by having

processes that ensure that a physical separation of veg and non-veg products is

maintained right from farm to the customer Vegetable products are prepared

separately using dedicated equipment and utensils Also in India McDonaldrsquos

uses only vegetable oil as a medium for cooking

30

McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash

lsquoto be driven by the leadership of local ownersrsquo This commitment has translated

into enduring benefits to the businesses at the grass root level in the areas of

introduction of new crops new agricultural practices and food processing methods

and procedures

McDonalds unique cold chain on which the QSR major has spent more than six

years setting up in India has brought about a veritable revolution immensely

benefiting the farmers at one end and enabling customers at retail counters get the

highest quality food products absolutely fresh and at great value

Setting up this extensive cold chain distribution system has involved the transfer of

state-of-the-art food processing technology by McDonalds and its international

suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain

From Field to -2⁰C in 90 Minutes

Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be

grown during the winter months but with McDonalds expertise in the area of

agriculture they are now able to grow this crop through the year

Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room

to remove field heat a large cold room and a refrigerated van for transportation where

the temperature and the relative humidity of the crop is maintained between 1ordm C and

4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room

within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling

to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at

the farms itself ensuring no delay between harvesting pre-cooling packaging and

cold storage

Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd

Flavour and Freshness locked in at - 35degC

Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable

range of products is another important player in this cold chain This includes hi-tech

refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C

This is vital to ensure that the frozen food retains it freshness for a long time and the

cold chain is maintained The frozen product is immediately moved to cold storage

rooms

31

Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes

McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for

quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk

coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -

thus maintaining the cold chain

All leading to the Consumer

McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The

DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity

of the products throughout the entire cold chain

Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the

McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C

as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state

All these suppliers share McDonalds commitment and dedication to satisfying

customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently

each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental

effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn

more

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 7: Entrepreneurship m com a

7

vision and commitment for its internal as well as external customers Since then it has evolved into a value driven brand and recognizes that affordability of its

products is an attractive proposition for its customers along with taste McDonalds continues to strengthen it business model and progress with

customers evolving needs

Key Landmarks - McDonaldrsquos India Journey

1996 hellipthe first McDonaldrsquos restaurant opened on Oct 13 at Basant Lok

Vasant Vihar New Delhi It was also the first McDonaldrsquos restaurant in the

world not serving beef on its menu

1997hellip

the first Drive ndashThru restaurant at Noida (UP)

the first disabled friendly store at Noida (UP)

1999hellipthe first Mall location restaurant at Ansal Plaza (New Delhi)

2000hellipthe first highway restaurant at Mathura (UP)

2001hellipthe first thematic restaurant at Connaught Place (New Delhi)

2002hellip

The first restaurant in a food court at 3Crsquos Lajpat Nagar (New Delhi)

The first restaurant at the Delhi Metro Station at Inter State Bus Terminus

The first fundraiser in association with ORBIS and Dr Shroffrsquos Charity

Eye hospital(Delhi)

2003 The first Dessert Kiosk ndash Faridabad (Haryana)

2004hellip McDonaldrsquos Delivery Service (McDelivery) introduced in New Delhi

2003-04hellip Indigenous products like McAloo Tikki McVeggie and Pizza

McPuff exported to Middle East countries

8

2006

McDelivery on Bicycles flagged off at Chandni Chowk (Delhi)- another

first initiative by McDonaldrsquos India

100th McDonaldrsquos Restaurant in India

10th Year Anniversary

2007

The first McDonaldrsquos open in Eastern Region at Park Street Kolkata

The first restaurant opened at Airport (Domestic Airport New Delhi)

The first MFY restaurant opened at Greater Noida Uttar Pradesh

2008hellip

The First restaurant to start extended hours procedure at Cyber Greens

Gurgaon and Saket New Delhi

The first restaurant to start Breakfast Menu at Janpath New Delhi

2009hellipThe first McDonaldrsquos Restaurant opens at Old Delhi Railway Station

2010hellipThe first reimaged new look restaurant opened at Ambiance mall

Vasant Kunj 6

2011hellip

McDonaldrsquos introduces premium products in it is menu ndash McSpicy range

of products

McDonaldrsquos introduces Mcflurry (premium desserts) in Oreo and

chocolate crispy flavors

McDonaldrsquos introduces Wi-Fi across DelhiNCR region

McDonaldrsquos currently has 235 restaurants in India

The Northern Region has 110 restaurants ndash

sect Delhi ndash 40

sect Haryana - 15

Faridabad ndash3 Manesar ndash 2 (Highway and Drive - Thru) Gurgaon ndash7

Karnal ndash 1 (Highway and Drive - Thru) Panipat -1 Ambala -1

9

sect Rajasthan -6

Jaipur ndash 3 Jodhpur ndash 1 Kota -1 Udaipur - 1

sect Uttaranchal -1

Dehradun ndash 1

sect Uttar Pradesh ndash29

Noida ndash 5 Greater Noida ndash 1 Ghaziabad ndash 7 Mathura ndash 1 (Highway and

Drive - Thru) Kanpur ndash 2 Meerut ndash 2 Lucknow ndash5 Agra ndash 1 Allahabad

ndash 1 Varanasi -2 Gajraula ndash 1 (Highway amp Drive Thru) Khatauli -

1(Highway and Drive thru)

sect Punjab ndash 13

Chandigarh ndash 2 Ludhiana ndash 2 Doraha ndash 1 (Highway and Drive - Thru)

Jalandhar ndash 2 Patarsi ndash 1 (Highway and Drive - Thru) Dasuya (Highway

and Drive Thru) ndash 1 Amritsar -1 Patiala -1 Zirakpur-2

sect West Bengal-3

Kolkata- 3

sect Himachal Pradesh -1

Jabli-1

sect Madhya Pradesh -2

Gwalior ndash 1 Bhopal -1

----------------------------------------------

The Western Region has 125 restaurants across the following states and cities ndash

Maharashtra - Mumbai Pune Nasik Kolhapur ndash

Gujarat - Ahmedabad Vododara Surat Indore Vapi

Madhya Pradesh ndash Indore

Andhra Pradesh - Hyderabad

Karnataka - Bangalore

Tamil Nadu - Chennai

10

GOALS AND OBJECTIVES

1 McDonaldrsquos vision is to be the worldrsquos best quick service restaurants

experience

2 McDonalds is committed to maintaining and developing the best food

products in the quick service restaurant market

3 In order to deliver this the company has made a number of commitments to

food safety and nutrition

4 Lead the Quick Service Restaurant market by a program of site development

and profitable restaurant openings and by attracting new customers Increasing

sales through promotions will enable them to continue their program of

expansion

5 McDonalds have an objective to continual enhance and improve their menu

This will better satisfy their customers and give customers more reason to visit

Many ideas for new items on the menu come from the franchisees responding to

customer demand Consumer tastes change over time and McDonalds has to

respond to these changes

MISSION STATEMENT

McDonalds vision is to be the worlds best quick service restaurant experience

Being the best means providing outstanding quality service cleanliness and

value so that we make every customer in every restaurant smile

11

AWARDS

McDonaldrsquos India has received many prestigious awards for its service and

performance including

The lsquoMost Respected Companyrsquo for four consecutive years (2003-2006)

in the Food Services sector by Businessworld

The lsquoMost Preferred Fast Food Outletrsquo 2006 amp 2007 by Awaaz

Consumer Award hosted by CNBC

Star Retailer ndash the lsquoConsumer Way Food Services Retailerrsquo of the

Year 2006 amp 2007 2008 by Franchise India

lsquoRetailer of the Yearrsquo Award for catering services (2004-2006) at the

Images Retail Awards

The lsquoAmity Corporate Excellence Awardrsquo ndashin 2007 amp 2008

The lsquoMost Wanted Brand of the Yearrsquo Award 2003 amp 2004 by

Franchising Holdings India Ltd

The lsquoMost Admired F amp B Retailer of the Year QSRs Foreign

Originrsquo ndash The Golden Spoon Awards by Images Retail

The Company with the Best Corporate Conscience ndash 2008 by Business

amp Economy

lsquoValue for Moneyrsquo brand ndash 2010 by Pitch Magazine

The most trusted family restaurant brand in the country award in

2010 by Readerrsquos Digest

12

Corporate Social Responsibility

Being responsible is at the core of everything that we do at McDonaldstrade It is

a deep-rooted value and a tradition that dates back to our founder Ray Kroc It is also one of our top business priorities

We believe that our continuing success depends on our stakeholders trust in

each and every aspect of our business be it the quality and safety of the food we serve in the way we do our business the way we connect and make the difference in the communities we operate being sensitive to environment and

being sustainable

1 We are committed to doing what is right

2 We are committed to be a good neighbour and partner in the community

3 We are committed to conducting our business ethically and with complete transparency

4 We are committed to treating our entire internal and external stakeholders with respect and dignity

13

McDonaldrsquos International

McDonaldrsquos has over 32000 local restaurants in more than 100 countries

70 percent of our restaurants worldwide are owned and operated by

independent local businessmen and businesswomen

McDonaldrsquos serves nearly 50 million customers each day

McDonaldrsquos first franchised restaurant opened at Des Plaines Illinois in

1955 by the founder Ray Kroc

McDonaldrsquos has its own Hamburger University in Illinois and the first

batch graduated in 1961

12 classes offered at Hamburger University are college accredited

In 1963 McDonaldrsquos sold its one billionth hamburger

McDonaldrsquos is listed on the New York Frankfurt Munich Paris and

Tokyo stock exchanges

McDonaldrsquos aired its first network TV advertisement ldquoMcDonaldrsquos -

Where Quality Starts Fresh Everydayrdquo in 1965

The first McDonaldrsquos Drive-Thru opened in Sierra Vista Arizona in 1975

14

Happy Meals were added to McDonaldrsquos menu in 1979

McDonaldrsquos launched the new worldwide Balanced Active Lifestyles

public awareness campaign in 2005

McDonaldrsquos celebrated its 50th Anniversary on April 15 2005

Business model

McDonalds Corporation earns revenue as an investor in properties

a franchiser of restaurants and an operator of restaurants Approximately 15 of McDonalds restaurants are owned and

operated by McDonalds Corporation directly The remainder are operated by others through a variety of franchise agreements and

joint ventures

The McDonalds Corporations business model is slightly different

from that of most other fast-food chains In addition to ordinary franchise fees and marketing fees which are calculated as

a percentage of sales McDonalds may also collect rent which may also be calculated on the basis of sales

As a condition of many franchise agreements which vary by

contract age country and location the Corporation may own or lease the properties on which McDonalds franchises are located In most if not all cases the franchisee does not own the location of its

restaurants

The United Kingdom and Ireland business model is different than the US in that fewer than 30 of restaurants are franchised with

the majority under the ownership of the company McDonalds trains its franchisees and others at Hamburger Univers ity in Oak

Brook Illino is

In other countries McDonalds restaurants are operated by joint

ventures of McDonalds Corporation and other local entities or governments

15

As a matter of policy McDonalds does not make direct sales of food or materials to franchisees instead organizing the supply of

food and materials to restaurants through approved third party logistics operators

According to Fast Food Nation by Eric Schlosser nearly one in

eight workers in the US have at some time been employed by McDonalds It also states that McDonalds is the largest private

operator of playgrounds in the US as well as the single largest purchaser of beef pork potatoes and apples The selection of

meats McDonalds uses varies with the culture of the host country

MARKETING MIX

The marketing mix of a company consists of the various elements as follows

which form the core of a companyrsquos marketing system and hence helps to

achieve marketing objectives The marketing mix of McDonaldrsquos is as follows-

The McDonald plains its marketing by simple keeping 4Ps in mind

Product

Price

Promotion

Place

Product - McDonaldrsquos places considerable emphasis on developing a menu

which customers want Market research establishes exactly what this is However customersrsquo requirements change over time In order to meet these

changes McDonaldrsquos has introduced new products and phased out old ones and will continue to do so Care is taken not to adversely affect the sales of one choice by introducing a new choice which will cannibalise sales from the

existing one (trade off) McDonaldrsquos knows that items on its menu will vary in popularity Their ability to generate profits will vary at different points in their

cycle In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian

The happy meal for the children is a great seller among others

Price-The customerrsquos 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 physical item it also has psychological

connotations for the customer The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised It is

16

important when deciding on price to be fully aware of the brand and its integrity

In India McDonalds classifies its products into 2 categories namely the branded

affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and

the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price

perceptions

Promotion- The promotions aspect of the marketing mix covers all types of

marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and

in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct

mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that

provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be

supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item

At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart

from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos

Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the

management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities

making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers

17

Other than the main four elements mentioned above there are a few other

elements too in the marketing mix which are as follows-

People -The employees in McDonaldrsquos have a standard uniform and

McDonaldrsquos specially focuses on friendly and prompt service to its customers

from their employees

Process -The food manufacturing process at McDonaldrsquos is completely

transparent ie the whole process is visible to the customers In fact the fast

food joint allows its customers to view and judge the hygienic standards at

McDonaldrsquos by allowing them to enter the area where the process takes place

The customers are invited to check the ingredients used in food

Physical evidence - McDonalds focuses on clean and hygienic interiors of

is outlets and at the same time the interiors are attractive and the fast food joint

maintains a proper decorum at its joints

18

SWOT ANALYSIS

Strengths

McDonaldrsquos holds a very strong brand name worldwide

They have large partnerships with other companies that provide them

with their desired products this increases the goodwill of the company

McDonaldrsquos is one of the most reputed firms who are socially

responsible

Loyal employees amp management amp customer are their biggest strength

19

McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind

while providing food to different countries

Clean environment and play areas for children where they can enjoy their

time

Weakness

The weakness that hits the list of employee turnover rate Every year

many of their employees are fired out of the restaurant

McDonalds mostly advertises products and food items that targets

children

Health conscious people often complain that they do not provide us with

the organic and healthy food This becomes their weakness when they get in the complaints

They also face quality issue at times This affects the business as they are

running the outlet worldwide if one franchise gets affected others also

get a bad name

Opportunities

It can open up online services for their customers so that they can easily

order their desired meals sitting at home

Discounts given on every food item may help them gain more customers

They can go for a joint venture with the retailers they work with

They can introduce healthy hamburgers and healthy drinks for the people who are health conscious

20

In order to be environment friendly they can use packing material which

can be recycled later or material that does not create pollution

Threats

Emerging competition of similar outlets is becoming a problem for McDonalds

Health issue also becomes a problem when it comes to food

As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies

Recession in any country would definitely affect the whole outlet

worldwide

People facing heart problems and obesity accuse McDonalds for not

providing them with the healthy food

They have a threat of local food outlets in different countries

McDonalds is operating in a fully fledged economy where competition is

increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession

McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local

Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government

regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled

Indian businesses to grow by improving their ability to compete in todays international markets

21

Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in

predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first

restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept

has today been adopted by various Indian and International players to deliver quality produce to consumers

For instance Cremica Industries worked with another McDonalds supplier

from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to

McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with

farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water

consumption better seeds amp agricultural management practices which result in greater yields

In some cases these Indian suppliers had the technology - but no market for the

products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk

casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to

restaurants across India

McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations

COMPANYrsquoS FINANCIAL INFORMATION

Company Name McDonalds Corporation

Ticker Symbol MCD

Web Address wwwmcdonaldscom

CEO Mr Donald Thompson

No of Employees 420000

Common Issue Type CS

Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other

22

goods from numerous independent suppliers

Industry Information LEISURE - Restaurants

Price Day Change Bid Ask Open High Low Volume

8718 -002 - - 8743 8743 8676 3658828

Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range

875267 10040 039 527 253 164 35 10222 - 8331

KEY FIGURES (Latest Twelve Months - LTM)

Yesterdays Close 8706 $

PE Ratio - LTM 164

Market Capitalisation 875267 mil

Latest Shares Outstanding 10040 mil

Earnings pS (EPS) 527 $

Dividend pS (DPS) 253 cent

Dividend Yield 35

Dividend Payout Ratio 48

Revenue per Employee 64300 $

Effective Tax Rate 313

Float 10153 mil

Float as of Shares Outstanding 999

Foreign Sales 18478 mil

Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue

910

Research amp Devlopment (RampD) as of Revenue

000

Gross Profit Margin 447

EBITDA Margin 356

Pre-Tax Profit Margin 291

Assets Turnover 08

Return on Assets (ROA) 161

Return on Equity (ROE) 392

Return on Capital Invested (ROCI) 204 Current Ratio 10

Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096

LT DebtTotal Capital 480

Working Capital pS 006 $

Cash pS 217 $

Book-Value pS 1383 $

Balance Sheet (at a glance) in Millions

DIVIDEND INFO

Dividend Declared Date 09202012

Dividend Ex-Date 11282012

Dividend Record Date 12022012

Dividend Pay Date 12162012

Dividend Amount 770

Type of Payment Cash Payment

Dividend Rate 308

Current Dividend Yield 35

5-Y Average Dividend Yield 31

Payout Ratio 480

5-Y Average Payout Ratio 530

Share price performance previous 3 years

Share price performance intraday

23

Tangible Book-Value pS 1110 $

Cash Flow pS 689 $

Free Cash Flow pS 125 $

KEY FIGURES (LTM) Price info PriceBook Ratio 630

PriceTangible Book Ratio 785 PriceCash Flow 126

PriceFree Cash Flow 699

PE as of Industry Group 420

PE as of Sector Segment 770

PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol

1 Week - - - 00 101 54041 66217

4 Weeks 8743 8331 8474 27 101 57129 856929

13 Weeks 9416 8331 9102 -44 98 61288 3554700

26 Weeks 9416 8331 8775 -08 93 59419 7189758

52 Weeks 10222 8331 9803 -112 79 59272 14521666

YTD 10222 8331 - -132 77 59774 13807695

Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)

8661 8631 8825 8931 9174 039 031

GROWTH RATES 5-Year

Growh Rsup2 of 5-Year Growth

3-Year

Growth

Revenue 381 776 666

Income 2017 811 978

Dividend 1536 947 1016

Capital Spending 697 NA 1052

RampD 000 NA 000

Normalized Inc 1158 NA 979

CHANGES YTD vs

Last YTD

Curr Qtr vs

Qtr 1-Yr ago

Annual vs

Last Annual

Revenue 21 -02 122

Earnings -14 -35 113

EPS 10 -14 151

EPS $ 004 -002 069

SOLVENCY RATIOS

SHORT-TERM SOLVENCY RATIOS

(LIQUIDITY)

Net Working Capital Ratio 271

Current Ratio 13

Quick Ratio (Acid Test) 10

Liquidity Ratio (Cash) 067

Receivables Turnover 215

Average Collection Period 17

Working CapitalEquity 62

Working Capital pS 088

Cash-Flow pS 677

Free Cash-Flow pS 209

24

FINANCIAL STRUCTURE RATIOS

Altmans Z-Score Ratio 485

Financial Leverage Ratio (AssetsEquity) 23

Debt Ratio 564

Total DebtEquity (Gearing Ratio) 087

LT DebtEquity 084

LT DebtCapital Invested 569

LT DebtTotal Liabilities 652

Interest Cover 173

InterestCapital Invested 167

25

People hellip McDonaldrsquos 1 Resource in India

26

McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs

around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in

1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with

McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)

The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive

training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course

(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the

Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University

27

The McDonaldrsquos Promise

QUALITY SERVICE CLEANLINESS amp VALUE

When asked to explain McDonalds success founder Ray Kroc used to say We

take the hamburger business more seriously than anyone else

Kroc was a perfectionist From the day he opened his first restaurant he vowed

to give his customers high quality products served quickly --and with a smile

in a clean and pleasant environment and all at a fair price Quality Service

Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds

business

QUALITY

McDonalds India serves only the highest quality products The attention to food

quality started long before the first restaurant opened McDonalds India has

established close relationships with local suppliers who provide McDonalds

with the highest quality freshest ingredients to make its products

All suppliers adhere to Indian government regulations on food health and

hygiene while continuously maintaining McDonalds own recognized standards

McDonalds has established an extensive cold chain distribution system in

India to ensure that the products which arrive at the restaurant from suppliers

all over India are absolutely fresh In the restaurants products and supplies are

used on a first-in first-out basis to ensure freshness All McDonalds products

are prepared using modern state-of-the-art cooking equipment to ensure quality

and safety

SERVICE

McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos

which sets its restaurants apart from others At McDonalds the customer

always comes first Every employee strives to provide 100 percent customer

satisfaction -- for every customer -- every visit This includes friendly and

attentive service accuracy in order taking and anticipation of customers needs

-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun

and youthful spirit we will proudly serve an exceptional McDonaldrsquos

eating experience that makes all people feel special and makes them smile ndash

every customer every timerdquo

28

CLEANLINESS

McDonalds restaurants provide a clean comfortable environment especially

suited for families McDonalds stringent cleaning standards ensure that all

tables seating highchairs and trays are sanitized several times each hour The

attention to cleanliness extends from the lobby to the kitchen to the sidewalk

and immediate areas outside the restaurant

In addition to urging customers to dispose of their litter properly and offering a

number of trash bins (both inside and outside the restaurants) for their

convenience McDonalds Litter Patrols walk around the restaurants several

times each day picking up litter -- even if it isnt from McDonalds

Restaurant managers walk through the dining areas each hour to ensure that it

is clean and well stocked All restaurants provide a variety of comfortable

seating arrangements to accommodate anyone -- from a single individual to a

large family The environment is warm inviting and well lit

VALUE

McDonalds menu is priced at a value that the largest segment of Indian

consumers can afford McDonalds does not sacrifice quality for value -- rather

McDonalds leverages economies of scale to minimize costs while maximizing

value to customers

McDonalds definition of value is broader than most restaurants of its kind -- it

is more than price Value at McDonalds is the sum of the total McDonalds

experience quality food fast friendly service a clean and pleasant

environment and products priced at very affordable prices for the largest

segment of Indian consumers possible That is value at McDonalds

29

McDonaldrsquos Indiahellip Culturally Sensitive

Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much

that is consistent with other McDonaldrsquos restaurants around the world such as

the quality of the food and the attention to service

The dedication to local cultures is not new for McDonaldrsquos For the past 50

years McDonaldrsquos has opened restaurants in more than 120 distinctly different

countries and cultures With guidance from its local partners McDonaldrsquos is

able to adapt- where necessary-its menu and restaurant operations to

complement existing eating-out options McDonaldrsquos local owners understand

what their customers want perhaps more importantly what is acceptable within

local customs and values

There is much too that is very different- such as the first beef-less and pork-

less menu in the world and special product formulations to cater to Indian

culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos

India says ldquoWe know the Indian culture because we were born in it

inherited its richness and respect it greatly It is the respect for this culture

and the sentiments of many of our customersrsquo that we do not serve any

beef and pork items in our restaurantsrdquo

McDonaldrsquos commitment to its Indian customers is evident even in

development of special sauces that use local spices and chillies The

mayonnaise and all other sauces are egg-less

In India vegetarianism is in many cases more than a lifestyle choice Many

people are vegetarians due to religious reasons and in some cases even the

vegetarian product that has come into contact with a non-vegetarian product is

unacceptable Hence McDonaldrsquos India has also changed its operations to

address the special requirements of our vegetarian customers by having

processes that ensure that a physical separation of veg and non-veg products is

maintained right from farm to the customer Vegetable products are prepared

separately using dedicated equipment and utensils Also in India McDonaldrsquos

uses only vegetable oil as a medium for cooking

30

McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash

lsquoto be driven by the leadership of local ownersrsquo This commitment has translated

into enduring benefits to the businesses at the grass root level in the areas of

introduction of new crops new agricultural practices and food processing methods

and procedures

McDonalds unique cold chain on which the QSR major has spent more than six

years setting up in India has brought about a veritable revolution immensely

benefiting the farmers at one end and enabling customers at retail counters get the

highest quality food products absolutely fresh and at great value

Setting up this extensive cold chain distribution system has involved the transfer of

state-of-the-art food processing technology by McDonalds and its international

suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain

From Field to -2⁰C in 90 Minutes

Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be

grown during the winter months but with McDonalds expertise in the area of

agriculture they are now able to grow this crop through the year

Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room

to remove field heat a large cold room and a refrigerated van for transportation where

the temperature and the relative humidity of the crop is maintained between 1ordm C and

4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room

within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling

to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at

the farms itself ensuring no delay between harvesting pre-cooling packaging and

cold storage

Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd

Flavour and Freshness locked in at - 35degC

Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable

range of products is another important player in this cold chain This includes hi-tech

refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C

This is vital to ensure that the frozen food retains it freshness for a long time and the

cold chain is maintained The frozen product is immediately moved to cold storage

rooms

31

Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes

McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for

quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk

coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -

thus maintaining the cold chain

All leading to the Consumer

McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The

DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity

of the products throughout the entire cold chain

Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the

McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C

as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state

All these suppliers share McDonalds commitment and dedication to satisfying

customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently

each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental

effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn

more

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 8: Entrepreneurship m com a

8

2006

McDelivery on Bicycles flagged off at Chandni Chowk (Delhi)- another

first initiative by McDonaldrsquos India

100th McDonaldrsquos Restaurant in India

10th Year Anniversary

2007

The first McDonaldrsquos open in Eastern Region at Park Street Kolkata

The first restaurant opened at Airport (Domestic Airport New Delhi)

The first MFY restaurant opened at Greater Noida Uttar Pradesh

2008hellip

The First restaurant to start extended hours procedure at Cyber Greens

Gurgaon and Saket New Delhi

The first restaurant to start Breakfast Menu at Janpath New Delhi

2009hellipThe first McDonaldrsquos Restaurant opens at Old Delhi Railway Station

2010hellipThe first reimaged new look restaurant opened at Ambiance mall

Vasant Kunj 6

2011hellip

McDonaldrsquos introduces premium products in it is menu ndash McSpicy range

of products

McDonaldrsquos introduces Mcflurry (premium desserts) in Oreo and

chocolate crispy flavors

McDonaldrsquos introduces Wi-Fi across DelhiNCR region

McDonaldrsquos currently has 235 restaurants in India

The Northern Region has 110 restaurants ndash

sect Delhi ndash 40

sect Haryana - 15

Faridabad ndash3 Manesar ndash 2 (Highway and Drive - Thru) Gurgaon ndash7

Karnal ndash 1 (Highway and Drive - Thru) Panipat -1 Ambala -1

9

sect Rajasthan -6

Jaipur ndash 3 Jodhpur ndash 1 Kota -1 Udaipur - 1

sect Uttaranchal -1

Dehradun ndash 1

sect Uttar Pradesh ndash29

Noida ndash 5 Greater Noida ndash 1 Ghaziabad ndash 7 Mathura ndash 1 (Highway and

Drive - Thru) Kanpur ndash 2 Meerut ndash 2 Lucknow ndash5 Agra ndash 1 Allahabad

ndash 1 Varanasi -2 Gajraula ndash 1 (Highway amp Drive Thru) Khatauli -

1(Highway and Drive thru)

sect Punjab ndash 13

Chandigarh ndash 2 Ludhiana ndash 2 Doraha ndash 1 (Highway and Drive - Thru)

Jalandhar ndash 2 Patarsi ndash 1 (Highway and Drive - Thru) Dasuya (Highway

and Drive Thru) ndash 1 Amritsar -1 Patiala -1 Zirakpur-2

sect West Bengal-3

Kolkata- 3

sect Himachal Pradesh -1

Jabli-1

sect Madhya Pradesh -2

Gwalior ndash 1 Bhopal -1

----------------------------------------------

The Western Region has 125 restaurants across the following states and cities ndash

Maharashtra - Mumbai Pune Nasik Kolhapur ndash

Gujarat - Ahmedabad Vododara Surat Indore Vapi

Madhya Pradesh ndash Indore

Andhra Pradesh - Hyderabad

Karnataka - Bangalore

Tamil Nadu - Chennai

10

GOALS AND OBJECTIVES

1 McDonaldrsquos vision is to be the worldrsquos best quick service restaurants

experience

2 McDonalds is committed to maintaining and developing the best food

products in the quick service restaurant market

3 In order to deliver this the company has made a number of commitments to

food safety and nutrition

4 Lead the Quick Service Restaurant market by a program of site development

and profitable restaurant openings and by attracting new customers Increasing

sales through promotions will enable them to continue their program of

expansion

5 McDonalds have an objective to continual enhance and improve their menu

This will better satisfy their customers and give customers more reason to visit

Many ideas for new items on the menu come from the franchisees responding to

customer demand Consumer tastes change over time and McDonalds has to

respond to these changes

MISSION STATEMENT

McDonalds vision is to be the worlds best quick service restaurant experience

Being the best means providing outstanding quality service cleanliness and

value so that we make every customer in every restaurant smile

11

AWARDS

McDonaldrsquos India has received many prestigious awards for its service and

performance including

The lsquoMost Respected Companyrsquo for four consecutive years (2003-2006)

in the Food Services sector by Businessworld

The lsquoMost Preferred Fast Food Outletrsquo 2006 amp 2007 by Awaaz

Consumer Award hosted by CNBC

Star Retailer ndash the lsquoConsumer Way Food Services Retailerrsquo of the

Year 2006 amp 2007 2008 by Franchise India

lsquoRetailer of the Yearrsquo Award for catering services (2004-2006) at the

Images Retail Awards

The lsquoAmity Corporate Excellence Awardrsquo ndashin 2007 amp 2008

The lsquoMost Wanted Brand of the Yearrsquo Award 2003 amp 2004 by

Franchising Holdings India Ltd

The lsquoMost Admired F amp B Retailer of the Year QSRs Foreign

Originrsquo ndash The Golden Spoon Awards by Images Retail

The Company with the Best Corporate Conscience ndash 2008 by Business

amp Economy

lsquoValue for Moneyrsquo brand ndash 2010 by Pitch Magazine

The most trusted family restaurant brand in the country award in

2010 by Readerrsquos Digest

12

Corporate Social Responsibility

Being responsible is at the core of everything that we do at McDonaldstrade It is

a deep-rooted value and a tradition that dates back to our founder Ray Kroc It is also one of our top business priorities

We believe that our continuing success depends on our stakeholders trust in

each and every aspect of our business be it the quality and safety of the food we serve in the way we do our business the way we connect and make the difference in the communities we operate being sensitive to environment and

being sustainable

1 We are committed to doing what is right

2 We are committed to be a good neighbour and partner in the community

3 We are committed to conducting our business ethically and with complete transparency

4 We are committed to treating our entire internal and external stakeholders with respect and dignity

13

McDonaldrsquos International

McDonaldrsquos has over 32000 local restaurants in more than 100 countries

70 percent of our restaurants worldwide are owned and operated by

independent local businessmen and businesswomen

McDonaldrsquos serves nearly 50 million customers each day

McDonaldrsquos first franchised restaurant opened at Des Plaines Illinois in

1955 by the founder Ray Kroc

McDonaldrsquos has its own Hamburger University in Illinois and the first

batch graduated in 1961

12 classes offered at Hamburger University are college accredited

In 1963 McDonaldrsquos sold its one billionth hamburger

McDonaldrsquos is listed on the New York Frankfurt Munich Paris and

Tokyo stock exchanges

McDonaldrsquos aired its first network TV advertisement ldquoMcDonaldrsquos -

Where Quality Starts Fresh Everydayrdquo in 1965

The first McDonaldrsquos Drive-Thru opened in Sierra Vista Arizona in 1975

14

Happy Meals were added to McDonaldrsquos menu in 1979

McDonaldrsquos launched the new worldwide Balanced Active Lifestyles

public awareness campaign in 2005

McDonaldrsquos celebrated its 50th Anniversary on April 15 2005

Business model

McDonalds Corporation earns revenue as an investor in properties

a franchiser of restaurants and an operator of restaurants Approximately 15 of McDonalds restaurants are owned and

operated by McDonalds Corporation directly The remainder are operated by others through a variety of franchise agreements and

joint ventures

The McDonalds Corporations business model is slightly different

from that of most other fast-food chains In addition to ordinary franchise fees and marketing fees which are calculated as

a percentage of sales McDonalds may also collect rent which may also be calculated on the basis of sales

As a condition of many franchise agreements which vary by

contract age country and location the Corporation may own or lease the properties on which McDonalds franchises are located In most if not all cases the franchisee does not own the location of its

restaurants

The United Kingdom and Ireland business model is different than the US in that fewer than 30 of restaurants are franchised with

the majority under the ownership of the company McDonalds trains its franchisees and others at Hamburger Univers ity in Oak

Brook Illino is

In other countries McDonalds restaurants are operated by joint

ventures of McDonalds Corporation and other local entities or governments

15

As a matter of policy McDonalds does not make direct sales of food or materials to franchisees instead organizing the supply of

food and materials to restaurants through approved third party logistics operators

According to Fast Food Nation by Eric Schlosser nearly one in

eight workers in the US have at some time been employed by McDonalds It also states that McDonalds is the largest private

operator of playgrounds in the US as well as the single largest purchaser of beef pork potatoes and apples The selection of

meats McDonalds uses varies with the culture of the host country

MARKETING MIX

The marketing mix of a company consists of the various elements as follows

which form the core of a companyrsquos marketing system and hence helps to

achieve marketing objectives The marketing mix of McDonaldrsquos is as follows-

The McDonald plains its marketing by simple keeping 4Ps in mind

Product

Price

Promotion

Place

Product - McDonaldrsquos places considerable emphasis on developing a menu

which customers want Market research establishes exactly what this is However customersrsquo requirements change over time In order to meet these

changes McDonaldrsquos has introduced new products and phased out old ones and will continue to do so Care is taken not to adversely affect the sales of one choice by introducing a new choice which will cannibalise sales from the

existing one (trade off) McDonaldrsquos knows that items on its menu will vary in popularity Their ability to generate profits will vary at different points in their

cycle In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian

The happy meal for the children is a great seller among others

Price-The customerrsquos 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 physical item it also has psychological

connotations for the customer The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised It is

16

important when deciding on price to be fully aware of the brand and its integrity

In India McDonalds classifies its products into 2 categories namely the branded

affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and

the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price

perceptions

Promotion- The promotions aspect of the marketing mix covers all types of

marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and

in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct

mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that

provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be

supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item

At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart

from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos

Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the

management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities

making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers

17

Other than the main four elements mentioned above there are a few other

elements too in the marketing mix which are as follows-

People -The employees in McDonaldrsquos have a standard uniform and

McDonaldrsquos specially focuses on friendly and prompt service to its customers

from their employees

Process -The food manufacturing process at McDonaldrsquos is completely

transparent ie the whole process is visible to the customers In fact the fast

food joint allows its customers to view and judge the hygienic standards at

McDonaldrsquos by allowing them to enter the area where the process takes place

The customers are invited to check the ingredients used in food

Physical evidence - McDonalds focuses on clean and hygienic interiors of

is outlets and at the same time the interiors are attractive and the fast food joint

maintains a proper decorum at its joints

18

SWOT ANALYSIS

Strengths

McDonaldrsquos holds a very strong brand name worldwide

They have large partnerships with other companies that provide them

with their desired products this increases the goodwill of the company

McDonaldrsquos is one of the most reputed firms who are socially

responsible

Loyal employees amp management amp customer are their biggest strength

19

McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind

while providing food to different countries

Clean environment and play areas for children where they can enjoy their

time

Weakness

The weakness that hits the list of employee turnover rate Every year

many of their employees are fired out of the restaurant

McDonalds mostly advertises products and food items that targets

children

Health conscious people often complain that they do not provide us with

the organic and healthy food This becomes their weakness when they get in the complaints

They also face quality issue at times This affects the business as they are

running the outlet worldwide if one franchise gets affected others also

get a bad name

Opportunities

It can open up online services for their customers so that they can easily

order their desired meals sitting at home

Discounts given on every food item may help them gain more customers

They can go for a joint venture with the retailers they work with

They can introduce healthy hamburgers and healthy drinks for the people who are health conscious

20

In order to be environment friendly they can use packing material which

can be recycled later or material that does not create pollution

Threats

Emerging competition of similar outlets is becoming a problem for McDonalds

Health issue also becomes a problem when it comes to food

As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies

Recession in any country would definitely affect the whole outlet

worldwide

People facing heart problems and obesity accuse McDonalds for not

providing them with the healthy food

They have a threat of local food outlets in different countries

McDonalds is operating in a fully fledged economy where competition is

increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession

McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local

Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government

regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled

Indian businesses to grow by improving their ability to compete in todays international markets

21

Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in

predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first

restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept

has today been adopted by various Indian and International players to deliver quality produce to consumers

For instance Cremica Industries worked with another McDonalds supplier

from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to

McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with

farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water

consumption better seeds amp agricultural management practices which result in greater yields

In some cases these Indian suppliers had the technology - but no market for the

products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk

casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to

restaurants across India

McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations

COMPANYrsquoS FINANCIAL INFORMATION

Company Name McDonalds Corporation

Ticker Symbol MCD

Web Address wwwmcdonaldscom

CEO Mr Donald Thompson

No of Employees 420000

Common Issue Type CS

Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other

22

goods from numerous independent suppliers

Industry Information LEISURE - Restaurants

Price Day Change Bid Ask Open High Low Volume

8718 -002 - - 8743 8743 8676 3658828

Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range

875267 10040 039 527 253 164 35 10222 - 8331

KEY FIGURES (Latest Twelve Months - LTM)

Yesterdays Close 8706 $

PE Ratio - LTM 164

Market Capitalisation 875267 mil

Latest Shares Outstanding 10040 mil

Earnings pS (EPS) 527 $

Dividend pS (DPS) 253 cent

Dividend Yield 35

Dividend Payout Ratio 48

Revenue per Employee 64300 $

Effective Tax Rate 313

Float 10153 mil

Float as of Shares Outstanding 999

Foreign Sales 18478 mil

Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue

910

Research amp Devlopment (RampD) as of Revenue

000

Gross Profit Margin 447

EBITDA Margin 356

Pre-Tax Profit Margin 291

Assets Turnover 08

Return on Assets (ROA) 161

Return on Equity (ROE) 392

Return on Capital Invested (ROCI) 204 Current Ratio 10

Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096

LT DebtTotal Capital 480

Working Capital pS 006 $

Cash pS 217 $

Book-Value pS 1383 $

Balance Sheet (at a glance) in Millions

DIVIDEND INFO

Dividend Declared Date 09202012

Dividend Ex-Date 11282012

Dividend Record Date 12022012

Dividend Pay Date 12162012

Dividend Amount 770

Type of Payment Cash Payment

Dividend Rate 308

Current Dividend Yield 35

5-Y Average Dividend Yield 31

Payout Ratio 480

5-Y Average Payout Ratio 530

Share price performance previous 3 years

Share price performance intraday

23

Tangible Book-Value pS 1110 $

Cash Flow pS 689 $

Free Cash Flow pS 125 $

KEY FIGURES (LTM) Price info PriceBook Ratio 630

PriceTangible Book Ratio 785 PriceCash Flow 126

PriceFree Cash Flow 699

PE as of Industry Group 420

PE as of Sector Segment 770

PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol

1 Week - - - 00 101 54041 66217

4 Weeks 8743 8331 8474 27 101 57129 856929

13 Weeks 9416 8331 9102 -44 98 61288 3554700

26 Weeks 9416 8331 8775 -08 93 59419 7189758

52 Weeks 10222 8331 9803 -112 79 59272 14521666

YTD 10222 8331 - -132 77 59774 13807695

Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)

8661 8631 8825 8931 9174 039 031

GROWTH RATES 5-Year

Growh Rsup2 of 5-Year Growth

3-Year

Growth

Revenue 381 776 666

Income 2017 811 978

Dividend 1536 947 1016

Capital Spending 697 NA 1052

RampD 000 NA 000

Normalized Inc 1158 NA 979

CHANGES YTD vs

Last YTD

Curr Qtr vs

Qtr 1-Yr ago

Annual vs

Last Annual

Revenue 21 -02 122

Earnings -14 -35 113

EPS 10 -14 151

EPS $ 004 -002 069

SOLVENCY RATIOS

SHORT-TERM SOLVENCY RATIOS

(LIQUIDITY)

Net Working Capital Ratio 271

Current Ratio 13

Quick Ratio (Acid Test) 10

Liquidity Ratio (Cash) 067

Receivables Turnover 215

Average Collection Period 17

Working CapitalEquity 62

Working Capital pS 088

Cash-Flow pS 677

Free Cash-Flow pS 209

24

FINANCIAL STRUCTURE RATIOS

Altmans Z-Score Ratio 485

Financial Leverage Ratio (AssetsEquity) 23

Debt Ratio 564

Total DebtEquity (Gearing Ratio) 087

LT DebtEquity 084

LT DebtCapital Invested 569

LT DebtTotal Liabilities 652

Interest Cover 173

InterestCapital Invested 167

25

People hellip McDonaldrsquos 1 Resource in India

26

McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs

around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in

1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with

McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)

The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive

training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course

(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the

Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University

27

The McDonaldrsquos Promise

QUALITY SERVICE CLEANLINESS amp VALUE

When asked to explain McDonalds success founder Ray Kroc used to say We

take the hamburger business more seriously than anyone else

Kroc was a perfectionist From the day he opened his first restaurant he vowed

to give his customers high quality products served quickly --and with a smile

in a clean and pleasant environment and all at a fair price Quality Service

Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds

business

QUALITY

McDonalds India serves only the highest quality products The attention to food

quality started long before the first restaurant opened McDonalds India has

established close relationships with local suppliers who provide McDonalds

with the highest quality freshest ingredients to make its products

All suppliers adhere to Indian government regulations on food health and

hygiene while continuously maintaining McDonalds own recognized standards

McDonalds has established an extensive cold chain distribution system in

India to ensure that the products which arrive at the restaurant from suppliers

all over India are absolutely fresh In the restaurants products and supplies are

used on a first-in first-out basis to ensure freshness All McDonalds products

are prepared using modern state-of-the-art cooking equipment to ensure quality

and safety

SERVICE

McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos

which sets its restaurants apart from others At McDonalds the customer

always comes first Every employee strives to provide 100 percent customer

satisfaction -- for every customer -- every visit This includes friendly and

attentive service accuracy in order taking and anticipation of customers needs

-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun

and youthful spirit we will proudly serve an exceptional McDonaldrsquos

eating experience that makes all people feel special and makes them smile ndash

every customer every timerdquo

28

CLEANLINESS

McDonalds restaurants provide a clean comfortable environment especially

suited for families McDonalds stringent cleaning standards ensure that all

tables seating highchairs and trays are sanitized several times each hour The

attention to cleanliness extends from the lobby to the kitchen to the sidewalk

and immediate areas outside the restaurant

In addition to urging customers to dispose of their litter properly and offering a

number of trash bins (both inside and outside the restaurants) for their

convenience McDonalds Litter Patrols walk around the restaurants several

times each day picking up litter -- even if it isnt from McDonalds

Restaurant managers walk through the dining areas each hour to ensure that it

is clean and well stocked All restaurants provide a variety of comfortable

seating arrangements to accommodate anyone -- from a single individual to a

large family The environment is warm inviting and well lit

VALUE

McDonalds menu is priced at a value that the largest segment of Indian

consumers can afford McDonalds does not sacrifice quality for value -- rather

McDonalds leverages economies of scale to minimize costs while maximizing

value to customers

McDonalds definition of value is broader than most restaurants of its kind -- it

is more than price Value at McDonalds is the sum of the total McDonalds

experience quality food fast friendly service a clean and pleasant

environment and products priced at very affordable prices for the largest

segment of Indian consumers possible That is value at McDonalds

29

McDonaldrsquos Indiahellip Culturally Sensitive

Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much

that is consistent with other McDonaldrsquos restaurants around the world such as

the quality of the food and the attention to service

The dedication to local cultures is not new for McDonaldrsquos For the past 50

years McDonaldrsquos has opened restaurants in more than 120 distinctly different

countries and cultures With guidance from its local partners McDonaldrsquos is

able to adapt- where necessary-its menu and restaurant operations to

complement existing eating-out options McDonaldrsquos local owners understand

what their customers want perhaps more importantly what is acceptable within

local customs and values

There is much too that is very different- such as the first beef-less and pork-

less menu in the world and special product formulations to cater to Indian

culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos

India says ldquoWe know the Indian culture because we were born in it

inherited its richness and respect it greatly It is the respect for this culture

and the sentiments of many of our customersrsquo that we do not serve any

beef and pork items in our restaurantsrdquo

McDonaldrsquos commitment to its Indian customers is evident even in

development of special sauces that use local spices and chillies The

mayonnaise and all other sauces are egg-less

In India vegetarianism is in many cases more than a lifestyle choice Many

people are vegetarians due to religious reasons and in some cases even the

vegetarian product that has come into contact with a non-vegetarian product is

unacceptable Hence McDonaldrsquos India has also changed its operations to

address the special requirements of our vegetarian customers by having

processes that ensure that a physical separation of veg and non-veg products is

maintained right from farm to the customer Vegetable products are prepared

separately using dedicated equipment and utensils Also in India McDonaldrsquos

uses only vegetable oil as a medium for cooking

30

McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash

lsquoto be driven by the leadership of local ownersrsquo This commitment has translated

into enduring benefits to the businesses at the grass root level in the areas of

introduction of new crops new agricultural practices and food processing methods

and procedures

McDonalds unique cold chain on which the QSR major has spent more than six

years setting up in India has brought about a veritable revolution immensely

benefiting the farmers at one end and enabling customers at retail counters get the

highest quality food products absolutely fresh and at great value

Setting up this extensive cold chain distribution system has involved the transfer of

state-of-the-art food processing technology by McDonalds and its international

suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain

From Field to -2⁰C in 90 Minutes

Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be

grown during the winter months but with McDonalds expertise in the area of

agriculture they are now able to grow this crop through the year

Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room

to remove field heat a large cold room and a refrigerated van for transportation where

the temperature and the relative humidity of the crop is maintained between 1ordm C and

4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room

within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling

to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at

the farms itself ensuring no delay between harvesting pre-cooling packaging and

cold storage

Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd

Flavour and Freshness locked in at - 35degC

Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable

range of products is another important player in this cold chain This includes hi-tech

refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C

This is vital to ensure that the frozen food retains it freshness for a long time and the

cold chain is maintained The frozen product is immediately moved to cold storage

rooms

31

Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes

McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for

quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk

coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -

thus maintaining the cold chain

All leading to the Consumer

McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The

DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity

of the products throughout the entire cold chain

Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the

McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C

as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state

All these suppliers share McDonalds commitment and dedication to satisfying

customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently

each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental

effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn

more

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 9: Entrepreneurship m com a

9

sect Rajasthan -6

Jaipur ndash 3 Jodhpur ndash 1 Kota -1 Udaipur - 1

sect Uttaranchal -1

Dehradun ndash 1

sect Uttar Pradesh ndash29

Noida ndash 5 Greater Noida ndash 1 Ghaziabad ndash 7 Mathura ndash 1 (Highway and

Drive - Thru) Kanpur ndash 2 Meerut ndash 2 Lucknow ndash5 Agra ndash 1 Allahabad

ndash 1 Varanasi -2 Gajraula ndash 1 (Highway amp Drive Thru) Khatauli -

1(Highway and Drive thru)

sect Punjab ndash 13

Chandigarh ndash 2 Ludhiana ndash 2 Doraha ndash 1 (Highway and Drive - Thru)

Jalandhar ndash 2 Patarsi ndash 1 (Highway and Drive - Thru) Dasuya (Highway

and Drive Thru) ndash 1 Amritsar -1 Patiala -1 Zirakpur-2

sect West Bengal-3

Kolkata- 3

sect Himachal Pradesh -1

Jabli-1

sect Madhya Pradesh -2

Gwalior ndash 1 Bhopal -1

----------------------------------------------

The Western Region has 125 restaurants across the following states and cities ndash

Maharashtra - Mumbai Pune Nasik Kolhapur ndash

Gujarat - Ahmedabad Vododara Surat Indore Vapi

Madhya Pradesh ndash Indore

Andhra Pradesh - Hyderabad

Karnataka - Bangalore

Tamil Nadu - Chennai

10

GOALS AND OBJECTIVES

1 McDonaldrsquos vision is to be the worldrsquos best quick service restaurants

experience

2 McDonalds is committed to maintaining and developing the best food

products in the quick service restaurant market

3 In order to deliver this the company has made a number of commitments to

food safety and nutrition

4 Lead the Quick Service Restaurant market by a program of site development

and profitable restaurant openings and by attracting new customers Increasing

sales through promotions will enable them to continue their program of

expansion

5 McDonalds have an objective to continual enhance and improve their menu

This will better satisfy their customers and give customers more reason to visit

Many ideas for new items on the menu come from the franchisees responding to

customer demand Consumer tastes change over time and McDonalds has to

respond to these changes

MISSION STATEMENT

McDonalds vision is to be the worlds best quick service restaurant experience

Being the best means providing outstanding quality service cleanliness and

value so that we make every customer in every restaurant smile

11

AWARDS

McDonaldrsquos India has received many prestigious awards for its service and

performance including

The lsquoMost Respected Companyrsquo for four consecutive years (2003-2006)

in the Food Services sector by Businessworld

The lsquoMost Preferred Fast Food Outletrsquo 2006 amp 2007 by Awaaz

Consumer Award hosted by CNBC

Star Retailer ndash the lsquoConsumer Way Food Services Retailerrsquo of the

Year 2006 amp 2007 2008 by Franchise India

lsquoRetailer of the Yearrsquo Award for catering services (2004-2006) at the

Images Retail Awards

The lsquoAmity Corporate Excellence Awardrsquo ndashin 2007 amp 2008

The lsquoMost Wanted Brand of the Yearrsquo Award 2003 amp 2004 by

Franchising Holdings India Ltd

The lsquoMost Admired F amp B Retailer of the Year QSRs Foreign

Originrsquo ndash The Golden Spoon Awards by Images Retail

The Company with the Best Corporate Conscience ndash 2008 by Business

amp Economy

lsquoValue for Moneyrsquo brand ndash 2010 by Pitch Magazine

The most trusted family restaurant brand in the country award in

2010 by Readerrsquos Digest

12

Corporate Social Responsibility

Being responsible is at the core of everything that we do at McDonaldstrade It is

a deep-rooted value and a tradition that dates back to our founder Ray Kroc It is also one of our top business priorities

We believe that our continuing success depends on our stakeholders trust in

each and every aspect of our business be it the quality and safety of the food we serve in the way we do our business the way we connect and make the difference in the communities we operate being sensitive to environment and

being sustainable

1 We are committed to doing what is right

2 We are committed to be a good neighbour and partner in the community

3 We are committed to conducting our business ethically and with complete transparency

4 We are committed to treating our entire internal and external stakeholders with respect and dignity

13

McDonaldrsquos International

McDonaldrsquos has over 32000 local restaurants in more than 100 countries

70 percent of our restaurants worldwide are owned and operated by

independent local businessmen and businesswomen

McDonaldrsquos serves nearly 50 million customers each day

McDonaldrsquos first franchised restaurant opened at Des Plaines Illinois in

1955 by the founder Ray Kroc

McDonaldrsquos has its own Hamburger University in Illinois and the first

batch graduated in 1961

12 classes offered at Hamburger University are college accredited

In 1963 McDonaldrsquos sold its one billionth hamburger

McDonaldrsquos is listed on the New York Frankfurt Munich Paris and

Tokyo stock exchanges

McDonaldrsquos aired its first network TV advertisement ldquoMcDonaldrsquos -

Where Quality Starts Fresh Everydayrdquo in 1965

The first McDonaldrsquos Drive-Thru opened in Sierra Vista Arizona in 1975

14

Happy Meals were added to McDonaldrsquos menu in 1979

McDonaldrsquos launched the new worldwide Balanced Active Lifestyles

public awareness campaign in 2005

McDonaldrsquos celebrated its 50th Anniversary on April 15 2005

Business model

McDonalds Corporation earns revenue as an investor in properties

a franchiser of restaurants and an operator of restaurants Approximately 15 of McDonalds restaurants are owned and

operated by McDonalds Corporation directly The remainder are operated by others through a variety of franchise agreements and

joint ventures

The McDonalds Corporations business model is slightly different

from that of most other fast-food chains In addition to ordinary franchise fees and marketing fees which are calculated as

a percentage of sales McDonalds may also collect rent which may also be calculated on the basis of sales

As a condition of many franchise agreements which vary by

contract age country and location the Corporation may own or lease the properties on which McDonalds franchises are located In most if not all cases the franchisee does not own the location of its

restaurants

The United Kingdom and Ireland business model is different than the US in that fewer than 30 of restaurants are franchised with

the majority under the ownership of the company McDonalds trains its franchisees and others at Hamburger Univers ity in Oak

Brook Illino is

In other countries McDonalds restaurants are operated by joint

ventures of McDonalds Corporation and other local entities or governments

15

As a matter of policy McDonalds does not make direct sales of food or materials to franchisees instead organizing the supply of

food and materials to restaurants through approved third party logistics operators

According to Fast Food Nation by Eric Schlosser nearly one in

eight workers in the US have at some time been employed by McDonalds It also states that McDonalds is the largest private

operator of playgrounds in the US as well as the single largest purchaser of beef pork potatoes and apples The selection of

meats McDonalds uses varies with the culture of the host country

MARKETING MIX

The marketing mix of a company consists of the various elements as follows

which form the core of a companyrsquos marketing system and hence helps to

achieve marketing objectives The marketing mix of McDonaldrsquos is as follows-

The McDonald plains its marketing by simple keeping 4Ps in mind

Product

Price

Promotion

Place

Product - McDonaldrsquos places considerable emphasis on developing a menu

which customers want Market research establishes exactly what this is However customersrsquo requirements change over time In order to meet these

changes McDonaldrsquos has introduced new products and phased out old ones and will continue to do so Care is taken not to adversely affect the sales of one choice by introducing a new choice which will cannibalise sales from the

existing one (trade off) McDonaldrsquos knows that items on its menu will vary in popularity Their ability to generate profits will vary at different points in their

cycle In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian

The happy meal for the children is a great seller among others

Price-The customerrsquos 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 physical item it also has psychological

connotations for the customer The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised It is

16

important when deciding on price to be fully aware of the brand and its integrity

In India McDonalds classifies its products into 2 categories namely the branded

affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and

the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price

perceptions

Promotion- The promotions aspect of the marketing mix covers all types of

marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and

in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct

mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that

provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be

supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item

At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart

from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos

Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the

management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities

making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers

17

Other than the main four elements mentioned above there are a few other

elements too in the marketing mix which are as follows-

People -The employees in McDonaldrsquos have a standard uniform and

McDonaldrsquos specially focuses on friendly and prompt service to its customers

from their employees

Process -The food manufacturing process at McDonaldrsquos is completely

transparent ie the whole process is visible to the customers In fact the fast

food joint allows its customers to view and judge the hygienic standards at

McDonaldrsquos by allowing them to enter the area where the process takes place

The customers are invited to check the ingredients used in food

Physical evidence - McDonalds focuses on clean and hygienic interiors of

is outlets and at the same time the interiors are attractive and the fast food joint

maintains a proper decorum at its joints

18

SWOT ANALYSIS

Strengths

McDonaldrsquos holds a very strong brand name worldwide

They have large partnerships with other companies that provide them

with their desired products this increases the goodwill of the company

McDonaldrsquos is one of the most reputed firms who are socially

responsible

Loyal employees amp management amp customer are their biggest strength

19

McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind

while providing food to different countries

Clean environment and play areas for children where they can enjoy their

time

Weakness

The weakness that hits the list of employee turnover rate Every year

many of their employees are fired out of the restaurant

McDonalds mostly advertises products and food items that targets

children

Health conscious people often complain that they do not provide us with

the organic and healthy food This becomes their weakness when they get in the complaints

They also face quality issue at times This affects the business as they are

running the outlet worldwide if one franchise gets affected others also

get a bad name

Opportunities

It can open up online services for their customers so that they can easily

order their desired meals sitting at home

Discounts given on every food item may help them gain more customers

They can go for a joint venture with the retailers they work with

They can introduce healthy hamburgers and healthy drinks for the people who are health conscious

20

In order to be environment friendly they can use packing material which

can be recycled later or material that does not create pollution

Threats

Emerging competition of similar outlets is becoming a problem for McDonalds

Health issue also becomes a problem when it comes to food

As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies

Recession in any country would definitely affect the whole outlet

worldwide

People facing heart problems and obesity accuse McDonalds for not

providing them with the healthy food

They have a threat of local food outlets in different countries

McDonalds is operating in a fully fledged economy where competition is

increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession

McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local

Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government

regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled

Indian businesses to grow by improving their ability to compete in todays international markets

21

Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in

predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first

restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept

has today been adopted by various Indian and International players to deliver quality produce to consumers

For instance Cremica Industries worked with another McDonalds supplier

from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to

McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with

farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water

consumption better seeds amp agricultural management practices which result in greater yields

In some cases these Indian suppliers had the technology - but no market for the

products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk

casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to

restaurants across India

McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations

COMPANYrsquoS FINANCIAL INFORMATION

Company Name McDonalds Corporation

Ticker Symbol MCD

Web Address wwwmcdonaldscom

CEO Mr Donald Thompson

No of Employees 420000

Common Issue Type CS

Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other

22

goods from numerous independent suppliers

Industry Information LEISURE - Restaurants

Price Day Change Bid Ask Open High Low Volume

8718 -002 - - 8743 8743 8676 3658828

Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range

875267 10040 039 527 253 164 35 10222 - 8331

KEY FIGURES (Latest Twelve Months - LTM)

Yesterdays Close 8706 $

PE Ratio - LTM 164

Market Capitalisation 875267 mil

Latest Shares Outstanding 10040 mil

Earnings pS (EPS) 527 $

Dividend pS (DPS) 253 cent

Dividend Yield 35

Dividend Payout Ratio 48

Revenue per Employee 64300 $

Effective Tax Rate 313

Float 10153 mil

Float as of Shares Outstanding 999

Foreign Sales 18478 mil

Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue

910

Research amp Devlopment (RampD) as of Revenue

000

Gross Profit Margin 447

EBITDA Margin 356

Pre-Tax Profit Margin 291

Assets Turnover 08

Return on Assets (ROA) 161

Return on Equity (ROE) 392

Return on Capital Invested (ROCI) 204 Current Ratio 10

Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096

LT DebtTotal Capital 480

Working Capital pS 006 $

Cash pS 217 $

Book-Value pS 1383 $

Balance Sheet (at a glance) in Millions

DIVIDEND INFO

Dividend Declared Date 09202012

Dividend Ex-Date 11282012

Dividend Record Date 12022012

Dividend Pay Date 12162012

Dividend Amount 770

Type of Payment Cash Payment

Dividend Rate 308

Current Dividend Yield 35

5-Y Average Dividend Yield 31

Payout Ratio 480

5-Y Average Payout Ratio 530

Share price performance previous 3 years

Share price performance intraday

23

Tangible Book-Value pS 1110 $

Cash Flow pS 689 $

Free Cash Flow pS 125 $

KEY FIGURES (LTM) Price info PriceBook Ratio 630

PriceTangible Book Ratio 785 PriceCash Flow 126

PriceFree Cash Flow 699

PE as of Industry Group 420

PE as of Sector Segment 770

PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol

1 Week - - - 00 101 54041 66217

4 Weeks 8743 8331 8474 27 101 57129 856929

13 Weeks 9416 8331 9102 -44 98 61288 3554700

26 Weeks 9416 8331 8775 -08 93 59419 7189758

52 Weeks 10222 8331 9803 -112 79 59272 14521666

YTD 10222 8331 - -132 77 59774 13807695

Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)

8661 8631 8825 8931 9174 039 031

GROWTH RATES 5-Year

Growh Rsup2 of 5-Year Growth

3-Year

Growth

Revenue 381 776 666

Income 2017 811 978

Dividend 1536 947 1016

Capital Spending 697 NA 1052

RampD 000 NA 000

Normalized Inc 1158 NA 979

CHANGES YTD vs

Last YTD

Curr Qtr vs

Qtr 1-Yr ago

Annual vs

Last Annual

Revenue 21 -02 122

Earnings -14 -35 113

EPS 10 -14 151

EPS $ 004 -002 069

SOLVENCY RATIOS

SHORT-TERM SOLVENCY RATIOS

(LIQUIDITY)

Net Working Capital Ratio 271

Current Ratio 13

Quick Ratio (Acid Test) 10

Liquidity Ratio (Cash) 067

Receivables Turnover 215

Average Collection Period 17

Working CapitalEquity 62

Working Capital pS 088

Cash-Flow pS 677

Free Cash-Flow pS 209

24

FINANCIAL STRUCTURE RATIOS

Altmans Z-Score Ratio 485

Financial Leverage Ratio (AssetsEquity) 23

Debt Ratio 564

Total DebtEquity (Gearing Ratio) 087

LT DebtEquity 084

LT DebtCapital Invested 569

LT DebtTotal Liabilities 652

Interest Cover 173

InterestCapital Invested 167

25

People hellip McDonaldrsquos 1 Resource in India

26

McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs

around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in

1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with

McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)

The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive

training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course

(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the

Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University

27

The McDonaldrsquos Promise

QUALITY SERVICE CLEANLINESS amp VALUE

When asked to explain McDonalds success founder Ray Kroc used to say We

take the hamburger business more seriously than anyone else

Kroc was a perfectionist From the day he opened his first restaurant he vowed

to give his customers high quality products served quickly --and with a smile

in a clean and pleasant environment and all at a fair price Quality Service

Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds

business

QUALITY

McDonalds India serves only the highest quality products The attention to food

quality started long before the first restaurant opened McDonalds India has

established close relationships with local suppliers who provide McDonalds

with the highest quality freshest ingredients to make its products

All suppliers adhere to Indian government regulations on food health and

hygiene while continuously maintaining McDonalds own recognized standards

McDonalds has established an extensive cold chain distribution system in

India to ensure that the products which arrive at the restaurant from suppliers

all over India are absolutely fresh In the restaurants products and supplies are

used on a first-in first-out basis to ensure freshness All McDonalds products

are prepared using modern state-of-the-art cooking equipment to ensure quality

and safety

SERVICE

McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos

which sets its restaurants apart from others At McDonalds the customer

always comes first Every employee strives to provide 100 percent customer

satisfaction -- for every customer -- every visit This includes friendly and

attentive service accuracy in order taking and anticipation of customers needs

-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun

and youthful spirit we will proudly serve an exceptional McDonaldrsquos

eating experience that makes all people feel special and makes them smile ndash

every customer every timerdquo

28

CLEANLINESS

McDonalds restaurants provide a clean comfortable environment especially

suited for families McDonalds stringent cleaning standards ensure that all

tables seating highchairs and trays are sanitized several times each hour The

attention to cleanliness extends from the lobby to the kitchen to the sidewalk

and immediate areas outside the restaurant

In addition to urging customers to dispose of their litter properly and offering a

number of trash bins (both inside and outside the restaurants) for their

convenience McDonalds Litter Patrols walk around the restaurants several

times each day picking up litter -- even if it isnt from McDonalds

Restaurant managers walk through the dining areas each hour to ensure that it

is clean and well stocked All restaurants provide a variety of comfortable

seating arrangements to accommodate anyone -- from a single individual to a

large family The environment is warm inviting and well lit

VALUE

McDonalds menu is priced at a value that the largest segment of Indian

consumers can afford McDonalds does not sacrifice quality for value -- rather

McDonalds leverages economies of scale to minimize costs while maximizing

value to customers

McDonalds definition of value is broader than most restaurants of its kind -- it

is more than price Value at McDonalds is the sum of the total McDonalds

experience quality food fast friendly service a clean and pleasant

environment and products priced at very affordable prices for the largest

segment of Indian consumers possible That is value at McDonalds

29

McDonaldrsquos Indiahellip Culturally Sensitive

Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much

that is consistent with other McDonaldrsquos restaurants around the world such as

the quality of the food and the attention to service

The dedication to local cultures is not new for McDonaldrsquos For the past 50

years McDonaldrsquos has opened restaurants in more than 120 distinctly different

countries and cultures With guidance from its local partners McDonaldrsquos is

able to adapt- where necessary-its menu and restaurant operations to

complement existing eating-out options McDonaldrsquos local owners understand

what their customers want perhaps more importantly what is acceptable within

local customs and values

There is much too that is very different- such as the first beef-less and pork-

less menu in the world and special product formulations to cater to Indian

culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos

India says ldquoWe know the Indian culture because we were born in it

inherited its richness and respect it greatly It is the respect for this culture

and the sentiments of many of our customersrsquo that we do not serve any

beef and pork items in our restaurantsrdquo

McDonaldrsquos commitment to its Indian customers is evident even in

development of special sauces that use local spices and chillies The

mayonnaise and all other sauces are egg-less

In India vegetarianism is in many cases more than a lifestyle choice Many

people are vegetarians due to religious reasons and in some cases even the

vegetarian product that has come into contact with a non-vegetarian product is

unacceptable Hence McDonaldrsquos India has also changed its operations to

address the special requirements of our vegetarian customers by having

processes that ensure that a physical separation of veg and non-veg products is

maintained right from farm to the customer Vegetable products are prepared

separately using dedicated equipment and utensils Also in India McDonaldrsquos

uses only vegetable oil as a medium for cooking

30

McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash

lsquoto be driven by the leadership of local ownersrsquo This commitment has translated

into enduring benefits to the businesses at the grass root level in the areas of

introduction of new crops new agricultural practices and food processing methods

and procedures

McDonalds unique cold chain on which the QSR major has spent more than six

years setting up in India has brought about a veritable revolution immensely

benefiting the farmers at one end and enabling customers at retail counters get the

highest quality food products absolutely fresh and at great value

Setting up this extensive cold chain distribution system has involved the transfer of

state-of-the-art food processing technology by McDonalds and its international

suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain

From Field to -2⁰C in 90 Minutes

Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be

grown during the winter months but with McDonalds expertise in the area of

agriculture they are now able to grow this crop through the year

Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room

to remove field heat a large cold room and a refrigerated van for transportation where

the temperature and the relative humidity of the crop is maintained between 1ordm C and

4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room

within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling

to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at

the farms itself ensuring no delay between harvesting pre-cooling packaging and

cold storage

Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd

Flavour and Freshness locked in at - 35degC

Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable

range of products is another important player in this cold chain This includes hi-tech

refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C

This is vital to ensure that the frozen food retains it freshness for a long time and the

cold chain is maintained The frozen product is immediately moved to cold storage

rooms

31

Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes

McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for

quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk

coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -

thus maintaining the cold chain

All leading to the Consumer

McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The

DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity

of the products throughout the entire cold chain

Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the

McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C

as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state

All these suppliers share McDonalds commitment and dedication to satisfying

customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently

each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental

effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn

more

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 10: Entrepreneurship m com a

10

GOALS AND OBJECTIVES

1 McDonaldrsquos vision is to be the worldrsquos best quick service restaurants

experience

2 McDonalds is committed to maintaining and developing the best food

products in the quick service restaurant market

3 In order to deliver this the company has made a number of commitments to

food safety and nutrition

4 Lead the Quick Service Restaurant market by a program of site development

and profitable restaurant openings and by attracting new customers Increasing

sales through promotions will enable them to continue their program of

expansion

5 McDonalds have an objective to continual enhance and improve their menu

This will better satisfy their customers and give customers more reason to visit

Many ideas for new items on the menu come from the franchisees responding to

customer demand Consumer tastes change over time and McDonalds has to

respond to these changes

MISSION STATEMENT

McDonalds vision is to be the worlds best quick service restaurant experience

Being the best means providing outstanding quality service cleanliness and

value so that we make every customer in every restaurant smile

11

AWARDS

McDonaldrsquos India has received many prestigious awards for its service and

performance including

The lsquoMost Respected Companyrsquo for four consecutive years (2003-2006)

in the Food Services sector by Businessworld

The lsquoMost Preferred Fast Food Outletrsquo 2006 amp 2007 by Awaaz

Consumer Award hosted by CNBC

Star Retailer ndash the lsquoConsumer Way Food Services Retailerrsquo of the

Year 2006 amp 2007 2008 by Franchise India

lsquoRetailer of the Yearrsquo Award for catering services (2004-2006) at the

Images Retail Awards

The lsquoAmity Corporate Excellence Awardrsquo ndashin 2007 amp 2008

The lsquoMost Wanted Brand of the Yearrsquo Award 2003 amp 2004 by

Franchising Holdings India Ltd

The lsquoMost Admired F amp B Retailer of the Year QSRs Foreign

Originrsquo ndash The Golden Spoon Awards by Images Retail

The Company with the Best Corporate Conscience ndash 2008 by Business

amp Economy

lsquoValue for Moneyrsquo brand ndash 2010 by Pitch Magazine

The most trusted family restaurant brand in the country award in

2010 by Readerrsquos Digest

12

Corporate Social Responsibility

Being responsible is at the core of everything that we do at McDonaldstrade It is

a deep-rooted value and a tradition that dates back to our founder Ray Kroc It is also one of our top business priorities

We believe that our continuing success depends on our stakeholders trust in

each and every aspect of our business be it the quality and safety of the food we serve in the way we do our business the way we connect and make the difference in the communities we operate being sensitive to environment and

being sustainable

1 We are committed to doing what is right

2 We are committed to be a good neighbour and partner in the community

3 We are committed to conducting our business ethically and with complete transparency

4 We are committed to treating our entire internal and external stakeholders with respect and dignity

13

McDonaldrsquos International

McDonaldrsquos has over 32000 local restaurants in more than 100 countries

70 percent of our restaurants worldwide are owned and operated by

independent local businessmen and businesswomen

McDonaldrsquos serves nearly 50 million customers each day

McDonaldrsquos first franchised restaurant opened at Des Plaines Illinois in

1955 by the founder Ray Kroc

McDonaldrsquos has its own Hamburger University in Illinois and the first

batch graduated in 1961

12 classes offered at Hamburger University are college accredited

In 1963 McDonaldrsquos sold its one billionth hamburger

McDonaldrsquos is listed on the New York Frankfurt Munich Paris and

Tokyo stock exchanges

McDonaldrsquos aired its first network TV advertisement ldquoMcDonaldrsquos -

Where Quality Starts Fresh Everydayrdquo in 1965

The first McDonaldrsquos Drive-Thru opened in Sierra Vista Arizona in 1975

14

Happy Meals were added to McDonaldrsquos menu in 1979

McDonaldrsquos launched the new worldwide Balanced Active Lifestyles

public awareness campaign in 2005

McDonaldrsquos celebrated its 50th Anniversary on April 15 2005

Business model

McDonalds Corporation earns revenue as an investor in properties

a franchiser of restaurants and an operator of restaurants Approximately 15 of McDonalds restaurants are owned and

operated by McDonalds Corporation directly The remainder are operated by others through a variety of franchise agreements and

joint ventures

The McDonalds Corporations business model is slightly different

from that of most other fast-food chains In addition to ordinary franchise fees and marketing fees which are calculated as

a percentage of sales McDonalds may also collect rent which may also be calculated on the basis of sales

As a condition of many franchise agreements which vary by

contract age country and location the Corporation may own or lease the properties on which McDonalds franchises are located In most if not all cases the franchisee does not own the location of its

restaurants

The United Kingdom and Ireland business model is different than the US in that fewer than 30 of restaurants are franchised with

the majority under the ownership of the company McDonalds trains its franchisees and others at Hamburger Univers ity in Oak

Brook Illino is

In other countries McDonalds restaurants are operated by joint

ventures of McDonalds Corporation and other local entities or governments

15

As a matter of policy McDonalds does not make direct sales of food or materials to franchisees instead organizing the supply of

food and materials to restaurants through approved third party logistics operators

According to Fast Food Nation by Eric Schlosser nearly one in

eight workers in the US have at some time been employed by McDonalds It also states that McDonalds is the largest private

operator of playgrounds in the US as well as the single largest purchaser of beef pork potatoes and apples The selection of

meats McDonalds uses varies with the culture of the host country

MARKETING MIX

The marketing mix of a company consists of the various elements as follows

which form the core of a companyrsquos marketing system and hence helps to

achieve marketing objectives The marketing mix of McDonaldrsquos is as follows-

The McDonald plains its marketing by simple keeping 4Ps in mind

Product

Price

Promotion

Place

Product - McDonaldrsquos places considerable emphasis on developing a menu

which customers want Market research establishes exactly what this is However customersrsquo requirements change over time In order to meet these

changes McDonaldrsquos has introduced new products and phased out old ones and will continue to do so Care is taken not to adversely affect the sales of one choice by introducing a new choice which will cannibalise sales from the

existing one (trade off) McDonaldrsquos knows that items on its menu will vary in popularity Their ability to generate profits will vary at different points in their

cycle In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian

The happy meal for the children is a great seller among others

Price-The customerrsquos 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 physical item it also has psychological

connotations for the customer The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised It is

16

important when deciding on price to be fully aware of the brand and its integrity

In India McDonalds classifies its products into 2 categories namely the branded

affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and

the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price

perceptions

Promotion- The promotions aspect of the marketing mix covers all types of

marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and

in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct

mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that

provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be

supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item

At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart

from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos

Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the

management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities

making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers

17

Other than the main four elements mentioned above there are a few other

elements too in the marketing mix which are as follows-

People -The employees in McDonaldrsquos have a standard uniform and

McDonaldrsquos specially focuses on friendly and prompt service to its customers

from their employees

Process -The food manufacturing process at McDonaldrsquos is completely

transparent ie the whole process is visible to the customers In fact the fast

food joint allows its customers to view and judge the hygienic standards at

McDonaldrsquos by allowing them to enter the area where the process takes place

The customers are invited to check the ingredients used in food

Physical evidence - McDonalds focuses on clean and hygienic interiors of

is outlets and at the same time the interiors are attractive and the fast food joint

maintains a proper decorum at its joints

18

SWOT ANALYSIS

Strengths

McDonaldrsquos holds a very strong brand name worldwide

They have large partnerships with other companies that provide them

with their desired products this increases the goodwill of the company

McDonaldrsquos is one of the most reputed firms who are socially

responsible

Loyal employees amp management amp customer are their biggest strength

19

McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind

while providing food to different countries

Clean environment and play areas for children where they can enjoy their

time

Weakness

The weakness that hits the list of employee turnover rate Every year

many of their employees are fired out of the restaurant

McDonalds mostly advertises products and food items that targets

children

Health conscious people often complain that they do not provide us with

the organic and healthy food This becomes their weakness when they get in the complaints

They also face quality issue at times This affects the business as they are

running the outlet worldwide if one franchise gets affected others also

get a bad name

Opportunities

It can open up online services for their customers so that they can easily

order their desired meals sitting at home

Discounts given on every food item may help them gain more customers

They can go for a joint venture with the retailers they work with

They can introduce healthy hamburgers and healthy drinks for the people who are health conscious

20

In order to be environment friendly they can use packing material which

can be recycled later or material that does not create pollution

Threats

Emerging competition of similar outlets is becoming a problem for McDonalds

Health issue also becomes a problem when it comes to food

As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies

Recession in any country would definitely affect the whole outlet

worldwide

People facing heart problems and obesity accuse McDonalds for not

providing them with the healthy food

They have a threat of local food outlets in different countries

McDonalds is operating in a fully fledged economy where competition is

increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession

McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local

Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government

regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled

Indian businesses to grow by improving their ability to compete in todays international markets

21

Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in

predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first

restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept

has today been adopted by various Indian and International players to deliver quality produce to consumers

For instance Cremica Industries worked with another McDonalds supplier

from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to

McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with

farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water

consumption better seeds amp agricultural management practices which result in greater yields

In some cases these Indian suppliers had the technology - but no market for the

products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk

casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to

restaurants across India

McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations

COMPANYrsquoS FINANCIAL INFORMATION

Company Name McDonalds Corporation

Ticker Symbol MCD

Web Address wwwmcdonaldscom

CEO Mr Donald Thompson

No of Employees 420000

Common Issue Type CS

Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other

22

goods from numerous independent suppliers

Industry Information LEISURE - Restaurants

Price Day Change Bid Ask Open High Low Volume

8718 -002 - - 8743 8743 8676 3658828

Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range

875267 10040 039 527 253 164 35 10222 - 8331

KEY FIGURES (Latest Twelve Months - LTM)

Yesterdays Close 8706 $

PE Ratio - LTM 164

Market Capitalisation 875267 mil

Latest Shares Outstanding 10040 mil

Earnings pS (EPS) 527 $

Dividend pS (DPS) 253 cent

Dividend Yield 35

Dividend Payout Ratio 48

Revenue per Employee 64300 $

Effective Tax Rate 313

Float 10153 mil

Float as of Shares Outstanding 999

Foreign Sales 18478 mil

Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue

910

Research amp Devlopment (RampD) as of Revenue

000

Gross Profit Margin 447

EBITDA Margin 356

Pre-Tax Profit Margin 291

Assets Turnover 08

Return on Assets (ROA) 161

Return on Equity (ROE) 392

Return on Capital Invested (ROCI) 204 Current Ratio 10

Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096

LT DebtTotal Capital 480

Working Capital pS 006 $

Cash pS 217 $

Book-Value pS 1383 $

Balance Sheet (at a glance) in Millions

DIVIDEND INFO

Dividend Declared Date 09202012

Dividend Ex-Date 11282012

Dividend Record Date 12022012

Dividend Pay Date 12162012

Dividend Amount 770

Type of Payment Cash Payment

Dividend Rate 308

Current Dividend Yield 35

5-Y Average Dividend Yield 31

Payout Ratio 480

5-Y Average Payout Ratio 530

Share price performance previous 3 years

Share price performance intraday

23

Tangible Book-Value pS 1110 $

Cash Flow pS 689 $

Free Cash Flow pS 125 $

KEY FIGURES (LTM) Price info PriceBook Ratio 630

PriceTangible Book Ratio 785 PriceCash Flow 126

PriceFree Cash Flow 699

PE as of Industry Group 420

PE as of Sector Segment 770

PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol

1 Week - - - 00 101 54041 66217

4 Weeks 8743 8331 8474 27 101 57129 856929

13 Weeks 9416 8331 9102 -44 98 61288 3554700

26 Weeks 9416 8331 8775 -08 93 59419 7189758

52 Weeks 10222 8331 9803 -112 79 59272 14521666

YTD 10222 8331 - -132 77 59774 13807695

Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)

8661 8631 8825 8931 9174 039 031

GROWTH RATES 5-Year

Growh Rsup2 of 5-Year Growth

3-Year

Growth

Revenue 381 776 666

Income 2017 811 978

Dividend 1536 947 1016

Capital Spending 697 NA 1052

RampD 000 NA 000

Normalized Inc 1158 NA 979

CHANGES YTD vs

Last YTD

Curr Qtr vs

Qtr 1-Yr ago

Annual vs

Last Annual

Revenue 21 -02 122

Earnings -14 -35 113

EPS 10 -14 151

EPS $ 004 -002 069

SOLVENCY RATIOS

SHORT-TERM SOLVENCY RATIOS

(LIQUIDITY)

Net Working Capital Ratio 271

Current Ratio 13

Quick Ratio (Acid Test) 10

Liquidity Ratio (Cash) 067

Receivables Turnover 215

Average Collection Period 17

Working CapitalEquity 62

Working Capital pS 088

Cash-Flow pS 677

Free Cash-Flow pS 209

24

FINANCIAL STRUCTURE RATIOS

Altmans Z-Score Ratio 485

Financial Leverage Ratio (AssetsEquity) 23

Debt Ratio 564

Total DebtEquity (Gearing Ratio) 087

LT DebtEquity 084

LT DebtCapital Invested 569

LT DebtTotal Liabilities 652

Interest Cover 173

InterestCapital Invested 167

25

People hellip McDonaldrsquos 1 Resource in India

26

McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs

around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in

1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with

McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)

The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive

training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course

(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the

Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University

27

The McDonaldrsquos Promise

QUALITY SERVICE CLEANLINESS amp VALUE

When asked to explain McDonalds success founder Ray Kroc used to say We

take the hamburger business more seriously than anyone else

Kroc was a perfectionist From the day he opened his first restaurant he vowed

to give his customers high quality products served quickly --and with a smile

in a clean and pleasant environment and all at a fair price Quality Service

Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds

business

QUALITY

McDonalds India serves only the highest quality products The attention to food

quality started long before the first restaurant opened McDonalds India has

established close relationships with local suppliers who provide McDonalds

with the highest quality freshest ingredients to make its products

All suppliers adhere to Indian government regulations on food health and

hygiene while continuously maintaining McDonalds own recognized standards

McDonalds has established an extensive cold chain distribution system in

India to ensure that the products which arrive at the restaurant from suppliers

all over India are absolutely fresh In the restaurants products and supplies are

used on a first-in first-out basis to ensure freshness All McDonalds products

are prepared using modern state-of-the-art cooking equipment to ensure quality

and safety

SERVICE

McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos

which sets its restaurants apart from others At McDonalds the customer

always comes first Every employee strives to provide 100 percent customer

satisfaction -- for every customer -- every visit This includes friendly and

attentive service accuracy in order taking and anticipation of customers needs

-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun

and youthful spirit we will proudly serve an exceptional McDonaldrsquos

eating experience that makes all people feel special and makes them smile ndash

every customer every timerdquo

28

CLEANLINESS

McDonalds restaurants provide a clean comfortable environment especially

suited for families McDonalds stringent cleaning standards ensure that all

tables seating highchairs and trays are sanitized several times each hour The

attention to cleanliness extends from the lobby to the kitchen to the sidewalk

and immediate areas outside the restaurant

In addition to urging customers to dispose of their litter properly and offering a

number of trash bins (both inside and outside the restaurants) for their

convenience McDonalds Litter Patrols walk around the restaurants several

times each day picking up litter -- even if it isnt from McDonalds

Restaurant managers walk through the dining areas each hour to ensure that it

is clean and well stocked All restaurants provide a variety of comfortable

seating arrangements to accommodate anyone -- from a single individual to a

large family The environment is warm inviting and well lit

VALUE

McDonalds menu is priced at a value that the largest segment of Indian

consumers can afford McDonalds does not sacrifice quality for value -- rather

McDonalds leverages economies of scale to minimize costs while maximizing

value to customers

McDonalds definition of value is broader than most restaurants of its kind -- it

is more than price Value at McDonalds is the sum of the total McDonalds

experience quality food fast friendly service a clean and pleasant

environment and products priced at very affordable prices for the largest

segment of Indian consumers possible That is value at McDonalds

29

McDonaldrsquos Indiahellip Culturally Sensitive

Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much

that is consistent with other McDonaldrsquos restaurants around the world such as

the quality of the food and the attention to service

The dedication to local cultures is not new for McDonaldrsquos For the past 50

years McDonaldrsquos has opened restaurants in more than 120 distinctly different

countries and cultures With guidance from its local partners McDonaldrsquos is

able to adapt- where necessary-its menu and restaurant operations to

complement existing eating-out options McDonaldrsquos local owners understand

what their customers want perhaps more importantly what is acceptable within

local customs and values

There is much too that is very different- such as the first beef-less and pork-

less menu in the world and special product formulations to cater to Indian

culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos

India says ldquoWe know the Indian culture because we were born in it

inherited its richness and respect it greatly It is the respect for this culture

and the sentiments of many of our customersrsquo that we do not serve any

beef and pork items in our restaurantsrdquo

McDonaldrsquos commitment to its Indian customers is evident even in

development of special sauces that use local spices and chillies The

mayonnaise and all other sauces are egg-less

In India vegetarianism is in many cases more than a lifestyle choice Many

people are vegetarians due to religious reasons and in some cases even the

vegetarian product that has come into contact with a non-vegetarian product is

unacceptable Hence McDonaldrsquos India has also changed its operations to

address the special requirements of our vegetarian customers by having

processes that ensure that a physical separation of veg and non-veg products is

maintained right from farm to the customer Vegetable products are prepared

separately using dedicated equipment and utensils Also in India McDonaldrsquos

uses only vegetable oil as a medium for cooking

30

McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash

lsquoto be driven by the leadership of local ownersrsquo This commitment has translated

into enduring benefits to the businesses at the grass root level in the areas of

introduction of new crops new agricultural practices and food processing methods

and procedures

McDonalds unique cold chain on which the QSR major has spent more than six

years setting up in India has brought about a veritable revolution immensely

benefiting the farmers at one end and enabling customers at retail counters get the

highest quality food products absolutely fresh and at great value

Setting up this extensive cold chain distribution system has involved the transfer of

state-of-the-art food processing technology by McDonalds and its international

suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain

From Field to -2⁰C in 90 Minutes

Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be

grown during the winter months but with McDonalds expertise in the area of

agriculture they are now able to grow this crop through the year

Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room

to remove field heat a large cold room and a refrigerated van for transportation where

the temperature and the relative humidity of the crop is maintained between 1ordm C and

4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room

within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling

to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at

the farms itself ensuring no delay between harvesting pre-cooling packaging and

cold storage

Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd

Flavour and Freshness locked in at - 35degC

Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable

range of products is another important player in this cold chain This includes hi-tech

refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C

This is vital to ensure that the frozen food retains it freshness for a long time and the

cold chain is maintained The frozen product is immediately moved to cold storage

rooms

31

Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes

McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for

quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk

coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -

thus maintaining the cold chain

All leading to the Consumer

McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The

DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity

of the products throughout the entire cold chain

Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the

McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C

as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state

All these suppliers share McDonalds commitment and dedication to satisfying

customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently

each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental

effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn

more

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 11: Entrepreneurship m com a

11

AWARDS

McDonaldrsquos India has received many prestigious awards for its service and

performance including

The lsquoMost Respected Companyrsquo for four consecutive years (2003-2006)

in the Food Services sector by Businessworld

The lsquoMost Preferred Fast Food Outletrsquo 2006 amp 2007 by Awaaz

Consumer Award hosted by CNBC

Star Retailer ndash the lsquoConsumer Way Food Services Retailerrsquo of the

Year 2006 amp 2007 2008 by Franchise India

lsquoRetailer of the Yearrsquo Award for catering services (2004-2006) at the

Images Retail Awards

The lsquoAmity Corporate Excellence Awardrsquo ndashin 2007 amp 2008

The lsquoMost Wanted Brand of the Yearrsquo Award 2003 amp 2004 by

Franchising Holdings India Ltd

The lsquoMost Admired F amp B Retailer of the Year QSRs Foreign

Originrsquo ndash The Golden Spoon Awards by Images Retail

The Company with the Best Corporate Conscience ndash 2008 by Business

amp Economy

lsquoValue for Moneyrsquo brand ndash 2010 by Pitch Magazine

The most trusted family restaurant brand in the country award in

2010 by Readerrsquos Digest

12

Corporate Social Responsibility

Being responsible is at the core of everything that we do at McDonaldstrade It is

a deep-rooted value and a tradition that dates back to our founder Ray Kroc It is also one of our top business priorities

We believe that our continuing success depends on our stakeholders trust in

each and every aspect of our business be it the quality and safety of the food we serve in the way we do our business the way we connect and make the difference in the communities we operate being sensitive to environment and

being sustainable

1 We are committed to doing what is right

2 We are committed to be a good neighbour and partner in the community

3 We are committed to conducting our business ethically and with complete transparency

4 We are committed to treating our entire internal and external stakeholders with respect and dignity

13

McDonaldrsquos International

McDonaldrsquos has over 32000 local restaurants in more than 100 countries

70 percent of our restaurants worldwide are owned and operated by

independent local businessmen and businesswomen

McDonaldrsquos serves nearly 50 million customers each day

McDonaldrsquos first franchised restaurant opened at Des Plaines Illinois in

1955 by the founder Ray Kroc

McDonaldrsquos has its own Hamburger University in Illinois and the first

batch graduated in 1961

12 classes offered at Hamburger University are college accredited

In 1963 McDonaldrsquos sold its one billionth hamburger

McDonaldrsquos is listed on the New York Frankfurt Munich Paris and

Tokyo stock exchanges

McDonaldrsquos aired its first network TV advertisement ldquoMcDonaldrsquos -

Where Quality Starts Fresh Everydayrdquo in 1965

The first McDonaldrsquos Drive-Thru opened in Sierra Vista Arizona in 1975

14

Happy Meals were added to McDonaldrsquos menu in 1979

McDonaldrsquos launched the new worldwide Balanced Active Lifestyles

public awareness campaign in 2005

McDonaldrsquos celebrated its 50th Anniversary on April 15 2005

Business model

McDonalds Corporation earns revenue as an investor in properties

a franchiser of restaurants and an operator of restaurants Approximately 15 of McDonalds restaurants are owned and

operated by McDonalds Corporation directly The remainder are operated by others through a variety of franchise agreements and

joint ventures

The McDonalds Corporations business model is slightly different

from that of most other fast-food chains In addition to ordinary franchise fees and marketing fees which are calculated as

a percentage of sales McDonalds may also collect rent which may also be calculated on the basis of sales

As a condition of many franchise agreements which vary by

contract age country and location the Corporation may own or lease the properties on which McDonalds franchises are located In most if not all cases the franchisee does not own the location of its

restaurants

The United Kingdom and Ireland business model is different than the US in that fewer than 30 of restaurants are franchised with

the majority under the ownership of the company McDonalds trains its franchisees and others at Hamburger Univers ity in Oak

Brook Illino is

In other countries McDonalds restaurants are operated by joint

ventures of McDonalds Corporation and other local entities or governments

15

As a matter of policy McDonalds does not make direct sales of food or materials to franchisees instead organizing the supply of

food and materials to restaurants through approved third party logistics operators

According to Fast Food Nation by Eric Schlosser nearly one in

eight workers in the US have at some time been employed by McDonalds It also states that McDonalds is the largest private

operator of playgrounds in the US as well as the single largest purchaser of beef pork potatoes and apples The selection of

meats McDonalds uses varies with the culture of the host country

MARKETING MIX

The marketing mix of a company consists of the various elements as follows

which form the core of a companyrsquos marketing system and hence helps to

achieve marketing objectives The marketing mix of McDonaldrsquos is as follows-

The McDonald plains its marketing by simple keeping 4Ps in mind

Product

Price

Promotion

Place

Product - McDonaldrsquos places considerable emphasis on developing a menu

which customers want Market research establishes exactly what this is However customersrsquo requirements change over time In order to meet these

changes McDonaldrsquos has introduced new products and phased out old ones and will continue to do so Care is taken not to adversely affect the sales of one choice by introducing a new choice which will cannibalise sales from the

existing one (trade off) McDonaldrsquos knows that items on its menu will vary in popularity Their ability to generate profits will vary at different points in their

cycle In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian

The happy meal for the children is a great seller among others

Price-The customerrsquos 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 physical item it also has psychological

connotations for the customer The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised It is

16

important when deciding on price to be fully aware of the brand and its integrity

In India McDonalds classifies its products into 2 categories namely the branded

affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and

the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price

perceptions

Promotion- The promotions aspect of the marketing mix covers all types of

marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and

in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct

mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that

provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be

supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item

At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart

from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos

Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the

management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities

making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers

17

Other than the main four elements mentioned above there are a few other

elements too in the marketing mix which are as follows-

People -The employees in McDonaldrsquos have a standard uniform and

McDonaldrsquos specially focuses on friendly and prompt service to its customers

from their employees

Process -The food manufacturing process at McDonaldrsquos is completely

transparent ie the whole process is visible to the customers In fact the fast

food joint allows its customers to view and judge the hygienic standards at

McDonaldrsquos by allowing them to enter the area where the process takes place

The customers are invited to check the ingredients used in food

Physical evidence - McDonalds focuses on clean and hygienic interiors of

is outlets and at the same time the interiors are attractive and the fast food joint

maintains a proper decorum at its joints

18

SWOT ANALYSIS

Strengths

McDonaldrsquos holds a very strong brand name worldwide

They have large partnerships with other companies that provide them

with their desired products this increases the goodwill of the company

McDonaldrsquos is one of the most reputed firms who are socially

responsible

Loyal employees amp management amp customer are their biggest strength

19

McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind

while providing food to different countries

Clean environment and play areas for children where they can enjoy their

time

Weakness

The weakness that hits the list of employee turnover rate Every year

many of their employees are fired out of the restaurant

McDonalds mostly advertises products and food items that targets

children

Health conscious people often complain that they do not provide us with

the organic and healthy food This becomes their weakness when they get in the complaints

They also face quality issue at times This affects the business as they are

running the outlet worldwide if one franchise gets affected others also

get a bad name

Opportunities

It can open up online services for their customers so that they can easily

order their desired meals sitting at home

Discounts given on every food item may help them gain more customers

They can go for a joint venture with the retailers they work with

They can introduce healthy hamburgers and healthy drinks for the people who are health conscious

20

In order to be environment friendly they can use packing material which

can be recycled later or material that does not create pollution

Threats

Emerging competition of similar outlets is becoming a problem for McDonalds

Health issue also becomes a problem when it comes to food

As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies

Recession in any country would definitely affect the whole outlet

worldwide

People facing heart problems and obesity accuse McDonalds for not

providing them with the healthy food

They have a threat of local food outlets in different countries

McDonalds is operating in a fully fledged economy where competition is

increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession

McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local

Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government

regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled

Indian businesses to grow by improving their ability to compete in todays international markets

21

Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in

predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first

restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept

has today been adopted by various Indian and International players to deliver quality produce to consumers

For instance Cremica Industries worked with another McDonalds supplier

from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to

McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with

farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water

consumption better seeds amp agricultural management practices which result in greater yields

In some cases these Indian suppliers had the technology - but no market for the

products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk

casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to

restaurants across India

McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations

COMPANYrsquoS FINANCIAL INFORMATION

Company Name McDonalds Corporation

Ticker Symbol MCD

Web Address wwwmcdonaldscom

CEO Mr Donald Thompson

No of Employees 420000

Common Issue Type CS

Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other

22

goods from numerous independent suppliers

Industry Information LEISURE - Restaurants

Price Day Change Bid Ask Open High Low Volume

8718 -002 - - 8743 8743 8676 3658828

Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range

875267 10040 039 527 253 164 35 10222 - 8331

KEY FIGURES (Latest Twelve Months - LTM)

Yesterdays Close 8706 $

PE Ratio - LTM 164

Market Capitalisation 875267 mil

Latest Shares Outstanding 10040 mil

Earnings pS (EPS) 527 $

Dividend pS (DPS) 253 cent

Dividend Yield 35

Dividend Payout Ratio 48

Revenue per Employee 64300 $

Effective Tax Rate 313

Float 10153 mil

Float as of Shares Outstanding 999

Foreign Sales 18478 mil

Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue

910

Research amp Devlopment (RampD) as of Revenue

000

Gross Profit Margin 447

EBITDA Margin 356

Pre-Tax Profit Margin 291

Assets Turnover 08

Return on Assets (ROA) 161

Return on Equity (ROE) 392

Return on Capital Invested (ROCI) 204 Current Ratio 10

Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096

LT DebtTotal Capital 480

Working Capital pS 006 $

Cash pS 217 $

Book-Value pS 1383 $

Balance Sheet (at a glance) in Millions

DIVIDEND INFO

Dividend Declared Date 09202012

Dividend Ex-Date 11282012

Dividend Record Date 12022012

Dividend Pay Date 12162012

Dividend Amount 770

Type of Payment Cash Payment

Dividend Rate 308

Current Dividend Yield 35

5-Y Average Dividend Yield 31

Payout Ratio 480

5-Y Average Payout Ratio 530

Share price performance previous 3 years

Share price performance intraday

23

Tangible Book-Value pS 1110 $

Cash Flow pS 689 $

Free Cash Flow pS 125 $

KEY FIGURES (LTM) Price info PriceBook Ratio 630

PriceTangible Book Ratio 785 PriceCash Flow 126

PriceFree Cash Flow 699

PE as of Industry Group 420

PE as of Sector Segment 770

PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol

1 Week - - - 00 101 54041 66217

4 Weeks 8743 8331 8474 27 101 57129 856929

13 Weeks 9416 8331 9102 -44 98 61288 3554700

26 Weeks 9416 8331 8775 -08 93 59419 7189758

52 Weeks 10222 8331 9803 -112 79 59272 14521666

YTD 10222 8331 - -132 77 59774 13807695

Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)

8661 8631 8825 8931 9174 039 031

GROWTH RATES 5-Year

Growh Rsup2 of 5-Year Growth

3-Year

Growth

Revenue 381 776 666

Income 2017 811 978

Dividend 1536 947 1016

Capital Spending 697 NA 1052

RampD 000 NA 000

Normalized Inc 1158 NA 979

CHANGES YTD vs

Last YTD

Curr Qtr vs

Qtr 1-Yr ago

Annual vs

Last Annual

Revenue 21 -02 122

Earnings -14 -35 113

EPS 10 -14 151

EPS $ 004 -002 069

SOLVENCY RATIOS

SHORT-TERM SOLVENCY RATIOS

(LIQUIDITY)

Net Working Capital Ratio 271

Current Ratio 13

Quick Ratio (Acid Test) 10

Liquidity Ratio (Cash) 067

Receivables Turnover 215

Average Collection Period 17

Working CapitalEquity 62

Working Capital pS 088

Cash-Flow pS 677

Free Cash-Flow pS 209

24

FINANCIAL STRUCTURE RATIOS

Altmans Z-Score Ratio 485

Financial Leverage Ratio (AssetsEquity) 23

Debt Ratio 564

Total DebtEquity (Gearing Ratio) 087

LT DebtEquity 084

LT DebtCapital Invested 569

LT DebtTotal Liabilities 652

Interest Cover 173

InterestCapital Invested 167

25

People hellip McDonaldrsquos 1 Resource in India

26

McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs

around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in

1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with

McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)

The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive

training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course

(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the

Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University

27

The McDonaldrsquos Promise

QUALITY SERVICE CLEANLINESS amp VALUE

When asked to explain McDonalds success founder Ray Kroc used to say We

take the hamburger business more seriously than anyone else

Kroc was a perfectionist From the day he opened his first restaurant he vowed

to give his customers high quality products served quickly --and with a smile

in a clean and pleasant environment and all at a fair price Quality Service

Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds

business

QUALITY

McDonalds India serves only the highest quality products The attention to food

quality started long before the first restaurant opened McDonalds India has

established close relationships with local suppliers who provide McDonalds

with the highest quality freshest ingredients to make its products

All suppliers adhere to Indian government regulations on food health and

hygiene while continuously maintaining McDonalds own recognized standards

McDonalds has established an extensive cold chain distribution system in

India to ensure that the products which arrive at the restaurant from suppliers

all over India are absolutely fresh In the restaurants products and supplies are

used on a first-in first-out basis to ensure freshness All McDonalds products

are prepared using modern state-of-the-art cooking equipment to ensure quality

and safety

SERVICE

McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos

which sets its restaurants apart from others At McDonalds the customer

always comes first Every employee strives to provide 100 percent customer

satisfaction -- for every customer -- every visit This includes friendly and

attentive service accuracy in order taking and anticipation of customers needs

-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun

and youthful spirit we will proudly serve an exceptional McDonaldrsquos

eating experience that makes all people feel special and makes them smile ndash

every customer every timerdquo

28

CLEANLINESS

McDonalds restaurants provide a clean comfortable environment especially

suited for families McDonalds stringent cleaning standards ensure that all

tables seating highchairs and trays are sanitized several times each hour The

attention to cleanliness extends from the lobby to the kitchen to the sidewalk

and immediate areas outside the restaurant

In addition to urging customers to dispose of their litter properly and offering a

number of trash bins (both inside and outside the restaurants) for their

convenience McDonalds Litter Patrols walk around the restaurants several

times each day picking up litter -- even if it isnt from McDonalds

Restaurant managers walk through the dining areas each hour to ensure that it

is clean and well stocked All restaurants provide a variety of comfortable

seating arrangements to accommodate anyone -- from a single individual to a

large family The environment is warm inviting and well lit

VALUE

McDonalds menu is priced at a value that the largest segment of Indian

consumers can afford McDonalds does not sacrifice quality for value -- rather

McDonalds leverages economies of scale to minimize costs while maximizing

value to customers

McDonalds definition of value is broader than most restaurants of its kind -- it

is more than price Value at McDonalds is the sum of the total McDonalds

experience quality food fast friendly service a clean and pleasant

environment and products priced at very affordable prices for the largest

segment of Indian consumers possible That is value at McDonalds

29

McDonaldrsquos Indiahellip Culturally Sensitive

Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much

that is consistent with other McDonaldrsquos restaurants around the world such as

the quality of the food and the attention to service

The dedication to local cultures is not new for McDonaldrsquos For the past 50

years McDonaldrsquos has opened restaurants in more than 120 distinctly different

countries and cultures With guidance from its local partners McDonaldrsquos is

able to adapt- where necessary-its menu and restaurant operations to

complement existing eating-out options McDonaldrsquos local owners understand

what their customers want perhaps more importantly what is acceptable within

local customs and values

There is much too that is very different- such as the first beef-less and pork-

less menu in the world and special product formulations to cater to Indian

culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos

India says ldquoWe know the Indian culture because we were born in it

inherited its richness and respect it greatly It is the respect for this culture

and the sentiments of many of our customersrsquo that we do not serve any

beef and pork items in our restaurantsrdquo

McDonaldrsquos commitment to its Indian customers is evident even in

development of special sauces that use local spices and chillies The

mayonnaise and all other sauces are egg-less

In India vegetarianism is in many cases more than a lifestyle choice Many

people are vegetarians due to religious reasons and in some cases even the

vegetarian product that has come into contact with a non-vegetarian product is

unacceptable Hence McDonaldrsquos India has also changed its operations to

address the special requirements of our vegetarian customers by having

processes that ensure that a physical separation of veg and non-veg products is

maintained right from farm to the customer Vegetable products are prepared

separately using dedicated equipment and utensils Also in India McDonaldrsquos

uses only vegetable oil as a medium for cooking

30

McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash

lsquoto be driven by the leadership of local ownersrsquo This commitment has translated

into enduring benefits to the businesses at the grass root level in the areas of

introduction of new crops new agricultural practices and food processing methods

and procedures

McDonalds unique cold chain on which the QSR major has spent more than six

years setting up in India has brought about a veritable revolution immensely

benefiting the farmers at one end and enabling customers at retail counters get the

highest quality food products absolutely fresh and at great value

Setting up this extensive cold chain distribution system has involved the transfer of

state-of-the-art food processing technology by McDonalds and its international

suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain

From Field to -2⁰C in 90 Minutes

Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be

grown during the winter months but with McDonalds expertise in the area of

agriculture they are now able to grow this crop through the year

Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room

to remove field heat a large cold room and a refrigerated van for transportation where

the temperature and the relative humidity of the crop is maintained between 1ordm C and

4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room

within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling

to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at

the farms itself ensuring no delay between harvesting pre-cooling packaging and

cold storage

Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd

Flavour and Freshness locked in at - 35degC

Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable

range of products is another important player in this cold chain This includes hi-tech

refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C

This is vital to ensure that the frozen food retains it freshness for a long time and the

cold chain is maintained The frozen product is immediately moved to cold storage

rooms

31

Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes

McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for

quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk

coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -

thus maintaining the cold chain

All leading to the Consumer

McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The

DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity

of the products throughout the entire cold chain

Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the

McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C

as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state

All these suppliers share McDonalds commitment and dedication to satisfying

customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently

each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental

effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn

more

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 12: Entrepreneurship m com a

12

Corporate Social Responsibility

Being responsible is at the core of everything that we do at McDonaldstrade It is

a deep-rooted value and a tradition that dates back to our founder Ray Kroc It is also one of our top business priorities

We believe that our continuing success depends on our stakeholders trust in

each and every aspect of our business be it the quality and safety of the food we serve in the way we do our business the way we connect and make the difference in the communities we operate being sensitive to environment and

being sustainable

1 We are committed to doing what is right

2 We are committed to be a good neighbour and partner in the community

3 We are committed to conducting our business ethically and with complete transparency

4 We are committed to treating our entire internal and external stakeholders with respect and dignity

13

McDonaldrsquos International

McDonaldrsquos has over 32000 local restaurants in more than 100 countries

70 percent of our restaurants worldwide are owned and operated by

independent local businessmen and businesswomen

McDonaldrsquos serves nearly 50 million customers each day

McDonaldrsquos first franchised restaurant opened at Des Plaines Illinois in

1955 by the founder Ray Kroc

McDonaldrsquos has its own Hamburger University in Illinois and the first

batch graduated in 1961

12 classes offered at Hamburger University are college accredited

In 1963 McDonaldrsquos sold its one billionth hamburger

McDonaldrsquos is listed on the New York Frankfurt Munich Paris and

Tokyo stock exchanges

McDonaldrsquos aired its first network TV advertisement ldquoMcDonaldrsquos -

Where Quality Starts Fresh Everydayrdquo in 1965

The first McDonaldrsquos Drive-Thru opened in Sierra Vista Arizona in 1975

14

Happy Meals were added to McDonaldrsquos menu in 1979

McDonaldrsquos launched the new worldwide Balanced Active Lifestyles

public awareness campaign in 2005

McDonaldrsquos celebrated its 50th Anniversary on April 15 2005

Business model

McDonalds Corporation earns revenue as an investor in properties

a franchiser of restaurants and an operator of restaurants Approximately 15 of McDonalds restaurants are owned and

operated by McDonalds Corporation directly The remainder are operated by others through a variety of franchise agreements and

joint ventures

The McDonalds Corporations business model is slightly different

from that of most other fast-food chains In addition to ordinary franchise fees and marketing fees which are calculated as

a percentage of sales McDonalds may also collect rent which may also be calculated on the basis of sales

As a condition of many franchise agreements which vary by

contract age country and location the Corporation may own or lease the properties on which McDonalds franchises are located In most if not all cases the franchisee does not own the location of its

restaurants

The United Kingdom and Ireland business model is different than the US in that fewer than 30 of restaurants are franchised with

the majority under the ownership of the company McDonalds trains its franchisees and others at Hamburger Univers ity in Oak

Brook Illino is

In other countries McDonalds restaurants are operated by joint

ventures of McDonalds Corporation and other local entities or governments

15

As a matter of policy McDonalds does not make direct sales of food or materials to franchisees instead organizing the supply of

food and materials to restaurants through approved third party logistics operators

According to Fast Food Nation by Eric Schlosser nearly one in

eight workers in the US have at some time been employed by McDonalds It also states that McDonalds is the largest private

operator of playgrounds in the US as well as the single largest purchaser of beef pork potatoes and apples The selection of

meats McDonalds uses varies with the culture of the host country

MARKETING MIX

The marketing mix of a company consists of the various elements as follows

which form the core of a companyrsquos marketing system and hence helps to

achieve marketing objectives The marketing mix of McDonaldrsquos is as follows-

The McDonald plains its marketing by simple keeping 4Ps in mind

Product

Price

Promotion

Place

Product - McDonaldrsquos places considerable emphasis on developing a menu

which customers want Market research establishes exactly what this is However customersrsquo requirements change over time In order to meet these

changes McDonaldrsquos has introduced new products and phased out old ones and will continue to do so Care is taken not to adversely affect the sales of one choice by introducing a new choice which will cannibalise sales from the

existing one (trade off) McDonaldrsquos knows that items on its menu will vary in popularity Their ability to generate profits will vary at different points in their

cycle In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian

The happy meal for the children is a great seller among others

Price-The customerrsquos 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 physical item it also has psychological

connotations for the customer The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised It is

16

important when deciding on price to be fully aware of the brand and its integrity

In India McDonalds classifies its products into 2 categories namely the branded

affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and

the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price

perceptions

Promotion- The promotions aspect of the marketing mix covers all types of

marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and

in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct

mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that

provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be

supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item

At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart

from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos

Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the

management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities

making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers

17

Other than the main four elements mentioned above there are a few other

elements too in the marketing mix which are as follows-

People -The employees in McDonaldrsquos have a standard uniform and

McDonaldrsquos specially focuses on friendly and prompt service to its customers

from their employees

Process -The food manufacturing process at McDonaldrsquos is completely

transparent ie the whole process is visible to the customers In fact the fast

food joint allows its customers to view and judge the hygienic standards at

McDonaldrsquos by allowing them to enter the area where the process takes place

The customers are invited to check the ingredients used in food

Physical evidence - McDonalds focuses on clean and hygienic interiors of

is outlets and at the same time the interiors are attractive and the fast food joint

maintains a proper decorum at its joints

18

SWOT ANALYSIS

Strengths

McDonaldrsquos holds a very strong brand name worldwide

They have large partnerships with other companies that provide them

with their desired products this increases the goodwill of the company

McDonaldrsquos is one of the most reputed firms who are socially

responsible

Loyal employees amp management amp customer are their biggest strength

19

McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind

while providing food to different countries

Clean environment and play areas for children where they can enjoy their

time

Weakness

The weakness that hits the list of employee turnover rate Every year

many of their employees are fired out of the restaurant

McDonalds mostly advertises products and food items that targets

children

Health conscious people often complain that they do not provide us with

the organic and healthy food This becomes their weakness when they get in the complaints

They also face quality issue at times This affects the business as they are

running the outlet worldwide if one franchise gets affected others also

get a bad name

Opportunities

It can open up online services for their customers so that they can easily

order their desired meals sitting at home

Discounts given on every food item may help them gain more customers

They can go for a joint venture with the retailers they work with

They can introduce healthy hamburgers and healthy drinks for the people who are health conscious

20

In order to be environment friendly they can use packing material which

can be recycled later or material that does not create pollution

Threats

Emerging competition of similar outlets is becoming a problem for McDonalds

Health issue also becomes a problem when it comes to food

As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies

Recession in any country would definitely affect the whole outlet

worldwide

People facing heart problems and obesity accuse McDonalds for not

providing them with the healthy food

They have a threat of local food outlets in different countries

McDonalds is operating in a fully fledged economy where competition is

increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession

McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local

Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government

regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled

Indian businesses to grow by improving their ability to compete in todays international markets

21

Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in

predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first

restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept

has today been adopted by various Indian and International players to deliver quality produce to consumers

For instance Cremica Industries worked with another McDonalds supplier

from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to

McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with

farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water

consumption better seeds amp agricultural management practices which result in greater yields

In some cases these Indian suppliers had the technology - but no market for the

products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk

casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to

restaurants across India

McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations

COMPANYrsquoS FINANCIAL INFORMATION

Company Name McDonalds Corporation

Ticker Symbol MCD

Web Address wwwmcdonaldscom

CEO Mr Donald Thompson

No of Employees 420000

Common Issue Type CS

Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other

22

goods from numerous independent suppliers

Industry Information LEISURE - Restaurants

Price Day Change Bid Ask Open High Low Volume

8718 -002 - - 8743 8743 8676 3658828

Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range

875267 10040 039 527 253 164 35 10222 - 8331

KEY FIGURES (Latest Twelve Months - LTM)

Yesterdays Close 8706 $

PE Ratio - LTM 164

Market Capitalisation 875267 mil

Latest Shares Outstanding 10040 mil

Earnings pS (EPS) 527 $

Dividend pS (DPS) 253 cent

Dividend Yield 35

Dividend Payout Ratio 48

Revenue per Employee 64300 $

Effective Tax Rate 313

Float 10153 mil

Float as of Shares Outstanding 999

Foreign Sales 18478 mil

Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue

910

Research amp Devlopment (RampD) as of Revenue

000

Gross Profit Margin 447

EBITDA Margin 356

Pre-Tax Profit Margin 291

Assets Turnover 08

Return on Assets (ROA) 161

Return on Equity (ROE) 392

Return on Capital Invested (ROCI) 204 Current Ratio 10

Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096

LT DebtTotal Capital 480

Working Capital pS 006 $

Cash pS 217 $

Book-Value pS 1383 $

Balance Sheet (at a glance) in Millions

DIVIDEND INFO

Dividend Declared Date 09202012

Dividend Ex-Date 11282012

Dividend Record Date 12022012

Dividend Pay Date 12162012

Dividend Amount 770

Type of Payment Cash Payment

Dividend Rate 308

Current Dividend Yield 35

5-Y Average Dividend Yield 31

Payout Ratio 480

5-Y Average Payout Ratio 530

Share price performance previous 3 years

Share price performance intraday

23

Tangible Book-Value pS 1110 $

Cash Flow pS 689 $

Free Cash Flow pS 125 $

KEY FIGURES (LTM) Price info PriceBook Ratio 630

PriceTangible Book Ratio 785 PriceCash Flow 126

PriceFree Cash Flow 699

PE as of Industry Group 420

PE as of Sector Segment 770

PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol

1 Week - - - 00 101 54041 66217

4 Weeks 8743 8331 8474 27 101 57129 856929

13 Weeks 9416 8331 9102 -44 98 61288 3554700

26 Weeks 9416 8331 8775 -08 93 59419 7189758

52 Weeks 10222 8331 9803 -112 79 59272 14521666

YTD 10222 8331 - -132 77 59774 13807695

Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)

8661 8631 8825 8931 9174 039 031

GROWTH RATES 5-Year

Growh Rsup2 of 5-Year Growth

3-Year

Growth

Revenue 381 776 666

Income 2017 811 978

Dividend 1536 947 1016

Capital Spending 697 NA 1052

RampD 000 NA 000

Normalized Inc 1158 NA 979

CHANGES YTD vs

Last YTD

Curr Qtr vs

Qtr 1-Yr ago

Annual vs

Last Annual

Revenue 21 -02 122

Earnings -14 -35 113

EPS 10 -14 151

EPS $ 004 -002 069

SOLVENCY RATIOS

SHORT-TERM SOLVENCY RATIOS

(LIQUIDITY)

Net Working Capital Ratio 271

Current Ratio 13

Quick Ratio (Acid Test) 10

Liquidity Ratio (Cash) 067

Receivables Turnover 215

Average Collection Period 17

Working CapitalEquity 62

Working Capital pS 088

Cash-Flow pS 677

Free Cash-Flow pS 209

24

FINANCIAL STRUCTURE RATIOS

Altmans Z-Score Ratio 485

Financial Leverage Ratio (AssetsEquity) 23

Debt Ratio 564

Total DebtEquity (Gearing Ratio) 087

LT DebtEquity 084

LT DebtCapital Invested 569

LT DebtTotal Liabilities 652

Interest Cover 173

InterestCapital Invested 167

25

People hellip McDonaldrsquos 1 Resource in India

26

McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs

around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in

1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with

McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)

The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive

training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course

(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the

Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University

27

The McDonaldrsquos Promise

QUALITY SERVICE CLEANLINESS amp VALUE

When asked to explain McDonalds success founder Ray Kroc used to say We

take the hamburger business more seriously than anyone else

Kroc was a perfectionist From the day he opened his first restaurant he vowed

to give his customers high quality products served quickly --and with a smile

in a clean and pleasant environment and all at a fair price Quality Service

Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds

business

QUALITY

McDonalds India serves only the highest quality products The attention to food

quality started long before the first restaurant opened McDonalds India has

established close relationships with local suppliers who provide McDonalds

with the highest quality freshest ingredients to make its products

All suppliers adhere to Indian government regulations on food health and

hygiene while continuously maintaining McDonalds own recognized standards

McDonalds has established an extensive cold chain distribution system in

India to ensure that the products which arrive at the restaurant from suppliers

all over India are absolutely fresh In the restaurants products and supplies are

used on a first-in first-out basis to ensure freshness All McDonalds products

are prepared using modern state-of-the-art cooking equipment to ensure quality

and safety

SERVICE

McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos

which sets its restaurants apart from others At McDonalds the customer

always comes first Every employee strives to provide 100 percent customer

satisfaction -- for every customer -- every visit This includes friendly and

attentive service accuracy in order taking and anticipation of customers needs

-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun

and youthful spirit we will proudly serve an exceptional McDonaldrsquos

eating experience that makes all people feel special and makes them smile ndash

every customer every timerdquo

28

CLEANLINESS

McDonalds restaurants provide a clean comfortable environment especially

suited for families McDonalds stringent cleaning standards ensure that all

tables seating highchairs and trays are sanitized several times each hour The

attention to cleanliness extends from the lobby to the kitchen to the sidewalk

and immediate areas outside the restaurant

In addition to urging customers to dispose of their litter properly and offering a

number of trash bins (both inside and outside the restaurants) for their

convenience McDonalds Litter Patrols walk around the restaurants several

times each day picking up litter -- even if it isnt from McDonalds

Restaurant managers walk through the dining areas each hour to ensure that it

is clean and well stocked All restaurants provide a variety of comfortable

seating arrangements to accommodate anyone -- from a single individual to a

large family The environment is warm inviting and well lit

VALUE

McDonalds menu is priced at a value that the largest segment of Indian

consumers can afford McDonalds does not sacrifice quality for value -- rather

McDonalds leverages economies of scale to minimize costs while maximizing

value to customers

McDonalds definition of value is broader than most restaurants of its kind -- it

is more than price Value at McDonalds is the sum of the total McDonalds

experience quality food fast friendly service a clean and pleasant

environment and products priced at very affordable prices for the largest

segment of Indian consumers possible That is value at McDonalds

29

McDonaldrsquos Indiahellip Culturally Sensitive

Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much

that is consistent with other McDonaldrsquos restaurants around the world such as

the quality of the food and the attention to service

The dedication to local cultures is not new for McDonaldrsquos For the past 50

years McDonaldrsquos has opened restaurants in more than 120 distinctly different

countries and cultures With guidance from its local partners McDonaldrsquos is

able to adapt- where necessary-its menu and restaurant operations to

complement existing eating-out options McDonaldrsquos local owners understand

what their customers want perhaps more importantly what is acceptable within

local customs and values

There is much too that is very different- such as the first beef-less and pork-

less menu in the world and special product formulations to cater to Indian

culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos

India says ldquoWe know the Indian culture because we were born in it

inherited its richness and respect it greatly It is the respect for this culture

and the sentiments of many of our customersrsquo that we do not serve any

beef and pork items in our restaurantsrdquo

McDonaldrsquos commitment to its Indian customers is evident even in

development of special sauces that use local spices and chillies The

mayonnaise and all other sauces are egg-less

In India vegetarianism is in many cases more than a lifestyle choice Many

people are vegetarians due to religious reasons and in some cases even the

vegetarian product that has come into contact with a non-vegetarian product is

unacceptable Hence McDonaldrsquos India has also changed its operations to

address the special requirements of our vegetarian customers by having

processes that ensure that a physical separation of veg and non-veg products is

maintained right from farm to the customer Vegetable products are prepared

separately using dedicated equipment and utensils Also in India McDonaldrsquos

uses only vegetable oil as a medium for cooking

30

McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash

lsquoto be driven by the leadership of local ownersrsquo This commitment has translated

into enduring benefits to the businesses at the grass root level in the areas of

introduction of new crops new agricultural practices and food processing methods

and procedures

McDonalds unique cold chain on which the QSR major has spent more than six

years setting up in India has brought about a veritable revolution immensely

benefiting the farmers at one end and enabling customers at retail counters get the

highest quality food products absolutely fresh and at great value

Setting up this extensive cold chain distribution system has involved the transfer of

state-of-the-art food processing technology by McDonalds and its international

suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain

From Field to -2⁰C in 90 Minutes

Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be

grown during the winter months but with McDonalds expertise in the area of

agriculture they are now able to grow this crop through the year

Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room

to remove field heat a large cold room and a refrigerated van for transportation where

the temperature and the relative humidity of the crop is maintained between 1ordm C and

4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room

within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling

to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at

the farms itself ensuring no delay between harvesting pre-cooling packaging and

cold storage

Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd

Flavour and Freshness locked in at - 35degC

Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable

range of products is another important player in this cold chain This includes hi-tech

refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C

This is vital to ensure that the frozen food retains it freshness for a long time and the

cold chain is maintained The frozen product is immediately moved to cold storage

rooms

31

Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes

McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for

quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk

coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -

thus maintaining the cold chain

All leading to the Consumer

McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The

DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity

of the products throughout the entire cold chain

Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the

McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C

as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state

All these suppliers share McDonalds commitment and dedication to satisfying

customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently

each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental

effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn

more

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 13: Entrepreneurship m com a

13

McDonaldrsquos International

McDonaldrsquos has over 32000 local restaurants in more than 100 countries

70 percent of our restaurants worldwide are owned and operated by

independent local businessmen and businesswomen

McDonaldrsquos serves nearly 50 million customers each day

McDonaldrsquos first franchised restaurant opened at Des Plaines Illinois in

1955 by the founder Ray Kroc

McDonaldrsquos has its own Hamburger University in Illinois and the first

batch graduated in 1961

12 classes offered at Hamburger University are college accredited

In 1963 McDonaldrsquos sold its one billionth hamburger

McDonaldrsquos is listed on the New York Frankfurt Munich Paris and

Tokyo stock exchanges

McDonaldrsquos aired its first network TV advertisement ldquoMcDonaldrsquos -

Where Quality Starts Fresh Everydayrdquo in 1965

The first McDonaldrsquos Drive-Thru opened in Sierra Vista Arizona in 1975

14

Happy Meals were added to McDonaldrsquos menu in 1979

McDonaldrsquos launched the new worldwide Balanced Active Lifestyles

public awareness campaign in 2005

McDonaldrsquos celebrated its 50th Anniversary on April 15 2005

Business model

McDonalds Corporation earns revenue as an investor in properties

a franchiser of restaurants and an operator of restaurants Approximately 15 of McDonalds restaurants are owned and

operated by McDonalds Corporation directly The remainder are operated by others through a variety of franchise agreements and

joint ventures

The McDonalds Corporations business model is slightly different

from that of most other fast-food chains In addition to ordinary franchise fees and marketing fees which are calculated as

a percentage of sales McDonalds may also collect rent which may also be calculated on the basis of sales

As a condition of many franchise agreements which vary by

contract age country and location the Corporation may own or lease the properties on which McDonalds franchises are located In most if not all cases the franchisee does not own the location of its

restaurants

The United Kingdom and Ireland business model is different than the US in that fewer than 30 of restaurants are franchised with

the majority under the ownership of the company McDonalds trains its franchisees and others at Hamburger Univers ity in Oak

Brook Illino is

In other countries McDonalds restaurants are operated by joint

ventures of McDonalds Corporation and other local entities or governments

15

As a matter of policy McDonalds does not make direct sales of food or materials to franchisees instead organizing the supply of

food and materials to restaurants through approved third party logistics operators

According to Fast Food Nation by Eric Schlosser nearly one in

eight workers in the US have at some time been employed by McDonalds It also states that McDonalds is the largest private

operator of playgrounds in the US as well as the single largest purchaser of beef pork potatoes and apples The selection of

meats McDonalds uses varies with the culture of the host country

MARKETING MIX

The marketing mix of a company consists of the various elements as follows

which form the core of a companyrsquos marketing system and hence helps to

achieve marketing objectives The marketing mix of McDonaldrsquos is as follows-

The McDonald plains its marketing by simple keeping 4Ps in mind

Product

Price

Promotion

Place

Product - McDonaldrsquos places considerable emphasis on developing a menu

which customers want Market research establishes exactly what this is However customersrsquo requirements change over time In order to meet these

changes McDonaldrsquos has introduced new products and phased out old ones and will continue to do so Care is taken not to adversely affect the sales of one choice by introducing a new choice which will cannibalise sales from the

existing one (trade off) McDonaldrsquos knows that items on its menu will vary in popularity Their ability to generate profits will vary at different points in their

cycle In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian

The happy meal for the children is a great seller among others

Price-The customerrsquos 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 physical item it also has psychological

connotations for the customer The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised It is

16

important when deciding on price to be fully aware of the brand and its integrity

In India McDonalds classifies its products into 2 categories namely the branded

affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and

the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price

perceptions

Promotion- The promotions aspect of the marketing mix covers all types of

marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and

in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct

mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that

provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be

supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item

At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart

from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos

Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the

management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities

making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers

17

Other than the main four elements mentioned above there are a few other

elements too in the marketing mix which are as follows-

People -The employees in McDonaldrsquos have a standard uniform and

McDonaldrsquos specially focuses on friendly and prompt service to its customers

from their employees

Process -The food manufacturing process at McDonaldrsquos is completely

transparent ie the whole process is visible to the customers In fact the fast

food joint allows its customers to view and judge the hygienic standards at

McDonaldrsquos by allowing them to enter the area where the process takes place

The customers are invited to check the ingredients used in food

Physical evidence - McDonalds focuses on clean and hygienic interiors of

is outlets and at the same time the interiors are attractive and the fast food joint

maintains a proper decorum at its joints

18

SWOT ANALYSIS

Strengths

McDonaldrsquos holds a very strong brand name worldwide

They have large partnerships with other companies that provide them

with their desired products this increases the goodwill of the company

McDonaldrsquos is one of the most reputed firms who are socially

responsible

Loyal employees amp management amp customer are their biggest strength

19

McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind

while providing food to different countries

Clean environment and play areas for children where they can enjoy their

time

Weakness

The weakness that hits the list of employee turnover rate Every year

many of their employees are fired out of the restaurant

McDonalds mostly advertises products and food items that targets

children

Health conscious people often complain that they do not provide us with

the organic and healthy food This becomes their weakness when they get in the complaints

They also face quality issue at times This affects the business as they are

running the outlet worldwide if one franchise gets affected others also

get a bad name

Opportunities

It can open up online services for their customers so that they can easily

order their desired meals sitting at home

Discounts given on every food item may help them gain more customers

They can go for a joint venture with the retailers they work with

They can introduce healthy hamburgers and healthy drinks for the people who are health conscious

20

In order to be environment friendly they can use packing material which

can be recycled later or material that does not create pollution

Threats

Emerging competition of similar outlets is becoming a problem for McDonalds

Health issue also becomes a problem when it comes to food

As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies

Recession in any country would definitely affect the whole outlet

worldwide

People facing heart problems and obesity accuse McDonalds for not

providing them with the healthy food

They have a threat of local food outlets in different countries

McDonalds is operating in a fully fledged economy where competition is

increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession

McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local

Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government

regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled

Indian businesses to grow by improving their ability to compete in todays international markets

21

Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in

predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first

restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept

has today been adopted by various Indian and International players to deliver quality produce to consumers

For instance Cremica Industries worked with another McDonalds supplier

from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to

McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with

farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water

consumption better seeds amp agricultural management practices which result in greater yields

In some cases these Indian suppliers had the technology - but no market for the

products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk

casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to

restaurants across India

McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations

COMPANYrsquoS FINANCIAL INFORMATION

Company Name McDonalds Corporation

Ticker Symbol MCD

Web Address wwwmcdonaldscom

CEO Mr Donald Thompson

No of Employees 420000

Common Issue Type CS

Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other

22

goods from numerous independent suppliers

Industry Information LEISURE - Restaurants

Price Day Change Bid Ask Open High Low Volume

8718 -002 - - 8743 8743 8676 3658828

Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range

875267 10040 039 527 253 164 35 10222 - 8331

KEY FIGURES (Latest Twelve Months - LTM)

Yesterdays Close 8706 $

PE Ratio - LTM 164

Market Capitalisation 875267 mil

Latest Shares Outstanding 10040 mil

Earnings pS (EPS) 527 $

Dividend pS (DPS) 253 cent

Dividend Yield 35

Dividend Payout Ratio 48

Revenue per Employee 64300 $

Effective Tax Rate 313

Float 10153 mil

Float as of Shares Outstanding 999

Foreign Sales 18478 mil

Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue

910

Research amp Devlopment (RampD) as of Revenue

000

Gross Profit Margin 447

EBITDA Margin 356

Pre-Tax Profit Margin 291

Assets Turnover 08

Return on Assets (ROA) 161

Return on Equity (ROE) 392

Return on Capital Invested (ROCI) 204 Current Ratio 10

Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096

LT DebtTotal Capital 480

Working Capital pS 006 $

Cash pS 217 $

Book-Value pS 1383 $

Balance Sheet (at a glance) in Millions

DIVIDEND INFO

Dividend Declared Date 09202012

Dividend Ex-Date 11282012

Dividend Record Date 12022012

Dividend Pay Date 12162012

Dividend Amount 770

Type of Payment Cash Payment

Dividend Rate 308

Current Dividend Yield 35

5-Y Average Dividend Yield 31

Payout Ratio 480

5-Y Average Payout Ratio 530

Share price performance previous 3 years

Share price performance intraday

23

Tangible Book-Value pS 1110 $

Cash Flow pS 689 $

Free Cash Flow pS 125 $

KEY FIGURES (LTM) Price info PriceBook Ratio 630

PriceTangible Book Ratio 785 PriceCash Flow 126

PriceFree Cash Flow 699

PE as of Industry Group 420

PE as of Sector Segment 770

PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol

1 Week - - - 00 101 54041 66217

4 Weeks 8743 8331 8474 27 101 57129 856929

13 Weeks 9416 8331 9102 -44 98 61288 3554700

26 Weeks 9416 8331 8775 -08 93 59419 7189758

52 Weeks 10222 8331 9803 -112 79 59272 14521666

YTD 10222 8331 - -132 77 59774 13807695

Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)

8661 8631 8825 8931 9174 039 031

GROWTH RATES 5-Year

Growh Rsup2 of 5-Year Growth

3-Year

Growth

Revenue 381 776 666

Income 2017 811 978

Dividend 1536 947 1016

Capital Spending 697 NA 1052

RampD 000 NA 000

Normalized Inc 1158 NA 979

CHANGES YTD vs

Last YTD

Curr Qtr vs

Qtr 1-Yr ago

Annual vs

Last Annual

Revenue 21 -02 122

Earnings -14 -35 113

EPS 10 -14 151

EPS $ 004 -002 069

SOLVENCY RATIOS

SHORT-TERM SOLVENCY RATIOS

(LIQUIDITY)

Net Working Capital Ratio 271

Current Ratio 13

Quick Ratio (Acid Test) 10

Liquidity Ratio (Cash) 067

Receivables Turnover 215

Average Collection Period 17

Working CapitalEquity 62

Working Capital pS 088

Cash-Flow pS 677

Free Cash-Flow pS 209

24

FINANCIAL STRUCTURE RATIOS

Altmans Z-Score Ratio 485

Financial Leverage Ratio (AssetsEquity) 23

Debt Ratio 564

Total DebtEquity (Gearing Ratio) 087

LT DebtEquity 084

LT DebtCapital Invested 569

LT DebtTotal Liabilities 652

Interest Cover 173

InterestCapital Invested 167

25

People hellip McDonaldrsquos 1 Resource in India

26

McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs

around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in

1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with

McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)

The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive

training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course

(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the

Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University

27

The McDonaldrsquos Promise

QUALITY SERVICE CLEANLINESS amp VALUE

When asked to explain McDonalds success founder Ray Kroc used to say We

take the hamburger business more seriously than anyone else

Kroc was a perfectionist From the day he opened his first restaurant he vowed

to give his customers high quality products served quickly --and with a smile

in a clean and pleasant environment and all at a fair price Quality Service

Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds

business

QUALITY

McDonalds India serves only the highest quality products The attention to food

quality started long before the first restaurant opened McDonalds India has

established close relationships with local suppliers who provide McDonalds

with the highest quality freshest ingredients to make its products

All suppliers adhere to Indian government regulations on food health and

hygiene while continuously maintaining McDonalds own recognized standards

McDonalds has established an extensive cold chain distribution system in

India to ensure that the products which arrive at the restaurant from suppliers

all over India are absolutely fresh In the restaurants products and supplies are

used on a first-in first-out basis to ensure freshness All McDonalds products

are prepared using modern state-of-the-art cooking equipment to ensure quality

and safety

SERVICE

McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos

which sets its restaurants apart from others At McDonalds the customer

always comes first Every employee strives to provide 100 percent customer

satisfaction -- for every customer -- every visit This includes friendly and

attentive service accuracy in order taking and anticipation of customers needs

-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun

and youthful spirit we will proudly serve an exceptional McDonaldrsquos

eating experience that makes all people feel special and makes them smile ndash

every customer every timerdquo

28

CLEANLINESS

McDonalds restaurants provide a clean comfortable environment especially

suited for families McDonalds stringent cleaning standards ensure that all

tables seating highchairs and trays are sanitized several times each hour The

attention to cleanliness extends from the lobby to the kitchen to the sidewalk

and immediate areas outside the restaurant

In addition to urging customers to dispose of their litter properly and offering a

number of trash bins (both inside and outside the restaurants) for their

convenience McDonalds Litter Patrols walk around the restaurants several

times each day picking up litter -- even if it isnt from McDonalds

Restaurant managers walk through the dining areas each hour to ensure that it

is clean and well stocked All restaurants provide a variety of comfortable

seating arrangements to accommodate anyone -- from a single individual to a

large family The environment is warm inviting and well lit

VALUE

McDonalds menu is priced at a value that the largest segment of Indian

consumers can afford McDonalds does not sacrifice quality for value -- rather

McDonalds leverages economies of scale to minimize costs while maximizing

value to customers

McDonalds definition of value is broader than most restaurants of its kind -- it

is more than price Value at McDonalds is the sum of the total McDonalds

experience quality food fast friendly service a clean and pleasant

environment and products priced at very affordable prices for the largest

segment of Indian consumers possible That is value at McDonalds

29

McDonaldrsquos Indiahellip Culturally Sensitive

Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much

that is consistent with other McDonaldrsquos restaurants around the world such as

the quality of the food and the attention to service

The dedication to local cultures is not new for McDonaldrsquos For the past 50

years McDonaldrsquos has opened restaurants in more than 120 distinctly different

countries and cultures With guidance from its local partners McDonaldrsquos is

able to adapt- where necessary-its menu and restaurant operations to

complement existing eating-out options McDonaldrsquos local owners understand

what their customers want perhaps more importantly what is acceptable within

local customs and values

There is much too that is very different- such as the first beef-less and pork-

less menu in the world and special product formulations to cater to Indian

culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos

India says ldquoWe know the Indian culture because we were born in it

inherited its richness and respect it greatly It is the respect for this culture

and the sentiments of many of our customersrsquo that we do not serve any

beef and pork items in our restaurantsrdquo

McDonaldrsquos commitment to its Indian customers is evident even in

development of special sauces that use local spices and chillies The

mayonnaise and all other sauces are egg-less

In India vegetarianism is in many cases more than a lifestyle choice Many

people are vegetarians due to religious reasons and in some cases even the

vegetarian product that has come into contact with a non-vegetarian product is

unacceptable Hence McDonaldrsquos India has also changed its operations to

address the special requirements of our vegetarian customers by having

processes that ensure that a physical separation of veg and non-veg products is

maintained right from farm to the customer Vegetable products are prepared

separately using dedicated equipment and utensils Also in India McDonaldrsquos

uses only vegetable oil as a medium for cooking

30

McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash

lsquoto be driven by the leadership of local ownersrsquo This commitment has translated

into enduring benefits to the businesses at the grass root level in the areas of

introduction of new crops new agricultural practices and food processing methods

and procedures

McDonalds unique cold chain on which the QSR major has spent more than six

years setting up in India has brought about a veritable revolution immensely

benefiting the farmers at one end and enabling customers at retail counters get the

highest quality food products absolutely fresh and at great value

Setting up this extensive cold chain distribution system has involved the transfer of

state-of-the-art food processing technology by McDonalds and its international

suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain

From Field to -2⁰C in 90 Minutes

Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be

grown during the winter months but with McDonalds expertise in the area of

agriculture they are now able to grow this crop through the year

Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room

to remove field heat a large cold room and a refrigerated van for transportation where

the temperature and the relative humidity of the crop is maintained between 1ordm C and

4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room

within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling

to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at

the farms itself ensuring no delay between harvesting pre-cooling packaging and

cold storage

Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd

Flavour and Freshness locked in at - 35degC

Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable

range of products is another important player in this cold chain This includes hi-tech

refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C

This is vital to ensure that the frozen food retains it freshness for a long time and the

cold chain is maintained The frozen product is immediately moved to cold storage

rooms

31

Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes

McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for

quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk

coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -

thus maintaining the cold chain

All leading to the Consumer

McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The

DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity

of the products throughout the entire cold chain

Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the

McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C

as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state

All these suppliers share McDonalds commitment and dedication to satisfying

customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently

each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental

effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn

more

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 14: Entrepreneurship m com a

14

Happy Meals were added to McDonaldrsquos menu in 1979

McDonaldrsquos launched the new worldwide Balanced Active Lifestyles

public awareness campaign in 2005

McDonaldrsquos celebrated its 50th Anniversary on April 15 2005

Business model

McDonalds Corporation earns revenue as an investor in properties

a franchiser of restaurants and an operator of restaurants Approximately 15 of McDonalds restaurants are owned and

operated by McDonalds Corporation directly The remainder are operated by others through a variety of franchise agreements and

joint ventures

The McDonalds Corporations business model is slightly different

from that of most other fast-food chains In addition to ordinary franchise fees and marketing fees which are calculated as

a percentage of sales McDonalds may also collect rent which may also be calculated on the basis of sales

As a condition of many franchise agreements which vary by

contract age country and location the Corporation may own or lease the properties on which McDonalds franchises are located In most if not all cases the franchisee does not own the location of its

restaurants

The United Kingdom and Ireland business model is different than the US in that fewer than 30 of restaurants are franchised with

the majority under the ownership of the company McDonalds trains its franchisees and others at Hamburger Univers ity in Oak

Brook Illino is

In other countries McDonalds restaurants are operated by joint

ventures of McDonalds Corporation and other local entities or governments

15

As a matter of policy McDonalds does not make direct sales of food or materials to franchisees instead organizing the supply of

food and materials to restaurants through approved third party logistics operators

According to Fast Food Nation by Eric Schlosser nearly one in

eight workers in the US have at some time been employed by McDonalds It also states that McDonalds is the largest private

operator of playgrounds in the US as well as the single largest purchaser of beef pork potatoes and apples The selection of

meats McDonalds uses varies with the culture of the host country

MARKETING MIX

The marketing mix of a company consists of the various elements as follows

which form the core of a companyrsquos marketing system and hence helps to

achieve marketing objectives The marketing mix of McDonaldrsquos is as follows-

The McDonald plains its marketing by simple keeping 4Ps in mind

Product

Price

Promotion

Place

Product - McDonaldrsquos places considerable emphasis on developing a menu

which customers want Market research establishes exactly what this is However customersrsquo requirements change over time In order to meet these

changes McDonaldrsquos has introduced new products and phased out old ones and will continue to do so Care is taken not to adversely affect the sales of one choice by introducing a new choice which will cannibalise sales from the

existing one (trade off) McDonaldrsquos knows that items on its menu will vary in popularity Their ability to generate profits will vary at different points in their

cycle In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian

The happy meal for the children is a great seller among others

Price-The customerrsquos 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 physical item it also has psychological

connotations for the customer The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised It is

16

important when deciding on price to be fully aware of the brand and its integrity

In India McDonalds classifies its products into 2 categories namely the branded

affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and

the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price

perceptions

Promotion- The promotions aspect of the marketing mix covers all types of

marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and

in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct

mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that

provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be

supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item

At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart

from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos

Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the

management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities

making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers

17

Other than the main four elements mentioned above there are a few other

elements too in the marketing mix which are as follows-

People -The employees in McDonaldrsquos have a standard uniform and

McDonaldrsquos specially focuses on friendly and prompt service to its customers

from their employees

Process -The food manufacturing process at McDonaldrsquos is completely

transparent ie the whole process is visible to the customers In fact the fast

food joint allows its customers to view and judge the hygienic standards at

McDonaldrsquos by allowing them to enter the area where the process takes place

The customers are invited to check the ingredients used in food

Physical evidence - McDonalds focuses on clean and hygienic interiors of

is outlets and at the same time the interiors are attractive and the fast food joint

maintains a proper decorum at its joints

18

SWOT ANALYSIS

Strengths

McDonaldrsquos holds a very strong brand name worldwide

They have large partnerships with other companies that provide them

with their desired products this increases the goodwill of the company

McDonaldrsquos is one of the most reputed firms who are socially

responsible

Loyal employees amp management amp customer are their biggest strength

19

McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind

while providing food to different countries

Clean environment and play areas for children where they can enjoy their

time

Weakness

The weakness that hits the list of employee turnover rate Every year

many of their employees are fired out of the restaurant

McDonalds mostly advertises products and food items that targets

children

Health conscious people often complain that they do not provide us with

the organic and healthy food This becomes their weakness when they get in the complaints

They also face quality issue at times This affects the business as they are

running the outlet worldwide if one franchise gets affected others also

get a bad name

Opportunities

It can open up online services for their customers so that they can easily

order their desired meals sitting at home

Discounts given on every food item may help them gain more customers

They can go for a joint venture with the retailers they work with

They can introduce healthy hamburgers and healthy drinks for the people who are health conscious

20

In order to be environment friendly they can use packing material which

can be recycled later or material that does not create pollution

Threats

Emerging competition of similar outlets is becoming a problem for McDonalds

Health issue also becomes a problem when it comes to food

As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies

Recession in any country would definitely affect the whole outlet

worldwide

People facing heart problems and obesity accuse McDonalds for not

providing them with the healthy food

They have a threat of local food outlets in different countries

McDonalds is operating in a fully fledged economy where competition is

increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession

McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local

Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government

regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled

Indian businesses to grow by improving their ability to compete in todays international markets

21

Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in

predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first

restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept

has today been adopted by various Indian and International players to deliver quality produce to consumers

For instance Cremica Industries worked with another McDonalds supplier

from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to

McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with

farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water

consumption better seeds amp agricultural management practices which result in greater yields

In some cases these Indian suppliers had the technology - but no market for the

products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk

casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to

restaurants across India

McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations

COMPANYrsquoS FINANCIAL INFORMATION

Company Name McDonalds Corporation

Ticker Symbol MCD

Web Address wwwmcdonaldscom

CEO Mr Donald Thompson

No of Employees 420000

Common Issue Type CS

Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other

22

goods from numerous independent suppliers

Industry Information LEISURE - Restaurants

Price Day Change Bid Ask Open High Low Volume

8718 -002 - - 8743 8743 8676 3658828

Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range

875267 10040 039 527 253 164 35 10222 - 8331

KEY FIGURES (Latest Twelve Months - LTM)

Yesterdays Close 8706 $

PE Ratio - LTM 164

Market Capitalisation 875267 mil

Latest Shares Outstanding 10040 mil

Earnings pS (EPS) 527 $

Dividend pS (DPS) 253 cent

Dividend Yield 35

Dividend Payout Ratio 48

Revenue per Employee 64300 $

Effective Tax Rate 313

Float 10153 mil

Float as of Shares Outstanding 999

Foreign Sales 18478 mil

Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue

910

Research amp Devlopment (RampD) as of Revenue

000

Gross Profit Margin 447

EBITDA Margin 356

Pre-Tax Profit Margin 291

Assets Turnover 08

Return on Assets (ROA) 161

Return on Equity (ROE) 392

Return on Capital Invested (ROCI) 204 Current Ratio 10

Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096

LT DebtTotal Capital 480

Working Capital pS 006 $

Cash pS 217 $

Book-Value pS 1383 $

Balance Sheet (at a glance) in Millions

DIVIDEND INFO

Dividend Declared Date 09202012

Dividend Ex-Date 11282012

Dividend Record Date 12022012

Dividend Pay Date 12162012

Dividend Amount 770

Type of Payment Cash Payment

Dividend Rate 308

Current Dividend Yield 35

5-Y Average Dividend Yield 31

Payout Ratio 480

5-Y Average Payout Ratio 530

Share price performance previous 3 years

Share price performance intraday

23

Tangible Book-Value pS 1110 $

Cash Flow pS 689 $

Free Cash Flow pS 125 $

KEY FIGURES (LTM) Price info PriceBook Ratio 630

PriceTangible Book Ratio 785 PriceCash Flow 126

PriceFree Cash Flow 699

PE as of Industry Group 420

PE as of Sector Segment 770

PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol

1 Week - - - 00 101 54041 66217

4 Weeks 8743 8331 8474 27 101 57129 856929

13 Weeks 9416 8331 9102 -44 98 61288 3554700

26 Weeks 9416 8331 8775 -08 93 59419 7189758

52 Weeks 10222 8331 9803 -112 79 59272 14521666

YTD 10222 8331 - -132 77 59774 13807695

Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)

8661 8631 8825 8931 9174 039 031

GROWTH RATES 5-Year

Growh Rsup2 of 5-Year Growth

3-Year

Growth

Revenue 381 776 666

Income 2017 811 978

Dividend 1536 947 1016

Capital Spending 697 NA 1052

RampD 000 NA 000

Normalized Inc 1158 NA 979

CHANGES YTD vs

Last YTD

Curr Qtr vs

Qtr 1-Yr ago

Annual vs

Last Annual

Revenue 21 -02 122

Earnings -14 -35 113

EPS 10 -14 151

EPS $ 004 -002 069

SOLVENCY RATIOS

SHORT-TERM SOLVENCY RATIOS

(LIQUIDITY)

Net Working Capital Ratio 271

Current Ratio 13

Quick Ratio (Acid Test) 10

Liquidity Ratio (Cash) 067

Receivables Turnover 215

Average Collection Period 17

Working CapitalEquity 62

Working Capital pS 088

Cash-Flow pS 677

Free Cash-Flow pS 209

24

FINANCIAL STRUCTURE RATIOS

Altmans Z-Score Ratio 485

Financial Leverage Ratio (AssetsEquity) 23

Debt Ratio 564

Total DebtEquity (Gearing Ratio) 087

LT DebtEquity 084

LT DebtCapital Invested 569

LT DebtTotal Liabilities 652

Interest Cover 173

InterestCapital Invested 167

25

People hellip McDonaldrsquos 1 Resource in India

26

McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs

around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in

1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with

McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)

The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive

training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course

(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the

Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University

27

The McDonaldrsquos Promise

QUALITY SERVICE CLEANLINESS amp VALUE

When asked to explain McDonalds success founder Ray Kroc used to say We

take the hamburger business more seriously than anyone else

Kroc was a perfectionist From the day he opened his first restaurant he vowed

to give his customers high quality products served quickly --and with a smile

in a clean and pleasant environment and all at a fair price Quality Service

Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds

business

QUALITY

McDonalds India serves only the highest quality products The attention to food

quality started long before the first restaurant opened McDonalds India has

established close relationships with local suppliers who provide McDonalds

with the highest quality freshest ingredients to make its products

All suppliers adhere to Indian government regulations on food health and

hygiene while continuously maintaining McDonalds own recognized standards

McDonalds has established an extensive cold chain distribution system in

India to ensure that the products which arrive at the restaurant from suppliers

all over India are absolutely fresh In the restaurants products and supplies are

used on a first-in first-out basis to ensure freshness All McDonalds products

are prepared using modern state-of-the-art cooking equipment to ensure quality

and safety

SERVICE

McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos

which sets its restaurants apart from others At McDonalds the customer

always comes first Every employee strives to provide 100 percent customer

satisfaction -- for every customer -- every visit This includes friendly and

attentive service accuracy in order taking and anticipation of customers needs

-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun

and youthful spirit we will proudly serve an exceptional McDonaldrsquos

eating experience that makes all people feel special and makes them smile ndash

every customer every timerdquo

28

CLEANLINESS

McDonalds restaurants provide a clean comfortable environment especially

suited for families McDonalds stringent cleaning standards ensure that all

tables seating highchairs and trays are sanitized several times each hour The

attention to cleanliness extends from the lobby to the kitchen to the sidewalk

and immediate areas outside the restaurant

In addition to urging customers to dispose of their litter properly and offering a

number of trash bins (both inside and outside the restaurants) for their

convenience McDonalds Litter Patrols walk around the restaurants several

times each day picking up litter -- even if it isnt from McDonalds

Restaurant managers walk through the dining areas each hour to ensure that it

is clean and well stocked All restaurants provide a variety of comfortable

seating arrangements to accommodate anyone -- from a single individual to a

large family The environment is warm inviting and well lit

VALUE

McDonalds menu is priced at a value that the largest segment of Indian

consumers can afford McDonalds does not sacrifice quality for value -- rather

McDonalds leverages economies of scale to minimize costs while maximizing

value to customers

McDonalds definition of value is broader than most restaurants of its kind -- it

is more than price Value at McDonalds is the sum of the total McDonalds

experience quality food fast friendly service a clean and pleasant

environment and products priced at very affordable prices for the largest

segment of Indian consumers possible That is value at McDonalds

29

McDonaldrsquos Indiahellip Culturally Sensitive

Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much

that is consistent with other McDonaldrsquos restaurants around the world such as

the quality of the food and the attention to service

The dedication to local cultures is not new for McDonaldrsquos For the past 50

years McDonaldrsquos has opened restaurants in more than 120 distinctly different

countries and cultures With guidance from its local partners McDonaldrsquos is

able to adapt- where necessary-its menu and restaurant operations to

complement existing eating-out options McDonaldrsquos local owners understand

what their customers want perhaps more importantly what is acceptable within

local customs and values

There is much too that is very different- such as the first beef-less and pork-

less menu in the world and special product formulations to cater to Indian

culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos

India says ldquoWe know the Indian culture because we were born in it

inherited its richness and respect it greatly It is the respect for this culture

and the sentiments of many of our customersrsquo that we do not serve any

beef and pork items in our restaurantsrdquo

McDonaldrsquos commitment to its Indian customers is evident even in

development of special sauces that use local spices and chillies The

mayonnaise and all other sauces are egg-less

In India vegetarianism is in many cases more than a lifestyle choice Many

people are vegetarians due to religious reasons and in some cases even the

vegetarian product that has come into contact with a non-vegetarian product is

unacceptable Hence McDonaldrsquos India has also changed its operations to

address the special requirements of our vegetarian customers by having

processes that ensure that a physical separation of veg and non-veg products is

maintained right from farm to the customer Vegetable products are prepared

separately using dedicated equipment and utensils Also in India McDonaldrsquos

uses only vegetable oil as a medium for cooking

30

McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash

lsquoto be driven by the leadership of local ownersrsquo This commitment has translated

into enduring benefits to the businesses at the grass root level in the areas of

introduction of new crops new agricultural practices and food processing methods

and procedures

McDonalds unique cold chain on which the QSR major has spent more than six

years setting up in India has brought about a veritable revolution immensely

benefiting the farmers at one end and enabling customers at retail counters get the

highest quality food products absolutely fresh and at great value

Setting up this extensive cold chain distribution system has involved the transfer of

state-of-the-art food processing technology by McDonalds and its international

suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain

From Field to -2⁰C in 90 Minutes

Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be

grown during the winter months but with McDonalds expertise in the area of

agriculture they are now able to grow this crop through the year

Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room

to remove field heat a large cold room and a refrigerated van for transportation where

the temperature and the relative humidity of the crop is maintained between 1ordm C and

4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room

within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling

to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at

the farms itself ensuring no delay between harvesting pre-cooling packaging and

cold storage

Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd

Flavour and Freshness locked in at - 35degC

Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable

range of products is another important player in this cold chain This includes hi-tech

refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C

This is vital to ensure that the frozen food retains it freshness for a long time and the

cold chain is maintained The frozen product is immediately moved to cold storage

rooms

31

Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes

McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for

quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk

coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -

thus maintaining the cold chain

All leading to the Consumer

McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The

DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity

of the products throughout the entire cold chain

Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the

McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C

as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state

All these suppliers share McDonalds commitment and dedication to satisfying

customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently

each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental

effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn

more

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 15: Entrepreneurship m com a

15

As a matter of policy McDonalds does not make direct sales of food or materials to franchisees instead organizing the supply of

food and materials to restaurants through approved third party logistics operators

According to Fast Food Nation by Eric Schlosser nearly one in

eight workers in the US have at some time been employed by McDonalds It also states that McDonalds is the largest private

operator of playgrounds in the US as well as the single largest purchaser of beef pork potatoes and apples The selection of

meats McDonalds uses varies with the culture of the host country

MARKETING MIX

The marketing mix of a company consists of the various elements as follows

which form the core of a companyrsquos marketing system and hence helps to

achieve marketing objectives The marketing mix of McDonaldrsquos is as follows-

The McDonald plains its marketing by simple keeping 4Ps in mind

Product

Price

Promotion

Place

Product - McDonaldrsquos places considerable emphasis on developing a menu

which customers want Market research establishes exactly what this is However customersrsquo requirements change over time In order to meet these

changes McDonaldrsquos has introduced new products and phased out old ones and will continue to do so Care is taken not to adversely affect the sales of one choice by introducing a new choice which will cannibalise sales from the

existing one (trade off) McDonaldrsquos knows that items on its menu will vary in popularity Their ability to generate profits will vary at different points in their

cycle In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian

The happy meal for the children is a great seller among others

Price-The customerrsquos 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 physical item it also has psychological

connotations for the customer The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised It is

16

important when deciding on price to be fully aware of the brand and its integrity

In India McDonalds classifies its products into 2 categories namely the branded

affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and

the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price

perceptions

Promotion- The promotions aspect of the marketing mix covers all types of

marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and

in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct

mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that

provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be

supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item

At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart

from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos

Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the

management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities

making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers

17

Other than the main four elements mentioned above there are a few other

elements too in the marketing mix which are as follows-

People -The employees in McDonaldrsquos have a standard uniform and

McDonaldrsquos specially focuses on friendly and prompt service to its customers

from their employees

Process -The food manufacturing process at McDonaldrsquos is completely

transparent ie the whole process is visible to the customers In fact the fast

food joint allows its customers to view and judge the hygienic standards at

McDonaldrsquos by allowing them to enter the area where the process takes place

The customers are invited to check the ingredients used in food

Physical evidence - McDonalds focuses on clean and hygienic interiors of

is outlets and at the same time the interiors are attractive and the fast food joint

maintains a proper decorum at its joints

18

SWOT ANALYSIS

Strengths

McDonaldrsquos holds a very strong brand name worldwide

They have large partnerships with other companies that provide them

with their desired products this increases the goodwill of the company

McDonaldrsquos is one of the most reputed firms who are socially

responsible

Loyal employees amp management amp customer are their biggest strength

19

McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind

while providing food to different countries

Clean environment and play areas for children where they can enjoy their

time

Weakness

The weakness that hits the list of employee turnover rate Every year

many of their employees are fired out of the restaurant

McDonalds mostly advertises products and food items that targets

children

Health conscious people often complain that they do not provide us with

the organic and healthy food This becomes their weakness when they get in the complaints

They also face quality issue at times This affects the business as they are

running the outlet worldwide if one franchise gets affected others also

get a bad name

Opportunities

It can open up online services for their customers so that they can easily

order their desired meals sitting at home

Discounts given on every food item may help them gain more customers

They can go for a joint venture with the retailers they work with

They can introduce healthy hamburgers and healthy drinks for the people who are health conscious

20

In order to be environment friendly they can use packing material which

can be recycled later or material that does not create pollution

Threats

Emerging competition of similar outlets is becoming a problem for McDonalds

Health issue also becomes a problem when it comes to food

As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies

Recession in any country would definitely affect the whole outlet

worldwide

People facing heart problems and obesity accuse McDonalds for not

providing them with the healthy food

They have a threat of local food outlets in different countries

McDonalds is operating in a fully fledged economy where competition is

increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession

McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local

Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government

regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled

Indian businesses to grow by improving their ability to compete in todays international markets

21

Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in

predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first

restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept

has today been adopted by various Indian and International players to deliver quality produce to consumers

For instance Cremica Industries worked with another McDonalds supplier

from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to

McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with

farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water

consumption better seeds amp agricultural management practices which result in greater yields

In some cases these Indian suppliers had the technology - but no market for the

products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk

casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to

restaurants across India

McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations

COMPANYrsquoS FINANCIAL INFORMATION

Company Name McDonalds Corporation

Ticker Symbol MCD

Web Address wwwmcdonaldscom

CEO Mr Donald Thompson

No of Employees 420000

Common Issue Type CS

Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other

22

goods from numerous independent suppliers

Industry Information LEISURE - Restaurants

Price Day Change Bid Ask Open High Low Volume

8718 -002 - - 8743 8743 8676 3658828

Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range

875267 10040 039 527 253 164 35 10222 - 8331

KEY FIGURES (Latest Twelve Months - LTM)

Yesterdays Close 8706 $

PE Ratio - LTM 164

Market Capitalisation 875267 mil

Latest Shares Outstanding 10040 mil

Earnings pS (EPS) 527 $

Dividend pS (DPS) 253 cent

Dividend Yield 35

Dividend Payout Ratio 48

Revenue per Employee 64300 $

Effective Tax Rate 313

Float 10153 mil

Float as of Shares Outstanding 999

Foreign Sales 18478 mil

Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue

910

Research amp Devlopment (RampD) as of Revenue

000

Gross Profit Margin 447

EBITDA Margin 356

Pre-Tax Profit Margin 291

Assets Turnover 08

Return on Assets (ROA) 161

Return on Equity (ROE) 392

Return on Capital Invested (ROCI) 204 Current Ratio 10

Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096

LT DebtTotal Capital 480

Working Capital pS 006 $

Cash pS 217 $

Book-Value pS 1383 $

Balance Sheet (at a glance) in Millions

DIVIDEND INFO

Dividend Declared Date 09202012

Dividend Ex-Date 11282012

Dividend Record Date 12022012

Dividend Pay Date 12162012

Dividend Amount 770

Type of Payment Cash Payment

Dividend Rate 308

Current Dividend Yield 35

5-Y Average Dividend Yield 31

Payout Ratio 480

5-Y Average Payout Ratio 530

Share price performance previous 3 years

Share price performance intraday

23

Tangible Book-Value pS 1110 $

Cash Flow pS 689 $

Free Cash Flow pS 125 $

KEY FIGURES (LTM) Price info PriceBook Ratio 630

PriceTangible Book Ratio 785 PriceCash Flow 126

PriceFree Cash Flow 699

PE as of Industry Group 420

PE as of Sector Segment 770

PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol

1 Week - - - 00 101 54041 66217

4 Weeks 8743 8331 8474 27 101 57129 856929

13 Weeks 9416 8331 9102 -44 98 61288 3554700

26 Weeks 9416 8331 8775 -08 93 59419 7189758

52 Weeks 10222 8331 9803 -112 79 59272 14521666

YTD 10222 8331 - -132 77 59774 13807695

Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)

8661 8631 8825 8931 9174 039 031

GROWTH RATES 5-Year

Growh Rsup2 of 5-Year Growth

3-Year

Growth

Revenue 381 776 666

Income 2017 811 978

Dividend 1536 947 1016

Capital Spending 697 NA 1052

RampD 000 NA 000

Normalized Inc 1158 NA 979

CHANGES YTD vs

Last YTD

Curr Qtr vs

Qtr 1-Yr ago

Annual vs

Last Annual

Revenue 21 -02 122

Earnings -14 -35 113

EPS 10 -14 151

EPS $ 004 -002 069

SOLVENCY RATIOS

SHORT-TERM SOLVENCY RATIOS

(LIQUIDITY)

Net Working Capital Ratio 271

Current Ratio 13

Quick Ratio (Acid Test) 10

Liquidity Ratio (Cash) 067

Receivables Turnover 215

Average Collection Period 17

Working CapitalEquity 62

Working Capital pS 088

Cash-Flow pS 677

Free Cash-Flow pS 209

24

FINANCIAL STRUCTURE RATIOS

Altmans Z-Score Ratio 485

Financial Leverage Ratio (AssetsEquity) 23

Debt Ratio 564

Total DebtEquity (Gearing Ratio) 087

LT DebtEquity 084

LT DebtCapital Invested 569

LT DebtTotal Liabilities 652

Interest Cover 173

InterestCapital Invested 167

25

People hellip McDonaldrsquos 1 Resource in India

26

McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs

around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in

1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with

McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)

The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive

training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course

(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the

Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University

27

The McDonaldrsquos Promise

QUALITY SERVICE CLEANLINESS amp VALUE

When asked to explain McDonalds success founder Ray Kroc used to say We

take the hamburger business more seriously than anyone else

Kroc was a perfectionist From the day he opened his first restaurant he vowed

to give his customers high quality products served quickly --and with a smile

in a clean and pleasant environment and all at a fair price Quality Service

Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds

business

QUALITY

McDonalds India serves only the highest quality products The attention to food

quality started long before the first restaurant opened McDonalds India has

established close relationships with local suppliers who provide McDonalds

with the highest quality freshest ingredients to make its products

All suppliers adhere to Indian government regulations on food health and

hygiene while continuously maintaining McDonalds own recognized standards

McDonalds has established an extensive cold chain distribution system in

India to ensure that the products which arrive at the restaurant from suppliers

all over India are absolutely fresh In the restaurants products and supplies are

used on a first-in first-out basis to ensure freshness All McDonalds products

are prepared using modern state-of-the-art cooking equipment to ensure quality

and safety

SERVICE

McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos

which sets its restaurants apart from others At McDonalds the customer

always comes first Every employee strives to provide 100 percent customer

satisfaction -- for every customer -- every visit This includes friendly and

attentive service accuracy in order taking and anticipation of customers needs

-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun

and youthful spirit we will proudly serve an exceptional McDonaldrsquos

eating experience that makes all people feel special and makes them smile ndash

every customer every timerdquo

28

CLEANLINESS

McDonalds restaurants provide a clean comfortable environment especially

suited for families McDonalds stringent cleaning standards ensure that all

tables seating highchairs and trays are sanitized several times each hour The

attention to cleanliness extends from the lobby to the kitchen to the sidewalk

and immediate areas outside the restaurant

In addition to urging customers to dispose of their litter properly and offering a

number of trash bins (both inside and outside the restaurants) for their

convenience McDonalds Litter Patrols walk around the restaurants several

times each day picking up litter -- even if it isnt from McDonalds

Restaurant managers walk through the dining areas each hour to ensure that it

is clean and well stocked All restaurants provide a variety of comfortable

seating arrangements to accommodate anyone -- from a single individual to a

large family The environment is warm inviting and well lit

VALUE

McDonalds menu is priced at a value that the largest segment of Indian

consumers can afford McDonalds does not sacrifice quality for value -- rather

McDonalds leverages economies of scale to minimize costs while maximizing

value to customers

McDonalds definition of value is broader than most restaurants of its kind -- it

is more than price Value at McDonalds is the sum of the total McDonalds

experience quality food fast friendly service a clean and pleasant

environment and products priced at very affordable prices for the largest

segment of Indian consumers possible That is value at McDonalds

29

McDonaldrsquos Indiahellip Culturally Sensitive

Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much

that is consistent with other McDonaldrsquos restaurants around the world such as

the quality of the food and the attention to service

The dedication to local cultures is not new for McDonaldrsquos For the past 50

years McDonaldrsquos has opened restaurants in more than 120 distinctly different

countries and cultures With guidance from its local partners McDonaldrsquos is

able to adapt- where necessary-its menu and restaurant operations to

complement existing eating-out options McDonaldrsquos local owners understand

what their customers want perhaps more importantly what is acceptable within

local customs and values

There is much too that is very different- such as the first beef-less and pork-

less menu in the world and special product formulations to cater to Indian

culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos

India says ldquoWe know the Indian culture because we were born in it

inherited its richness and respect it greatly It is the respect for this culture

and the sentiments of many of our customersrsquo that we do not serve any

beef and pork items in our restaurantsrdquo

McDonaldrsquos commitment to its Indian customers is evident even in

development of special sauces that use local spices and chillies The

mayonnaise and all other sauces are egg-less

In India vegetarianism is in many cases more than a lifestyle choice Many

people are vegetarians due to religious reasons and in some cases even the

vegetarian product that has come into contact with a non-vegetarian product is

unacceptable Hence McDonaldrsquos India has also changed its operations to

address the special requirements of our vegetarian customers by having

processes that ensure that a physical separation of veg and non-veg products is

maintained right from farm to the customer Vegetable products are prepared

separately using dedicated equipment and utensils Also in India McDonaldrsquos

uses only vegetable oil as a medium for cooking

30

McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash

lsquoto be driven by the leadership of local ownersrsquo This commitment has translated

into enduring benefits to the businesses at the grass root level in the areas of

introduction of new crops new agricultural practices and food processing methods

and procedures

McDonalds unique cold chain on which the QSR major has spent more than six

years setting up in India has brought about a veritable revolution immensely

benefiting the farmers at one end and enabling customers at retail counters get the

highest quality food products absolutely fresh and at great value

Setting up this extensive cold chain distribution system has involved the transfer of

state-of-the-art food processing technology by McDonalds and its international

suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain

From Field to -2⁰C in 90 Minutes

Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be

grown during the winter months but with McDonalds expertise in the area of

agriculture they are now able to grow this crop through the year

Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room

to remove field heat a large cold room and a refrigerated van for transportation where

the temperature and the relative humidity of the crop is maintained between 1ordm C and

4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room

within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling

to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at

the farms itself ensuring no delay between harvesting pre-cooling packaging and

cold storage

Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd

Flavour and Freshness locked in at - 35degC

Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable

range of products is another important player in this cold chain This includes hi-tech

refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C

This is vital to ensure that the frozen food retains it freshness for a long time and the

cold chain is maintained The frozen product is immediately moved to cold storage

rooms

31

Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes

McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for

quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk

coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -

thus maintaining the cold chain

All leading to the Consumer

McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The

DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity

of the products throughout the entire cold chain

Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the

McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C

as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state

All these suppliers share McDonalds commitment and dedication to satisfying

customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently

each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental

effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn

more

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 16: Entrepreneurship m com a

16

important when deciding on price to be fully aware of the brand and its integrity

In India McDonalds classifies its products into 2 categories namely the branded

affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and

the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price

perceptions

Promotion- The promotions aspect of the marketing mix covers all types of

marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and

in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct

mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that

provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be

supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item

At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart

from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos

Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the

management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities

making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers

17

Other than the main four elements mentioned above there are a few other

elements too in the marketing mix which are as follows-

People -The employees in McDonaldrsquos have a standard uniform and

McDonaldrsquos specially focuses on friendly and prompt service to its customers

from their employees

Process -The food manufacturing process at McDonaldrsquos is completely

transparent ie the whole process is visible to the customers In fact the fast

food joint allows its customers to view and judge the hygienic standards at

McDonaldrsquos by allowing them to enter the area where the process takes place

The customers are invited to check the ingredients used in food

Physical evidence - McDonalds focuses on clean and hygienic interiors of

is outlets and at the same time the interiors are attractive and the fast food joint

maintains a proper decorum at its joints

18

SWOT ANALYSIS

Strengths

McDonaldrsquos holds a very strong brand name worldwide

They have large partnerships with other companies that provide them

with their desired products this increases the goodwill of the company

McDonaldrsquos is one of the most reputed firms who are socially

responsible

Loyal employees amp management amp customer are their biggest strength

19

McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind

while providing food to different countries

Clean environment and play areas for children where they can enjoy their

time

Weakness

The weakness that hits the list of employee turnover rate Every year

many of their employees are fired out of the restaurant

McDonalds mostly advertises products and food items that targets

children

Health conscious people often complain that they do not provide us with

the organic and healthy food This becomes their weakness when they get in the complaints

They also face quality issue at times This affects the business as they are

running the outlet worldwide if one franchise gets affected others also

get a bad name

Opportunities

It can open up online services for their customers so that they can easily

order their desired meals sitting at home

Discounts given on every food item may help them gain more customers

They can go for a joint venture with the retailers they work with

They can introduce healthy hamburgers and healthy drinks for the people who are health conscious

20

In order to be environment friendly they can use packing material which

can be recycled later or material that does not create pollution

Threats

Emerging competition of similar outlets is becoming a problem for McDonalds

Health issue also becomes a problem when it comes to food

As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies

Recession in any country would definitely affect the whole outlet

worldwide

People facing heart problems and obesity accuse McDonalds for not

providing them with the healthy food

They have a threat of local food outlets in different countries

McDonalds is operating in a fully fledged economy where competition is

increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession

McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local

Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government

regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled

Indian businesses to grow by improving their ability to compete in todays international markets

21

Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in

predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first

restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept

has today been adopted by various Indian and International players to deliver quality produce to consumers

For instance Cremica Industries worked with another McDonalds supplier

from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to

McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with

farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water

consumption better seeds amp agricultural management practices which result in greater yields

In some cases these Indian suppliers had the technology - but no market for the

products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk

casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to

restaurants across India

McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations

COMPANYrsquoS FINANCIAL INFORMATION

Company Name McDonalds Corporation

Ticker Symbol MCD

Web Address wwwmcdonaldscom

CEO Mr Donald Thompson

No of Employees 420000

Common Issue Type CS

Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other

22

goods from numerous independent suppliers

Industry Information LEISURE - Restaurants

Price Day Change Bid Ask Open High Low Volume

8718 -002 - - 8743 8743 8676 3658828

Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range

875267 10040 039 527 253 164 35 10222 - 8331

KEY FIGURES (Latest Twelve Months - LTM)

Yesterdays Close 8706 $

PE Ratio - LTM 164

Market Capitalisation 875267 mil

Latest Shares Outstanding 10040 mil

Earnings pS (EPS) 527 $

Dividend pS (DPS) 253 cent

Dividend Yield 35

Dividend Payout Ratio 48

Revenue per Employee 64300 $

Effective Tax Rate 313

Float 10153 mil

Float as of Shares Outstanding 999

Foreign Sales 18478 mil

Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue

910

Research amp Devlopment (RampD) as of Revenue

000

Gross Profit Margin 447

EBITDA Margin 356

Pre-Tax Profit Margin 291

Assets Turnover 08

Return on Assets (ROA) 161

Return on Equity (ROE) 392

Return on Capital Invested (ROCI) 204 Current Ratio 10

Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096

LT DebtTotal Capital 480

Working Capital pS 006 $

Cash pS 217 $

Book-Value pS 1383 $

Balance Sheet (at a glance) in Millions

DIVIDEND INFO

Dividend Declared Date 09202012

Dividend Ex-Date 11282012

Dividend Record Date 12022012

Dividend Pay Date 12162012

Dividend Amount 770

Type of Payment Cash Payment

Dividend Rate 308

Current Dividend Yield 35

5-Y Average Dividend Yield 31

Payout Ratio 480

5-Y Average Payout Ratio 530

Share price performance previous 3 years

Share price performance intraday

23

Tangible Book-Value pS 1110 $

Cash Flow pS 689 $

Free Cash Flow pS 125 $

KEY FIGURES (LTM) Price info PriceBook Ratio 630

PriceTangible Book Ratio 785 PriceCash Flow 126

PriceFree Cash Flow 699

PE as of Industry Group 420

PE as of Sector Segment 770

PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol

1 Week - - - 00 101 54041 66217

4 Weeks 8743 8331 8474 27 101 57129 856929

13 Weeks 9416 8331 9102 -44 98 61288 3554700

26 Weeks 9416 8331 8775 -08 93 59419 7189758

52 Weeks 10222 8331 9803 -112 79 59272 14521666

YTD 10222 8331 - -132 77 59774 13807695

Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)

8661 8631 8825 8931 9174 039 031

GROWTH RATES 5-Year

Growh Rsup2 of 5-Year Growth

3-Year

Growth

Revenue 381 776 666

Income 2017 811 978

Dividend 1536 947 1016

Capital Spending 697 NA 1052

RampD 000 NA 000

Normalized Inc 1158 NA 979

CHANGES YTD vs

Last YTD

Curr Qtr vs

Qtr 1-Yr ago

Annual vs

Last Annual

Revenue 21 -02 122

Earnings -14 -35 113

EPS 10 -14 151

EPS $ 004 -002 069

SOLVENCY RATIOS

SHORT-TERM SOLVENCY RATIOS

(LIQUIDITY)

Net Working Capital Ratio 271

Current Ratio 13

Quick Ratio (Acid Test) 10

Liquidity Ratio (Cash) 067

Receivables Turnover 215

Average Collection Period 17

Working CapitalEquity 62

Working Capital pS 088

Cash-Flow pS 677

Free Cash-Flow pS 209

24

FINANCIAL STRUCTURE RATIOS

Altmans Z-Score Ratio 485

Financial Leverage Ratio (AssetsEquity) 23

Debt Ratio 564

Total DebtEquity (Gearing Ratio) 087

LT DebtEquity 084

LT DebtCapital Invested 569

LT DebtTotal Liabilities 652

Interest Cover 173

InterestCapital Invested 167

25

People hellip McDonaldrsquos 1 Resource in India

26

McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs

around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in

1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with

McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)

The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive

training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course

(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the

Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University

27

The McDonaldrsquos Promise

QUALITY SERVICE CLEANLINESS amp VALUE

When asked to explain McDonalds success founder Ray Kroc used to say We

take the hamburger business more seriously than anyone else

Kroc was a perfectionist From the day he opened his first restaurant he vowed

to give his customers high quality products served quickly --and with a smile

in a clean and pleasant environment and all at a fair price Quality Service

Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds

business

QUALITY

McDonalds India serves only the highest quality products The attention to food

quality started long before the first restaurant opened McDonalds India has

established close relationships with local suppliers who provide McDonalds

with the highest quality freshest ingredients to make its products

All suppliers adhere to Indian government regulations on food health and

hygiene while continuously maintaining McDonalds own recognized standards

McDonalds has established an extensive cold chain distribution system in

India to ensure that the products which arrive at the restaurant from suppliers

all over India are absolutely fresh In the restaurants products and supplies are

used on a first-in first-out basis to ensure freshness All McDonalds products

are prepared using modern state-of-the-art cooking equipment to ensure quality

and safety

SERVICE

McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos

which sets its restaurants apart from others At McDonalds the customer

always comes first Every employee strives to provide 100 percent customer

satisfaction -- for every customer -- every visit This includes friendly and

attentive service accuracy in order taking and anticipation of customers needs

-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun

and youthful spirit we will proudly serve an exceptional McDonaldrsquos

eating experience that makes all people feel special and makes them smile ndash

every customer every timerdquo

28

CLEANLINESS

McDonalds restaurants provide a clean comfortable environment especially

suited for families McDonalds stringent cleaning standards ensure that all

tables seating highchairs and trays are sanitized several times each hour The

attention to cleanliness extends from the lobby to the kitchen to the sidewalk

and immediate areas outside the restaurant

In addition to urging customers to dispose of their litter properly and offering a

number of trash bins (both inside and outside the restaurants) for their

convenience McDonalds Litter Patrols walk around the restaurants several

times each day picking up litter -- even if it isnt from McDonalds

Restaurant managers walk through the dining areas each hour to ensure that it

is clean and well stocked All restaurants provide a variety of comfortable

seating arrangements to accommodate anyone -- from a single individual to a

large family The environment is warm inviting and well lit

VALUE

McDonalds menu is priced at a value that the largest segment of Indian

consumers can afford McDonalds does not sacrifice quality for value -- rather

McDonalds leverages economies of scale to minimize costs while maximizing

value to customers

McDonalds definition of value is broader than most restaurants of its kind -- it

is more than price Value at McDonalds is the sum of the total McDonalds

experience quality food fast friendly service a clean and pleasant

environment and products priced at very affordable prices for the largest

segment of Indian consumers possible That is value at McDonalds

29

McDonaldrsquos Indiahellip Culturally Sensitive

Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much

that is consistent with other McDonaldrsquos restaurants around the world such as

the quality of the food and the attention to service

The dedication to local cultures is not new for McDonaldrsquos For the past 50

years McDonaldrsquos has opened restaurants in more than 120 distinctly different

countries and cultures With guidance from its local partners McDonaldrsquos is

able to adapt- where necessary-its menu and restaurant operations to

complement existing eating-out options McDonaldrsquos local owners understand

what their customers want perhaps more importantly what is acceptable within

local customs and values

There is much too that is very different- such as the first beef-less and pork-

less menu in the world and special product formulations to cater to Indian

culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos

India says ldquoWe know the Indian culture because we were born in it

inherited its richness and respect it greatly It is the respect for this culture

and the sentiments of many of our customersrsquo that we do not serve any

beef and pork items in our restaurantsrdquo

McDonaldrsquos commitment to its Indian customers is evident even in

development of special sauces that use local spices and chillies The

mayonnaise and all other sauces are egg-less

In India vegetarianism is in many cases more than a lifestyle choice Many

people are vegetarians due to religious reasons and in some cases even the

vegetarian product that has come into contact with a non-vegetarian product is

unacceptable Hence McDonaldrsquos India has also changed its operations to

address the special requirements of our vegetarian customers by having

processes that ensure that a physical separation of veg and non-veg products is

maintained right from farm to the customer Vegetable products are prepared

separately using dedicated equipment and utensils Also in India McDonaldrsquos

uses only vegetable oil as a medium for cooking

30

McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash

lsquoto be driven by the leadership of local ownersrsquo This commitment has translated

into enduring benefits to the businesses at the grass root level in the areas of

introduction of new crops new agricultural practices and food processing methods

and procedures

McDonalds unique cold chain on which the QSR major has spent more than six

years setting up in India has brought about a veritable revolution immensely

benefiting the farmers at one end and enabling customers at retail counters get the

highest quality food products absolutely fresh and at great value

Setting up this extensive cold chain distribution system has involved the transfer of

state-of-the-art food processing technology by McDonalds and its international

suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain

From Field to -2⁰C in 90 Minutes

Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be

grown during the winter months but with McDonalds expertise in the area of

agriculture they are now able to grow this crop through the year

Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room

to remove field heat a large cold room and a refrigerated van for transportation where

the temperature and the relative humidity of the crop is maintained between 1ordm C and

4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room

within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling

to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at

the farms itself ensuring no delay between harvesting pre-cooling packaging and

cold storage

Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd

Flavour and Freshness locked in at - 35degC

Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable

range of products is another important player in this cold chain This includes hi-tech

refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C

This is vital to ensure that the frozen food retains it freshness for a long time and the

cold chain is maintained The frozen product is immediately moved to cold storage

rooms

31

Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes

McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for

quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk

coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -

thus maintaining the cold chain

All leading to the Consumer

McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The

DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity

of the products throughout the entire cold chain

Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the

McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C

as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state

All these suppliers share McDonalds commitment and dedication to satisfying

customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently

each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental

effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn

more

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 17: Entrepreneurship m com a

17

Other than the main four elements mentioned above there are a few other

elements too in the marketing mix which are as follows-

People -The employees in McDonaldrsquos have a standard uniform and

McDonaldrsquos specially focuses on friendly and prompt service to its customers

from their employees

Process -The food manufacturing process at McDonaldrsquos is completely

transparent ie the whole process is visible to the customers In fact the fast

food joint allows its customers to view and judge the hygienic standards at

McDonaldrsquos by allowing them to enter the area where the process takes place

The customers are invited to check the ingredients used in food

Physical evidence - McDonalds focuses on clean and hygienic interiors of

is outlets and at the same time the interiors are attractive and the fast food joint

maintains a proper decorum at its joints

18

SWOT ANALYSIS

Strengths

McDonaldrsquos holds a very strong brand name worldwide

They have large partnerships with other companies that provide them

with their desired products this increases the goodwill of the company

McDonaldrsquos is one of the most reputed firms who are socially

responsible

Loyal employees amp management amp customer are their biggest strength

19

McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind

while providing food to different countries

Clean environment and play areas for children where they can enjoy their

time

Weakness

The weakness that hits the list of employee turnover rate Every year

many of their employees are fired out of the restaurant

McDonalds mostly advertises products and food items that targets

children

Health conscious people often complain that they do not provide us with

the organic and healthy food This becomes their weakness when they get in the complaints

They also face quality issue at times This affects the business as they are

running the outlet worldwide if one franchise gets affected others also

get a bad name

Opportunities

It can open up online services for their customers so that they can easily

order their desired meals sitting at home

Discounts given on every food item may help them gain more customers

They can go for a joint venture with the retailers they work with

They can introduce healthy hamburgers and healthy drinks for the people who are health conscious

20

In order to be environment friendly they can use packing material which

can be recycled later or material that does not create pollution

Threats

Emerging competition of similar outlets is becoming a problem for McDonalds

Health issue also becomes a problem when it comes to food

As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies

Recession in any country would definitely affect the whole outlet

worldwide

People facing heart problems and obesity accuse McDonalds for not

providing them with the healthy food

They have a threat of local food outlets in different countries

McDonalds is operating in a fully fledged economy where competition is

increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession

McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local

Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government

regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled

Indian businesses to grow by improving their ability to compete in todays international markets

21

Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in

predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first

restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept

has today been adopted by various Indian and International players to deliver quality produce to consumers

For instance Cremica Industries worked with another McDonalds supplier

from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to

McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with

farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water

consumption better seeds amp agricultural management practices which result in greater yields

In some cases these Indian suppliers had the technology - but no market for the

products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk

casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to

restaurants across India

McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations

COMPANYrsquoS FINANCIAL INFORMATION

Company Name McDonalds Corporation

Ticker Symbol MCD

Web Address wwwmcdonaldscom

CEO Mr Donald Thompson

No of Employees 420000

Common Issue Type CS

Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other

22

goods from numerous independent suppliers

Industry Information LEISURE - Restaurants

Price Day Change Bid Ask Open High Low Volume

8718 -002 - - 8743 8743 8676 3658828

Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range

875267 10040 039 527 253 164 35 10222 - 8331

KEY FIGURES (Latest Twelve Months - LTM)

Yesterdays Close 8706 $

PE Ratio - LTM 164

Market Capitalisation 875267 mil

Latest Shares Outstanding 10040 mil

Earnings pS (EPS) 527 $

Dividend pS (DPS) 253 cent

Dividend Yield 35

Dividend Payout Ratio 48

Revenue per Employee 64300 $

Effective Tax Rate 313

Float 10153 mil

Float as of Shares Outstanding 999

Foreign Sales 18478 mil

Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue

910

Research amp Devlopment (RampD) as of Revenue

000

Gross Profit Margin 447

EBITDA Margin 356

Pre-Tax Profit Margin 291

Assets Turnover 08

Return on Assets (ROA) 161

Return on Equity (ROE) 392

Return on Capital Invested (ROCI) 204 Current Ratio 10

Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096

LT DebtTotal Capital 480

Working Capital pS 006 $

Cash pS 217 $

Book-Value pS 1383 $

Balance Sheet (at a glance) in Millions

DIVIDEND INFO

Dividend Declared Date 09202012

Dividend Ex-Date 11282012

Dividend Record Date 12022012

Dividend Pay Date 12162012

Dividend Amount 770

Type of Payment Cash Payment

Dividend Rate 308

Current Dividend Yield 35

5-Y Average Dividend Yield 31

Payout Ratio 480

5-Y Average Payout Ratio 530

Share price performance previous 3 years

Share price performance intraday

23

Tangible Book-Value pS 1110 $

Cash Flow pS 689 $

Free Cash Flow pS 125 $

KEY FIGURES (LTM) Price info PriceBook Ratio 630

PriceTangible Book Ratio 785 PriceCash Flow 126

PriceFree Cash Flow 699

PE as of Industry Group 420

PE as of Sector Segment 770

PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol

1 Week - - - 00 101 54041 66217

4 Weeks 8743 8331 8474 27 101 57129 856929

13 Weeks 9416 8331 9102 -44 98 61288 3554700

26 Weeks 9416 8331 8775 -08 93 59419 7189758

52 Weeks 10222 8331 9803 -112 79 59272 14521666

YTD 10222 8331 - -132 77 59774 13807695

Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)

8661 8631 8825 8931 9174 039 031

GROWTH RATES 5-Year

Growh Rsup2 of 5-Year Growth

3-Year

Growth

Revenue 381 776 666

Income 2017 811 978

Dividend 1536 947 1016

Capital Spending 697 NA 1052

RampD 000 NA 000

Normalized Inc 1158 NA 979

CHANGES YTD vs

Last YTD

Curr Qtr vs

Qtr 1-Yr ago

Annual vs

Last Annual

Revenue 21 -02 122

Earnings -14 -35 113

EPS 10 -14 151

EPS $ 004 -002 069

SOLVENCY RATIOS

SHORT-TERM SOLVENCY RATIOS

(LIQUIDITY)

Net Working Capital Ratio 271

Current Ratio 13

Quick Ratio (Acid Test) 10

Liquidity Ratio (Cash) 067

Receivables Turnover 215

Average Collection Period 17

Working CapitalEquity 62

Working Capital pS 088

Cash-Flow pS 677

Free Cash-Flow pS 209

24

FINANCIAL STRUCTURE RATIOS

Altmans Z-Score Ratio 485

Financial Leverage Ratio (AssetsEquity) 23

Debt Ratio 564

Total DebtEquity (Gearing Ratio) 087

LT DebtEquity 084

LT DebtCapital Invested 569

LT DebtTotal Liabilities 652

Interest Cover 173

InterestCapital Invested 167

25

People hellip McDonaldrsquos 1 Resource in India

26

McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs

around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in

1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with

McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)

The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive

training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course

(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the

Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University

27

The McDonaldrsquos Promise

QUALITY SERVICE CLEANLINESS amp VALUE

When asked to explain McDonalds success founder Ray Kroc used to say We

take the hamburger business more seriously than anyone else

Kroc was a perfectionist From the day he opened his first restaurant he vowed

to give his customers high quality products served quickly --and with a smile

in a clean and pleasant environment and all at a fair price Quality Service

Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds

business

QUALITY

McDonalds India serves only the highest quality products The attention to food

quality started long before the first restaurant opened McDonalds India has

established close relationships with local suppliers who provide McDonalds

with the highest quality freshest ingredients to make its products

All suppliers adhere to Indian government regulations on food health and

hygiene while continuously maintaining McDonalds own recognized standards

McDonalds has established an extensive cold chain distribution system in

India to ensure that the products which arrive at the restaurant from suppliers

all over India are absolutely fresh In the restaurants products and supplies are

used on a first-in first-out basis to ensure freshness All McDonalds products

are prepared using modern state-of-the-art cooking equipment to ensure quality

and safety

SERVICE

McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos

which sets its restaurants apart from others At McDonalds the customer

always comes first Every employee strives to provide 100 percent customer

satisfaction -- for every customer -- every visit This includes friendly and

attentive service accuracy in order taking and anticipation of customers needs

-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun

and youthful spirit we will proudly serve an exceptional McDonaldrsquos

eating experience that makes all people feel special and makes them smile ndash

every customer every timerdquo

28

CLEANLINESS

McDonalds restaurants provide a clean comfortable environment especially

suited for families McDonalds stringent cleaning standards ensure that all

tables seating highchairs and trays are sanitized several times each hour The

attention to cleanliness extends from the lobby to the kitchen to the sidewalk

and immediate areas outside the restaurant

In addition to urging customers to dispose of their litter properly and offering a

number of trash bins (both inside and outside the restaurants) for their

convenience McDonalds Litter Patrols walk around the restaurants several

times each day picking up litter -- even if it isnt from McDonalds

Restaurant managers walk through the dining areas each hour to ensure that it

is clean and well stocked All restaurants provide a variety of comfortable

seating arrangements to accommodate anyone -- from a single individual to a

large family The environment is warm inviting and well lit

VALUE

McDonalds menu is priced at a value that the largest segment of Indian

consumers can afford McDonalds does not sacrifice quality for value -- rather

McDonalds leverages economies of scale to minimize costs while maximizing

value to customers

McDonalds definition of value is broader than most restaurants of its kind -- it

is more than price Value at McDonalds is the sum of the total McDonalds

experience quality food fast friendly service a clean and pleasant

environment and products priced at very affordable prices for the largest

segment of Indian consumers possible That is value at McDonalds

29

McDonaldrsquos Indiahellip Culturally Sensitive

Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much

that is consistent with other McDonaldrsquos restaurants around the world such as

the quality of the food and the attention to service

The dedication to local cultures is not new for McDonaldrsquos For the past 50

years McDonaldrsquos has opened restaurants in more than 120 distinctly different

countries and cultures With guidance from its local partners McDonaldrsquos is

able to adapt- where necessary-its menu and restaurant operations to

complement existing eating-out options McDonaldrsquos local owners understand

what their customers want perhaps more importantly what is acceptable within

local customs and values

There is much too that is very different- such as the first beef-less and pork-

less menu in the world and special product formulations to cater to Indian

culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos

India says ldquoWe know the Indian culture because we were born in it

inherited its richness and respect it greatly It is the respect for this culture

and the sentiments of many of our customersrsquo that we do not serve any

beef and pork items in our restaurantsrdquo

McDonaldrsquos commitment to its Indian customers is evident even in

development of special sauces that use local spices and chillies The

mayonnaise and all other sauces are egg-less

In India vegetarianism is in many cases more than a lifestyle choice Many

people are vegetarians due to religious reasons and in some cases even the

vegetarian product that has come into contact with a non-vegetarian product is

unacceptable Hence McDonaldrsquos India has also changed its operations to

address the special requirements of our vegetarian customers by having

processes that ensure that a physical separation of veg and non-veg products is

maintained right from farm to the customer Vegetable products are prepared

separately using dedicated equipment and utensils Also in India McDonaldrsquos

uses only vegetable oil as a medium for cooking

30

McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash

lsquoto be driven by the leadership of local ownersrsquo This commitment has translated

into enduring benefits to the businesses at the grass root level in the areas of

introduction of new crops new agricultural practices and food processing methods

and procedures

McDonalds unique cold chain on which the QSR major has spent more than six

years setting up in India has brought about a veritable revolution immensely

benefiting the farmers at one end and enabling customers at retail counters get the

highest quality food products absolutely fresh and at great value

Setting up this extensive cold chain distribution system has involved the transfer of

state-of-the-art food processing technology by McDonalds and its international

suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain

From Field to -2⁰C in 90 Minutes

Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be

grown during the winter months but with McDonalds expertise in the area of

agriculture they are now able to grow this crop through the year

Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room

to remove field heat a large cold room and a refrigerated van for transportation where

the temperature and the relative humidity of the crop is maintained between 1ordm C and

4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room

within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling

to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at

the farms itself ensuring no delay between harvesting pre-cooling packaging and

cold storage

Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd

Flavour and Freshness locked in at - 35degC

Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable

range of products is another important player in this cold chain This includes hi-tech

refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C

This is vital to ensure that the frozen food retains it freshness for a long time and the

cold chain is maintained The frozen product is immediately moved to cold storage

rooms

31

Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes

McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for

quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk

coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -

thus maintaining the cold chain

All leading to the Consumer

McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The

DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity

of the products throughout the entire cold chain

Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the

McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C

as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state

All these suppliers share McDonalds commitment and dedication to satisfying

customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently

each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental

effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn

more

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 18: Entrepreneurship m com a

18

SWOT ANALYSIS

Strengths

McDonaldrsquos holds a very strong brand name worldwide

They have large partnerships with other companies that provide them

with their desired products this increases the goodwill of the company

McDonaldrsquos is one of the most reputed firms who are socially

responsible

Loyal employees amp management amp customer are their biggest strength

19

McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind

while providing food to different countries

Clean environment and play areas for children where they can enjoy their

time

Weakness

The weakness that hits the list of employee turnover rate Every year

many of their employees are fired out of the restaurant

McDonalds mostly advertises products and food items that targets

children

Health conscious people often complain that they do not provide us with

the organic and healthy food This becomes their weakness when they get in the complaints

They also face quality issue at times This affects the business as they are

running the outlet worldwide if one franchise gets affected others also

get a bad name

Opportunities

It can open up online services for their customers so that they can easily

order their desired meals sitting at home

Discounts given on every food item may help them gain more customers

They can go for a joint venture with the retailers they work with

They can introduce healthy hamburgers and healthy drinks for the people who are health conscious

20

In order to be environment friendly they can use packing material which

can be recycled later or material that does not create pollution

Threats

Emerging competition of similar outlets is becoming a problem for McDonalds

Health issue also becomes a problem when it comes to food

As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies

Recession in any country would definitely affect the whole outlet

worldwide

People facing heart problems and obesity accuse McDonalds for not

providing them with the healthy food

They have a threat of local food outlets in different countries

McDonalds is operating in a fully fledged economy where competition is

increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession

McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local

Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government

regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled

Indian businesses to grow by improving their ability to compete in todays international markets

21

Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in

predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first

restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept

has today been adopted by various Indian and International players to deliver quality produce to consumers

For instance Cremica Industries worked with another McDonalds supplier

from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to

McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with

farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water

consumption better seeds amp agricultural management practices which result in greater yields

In some cases these Indian suppliers had the technology - but no market for the

products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk

casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to

restaurants across India

McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations

COMPANYrsquoS FINANCIAL INFORMATION

Company Name McDonalds Corporation

Ticker Symbol MCD

Web Address wwwmcdonaldscom

CEO Mr Donald Thompson

No of Employees 420000

Common Issue Type CS

Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other

22

goods from numerous independent suppliers

Industry Information LEISURE - Restaurants

Price Day Change Bid Ask Open High Low Volume

8718 -002 - - 8743 8743 8676 3658828

Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range

875267 10040 039 527 253 164 35 10222 - 8331

KEY FIGURES (Latest Twelve Months - LTM)

Yesterdays Close 8706 $

PE Ratio - LTM 164

Market Capitalisation 875267 mil

Latest Shares Outstanding 10040 mil

Earnings pS (EPS) 527 $

Dividend pS (DPS) 253 cent

Dividend Yield 35

Dividend Payout Ratio 48

Revenue per Employee 64300 $

Effective Tax Rate 313

Float 10153 mil

Float as of Shares Outstanding 999

Foreign Sales 18478 mil

Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue

910

Research amp Devlopment (RampD) as of Revenue

000

Gross Profit Margin 447

EBITDA Margin 356

Pre-Tax Profit Margin 291

Assets Turnover 08

Return on Assets (ROA) 161

Return on Equity (ROE) 392

Return on Capital Invested (ROCI) 204 Current Ratio 10

Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096

LT DebtTotal Capital 480

Working Capital pS 006 $

Cash pS 217 $

Book-Value pS 1383 $

Balance Sheet (at a glance) in Millions

DIVIDEND INFO

Dividend Declared Date 09202012

Dividend Ex-Date 11282012

Dividend Record Date 12022012

Dividend Pay Date 12162012

Dividend Amount 770

Type of Payment Cash Payment

Dividend Rate 308

Current Dividend Yield 35

5-Y Average Dividend Yield 31

Payout Ratio 480

5-Y Average Payout Ratio 530

Share price performance previous 3 years

Share price performance intraday

23

Tangible Book-Value pS 1110 $

Cash Flow pS 689 $

Free Cash Flow pS 125 $

KEY FIGURES (LTM) Price info PriceBook Ratio 630

PriceTangible Book Ratio 785 PriceCash Flow 126

PriceFree Cash Flow 699

PE as of Industry Group 420

PE as of Sector Segment 770

PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol

1 Week - - - 00 101 54041 66217

4 Weeks 8743 8331 8474 27 101 57129 856929

13 Weeks 9416 8331 9102 -44 98 61288 3554700

26 Weeks 9416 8331 8775 -08 93 59419 7189758

52 Weeks 10222 8331 9803 -112 79 59272 14521666

YTD 10222 8331 - -132 77 59774 13807695

Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)

8661 8631 8825 8931 9174 039 031

GROWTH RATES 5-Year

Growh Rsup2 of 5-Year Growth

3-Year

Growth

Revenue 381 776 666

Income 2017 811 978

Dividend 1536 947 1016

Capital Spending 697 NA 1052

RampD 000 NA 000

Normalized Inc 1158 NA 979

CHANGES YTD vs

Last YTD

Curr Qtr vs

Qtr 1-Yr ago

Annual vs

Last Annual

Revenue 21 -02 122

Earnings -14 -35 113

EPS 10 -14 151

EPS $ 004 -002 069

SOLVENCY RATIOS

SHORT-TERM SOLVENCY RATIOS

(LIQUIDITY)

Net Working Capital Ratio 271

Current Ratio 13

Quick Ratio (Acid Test) 10

Liquidity Ratio (Cash) 067

Receivables Turnover 215

Average Collection Period 17

Working CapitalEquity 62

Working Capital pS 088

Cash-Flow pS 677

Free Cash-Flow pS 209

24

FINANCIAL STRUCTURE RATIOS

Altmans Z-Score Ratio 485

Financial Leverage Ratio (AssetsEquity) 23

Debt Ratio 564

Total DebtEquity (Gearing Ratio) 087

LT DebtEquity 084

LT DebtCapital Invested 569

LT DebtTotal Liabilities 652

Interest Cover 173

InterestCapital Invested 167

25

People hellip McDonaldrsquos 1 Resource in India

26

McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs

around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in

1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with

McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)

The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive

training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course

(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the

Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University

27

The McDonaldrsquos Promise

QUALITY SERVICE CLEANLINESS amp VALUE

When asked to explain McDonalds success founder Ray Kroc used to say We

take the hamburger business more seriously than anyone else

Kroc was a perfectionist From the day he opened his first restaurant he vowed

to give his customers high quality products served quickly --and with a smile

in a clean and pleasant environment and all at a fair price Quality Service

Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds

business

QUALITY

McDonalds India serves only the highest quality products The attention to food

quality started long before the first restaurant opened McDonalds India has

established close relationships with local suppliers who provide McDonalds

with the highest quality freshest ingredients to make its products

All suppliers adhere to Indian government regulations on food health and

hygiene while continuously maintaining McDonalds own recognized standards

McDonalds has established an extensive cold chain distribution system in

India to ensure that the products which arrive at the restaurant from suppliers

all over India are absolutely fresh In the restaurants products and supplies are

used on a first-in first-out basis to ensure freshness All McDonalds products

are prepared using modern state-of-the-art cooking equipment to ensure quality

and safety

SERVICE

McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos

which sets its restaurants apart from others At McDonalds the customer

always comes first Every employee strives to provide 100 percent customer

satisfaction -- for every customer -- every visit This includes friendly and

attentive service accuracy in order taking and anticipation of customers needs

-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun

and youthful spirit we will proudly serve an exceptional McDonaldrsquos

eating experience that makes all people feel special and makes them smile ndash

every customer every timerdquo

28

CLEANLINESS

McDonalds restaurants provide a clean comfortable environment especially

suited for families McDonalds stringent cleaning standards ensure that all

tables seating highchairs and trays are sanitized several times each hour The

attention to cleanliness extends from the lobby to the kitchen to the sidewalk

and immediate areas outside the restaurant

In addition to urging customers to dispose of their litter properly and offering a

number of trash bins (both inside and outside the restaurants) for their

convenience McDonalds Litter Patrols walk around the restaurants several

times each day picking up litter -- even if it isnt from McDonalds

Restaurant managers walk through the dining areas each hour to ensure that it

is clean and well stocked All restaurants provide a variety of comfortable

seating arrangements to accommodate anyone -- from a single individual to a

large family The environment is warm inviting and well lit

VALUE

McDonalds menu is priced at a value that the largest segment of Indian

consumers can afford McDonalds does not sacrifice quality for value -- rather

McDonalds leverages economies of scale to minimize costs while maximizing

value to customers

McDonalds definition of value is broader than most restaurants of its kind -- it

is more than price Value at McDonalds is the sum of the total McDonalds

experience quality food fast friendly service a clean and pleasant

environment and products priced at very affordable prices for the largest

segment of Indian consumers possible That is value at McDonalds

29

McDonaldrsquos Indiahellip Culturally Sensitive

Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much

that is consistent with other McDonaldrsquos restaurants around the world such as

the quality of the food and the attention to service

The dedication to local cultures is not new for McDonaldrsquos For the past 50

years McDonaldrsquos has opened restaurants in more than 120 distinctly different

countries and cultures With guidance from its local partners McDonaldrsquos is

able to adapt- where necessary-its menu and restaurant operations to

complement existing eating-out options McDonaldrsquos local owners understand

what their customers want perhaps more importantly what is acceptable within

local customs and values

There is much too that is very different- such as the first beef-less and pork-

less menu in the world and special product formulations to cater to Indian

culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos

India says ldquoWe know the Indian culture because we were born in it

inherited its richness and respect it greatly It is the respect for this culture

and the sentiments of many of our customersrsquo that we do not serve any

beef and pork items in our restaurantsrdquo

McDonaldrsquos commitment to its Indian customers is evident even in

development of special sauces that use local spices and chillies The

mayonnaise and all other sauces are egg-less

In India vegetarianism is in many cases more than a lifestyle choice Many

people are vegetarians due to religious reasons and in some cases even the

vegetarian product that has come into contact with a non-vegetarian product is

unacceptable Hence McDonaldrsquos India has also changed its operations to

address the special requirements of our vegetarian customers by having

processes that ensure that a physical separation of veg and non-veg products is

maintained right from farm to the customer Vegetable products are prepared

separately using dedicated equipment and utensils Also in India McDonaldrsquos

uses only vegetable oil as a medium for cooking

30

McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash

lsquoto be driven by the leadership of local ownersrsquo This commitment has translated

into enduring benefits to the businesses at the grass root level in the areas of

introduction of new crops new agricultural practices and food processing methods

and procedures

McDonalds unique cold chain on which the QSR major has spent more than six

years setting up in India has brought about a veritable revolution immensely

benefiting the farmers at one end and enabling customers at retail counters get the

highest quality food products absolutely fresh and at great value

Setting up this extensive cold chain distribution system has involved the transfer of

state-of-the-art food processing technology by McDonalds and its international

suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain

From Field to -2⁰C in 90 Minutes

Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be

grown during the winter months but with McDonalds expertise in the area of

agriculture they are now able to grow this crop through the year

Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room

to remove field heat a large cold room and a refrigerated van for transportation where

the temperature and the relative humidity of the crop is maintained between 1ordm C and

4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room

within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling

to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at

the farms itself ensuring no delay between harvesting pre-cooling packaging and

cold storage

Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd

Flavour and Freshness locked in at - 35degC

Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable

range of products is another important player in this cold chain This includes hi-tech

refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C

This is vital to ensure that the frozen food retains it freshness for a long time and the

cold chain is maintained The frozen product is immediately moved to cold storage

rooms

31

Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes

McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for

quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk

coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -

thus maintaining the cold chain

All leading to the Consumer

McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The

DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity

of the products throughout the entire cold chain

Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the

McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C

as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state

All these suppliers share McDonalds commitment and dedication to satisfying

customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently

each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental

effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn

more

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 19: Entrepreneurship m com a

19

McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind

while providing food to different countries

Clean environment and play areas for children where they can enjoy their

time

Weakness

The weakness that hits the list of employee turnover rate Every year

many of their employees are fired out of the restaurant

McDonalds mostly advertises products and food items that targets

children

Health conscious people often complain that they do not provide us with

the organic and healthy food This becomes their weakness when they get in the complaints

They also face quality issue at times This affects the business as they are

running the outlet worldwide if one franchise gets affected others also

get a bad name

Opportunities

It can open up online services for their customers so that they can easily

order their desired meals sitting at home

Discounts given on every food item may help them gain more customers

They can go for a joint venture with the retailers they work with

They can introduce healthy hamburgers and healthy drinks for the people who are health conscious

20

In order to be environment friendly they can use packing material which

can be recycled later or material that does not create pollution

Threats

Emerging competition of similar outlets is becoming a problem for McDonalds

Health issue also becomes a problem when it comes to food

As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies

Recession in any country would definitely affect the whole outlet

worldwide

People facing heart problems and obesity accuse McDonalds for not

providing them with the healthy food

They have a threat of local food outlets in different countries

McDonalds is operating in a fully fledged economy where competition is

increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession

McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local

Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government

regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled

Indian businesses to grow by improving their ability to compete in todays international markets

21

Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in

predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first

restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept

has today been adopted by various Indian and International players to deliver quality produce to consumers

For instance Cremica Industries worked with another McDonalds supplier

from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to

McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with

farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water

consumption better seeds amp agricultural management practices which result in greater yields

In some cases these Indian suppliers had the technology - but no market for the

products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk

casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to

restaurants across India

McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations

COMPANYrsquoS FINANCIAL INFORMATION

Company Name McDonalds Corporation

Ticker Symbol MCD

Web Address wwwmcdonaldscom

CEO Mr Donald Thompson

No of Employees 420000

Common Issue Type CS

Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other

22

goods from numerous independent suppliers

Industry Information LEISURE - Restaurants

Price Day Change Bid Ask Open High Low Volume

8718 -002 - - 8743 8743 8676 3658828

Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range

875267 10040 039 527 253 164 35 10222 - 8331

KEY FIGURES (Latest Twelve Months - LTM)

Yesterdays Close 8706 $

PE Ratio - LTM 164

Market Capitalisation 875267 mil

Latest Shares Outstanding 10040 mil

Earnings pS (EPS) 527 $

Dividend pS (DPS) 253 cent

Dividend Yield 35

Dividend Payout Ratio 48

Revenue per Employee 64300 $

Effective Tax Rate 313

Float 10153 mil

Float as of Shares Outstanding 999

Foreign Sales 18478 mil

Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue

910

Research amp Devlopment (RampD) as of Revenue

000

Gross Profit Margin 447

EBITDA Margin 356

Pre-Tax Profit Margin 291

Assets Turnover 08

Return on Assets (ROA) 161

Return on Equity (ROE) 392

Return on Capital Invested (ROCI) 204 Current Ratio 10

Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096

LT DebtTotal Capital 480

Working Capital pS 006 $

Cash pS 217 $

Book-Value pS 1383 $

Balance Sheet (at a glance) in Millions

DIVIDEND INFO

Dividend Declared Date 09202012

Dividend Ex-Date 11282012

Dividend Record Date 12022012

Dividend Pay Date 12162012

Dividend Amount 770

Type of Payment Cash Payment

Dividend Rate 308

Current Dividend Yield 35

5-Y Average Dividend Yield 31

Payout Ratio 480

5-Y Average Payout Ratio 530

Share price performance previous 3 years

Share price performance intraday

23

Tangible Book-Value pS 1110 $

Cash Flow pS 689 $

Free Cash Flow pS 125 $

KEY FIGURES (LTM) Price info PriceBook Ratio 630

PriceTangible Book Ratio 785 PriceCash Flow 126

PriceFree Cash Flow 699

PE as of Industry Group 420

PE as of Sector Segment 770

PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol

1 Week - - - 00 101 54041 66217

4 Weeks 8743 8331 8474 27 101 57129 856929

13 Weeks 9416 8331 9102 -44 98 61288 3554700

26 Weeks 9416 8331 8775 -08 93 59419 7189758

52 Weeks 10222 8331 9803 -112 79 59272 14521666

YTD 10222 8331 - -132 77 59774 13807695

Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)

8661 8631 8825 8931 9174 039 031

GROWTH RATES 5-Year

Growh Rsup2 of 5-Year Growth

3-Year

Growth

Revenue 381 776 666

Income 2017 811 978

Dividend 1536 947 1016

Capital Spending 697 NA 1052

RampD 000 NA 000

Normalized Inc 1158 NA 979

CHANGES YTD vs

Last YTD

Curr Qtr vs

Qtr 1-Yr ago

Annual vs

Last Annual

Revenue 21 -02 122

Earnings -14 -35 113

EPS 10 -14 151

EPS $ 004 -002 069

SOLVENCY RATIOS

SHORT-TERM SOLVENCY RATIOS

(LIQUIDITY)

Net Working Capital Ratio 271

Current Ratio 13

Quick Ratio (Acid Test) 10

Liquidity Ratio (Cash) 067

Receivables Turnover 215

Average Collection Period 17

Working CapitalEquity 62

Working Capital pS 088

Cash-Flow pS 677

Free Cash-Flow pS 209

24

FINANCIAL STRUCTURE RATIOS

Altmans Z-Score Ratio 485

Financial Leverage Ratio (AssetsEquity) 23

Debt Ratio 564

Total DebtEquity (Gearing Ratio) 087

LT DebtEquity 084

LT DebtCapital Invested 569

LT DebtTotal Liabilities 652

Interest Cover 173

InterestCapital Invested 167

25

People hellip McDonaldrsquos 1 Resource in India

26

McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs

around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in

1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with

McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)

The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive

training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course

(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the

Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University

27

The McDonaldrsquos Promise

QUALITY SERVICE CLEANLINESS amp VALUE

When asked to explain McDonalds success founder Ray Kroc used to say We

take the hamburger business more seriously than anyone else

Kroc was a perfectionist From the day he opened his first restaurant he vowed

to give his customers high quality products served quickly --and with a smile

in a clean and pleasant environment and all at a fair price Quality Service

Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds

business

QUALITY

McDonalds India serves only the highest quality products The attention to food

quality started long before the first restaurant opened McDonalds India has

established close relationships with local suppliers who provide McDonalds

with the highest quality freshest ingredients to make its products

All suppliers adhere to Indian government regulations on food health and

hygiene while continuously maintaining McDonalds own recognized standards

McDonalds has established an extensive cold chain distribution system in

India to ensure that the products which arrive at the restaurant from suppliers

all over India are absolutely fresh In the restaurants products and supplies are

used on a first-in first-out basis to ensure freshness All McDonalds products

are prepared using modern state-of-the-art cooking equipment to ensure quality

and safety

SERVICE

McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos

which sets its restaurants apart from others At McDonalds the customer

always comes first Every employee strives to provide 100 percent customer

satisfaction -- for every customer -- every visit This includes friendly and

attentive service accuracy in order taking and anticipation of customers needs

-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun

and youthful spirit we will proudly serve an exceptional McDonaldrsquos

eating experience that makes all people feel special and makes them smile ndash

every customer every timerdquo

28

CLEANLINESS

McDonalds restaurants provide a clean comfortable environment especially

suited for families McDonalds stringent cleaning standards ensure that all

tables seating highchairs and trays are sanitized several times each hour The

attention to cleanliness extends from the lobby to the kitchen to the sidewalk

and immediate areas outside the restaurant

In addition to urging customers to dispose of their litter properly and offering a

number of trash bins (both inside and outside the restaurants) for their

convenience McDonalds Litter Patrols walk around the restaurants several

times each day picking up litter -- even if it isnt from McDonalds

Restaurant managers walk through the dining areas each hour to ensure that it

is clean and well stocked All restaurants provide a variety of comfortable

seating arrangements to accommodate anyone -- from a single individual to a

large family The environment is warm inviting and well lit

VALUE

McDonalds menu is priced at a value that the largest segment of Indian

consumers can afford McDonalds does not sacrifice quality for value -- rather

McDonalds leverages economies of scale to minimize costs while maximizing

value to customers

McDonalds definition of value is broader than most restaurants of its kind -- it

is more than price Value at McDonalds is the sum of the total McDonalds

experience quality food fast friendly service a clean and pleasant

environment and products priced at very affordable prices for the largest

segment of Indian consumers possible That is value at McDonalds

29

McDonaldrsquos Indiahellip Culturally Sensitive

Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much

that is consistent with other McDonaldrsquos restaurants around the world such as

the quality of the food and the attention to service

The dedication to local cultures is not new for McDonaldrsquos For the past 50

years McDonaldrsquos has opened restaurants in more than 120 distinctly different

countries and cultures With guidance from its local partners McDonaldrsquos is

able to adapt- where necessary-its menu and restaurant operations to

complement existing eating-out options McDonaldrsquos local owners understand

what their customers want perhaps more importantly what is acceptable within

local customs and values

There is much too that is very different- such as the first beef-less and pork-

less menu in the world and special product formulations to cater to Indian

culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos

India says ldquoWe know the Indian culture because we were born in it

inherited its richness and respect it greatly It is the respect for this culture

and the sentiments of many of our customersrsquo that we do not serve any

beef and pork items in our restaurantsrdquo

McDonaldrsquos commitment to its Indian customers is evident even in

development of special sauces that use local spices and chillies The

mayonnaise and all other sauces are egg-less

In India vegetarianism is in many cases more than a lifestyle choice Many

people are vegetarians due to religious reasons and in some cases even the

vegetarian product that has come into contact with a non-vegetarian product is

unacceptable Hence McDonaldrsquos India has also changed its operations to

address the special requirements of our vegetarian customers by having

processes that ensure that a physical separation of veg and non-veg products is

maintained right from farm to the customer Vegetable products are prepared

separately using dedicated equipment and utensils Also in India McDonaldrsquos

uses only vegetable oil as a medium for cooking

30

McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash

lsquoto be driven by the leadership of local ownersrsquo This commitment has translated

into enduring benefits to the businesses at the grass root level in the areas of

introduction of new crops new agricultural practices and food processing methods

and procedures

McDonalds unique cold chain on which the QSR major has spent more than six

years setting up in India has brought about a veritable revolution immensely

benefiting the farmers at one end and enabling customers at retail counters get the

highest quality food products absolutely fresh and at great value

Setting up this extensive cold chain distribution system has involved the transfer of

state-of-the-art food processing technology by McDonalds and its international

suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain

From Field to -2⁰C in 90 Minutes

Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be

grown during the winter months but with McDonalds expertise in the area of

agriculture they are now able to grow this crop through the year

Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room

to remove field heat a large cold room and a refrigerated van for transportation where

the temperature and the relative humidity of the crop is maintained between 1ordm C and

4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room

within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling

to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at

the farms itself ensuring no delay between harvesting pre-cooling packaging and

cold storage

Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd

Flavour and Freshness locked in at - 35degC

Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable

range of products is another important player in this cold chain This includes hi-tech

refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C

This is vital to ensure that the frozen food retains it freshness for a long time and the

cold chain is maintained The frozen product is immediately moved to cold storage

rooms

31

Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes

McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for

quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk

coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -

thus maintaining the cold chain

All leading to the Consumer

McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The

DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity

of the products throughout the entire cold chain

Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the

McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C

as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state

All these suppliers share McDonalds commitment and dedication to satisfying

customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently

each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental

effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn

more

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 20: Entrepreneurship m com a

20

In order to be environment friendly they can use packing material which

can be recycled later or material that does not create pollution

Threats

Emerging competition of similar outlets is becoming a problem for McDonalds

Health issue also becomes a problem when it comes to food

As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies

Recession in any country would definitely affect the whole outlet

worldwide

People facing heart problems and obesity accuse McDonalds for not

providing them with the healthy food

They have a threat of local food outlets in different countries

McDonalds is operating in a fully fledged economy where competition is

increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession

McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local

Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government

regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled

Indian businesses to grow by improving their ability to compete in todays international markets

21

Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in

predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first

restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept

has today been adopted by various Indian and International players to deliver quality produce to consumers

For instance Cremica Industries worked with another McDonalds supplier

from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to

McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with

farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water

consumption better seeds amp agricultural management practices which result in greater yields

In some cases these Indian suppliers had the technology - but no market for the

products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk

casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to

restaurants across India

McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations

COMPANYrsquoS FINANCIAL INFORMATION

Company Name McDonalds Corporation

Ticker Symbol MCD

Web Address wwwmcdonaldscom

CEO Mr Donald Thompson

No of Employees 420000

Common Issue Type CS

Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other

22

goods from numerous independent suppliers

Industry Information LEISURE - Restaurants

Price Day Change Bid Ask Open High Low Volume

8718 -002 - - 8743 8743 8676 3658828

Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range

875267 10040 039 527 253 164 35 10222 - 8331

KEY FIGURES (Latest Twelve Months - LTM)

Yesterdays Close 8706 $

PE Ratio - LTM 164

Market Capitalisation 875267 mil

Latest Shares Outstanding 10040 mil

Earnings pS (EPS) 527 $

Dividend pS (DPS) 253 cent

Dividend Yield 35

Dividend Payout Ratio 48

Revenue per Employee 64300 $

Effective Tax Rate 313

Float 10153 mil

Float as of Shares Outstanding 999

Foreign Sales 18478 mil

Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue

910

Research amp Devlopment (RampD) as of Revenue

000

Gross Profit Margin 447

EBITDA Margin 356

Pre-Tax Profit Margin 291

Assets Turnover 08

Return on Assets (ROA) 161

Return on Equity (ROE) 392

Return on Capital Invested (ROCI) 204 Current Ratio 10

Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096

LT DebtTotal Capital 480

Working Capital pS 006 $

Cash pS 217 $

Book-Value pS 1383 $

Balance Sheet (at a glance) in Millions

DIVIDEND INFO

Dividend Declared Date 09202012

Dividend Ex-Date 11282012

Dividend Record Date 12022012

Dividend Pay Date 12162012

Dividend Amount 770

Type of Payment Cash Payment

Dividend Rate 308

Current Dividend Yield 35

5-Y Average Dividend Yield 31

Payout Ratio 480

5-Y Average Payout Ratio 530

Share price performance previous 3 years

Share price performance intraday

23

Tangible Book-Value pS 1110 $

Cash Flow pS 689 $

Free Cash Flow pS 125 $

KEY FIGURES (LTM) Price info PriceBook Ratio 630

PriceTangible Book Ratio 785 PriceCash Flow 126

PriceFree Cash Flow 699

PE as of Industry Group 420

PE as of Sector Segment 770

PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol

1 Week - - - 00 101 54041 66217

4 Weeks 8743 8331 8474 27 101 57129 856929

13 Weeks 9416 8331 9102 -44 98 61288 3554700

26 Weeks 9416 8331 8775 -08 93 59419 7189758

52 Weeks 10222 8331 9803 -112 79 59272 14521666

YTD 10222 8331 - -132 77 59774 13807695

Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)

8661 8631 8825 8931 9174 039 031

GROWTH RATES 5-Year

Growh Rsup2 of 5-Year Growth

3-Year

Growth

Revenue 381 776 666

Income 2017 811 978

Dividend 1536 947 1016

Capital Spending 697 NA 1052

RampD 000 NA 000

Normalized Inc 1158 NA 979

CHANGES YTD vs

Last YTD

Curr Qtr vs

Qtr 1-Yr ago

Annual vs

Last Annual

Revenue 21 -02 122

Earnings -14 -35 113

EPS 10 -14 151

EPS $ 004 -002 069

SOLVENCY RATIOS

SHORT-TERM SOLVENCY RATIOS

(LIQUIDITY)

Net Working Capital Ratio 271

Current Ratio 13

Quick Ratio (Acid Test) 10

Liquidity Ratio (Cash) 067

Receivables Turnover 215

Average Collection Period 17

Working CapitalEquity 62

Working Capital pS 088

Cash-Flow pS 677

Free Cash-Flow pS 209

24

FINANCIAL STRUCTURE RATIOS

Altmans Z-Score Ratio 485

Financial Leverage Ratio (AssetsEquity) 23

Debt Ratio 564

Total DebtEquity (Gearing Ratio) 087

LT DebtEquity 084

LT DebtCapital Invested 569

LT DebtTotal Liabilities 652

Interest Cover 173

InterestCapital Invested 167

25

People hellip McDonaldrsquos 1 Resource in India

26

McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs

around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in

1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with

McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)

The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive

training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course

(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the

Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University

27

The McDonaldrsquos Promise

QUALITY SERVICE CLEANLINESS amp VALUE

When asked to explain McDonalds success founder Ray Kroc used to say We

take the hamburger business more seriously than anyone else

Kroc was a perfectionist From the day he opened his first restaurant he vowed

to give his customers high quality products served quickly --and with a smile

in a clean and pleasant environment and all at a fair price Quality Service

Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds

business

QUALITY

McDonalds India serves only the highest quality products The attention to food

quality started long before the first restaurant opened McDonalds India has

established close relationships with local suppliers who provide McDonalds

with the highest quality freshest ingredients to make its products

All suppliers adhere to Indian government regulations on food health and

hygiene while continuously maintaining McDonalds own recognized standards

McDonalds has established an extensive cold chain distribution system in

India to ensure that the products which arrive at the restaurant from suppliers

all over India are absolutely fresh In the restaurants products and supplies are

used on a first-in first-out basis to ensure freshness All McDonalds products

are prepared using modern state-of-the-art cooking equipment to ensure quality

and safety

SERVICE

McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos

which sets its restaurants apart from others At McDonalds the customer

always comes first Every employee strives to provide 100 percent customer

satisfaction -- for every customer -- every visit This includes friendly and

attentive service accuracy in order taking and anticipation of customers needs

-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun

and youthful spirit we will proudly serve an exceptional McDonaldrsquos

eating experience that makes all people feel special and makes them smile ndash

every customer every timerdquo

28

CLEANLINESS

McDonalds restaurants provide a clean comfortable environment especially

suited for families McDonalds stringent cleaning standards ensure that all

tables seating highchairs and trays are sanitized several times each hour The

attention to cleanliness extends from the lobby to the kitchen to the sidewalk

and immediate areas outside the restaurant

In addition to urging customers to dispose of their litter properly and offering a

number of trash bins (both inside and outside the restaurants) for their

convenience McDonalds Litter Patrols walk around the restaurants several

times each day picking up litter -- even if it isnt from McDonalds

Restaurant managers walk through the dining areas each hour to ensure that it

is clean and well stocked All restaurants provide a variety of comfortable

seating arrangements to accommodate anyone -- from a single individual to a

large family The environment is warm inviting and well lit

VALUE

McDonalds menu is priced at a value that the largest segment of Indian

consumers can afford McDonalds does not sacrifice quality for value -- rather

McDonalds leverages economies of scale to minimize costs while maximizing

value to customers

McDonalds definition of value is broader than most restaurants of its kind -- it

is more than price Value at McDonalds is the sum of the total McDonalds

experience quality food fast friendly service a clean and pleasant

environment and products priced at very affordable prices for the largest

segment of Indian consumers possible That is value at McDonalds

29

McDonaldrsquos Indiahellip Culturally Sensitive

Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much

that is consistent with other McDonaldrsquos restaurants around the world such as

the quality of the food and the attention to service

The dedication to local cultures is not new for McDonaldrsquos For the past 50

years McDonaldrsquos has opened restaurants in more than 120 distinctly different

countries and cultures With guidance from its local partners McDonaldrsquos is

able to adapt- where necessary-its menu and restaurant operations to

complement existing eating-out options McDonaldrsquos local owners understand

what their customers want perhaps more importantly what is acceptable within

local customs and values

There is much too that is very different- such as the first beef-less and pork-

less menu in the world and special product formulations to cater to Indian

culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos

India says ldquoWe know the Indian culture because we were born in it

inherited its richness and respect it greatly It is the respect for this culture

and the sentiments of many of our customersrsquo that we do not serve any

beef and pork items in our restaurantsrdquo

McDonaldrsquos commitment to its Indian customers is evident even in

development of special sauces that use local spices and chillies The

mayonnaise and all other sauces are egg-less

In India vegetarianism is in many cases more than a lifestyle choice Many

people are vegetarians due to religious reasons and in some cases even the

vegetarian product that has come into contact with a non-vegetarian product is

unacceptable Hence McDonaldrsquos India has also changed its operations to

address the special requirements of our vegetarian customers by having

processes that ensure that a physical separation of veg and non-veg products is

maintained right from farm to the customer Vegetable products are prepared

separately using dedicated equipment and utensils Also in India McDonaldrsquos

uses only vegetable oil as a medium for cooking

30

McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash

lsquoto be driven by the leadership of local ownersrsquo This commitment has translated

into enduring benefits to the businesses at the grass root level in the areas of

introduction of new crops new agricultural practices and food processing methods

and procedures

McDonalds unique cold chain on which the QSR major has spent more than six

years setting up in India has brought about a veritable revolution immensely

benefiting the farmers at one end and enabling customers at retail counters get the

highest quality food products absolutely fresh and at great value

Setting up this extensive cold chain distribution system has involved the transfer of

state-of-the-art food processing technology by McDonalds and its international

suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain

From Field to -2⁰C in 90 Minutes

Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be

grown during the winter months but with McDonalds expertise in the area of

agriculture they are now able to grow this crop through the year

Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room

to remove field heat a large cold room and a refrigerated van for transportation where

the temperature and the relative humidity of the crop is maintained between 1ordm C and

4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room

within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling

to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at

the farms itself ensuring no delay between harvesting pre-cooling packaging and

cold storage

Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd

Flavour and Freshness locked in at - 35degC

Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable

range of products is another important player in this cold chain This includes hi-tech

refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C

This is vital to ensure that the frozen food retains it freshness for a long time and the

cold chain is maintained The frozen product is immediately moved to cold storage

rooms

31

Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes

McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for

quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk

coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -

thus maintaining the cold chain

All leading to the Consumer

McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The

DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity

of the products throughout the entire cold chain

Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the

McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C

as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state

All these suppliers share McDonalds commitment and dedication to satisfying

customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently

each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental

effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn

more

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 21: Entrepreneurship m com a

21

Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in

predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first

restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept

has today been adopted by various Indian and International players to deliver quality produce to consumers

For instance Cremica Industries worked with another McDonalds supplier

from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to

McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with

farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water

consumption better seeds amp agricultural management practices which result in greater yields

In some cases these Indian suppliers had the technology - but no market for the

products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk

casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to

restaurants across India

McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations

COMPANYrsquoS FINANCIAL INFORMATION

Company Name McDonalds Corporation

Ticker Symbol MCD

Web Address wwwmcdonaldscom

CEO Mr Donald Thompson

No of Employees 420000

Common Issue Type CS

Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other

22

goods from numerous independent suppliers

Industry Information LEISURE - Restaurants

Price Day Change Bid Ask Open High Low Volume

8718 -002 - - 8743 8743 8676 3658828

Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range

875267 10040 039 527 253 164 35 10222 - 8331

KEY FIGURES (Latest Twelve Months - LTM)

Yesterdays Close 8706 $

PE Ratio - LTM 164

Market Capitalisation 875267 mil

Latest Shares Outstanding 10040 mil

Earnings pS (EPS) 527 $

Dividend pS (DPS) 253 cent

Dividend Yield 35

Dividend Payout Ratio 48

Revenue per Employee 64300 $

Effective Tax Rate 313

Float 10153 mil

Float as of Shares Outstanding 999

Foreign Sales 18478 mil

Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue

910

Research amp Devlopment (RampD) as of Revenue

000

Gross Profit Margin 447

EBITDA Margin 356

Pre-Tax Profit Margin 291

Assets Turnover 08

Return on Assets (ROA) 161

Return on Equity (ROE) 392

Return on Capital Invested (ROCI) 204 Current Ratio 10

Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096

LT DebtTotal Capital 480

Working Capital pS 006 $

Cash pS 217 $

Book-Value pS 1383 $

Balance Sheet (at a glance) in Millions

DIVIDEND INFO

Dividend Declared Date 09202012

Dividend Ex-Date 11282012

Dividend Record Date 12022012

Dividend Pay Date 12162012

Dividend Amount 770

Type of Payment Cash Payment

Dividend Rate 308

Current Dividend Yield 35

5-Y Average Dividend Yield 31

Payout Ratio 480

5-Y Average Payout Ratio 530

Share price performance previous 3 years

Share price performance intraday

23

Tangible Book-Value pS 1110 $

Cash Flow pS 689 $

Free Cash Flow pS 125 $

KEY FIGURES (LTM) Price info PriceBook Ratio 630

PriceTangible Book Ratio 785 PriceCash Flow 126

PriceFree Cash Flow 699

PE as of Industry Group 420

PE as of Sector Segment 770

PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol

1 Week - - - 00 101 54041 66217

4 Weeks 8743 8331 8474 27 101 57129 856929

13 Weeks 9416 8331 9102 -44 98 61288 3554700

26 Weeks 9416 8331 8775 -08 93 59419 7189758

52 Weeks 10222 8331 9803 -112 79 59272 14521666

YTD 10222 8331 - -132 77 59774 13807695

Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)

8661 8631 8825 8931 9174 039 031

GROWTH RATES 5-Year

Growh Rsup2 of 5-Year Growth

3-Year

Growth

Revenue 381 776 666

Income 2017 811 978

Dividend 1536 947 1016

Capital Spending 697 NA 1052

RampD 000 NA 000

Normalized Inc 1158 NA 979

CHANGES YTD vs

Last YTD

Curr Qtr vs

Qtr 1-Yr ago

Annual vs

Last Annual

Revenue 21 -02 122

Earnings -14 -35 113

EPS 10 -14 151

EPS $ 004 -002 069

SOLVENCY RATIOS

SHORT-TERM SOLVENCY RATIOS

(LIQUIDITY)

Net Working Capital Ratio 271

Current Ratio 13

Quick Ratio (Acid Test) 10

Liquidity Ratio (Cash) 067

Receivables Turnover 215

Average Collection Period 17

Working CapitalEquity 62

Working Capital pS 088

Cash-Flow pS 677

Free Cash-Flow pS 209

24

FINANCIAL STRUCTURE RATIOS

Altmans Z-Score Ratio 485

Financial Leverage Ratio (AssetsEquity) 23

Debt Ratio 564

Total DebtEquity (Gearing Ratio) 087

LT DebtEquity 084

LT DebtCapital Invested 569

LT DebtTotal Liabilities 652

Interest Cover 173

InterestCapital Invested 167

25

People hellip McDonaldrsquos 1 Resource in India

26

McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs

around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in

1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with

McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)

The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive

training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course

(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the

Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University

27

The McDonaldrsquos Promise

QUALITY SERVICE CLEANLINESS amp VALUE

When asked to explain McDonalds success founder Ray Kroc used to say We

take the hamburger business more seriously than anyone else

Kroc was a perfectionist From the day he opened his first restaurant he vowed

to give his customers high quality products served quickly --and with a smile

in a clean and pleasant environment and all at a fair price Quality Service

Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds

business

QUALITY

McDonalds India serves only the highest quality products The attention to food

quality started long before the first restaurant opened McDonalds India has

established close relationships with local suppliers who provide McDonalds

with the highest quality freshest ingredients to make its products

All suppliers adhere to Indian government regulations on food health and

hygiene while continuously maintaining McDonalds own recognized standards

McDonalds has established an extensive cold chain distribution system in

India to ensure that the products which arrive at the restaurant from suppliers

all over India are absolutely fresh In the restaurants products and supplies are

used on a first-in first-out basis to ensure freshness All McDonalds products

are prepared using modern state-of-the-art cooking equipment to ensure quality

and safety

SERVICE

McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos

which sets its restaurants apart from others At McDonalds the customer

always comes first Every employee strives to provide 100 percent customer

satisfaction -- for every customer -- every visit This includes friendly and

attentive service accuracy in order taking and anticipation of customers needs

-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun

and youthful spirit we will proudly serve an exceptional McDonaldrsquos

eating experience that makes all people feel special and makes them smile ndash

every customer every timerdquo

28

CLEANLINESS

McDonalds restaurants provide a clean comfortable environment especially

suited for families McDonalds stringent cleaning standards ensure that all

tables seating highchairs and trays are sanitized several times each hour The

attention to cleanliness extends from the lobby to the kitchen to the sidewalk

and immediate areas outside the restaurant

In addition to urging customers to dispose of their litter properly and offering a

number of trash bins (both inside and outside the restaurants) for their

convenience McDonalds Litter Patrols walk around the restaurants several

times each day picking up litter -- even if it isnt from McDonalds

Restaurant managers walk through the dining areas each hour to ensure that it

is clean and well stocked All restaurants provide a variety of comfortable

seating arrangements to accommodate anyone -- from a single individual to a

large family The environment is warm inviting and well lit

VALUE

McDonalds menu is priced at a value that the largest segment of Indian

consumers can afford McDonalds does not sacrifice quality for value -- rather

McDonalds leverages economies of scale to minimize costs while maximizing

value to customers

McDonalds definition of value is broader than most restaurants of its kind -- it

is more than price Value at McDonalds is the sum of the total McDonalds

experience quality food fast friendly service a clean and pleasant

environment and products priced at very affordable prices for the largest

segment of Indian consumers possible That is value at McDonalds

29

McDonaldrsquos Indiahellip Culturally Sensitive

Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much

that is consistent with other McDonaldrsquos restaurants around the world such as

the quality of the food and the attention to service

The dedication to local cultures is not new for McDonaldrsquos For the past 50

years McDonaldrsquos has opened restaurants in more than 120 distinctly different

countries and cultures With guidance from its local partners McDonaldrsquos is

able to adapt- where necessary-its menu and restaurant operations to

complement existing eating-out options McDonaldrsquos local owners understand

what their customers want perhaps more importantly what is acceptable within

local customs and values

There is much too that is very different- such as the first beef-less and pork-

less menu in the world and special product formulations to cater to Indian

culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos

India says ldquoWe know the Indian culture because we were born in it

inherited its richness and respect it greatly It is the respect for this culture

and the sentiments of many of our customersrsquo that we do not serve any

beef and pork items in our restaurantsrdquo

McDonaldrsquos commitment to its Indian customers is evident even in

development of special sauces that use local spices and chillies The

mayonnaise and all other sauces are egg-less

In India vegetarianism is in many cases more than a lifestyle choice Many

people are vegetarians due to religious reasons and in some cases even the

vegetarian product that has come into contact with a non-vegetarian product is

unacceptable Hence McDonaldrsquos India has also changed its operations to

address the special requirements of our vegetarian customers by having

processes that ensure that a physical separation of veg and non-veg products is

maintained right from farm to the customer Vegetable products are prepared

separately using dedicated equipment and utensils Also in India McDonaldrsquos

uses only vegetable oil as a medium for cooking

30

McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash

lsquoto be driven by the leadership of local ownersrsquo This commitment has translated

into enduring benefits to the businesses at the grass root level in the areas of

introduction of new crops new agricultural practices and food processing methods

and procedures

McDonalds unique cold chain on which the QSR major has spent more than six

years setting up in India has brought about a veritable revolution immensely

benefiting the farmers at one end and enabling customers at retail counters get the

highest quality food products absolutely fresh and at great value

Setting up this extensive cold chain distribution system has involved the transfer of

state-of-the-art food processing technology by McDonalds and its international

suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain

From Field to -2⁰C in 90 Minutes

Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be

grown during the winter months but with McDonalds expertise in the area of

agriculture they are now able to grow this crop through the year

Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room

to remove field heat a large cold room and a refrigerated van for transportation where

the temperature and the relative humidity of the crop is maintained between 1ordm C and

4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room

within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling

to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at

the farms itself ensuring no delay between harvesting pre-cooling packaging and

cold storage

Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd

Flavour and Freshness locked in at - 35degC

Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable

range of products is another important player in this cold chain This includes hi-tech

refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C

This is vital to ensure that the frozen food retains it freshness for a long time and the

cold chain is maintained The frozen product is immediately moved to cold storage

rooms

31

Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes

McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for

quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk

coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -

thus maintaining the cold chain

All leading to the Consumer

McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The

DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity

of the products throughout the entire cold chain

Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the

McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C

as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state

All these suppliers share McDonalds commitment and dedication to satisfying

customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently

each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental

effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn

more

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 22: Entrepreneurship m com a

22

goods from numerous independent suppliers

Industry Information LEISURE - Restaurants

Price Day Change Bid Ask Open High Low Volume

8718 -002 - - 8743 8743 8676 3658828

Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range

875267 10040 039 527 253 164 35 10222 - 8331

KEY FIGURES (Latest Twelve Months - LTM)

Yesterdays Close 8706 $

PE Ratio - LTM 164

Market Capitalisation 875267 mil

Latest Shares Outstanding 10040 mil

Earnings pS (EPS) 527 $

Dividend pS (DPS) 253 cent

Dividend Yield 35

Dividend Payout Ratio 48

Revenue per Employee 64300 $

Effective Tax Rate 313

Float 10153 mil

Float as of Shares Outstanding 999

Foreign Sales 18478 mil

Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue

910

Research amp Devlopment (RampD) as of Revenue

000

Gross Profit Margin 447

EBITDA Margin 356

Pre-Tax Profit Margin 291

Assets Turnover 08

Return on Assets (ROA) 161

Return on Equity (ROE) 392

Return on Capital Invested (ROCI) 204 Current Ratio 10

Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096

LT DebtTotal Capital 480

Working Capital pS 006 $

Cash pS 217 $

Book-Value pS 1383 $

Balance Sheet (at a glance) in Millions

DIVIDEND INFO

Dividend Declared Date 09202012

Dividend Ex-Date 11282012

Dividend Record Date 12022012

Dividend Pay Date 12162012

Dividend Amount 770

Type of Payment Cash Payment

Dividend Rate 308

Current Dividend Yield 35

5-Y Average Dividend Yield 31

Payout Ratio 480

5-Y Average Payout Ratio 530

Share price performance previous 3 years

Share price performance intraday

23

Tangible Book-Value pS 1110 $

Cash Flow pS 689 $

Free Cash Flow pS 125 $

KEY FIGURES (LTM) Price info PriceBook Ratio 630

PriceTangible Book Ratio 785 PriceCash Flow 126

PriceFree Cash Flow 699

PE as of Industry Group 420

PE as of Sector Segment 770

PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol

1 Week - - - 00 101 54041 66217

4 Weeks 8743 8331 8474 27 101 57129 856929

13 Weeks 9416 8331 9102 -44 98 61288 3554700

26 Weeks 9416 8331 8775 -08 93 59419 7189758

52 Weeks 10222 8331 9803 -112 79 59272 14521666

YTD 10222 8331 - -132 77 59774 13807695

Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)

8661 8631 8825 8931 9174 039 031

GROWTH RATES 5-Year

Growh Rsup2 of 5-Year Growth

3-Year

Growth

Revenue 381 776 666

Income 2017 811 978

Dividend 1536 947 1016

Capital Spending 697 NA 1052

RampD 000 NA 000

Normalized Inc 1158 NA 979

CHANGES YTD vs

Last YTD

Curr Qtr vs

Qtr 1-Yr ago

Annual vs

Last Annual

Revenue 21 -02 122

Earnings -14 -35 113

EPS 10 -14 151

EPS $ 004 -002 069

SOLVENCY RATIOS

SHORT-TERM SOLVENCY RATIOS

(LIQUIDITY)

Net Working Capital Ratio 271

Current Ratio 13

Quick Ratio (Acid Test) 10

Liquidity Ratio (Cash) 067

Receivables Turnover 215

Average Collection Period 17

Working CapitalEquity 62

Working Capital pS 088

Cash-Flow pS 677

Free Cash-Flow pS 209

24

FINANCIAL STRUCTURE RATIOS

Altmans Z-Score Ratio 485

Financial Leverage Ratio (AssetsEquity) 23

Debt Ratio 564

Total DebtEquity (Gearing Ratio) 087

LT DebtEquity 084

LT DebtCapital Invested 569

LT DebtTotal Liabilities 652

Interest Cover 173

InterestCapital Invested 167

25

People hellip McDonaldrsquos 1 Resource in India

26

McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs

around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in

1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with

McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)

The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive

training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course

(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the

Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University

27

The McDonaldrsquos Promise

QUALITY SERVICE CLEANLINESS amp VALUE

When asked to explain McDonalds success founder Ray Kroc used to say We

take the hamburger business more seriously than anyone else

Kroc was a perfectionist From the day he opened his first restaurant he vowed

to give his customers high quality products served quickly --and with a smile

in a clean and pleasant environment and all at a fair price Quality Service

Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds

business

QUALITY

McDonalds India serves only the highest quality products The attention to food

quality started long before the first restaurant opened McDonalds India has

established close relationships with local suppliers who provide McDonalds

with the highest quality freshest ingredients to make its products

All suppliers adhere to Indian government regulations on food health and

hygiene while continuously maintaining McDonalds own recognized standards

McDonalds has established an extensive cold chain distribution system in

India to ensure that the products which arrive at the restaurant from suppliers

all over India are absolutely fresh In the restaurants products and supplies are

used on a first-in first-out basis to ensure freshness All McDonalds products

are prepared using modern state-of-the-art cooking equipment to ensure quality

and safety

SERVICE

McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos

which sets its restaurants apart from others At McDonalds the customer

always comes first Every employee strives to provide 100 percent customer

satisfaction -- for every customer -- every visit This includes friendly and

attentive service accuracy in order taking and anticipation of customers needs

-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun

and youthful spirit we will proudly serve an exceptional McDonaldrsquos

eating experience that makes all people feel special and makes them smile ndash

every customer every timerdquo

28

CLEANLINESS

McDonalds restaurants provide a clean comfortable environment especially

suited for families McDonalds stringent cleaning standards ensure that all

tables seating highchairs and trays are sanitized several times each hour The

attention to cleanliness extends from the lobby to the kitchen to the sidewalk

and immediate areas outside the restaurant

In addition to urging customers to dispose of their litter properly and offering a

number of trash bins (both inside and outside the restaurants) for their

convenience McDonalds Litter Patrols walk around the restaurants several

times each day picking up litter -- even if it isnt from McDonalds

Restaurant managers walk through the dining areas each hour to ensure that it

is clean and well stocked All restaurants provide a variety of comfortable

seating arrangements to accommodate anyone -- from a single individual to a

large family The environment is warm inviting and well lit

VALUE

McDonalds menu is priced at a value that the largest segment of Indian

consumers can afford McDonalds does not sacrifice quality for value -- rather

McDonalds leverages economies of scale to minimize costs while maximizing

value to customers

McDonalds definition of value is broader than most restaurants of its kind -- it

is more than price Value at McDonalds is the sum of the total McDonalds

experience quality food fast friendly service a clean and pleasant

environment and products priced at very affordable prices for the largest

segment of Indian consumers possible That is value at McDonalds

29

McDonaldrsquos Indiahellip Culturally Sensitive

Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much

that is consistent with other McDonaldrsquos restaurants around the world such as

the quality of the food and the attention to service

The dedication to local cultures is not new for McDonaldrsquos For the past 50

years McDonaldrsquos has opened restaurants in more than 120 distinctly different

countries and cultures With guidance from its local partners McDonaldrsquos is

able to adapt- where necessary-its menu and restaurant operations to

complement existing eating-out options McDonaldrsquos local owners understand

what their customers want perhaps more importantly what is acceptable within

local customs and values

There is much too that is very different- such as the first beef-less and pork-

less menu in the world and special product formulations to cater to Indian

culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos

India says ldquoWe know the Indian culture because we were born in it

inherited its richness and respect it greatly It is the respect for this culture

and the sentiments of many of our customersrsquo that we do not serve any

beef and pork items in our restaurantsrdquo

McDonaldrsquos commitment to its Indian customers is evident even in

development of special sauces that use local spices and chillies The

mayonnaise and all other sauces are egg-less

In India vegetarianism is in many cases more than a lifestyle choice Many

people are vegetarians due to religious reasons and in some cases even the

vegetarian product that has come into contact with a non-vegetarian product is

unacceptable Hence McDonaldrsquos India has also changed its operations to

address the special requirements of our vegetarian customers by having

processes that ensure that a physical separation of veg and non-veg products is

maintained right from farm to the customer Vegetable products are prepared

separately using dedicated equipment and utensils Also in India McDonaldrsquos

uses only vegetable oil as a medium for cooking

30

McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash

lsquoto be driven by the leadership of local ownersrsquo This commitment has translated

into enduring benefits to the businesses at the grass root level in the areas of

introduction of new crops new agricultural practices and food processing methods

and procedures

McDonalds unique cold chain on which the QSR major has spent more than six

years setting up in India has brought about a veritable revolution immensely

benefiting the farmers at one end and enabling customers at retail counters get the

highest quality food products absolutely fresh and at great value

Setting up this extensive cold chain distribution system has involved the transfer of

state-of-the-art food processing technology by McDonalds and its international

suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain

From Field to -2⁰C in 90 Minutes

Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be

grown during the winter months but with McDonalds expertise in the area of

agriculture they are now able to grow this crop through the year

Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room

to remove field heat a large cold room and a refrigerated van for transportation where

the temperature and the relative humidity of the crop is maintained between 1ordm C and

4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room

within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling

to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at

the farms itself ensuring no delay between harvesting pre-cooling packaging and

cold storage

Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd

Flavour and Freshness locked in at - 35degC

Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable

range of products is another important player in this cold chain This includes hi-tech

refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C

This is vital to ensure that the frozen food retains it freshness for a long time and the

cold chain is maintained The frozen product is immediately moved to cold storage

rooms

31

Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes

McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for

quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk

coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -

thus maintaining the cold chain

All leading to the Consumer

McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The

DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity

of the products throughout the entire cold chain

Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the

McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C

as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state

All these suppliers share McDonalds commitment and dedication to satisfying

customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently

each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental

effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn

more

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 23: Entrepreneurship m com a

23

Tangible Book-Value pS 1110 $

Cash Flow pS 689 $

Free Cash Flow pS 125 $

KEY FIGURES (LTM) Price info PriceBook Ratio 630

PriceTangible Book Ratio 785 PriceCash Flow 126

PriceFree Cash Flow 699

PE as of Industry Group 420

PE as of Sector Segment 770

PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol

1 Week - - - 00 101 54041 66217

4 Weeks 8743 8331 8474 27 101 57129 856929

13 Weeks 9416 8331 9102 -44 98 61288 3554700

26 Weeks 9416 8331 8775 -08 93 59419 7189758

52 Weeks 10222 8331 9803 -112 79 59272 14521666

YTD 10222 8331 - -132 77 59774 13807695

Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)

8661 8631 8825 8931 9174 039 031

GROWTH RATES 5-Year

Growh Rsup2 of 5-Year Growth

3-Year

Growth

Revenue 381 776 666

Income 2017 811 978

Dividend 1536 947 1016

Capital Spending 697 NA 1052

RampD 000 NA 000

Normalized Inc 1158 NA 979

CHANGES YTD vs

Last YTD

Curr Qtr vs

Qtr 1-Yr ago

Annual vs

Last Annual

Revenue 21 -02 122

Earnings -14 -35 113

EPS 10 -14 151

EPS $ 004 -002 069

SOLVENCY RATIOS

SHORT-TERM SOLVENCY RATIOS

(LIQUIDITY)

Net Working Capital Ratio 271

Current Ratio 13

Quick Ratio (Acid Test) 10

Liquidity Ratio (Cash) 067

Receivables Turnover 215

Average Collection Period 17

Working CapitalEquity 62

Working Capital pS 088

Cash-Flow pS 677

Free Cash-Flow pS 209

24

FINANCIAL STRUCTURE RATIOS

Altmans Z-Score Ratio 485

Financial Leverage Ratio (AssetsEquity) 23

Debt Ratio 564

Total DebtEquity (Gearing Ratio) 087

LT DebtEquity 084

LT DebtCapital Invested 569

LT DebtTotal Liabilities 652

Interest Cover 173

InterestCapital Invested 167

25

People hellip McDonaldrsquos 1 Resource in India

26

McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs

around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in

1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with

McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)

The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive

training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course

(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the

Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University

27

The McDonaldrsquos Promise

QUALITY SERVICE CLEANLINESS amp VALUE

When asked to explain McDonalds success founder Ray Kroc used to say We

take the hamburger business more seriously than anyone else

Kroc was a perfectionist From the day he opened his first restaurant he vowed

to give his customers high quality products served quickly --and with a smile

in a clean and pleasant environment and all at a fair price Quality Service

Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds

business

QUALITY

McDonalds India serves only the highest quality products The attention to food

quality started long before the first restaurant opened McDonalds India has

established close relationships with local suppliers who provide McDonalds

with the highest quality freshest ingredients to make its products

All suppliers adhere to Indian government regulations on food health and

hygiene while continuously maintaining McDonalds own recognized standards

McDonalds has established an extensive cold chain distribution system in

India to ensure that the products which arrive at the restaurant from suppliers

all over India are absolutely fresh In the restaurants products and supplies are

used on a first-in first-out basis to ensure freshness All McDonalds products

are prepared using modern state-of-the-art cooking equipment to ensure quality

and safety

SERVICE

McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos

which sets its restaurants apart from others At McDonalds the customer

always comes first Every employee strives to provide 100 percent customer

satisfaction -- for every customer -- every visit This includes friendly and

attentive service accuracy in order taking and anticipation of customers needs

-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun

and youthful spirit we will proudly serve an exceptional McDonaldrsquos

eating experience that makes all people feel special and makes them smile ndash

every customer every timerdquo

28

CLEANLINESS

McDonalds restaurants provide a clean comfortable environment especially

suited for families McDonalds stringent cleaning standards ensure that all

tables seating highchairs and trays are sanitized several times each hour The

attention to cleanliness extends from the lobby to the kitchen to the sidewalk

and immediate areas outside the restaurant

In addition to urging customers to dispose of their litter properly and offering a

number of trash bins (both inside and outside the restaurants) for their

convenience McDonalds Litter Patrols walk around the restaurants several

times each day picking up litter -- even if it isnt from McDonalds

Restaurant managers walk through the dining areas each hour to ensure that it

is clean and well stocked All restaurants provide a variety of comfortable

seating arrangements to accommodate anyone -- from a single individual to a

large family The environment is warm inviting and well lit

VALUE

McDonalds menu is priced at a value that the largest segment of Indian

consumers can afford McDonalds does not sacrifice quality for value -- rather

McDonalds leverages economies of scale to minimize costs while maximizing

value to customers

McDonalds definition of value is broader than most restaurants of its kind -- it

is more than price Value at McDonalds is the sum of the total McDonalds

experience quality food fast friendly service a clean and pleasant

environment and products priced at very affordable prices for the largest

segment of Indian consumers possible That is value at McDonalds

29

McDonaldrsquos Indiahellip Culturally Sensitive

Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much

that is consistent with other McDonaldrsquos restaurants around the world such as

the quality of the food and the attention to service

The dedication to local cultures is not new for McDonaldrsquos For the past 50

years McDonaldrsquos has opened restaurants in more than 120 distinctly different

countries and cultures With guidance from its local partners McDonaldrsquos is

able to adapt- where necessary-its menu and restaurant operations to

complement existing eating-out options McDonaldrsquos local owners understand

what their customers want perhaps more importantly what is acceptable within

local customs and values

There is much too that is very different- such as the first beef-less and pork-

less menu in the world and special product formulations to cater to Indian

culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos

India says ldquoWe know the Indian culture because we were born in it

inherited its richness and respect it greatly It is the respect for this culture

and the sentiments of many of our customersrsquo that we do not serve any

beef and pork items in our restaurantsrdquo

McDonaldrsquos commitment to its Indian customers is evident even in

development of special sauces that use local spices and chillies The

mayonnaise and all other sauces are egg-less

In India vegetarianism is in many cases more than a lifestyle choice Many

people are vegetarians due to religious reasons and in some cases even the

vegetarian product that has come into contact with a non-vegetarian product is

unacceptable Hence McDonaldrsquos India has also changed its operations to

address the special requirements of our vegetarian customers by having

processes that ensure that a physical separation of veg and non-veg products is

maintained right from farm to the customer Vegetable products are prepared

separately using dedicated equipment and utensils Also in India McDonaldrsquos

uses only vegetable oil as a medium for cooking

30

McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash

lsquoto be driven by the leadership of local ownersrsquo This commitment has translated

into enduring benefits to the businesses at the grass root level in the areas of

introduction of new crops new agricultural practices and food processing methods

and procedures

McDonalds unique cold chain on which the QSR major has spent more than six

years setting up in India has brought about a veritable revolution immensely

benefiting the farmers at one end and enabling customers at retail counters get the

highest quality food products absolutely fresh and at great value

Setting up this extensive cold chain distribution system has involved the transfer of

state-of-the-art food processing technology by McDonalds and its international

suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain

From Field to -2⁰C in 90 Minutes

Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be

grown during the winter months but with McDonalds expertise in the area of

agriculture they are now able to grow this crop through the year

Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room

to remove field heat a large cold room and a refrigerated van for transportation where

the temperature and the relative humidity of the crop is maintained between 1ordm C and

4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room

within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling

to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at

the farms itself ensuring no delay between harvesting pre-cooling packaging and

cold storage

Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd

Flavour and Freshness locked in at - 35degC

Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable

range of products is another important player in this cold chain This includes hi-tech

refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C

This is vital to ensure that the frozen food retains it freshness for a long time and the

cold chain is maintained The frozen product is immediately moved to cold storage

rooms

31

Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes

McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for

quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk

coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -

thus maintaining the cold chain

All leading to the Consumer

McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The

DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity

of the products throughout the entire cold chain

Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the

McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C

as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state

All these suppliers share McDonalds commitment and dedication to satisfying

customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently

each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental

effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn

more

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 24: Entrepreneurship m com a

24

FINANCIAL STRUCTURE RATIOS

Altmans Z-Score Ratio 485

Financial Leverage Ratio (AssetsEquity) 23

Debt Ratio 564

Total DebtEquity (Gearing Ratio) 087

LT DebtEquity 084

LT DebtCapital Invested 569

LT DebtTotal Liabilities 652

Interest Cover 173

InterestCapital Invested 167

25

People hellip McDonaldrsquos 1 Resource in India

26

McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs

around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in

1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with

McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)

The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive

training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course

(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the

Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University

27

The McDonaldrsquos Promise

QUALITY SERVICE CLEANLINESS amp VALUE

When asked to explain McDonalds success founder Ray Kroc used to say We

take the hamburger business more seriously than anyone else

Kroc was a perfectionist From the day he opened his first restaurant he vowed

to give his customers high quality products served quickly --and with a smile

in a clean and pleasant environment and all at a fair price Quality Service

Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds

business

QUALITY

McDonalds India serves only the highest quality products The attention to food

quality started long before the first restaurant opened McDonalds India has

established close relationships with local suppliers who provide McDonalds

with the highest quality freshest ingredients to make its products

All suppliers adhere to Indian government regulations on food health and

hygiene while continuously maintaining McDonalds own recognized standards

McDonalds has established an extensive cold chain distribution system in

India to ensure that the products which arrive at the restaurant from suppliers

all over India are absolutely fresh In the restaurants products and supplies are

used on a first-in first-out basis to ensure freshness All McDonalds products

are prepared using modern state-of-the-art cooking equipment to ensure quality

and safety

SERVICE

McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos

which sets its restaurants apart from others At McDonalds the customer

always comes first Every employee strives to provide 100 percent customer

satisfaction -- for every customer -- every visit This includes friendly and

attentive service accuracy in order taking and anticipation of customers needs

-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun

and youthful spirit we will proudly serve an exceptional McDonaldrsquos

eating experience that makes all people feel special and makes them smile ndash

every customer every timerdquo

28

CLEANLINESS

McDonalds restaurants provide a clean comfortable environment especially

suited for families McDonalds stringent cleaning standards ensure that all

tables seating highchairs and trays are sanitized several times each hour The

attention to cleanliness extends from the lobby to the kitchen to the sidewalk

and immediate areas outside the restaurant

In addition to urging customers to dispose of their litter properly and offering a

number of trash bins (both inside and outside the restaurants) for their

convenience McDonalds Litter Patrols walk around the restaurants several

times each day picking up litter -- even if it isnt from McDonalds

Restaurant managers walk through the dining areas each hour to ensure that it

is clean and well stocked All restaurants provide a variety of comfortable

seating arrangements to accommodate anyone -- from a single individual to a

large family The environment is warm inviting and well lit

VALUE

McDonalds menu is priced at a value that the largest segment of Indian

consumers can afford McDonalds does not sacrifice quality for value -- rather

McDonalds leverages economies of scale to minimize costs while maximizing

value to customers

McDonalds definition of value is broader than most restaurants of its kind -- it

is more than price Value at McDonalds is the sum of the total McDonalds

experience quality food fast friendly service a clean and pleasant

environment and products priced at very affordable prices for the largest

segment of Indian consumers possible That is value at McDonalds

29

McDonaldrsquos Indiahellip Culturally Sensitive

Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much

that is consistent with other McDonaldrsquos restaurants around the world such as

the quality of the food and the attention to service

The dedication to local cultures is not new for McDonaldrsquos For the past 50

years McDonaldrsquos has opened restaurants in more than 120 distinctly different

countries and cultures With guidance from its local partners McDonaldrsquos is

able to adapt- where necessary-its menu and restaurant operations to

complement existing eating-out options McDonaldrsquos local owners understand

what their customers want perhaps more importantly what is acceptable within

local customs and values

There is much too that is very different- such as the first beef-less and pork-

less menu in the world and special product formulations to cater to Indian

culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos

India says ldquoWe know the Indian culture because we were born in it

inherited its richness and respect it greatly It is the respect for this culture

and the sentiments of many of our customersrsquo that we do not serve any

beef and pork items in our restaurantsrdquo

McDonaldrsquos commitment to its Indian customers is evident even in

development of special sauces that use local spices and chillies The

mayonnaise and all other sauces are egg-less

In India vegetarianism is in many cases more than a lifestyle choice Many

people are vegetarians due to religious reasons and in some cases even the

vegetarian product that has come into contact with a non-vegetarian product is

unacceptable Hence McDonaldrsquos India has also changed its operations to

address the special requirements of our vegetarian customers by having

processes that ensure that a physical separation of veg and non-veg products is

maintained right from farm to the customer Vegetable products are prepared

separately using dedicated equipment and utensils Also in India McDonaldrsquos

uses only vegetable oil as a medium for cooking

30

McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash

lsquoto be driven by the leadership of local ownersrsquo This commitment has translated

into enduring benefits to the businesses at the grass root level in the areas of

introduction of new crops new agricultural practices and food processing methods

and procedures

McDonalds unique cold chain on which the QSR major has spent more than six

years setting up in India has brought about a veritable revolution immensely

benefiting the farmers at one end and enabling customers at retail counters get the

highest quality food products absolutely fresh and at great value

Setting up this extensive cold chain distribution system has involved the transfer of

state-of-the-art food processing technology by McDonalds and its international

suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain

From Field to -2⁰C in 90 Minutes

Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be

grown during the winter months but with McDonalds expertise in the area of

agriculture they are now able to grow this crop through the year

Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room

to remove field heat a large cold room and a refrigerated van for transportation where

the temperature and the relative humidity of the crop is maintained between 1ordm C and

4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room

within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling

to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at

the farms itself ensuring no delay between harvesting pre-cooling packaging and

cold storage

Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd

Flavour and Freshness locked in at - 35degC

Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable

range of products is another important player in this cold chain This includes hi-tech

refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C

This is vital to ensure that the frozen food retains it freshness for a long time and the

cold chain is maintained The frozen product is immediately moved to cold storage

rooms

31

Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes

McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for

quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk

coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -

thus maintaining the cold chain

All leading to the Consumer

McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The

DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity

of the products throughout the entire cold chain

Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the

McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C

as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state

All these suppliers share McDonalds commitment and dedication to satisfying

customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently

each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental

effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn

more

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 25: Entrepreneurship m com a

25

People hellip McDonaldrsquos 1 Resource in India

26

McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs

around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in

1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with

McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)

The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive

training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course

(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the

Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University

27

The McDonaldrsquos Promise

QUALITY SERVICE CLEANLINESS amp VALUE

When asked to explain McDonalds success founder Ray Kroc used to say We

take the hamburger business more seriously than anyone else

Kroc was a perfectionist From the day he opened his first restaurant he vowed

to give his customers high quality products served quickly --and with a smile

in a clean and pleasant environment and all at a fair price Quality Service

Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds

business

QUALITY

McDonalds India serves only the highest quality products The attention to food

quality started long before the first restaurant opened McDonalds India has

established close relationships with local suppliers who provide McDonalds

with the highest quality freshest ingredients to make its products

All suppliers adhere to Indian government regulations on food health and

hygiene while continuously maintaining McDonalds own recognized standards

McDonalds has established an extensive cold chain distribution system in

India to ensure that the products which arrive at the restaurant from suppliers

all over India are absolutely fresh In the restaurants products and supplies are

used on a first-in first-out basis to ensure freshness All McDonalds products

are prepared using modern state-of-the-art cooking equipment to ensure quality

and safety

SERVICE

McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos

which sets its restaurants apart from others At McDonalds the customer

always comes first Every employee strives to provide 100 percent customer

satisfaction -- for every customer -- every visit This includes friendly and

attentive service accuracy in order taking and anticipation of customers needs

-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun

and youthful spirit we will proudly serve an exceptional McDonaldrsquos

eating experience that makes all people feel special and makes them smile ndash

every customer every timerdquo

28

CLEANLINESS

McDonalds restaurants provide a clean comfortable environment especially

suited for families McDonalds stringent cleaning standards ensure that all

tables seating highchairs and trays are sanitized several times each hour The

attention to cleanliness extends from the lobby to the kitchen to the sidewalk

and immediate areas outside the restaurant

In addition to urging customers to dispose of their litter properly and offering a

number of trash bins (both inside and outside the restaurants) for their

convenience McDonalds Litter Patrols walk around the restaurants several

times each day picking up litter -- even if it isnt from McDonalds

Restaurant managers walk through the dining areas each hour to ensure that it

is clean and well stocked All restaurants provide a variety of comfortable

seating arrangements to accommodate anyone -- from a single individual to a

large family The environment is warm inviting and well lit

VALUE

McDonalds menu is priced at a value that the largest segment of Indian

consumers can afford McDonalds does not sacrifice quality for value -- rather

McDonalds leverages economies of scale to minimize costs while maximizing

value to customers

McDonalds definition of value is broader than most restaurants of its kind -- it

is more than price Value at McDonalds is the sum of the total McDonalds

experience quality food fast friendly service a clean and pleasant

environment and products priced at very affordable prices for the largest

segment of Indian consumers possible That is value at McDonalds

29

McDonaldrsquos Indiahellip Culturally Sensitive

Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much

that is consistent with other McDonaldrsquos restaurants around the world such as

the quality of the food and the attention to service

The dedication to local cultures is not new for McDonaldrsquos For the past 50

years McDonaldrsquos has opened restaurants in more than 120 distinctly different

countries and cultures With guidance from its local partners McDonaldrsquos is

able to adapt- where necessary-its menu and restaurant operations to

complement existing eating-out options McDonaldrsquos local owners understand

what their customers want perhaps more importantly what is acceptable within

local customs and values

There is much too that is very different- such as the first beef-less and pork-

less menu in the world and special product formulations to cater to Indian

culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos

India says ldquoWe know the Indian culture because we were born in it

inherited its richness and respect it greatly It is the respect for this culture

and the sentiments of many of our customersrsquo that we do not serve any

beef and pork items in our restaurantsrdquo

McDonaldrsquos commitment to its Indian customers is evident even in

development of special sauces that use local spices and chillies The

mayonnaise and all other sauces are egg-less

In India vegetarianism is in many cases more than a lifestyle choice Many

people are vegetarians due to religious reasons and in some cases even the

vegetarian product that has come into contact with a non-vegetarian product is

unacceptable Hence McDonaldrsquos India has also changed its operations to

address the special requirements of our vegetarian customers by having

processes that ensure that a physical separation of veg and non-veg products is

maintained right from farm to the customer Vegetable products are prepared

separately using dedicated equipment and utensils Also in India McDonaldrsquos

uses only vegetable oil as a medium for cooking

30

McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash

lsquoto be driven by the leadership of local ownersrsquo This commitment has translated

into enduring benefits to the businesses at the grass root level in the areas of

introduction of new crops new agricultural practices and food processing methods

and procedures

McDonalds unique cold chain on which the QSR major has spent more than six

years setting up in India has brought about a veritable revolution immensely

benefiting the farmers at one end and enabling customers at retail counters get the

highest quality food products absolutely fresh and at great value

Setting up this extensive cold chain distribution system has involved the transfer of

state-of-the-art food processing technology by McDonalds and its international

suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain

From Field to -2⁰C in 90 Minutes

Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be

grown during the winter months but with McDonalds expertise in the area of

agriculture they are now able to grow this crop through the year

Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room

to remove field heat a large cold room and a refrigerated van for transportation where

the temperature and the relative humidity of the crop is maintained between 1ordm C and

4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room

within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling

to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at

the farms itself ensuring no delay between harvesting pre-cooling packaging and

cold storage

Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd

Flavour and Freshness locked in at - 35degC

Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable

range of products is another important player in this cold chain This includes hi-tech

refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C

This is vital to ensure that the frozen food retains it freshness for a long time and the

cold chain is maintained The frozen product is immediately moved to cold storage

rooms

31

Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes

McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for

quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk

coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -

thus maintaining the cold chain

All leading to the Consumer

McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The

DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity

of the products throughout the entire cold chain

Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the

McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C

as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state

All these suppliers share McDonalds commitment and dedication to satisfying

customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently

each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental

effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn

more

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 26: Entrepreneurship m com a

26

McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs

around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in

1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with

McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)

The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive

training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course

(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the

Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University

27

The McDonaldrsquos Promise

QUALITY SERVICE CLEANLINESS amp VALUE

When asked to explain McDonalds success founder Ray Kroc used to say We

take the hamburger business more seriously than anyone else

Kroc was a perfectionist From the day he opened his first restaurant he vowed

to give his customers high quality products served quickly --and with a smile

in a clean and pleasant environment and all at a fair price Quality Service

Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds

business

QUALITY

McDonalds India serves only the highest quality products The attention to food

quality started long before the first restaurant opened McDonalds India has

established close relationships with local suppliers who provide McDonalds

with the highest quality freshest ingredients to make its products

All suppliers adhere to Indian government regulations on food health and

hygiene while continuously maintaining McDonalds own recognized standards

McDonalds has established an extensive cold chain distribution system in

India to ensure that the products which arrive at the restaurant from suppliers

all over India are absolutely fresh In the restaurants products and supplies are

used on a first-in first-out basis to ensure freshness All McDonalds products

are prepared using modern state-of-the-art cooking equipment to ensure quality

and safety

SERVICE

McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos

which sets its restaurants apart from others At McDonalds the customer

always comes first Every employee strives to provide 100 percent customer

satisfaction -- for every customer -- every visit This includes friendly and

attentive service accuracy in order taking and anticipation of customers needs

-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun

and youthful spirit we will proudly serve an exceptional McDonaldrsquos

eating experience that makes all people feel special and makes them smile ndash

every customer every timerdquo

28

CLEANLINESS

McDonalds restaurants provide a clean comfortable environment especially

suited for families McDonalds stringent cleaning standards ensure that all

tables seating highchairs and trays are sanitized several times each hour The

attention to cleanliness extends from the lobby to the kitchen to the sidewalk

and immediate areas outside the restaurant

In addition to urging customers to dispose of their litter properly and offering a

number of trash bins (both inside and outside the restaurants) for their

convenience McDonalds Litter Patrols walk around the restaurants several

times each day picking up litter -- even if it isnt from McDonalds

Restaurant managers walk through the dining areas each hour to ensure that it

is clean and well stocked All restaurants provide a variety of comfortable

seating arrangements to accommodate anyone -- from a single individual to a

large family The environment is warm inviting and well lit

VALUE

McDonalds menu is priced at a value that the largest segment of Indian

consumers can afford McDonalds does not sacrifice quality for value -- rather

McDonalds leverages economies of scale to minimize costs while maximizing

value to customers

McDonalds definition of value is broader than most restaurants of its kind -- it

is more than price Value at McDonalds is the sum of the total McDonalds

experience quality food fast friendly service a clean and pleasant

environment and products priced at very affordable prices for the largest

segment of Indian consumers possible That is value at McDonalds

29

McDonaldrsquos Indiahellip Culturally Sensitive

Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much

that is consistent with other McDonaldrsquos restaurants around the world such as

the quality of the food and the attention to service

The dedication to local cultures is not new for McDonaldrsquos For the past 50

years McDonaldrsquos has opened restaurants in more than 120 distinctly different

countries and cultures With guidance from its local partners McDonaldrsquos is

able to adapt- where necessary-its menu and restaurant operations to

complement existing eating-out options McDonaldrsquos local owners understand

what their customers want perhaps more importantly what is acceptable within

local customs and values

There is much too that is very different- such as the first beef-less and pork-

less menu in the world and special product formulations to cater to Indian

culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos

India says ldquoWe know the Indian culture because we were born in it

inherited its richness and respect it greatly It is the respect for this culture

and the sentiments of many of our customersrsquo that we do not serve any

beef and pork items in our restaurantsrdquo

McDonaldrsquos commitment to its Indian customers is evident even in

development of special sauces that use local spices and chillies The

mayonnaise and all other sauces are egg-less

In India vegetarianism is in many cases more than a lifestyle choice Many

people are vegetarians due to religious reasons and in some cases even the

vegetarian product that has come into contact with a non-vegetarian product is

unacceptable Hence McDonaldrsquos India has also changed its operations to

address the special requirements of our vegetarian customers by having

processes that ensure that a physical separation of veg and non-veg products is

maintained right from farm to the customer Vegetable products are prepared

separately using dedicated equipment and utensils Also in India McDonaldrsquos

uses only vegetable oil as a medium for cooking

30

McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash

lsquoto be driven by the leadership of local ownersrsquo This commitment has translated

into enduring benefits to the businesses at the grass root level in the areas of

introduction of new crops new agricultural practices and food processing methods

and procedures

McDonalds unique cold chain on which the QSR major has spent more than six

years setting up in India has brought about a veritable revolution immensely

benefiting the farmers at one end and enabling customers at retail counters get the

highest quality food products absolutely fresh and at great value

Setting up this extensive cold chain distribution system has involved the transfer of

state-of-the-art food processing technology by McDonalds and its international

suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain

From Field to -2⁰C in 90 Minutes

Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be

grown during the winter months but with McDonalds expertise in the area of

agriculture they are now able to grow this crop through the year

Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room

to remove field heat a large cold room and a refrigerated van for transportation where

the temperature and the relative humidity of the crop is maintained between 1ordm C and

4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room

within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling

to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at

the farms itself ensuring no delay between harvesting pre-cooling packaging and

cold storage

Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd

Flavour and Freshness locked in at - 35degC

Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable

range of products is another important player in this cold chain This includes hi-tech

refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C

This is vital to ensure that the frozen food retains it freshness for a long time and the

cold chain is maintained The frozen product is immediately moved to cold storage

rooms

31

Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes

McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for

quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk

coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -

thus maintaining the cold chain

All leading to the Consumer

McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The

DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity

of the products throughout the entire cold chain

Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the

McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C

as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state

All these suppliers share McDonalds commitment and dedication to satisfying

customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently

each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental

effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn

more

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 27: Entrepreneurship m com a

27

The McDonaldrsquos Promise

QUALITY SERVICE CLEANLINESS amp VALUE

When asked to explain McDonalds success founder Ray Kroc used to say We

take the hamburger business more seriously than anyone else

Kroc was a perfectionist From the day he opened his first restaurant he vowed

to give his customers high quality products served quickly --and with a smile

in a clean and pleasant environment and all at a fair price Quality Service

Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds

business

QUALITY

McDonalds India serves only the highest quality products The attention to food

quality started long before the first restaurant opened McDonalds India has

established close relationships with local suppliers who provide McDonalds

with the highest quality freshest ingredients to make its products

All suppliers adhere to Indian government regulations on food health and

hygiene while continuously maintaining McDonalds own recognized standards

McDonalds has established an extensive cold chain distribution system in

India to ensure that the products which arrive at the restaurant from suppliers

all over India are absolutely fresh In the restaurants products and supplies are

used on a first-in first-out basis to ensure freshness All McDonalds products

are prepared using modern state-of-the-art cooking equipment to ensure quality

and safety

SERVICE

McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos

which sets its restaurants apart from others At McDonalds the customer

always comes first Every employee strives to provide 100 percent customer

satisfaction -- for every customer -- every visit This includes friendly and

attentive service accuracy in order taking and anticipation of customers needs

-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun

and youthful spirit we will proudly serve an exceptional McDonaldrsquos

eating experience that makes all people feel special and makes them smile ndash

every customer every timerdquo

28

CLEANLINESS

McDonalds restaurants provide a clean comfortable environment especially

suited for families McDonalds stringent cleaning standards ensure that all

tables seating highchairs and trays are sanitized several times each hour The

attention to cleanliness extends from the lobby to the kitchen to the sidewalk

and immediate areas outside the restaurant

In addition to urging customers to dispose of their litter properly and offering a

number of trash bins (both inside and outside the restaurants) for their

convenience McDonalds Litter Patrols walk around the restaurants several

times each day picking up litter -- even if it isnt from McDonalds

Restaurant managers walk through the dining areas each hour to ensure that it

is clean and well stocked All restaurants provide a variety of comfortable

seating arrangements to accommodate anyone -- from a single individual to a

large family The environment is warm inviting and well lit

VALUE

McDonalds menu is priced at a value that the largest segment of Indian

consumers can afford McDonalds does not sacrifice quality for value -- rather

McDonalds leverages economies of scale to minimize costs while maximizing

value to customers

McDonalds definition of value is broader than most restaurants of its kind -- it

is more than price Value at McDonalds is the sum of the total McDonalds

experience quality food fast friendly service a clean and pleasant

environment and products priced at very affordable prices for the largest

segment of Indian consumers possible That is value at McDonalds

29

McDonaldrsquos Indiahellip Culturally Sensitive

Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much

that is consistent with other McDonaldrsquos restaurants around the world such as

the quality of the food and the attention to service

The dedication to local cultures is not new for McDonaldrsquos For the past 50

years McDonaldrsquos has opened restaurants in more than 120 distinctly different

countries and cultures With guidance from its local partners McDonaldrsquos is

able to adapt- where necessary-its menu and restaurant operations to

complement existing eating-out options McDonaldrsquos local owners understand

what their customers want perhaps more importantly what is acceptable within

local customs and values

There is much too that is very different- such as the first beef-less and pork-

less menu in the world and special product formulations to cater to Indian

culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos

India says ldquoWe know the Indian culture because we were born in it

inherited its richness and respect it greatly It is the respect for this culture

and the sentiments of many of our customersrsquo that we do not serve any

beef and pork items in our restaurantsrdquo

McDonaldrsquos commitment to its Indian customers is evident even in

development of special sauces that use local spices and chillies The

mayonnaise and all other sauces are egg-less

In India vegetarianism is in many cases more than a lifestyle choice Many

people are vegetarians due to religious reasons and in some cases even the

vegetarian product that has come into contact with a non-vegetarian product is

unacceptable Hence McDonaldrsquos India has also changed its operations to

address the special requirements of our vegetarian customers by having

processes that ensure that a physical separation of veg and non-veg products is

maintained right from farm to the customer Vegetable products are prepared

separately using dedicated equipment and utensils Also in India McDonaldrsquos

uses only vegetable oil as a medium for cooking

30

McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash

lsquoto be driven by the leadership of local ownersrsquo This commitment has translated

into enduring benefits to the businesses at the grass root level in the areas of

introduction of new crops new agricultural practices and food processing methods

and procedures

McDonalds unique cold chain on which the QSR major has spent more than six

years setting up in India has brought about a veritable revolution immensely

benefiting the farmers at one end and enabling customers at retail counters get the

highest quality food products absolutely fresh and at great value

Setting up this extensive cold chain distribution system has involved the transfer of

state-of-the-art food processing technology by McDonalds and its international

suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain

From Field to -2⁰C in 90 Minutes

Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be

grown during the winter months but with McDonalds expertise in the area of

agriculture they are now able to grow this crop through the year

Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room

to remove field heat a large cold room and a refrigerated van for transportation where

the temperature and the relative humidity of the crop is maintained between 1ordm C and

4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room

within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling

to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at

the farms itself ensuring no delay between harvesting pre-cooling packaging and

cold storage

Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd

Flavour and Freshness locked in at - 35degC

Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable

range of products is another important player in this cold chain This includes hi-tech

refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C

This is vital to ensure that the frozen food retains it freshness for a long time and the

cold chain is maintained The frozen product is immediately moved to cold storage

rooms

31

Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes

McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for

quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk

coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -

thus maintaining the cold chain

All leading to the Consumer

McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The

DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity

of the products throughout the entire cold chain

Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the

McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C

as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state

All these suppliers share McDonalds commitment and dedication to satisfying

customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently

each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental

effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn

more

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 28: Entrepreneurship m com a

28

CLEANLINESS

McDonalds restaurants provide a clean comfortable environment especially

suited for families McDonalds stringent cleaning standards ensure that all

tables seating highchairs and trays are sanitized several times each hour The

attention to cleanliness extends from the lobby to the kitchen to the sidewalk

and immediate areas outside the restaurant

In addition to urging customers to dispose of their litter properly and offering a

number of trash bins (both inside and outside the restaurants) for their

convenience McDonalds Litter Patrols walk around the restaurants several

times each day picking up litter -- even if it isnt from McDonalds

Restaurant managers walk through the dining areas each hour to ensure that it

is clean and well stocked All restaurants provide a variety of comfortable

seating arrangements to accommodate anyone -- from a single individual to a

large family The environment is warm inviting and well lit

VALUE

McDonalds menu is priced at a value that the largest segment of Indian

consumers can afford McDonalds does not sacrifice quality for value -- rather

McDonalds leverages economies of scale to minimize costs while maximizing

value to customers

McDonalds definition of value is broader than most restaurants of its kind -- it

is more than price Value at McDonalds is the sum of the total McDonalds

experience quality food fast friendly service a clean and pleasant

environment and products priced at very affordable prices for the largest

segment of Indian consumers possible That is value at McDonalds

29

McDonaldrsquos Indiahellip Culturally Sensitive

Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much

that is consistent with other McDonaldrsquos restaurants around the world such as

the quality of the food and the attention to service

The dedication to local cultures is not new for McDonaldrsquos For the past 50

years McDonaldrsquos has opened restaurants in more than 120 distinctly different

countries and cultures With guidance from its local partners McDonaldrsquos is

able to adapt- where necessary-its menu and restaurant operations to

complement existing eating-out options McDonaldrsquos local owners understand

what their customers want perhaps more importantly what is acceptable within

local customs and values

There is much too that is very different- such as the first beef-less and pork-

less menu in the world and special product formulations to cater to Indian

culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos

India says ldquoWe know the Indian culture because we were born in it

inherited its richness and respect it greatly It is the respect for this culture

and the sentiments of many of our customersrsquo that we do not serve any

beef and pork items in our restaurantsrdquo

McDonaldrsquos commitment to its Indian customers is evident even in

development of special sauces that use local spices and chillies The

mayonnaise and all other sauces are egg-less

In India vegetarianism is in many cases more than a lifestyle choice Many

people are vegetarians due to religious reasons and in some cases even the

vegetarian product that has come into contact with a non-vegetarian product is

unacceptable Hence McDonaldrsquos India has also changed its operations to

address the special requirements of our vegetarian customers by having

processes that ensure that a physical separation of veg and non-veg products is

maintained right from farm to the customer Vegetable products are prepared

separately using dedicated equipment and utensils Also in India McDonaldrsquos

uses only vegetable oil as a medium for cooking

30

McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash

lsquoto be driven by the leadership of local ownersrsquo This commitment has translated

into enduring benefits to the businesses at the grass root level in the areas of

introduction of new crops new agricultural practices and food processing methods

and procedures

McDonalds unique cold chain on which the QSR major has spent more than six

years setting up in India has brought about a veritable revolution immensely

benefiting the farmers at one end and enabling customers at retail counters get the

highest quality food products absolutely fresh and at great value

Setting up this extensive cold chain distribution system has involved the transfer of

state-of-the-art food processing technology by McDonalds and its international

suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain

From Field to -2⁰C in 90 Minutes

Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be

grown during the winter months but with McDonalds expertise in the area of

agriculture they are now able to grow this crop through the year

Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room

to remove field heat a large cold room and a refrigerated van for transportation where

the temperature and the relative humidity of the crop is maintained between 1ordm C and

4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room

within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling

to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at

the farms itself ensuring no delay between harvesting pre-cooling packaging and

cold storage

Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd

Flavour and Freshness locked in at - 35degC

Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable

range of products is another important player in this cold chain This includes hi-tech

refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C

This is vital to ensure that the frozen food retains it freshness for a long time and the

cold chain is maintained The frozen product is immediately moved to cold storage

rooms

31

Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes

McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for

quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk

coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -

thus maintaining the cold chain

All leading to the Consumer

McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The

DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity

of the products throughout the entire cold chain

Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the

McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C

as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state

All these suppliers share McDonalds commitment and dedication to satisfying

customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently

each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental

effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn

more

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 29: Entrepreneurship m com a

29

McDonaldrsquos Indiahellip Culturally Sensitive

Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much

that is consistent with other McDonaldrsquos restaurants around the world such as

the quality of the food and the attention to service

The dedication to local cultures is not new for McDonaldrsquos For the past 50

years McDonaldrsquos has opened restaurants in more than 120 distinctly different

countries and cultures With guidance from its local partners McDonaldrsquos is

able to adapt- where necessary-its menu and restaurant operations to

complement existing eating-out options McDonaldrsquos local owners understand

what their customers want perhaps more importantly what is acceptable within

local customs and values

There is much too that is very different- such as the first beef-less and pork-

less menu in the world and special product formulations to cater to Indian

culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos

India says ldquoWe know the Indian culture because we were born in it

inherited its richness and respect it greatly It is the respect for this culture

and the sentiments of many of our customersrsquo that we do not serve any

beef and pork items in our restaurantsrdquo

McDonaldrsquos commitment to its Indian customers is evident even in

development of special sauces that use local spices and chillies The

mayonnaise and all other sauces are egg-less

In India vegetarianism is in many cases more than a lifestyle choice Many

people are vegetarians due to religious reasons and in some cases even the

vegetarian product that has come into contact with a non-vegetarian product is

unacceptable Hence McDonaldrsquos India has also changed its operations to

address the special requirements of our vegetarian customers by having

processes that ensure that a physical separation of veg and non-veg products is

maintained right from farm to the customer Vegetable products are prepared

separately using dedicated equipment and utensils Also in India McDonaldrsquos

uses only vegetable oil as a medium for cooking

30

McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash

lsquoto be driven by the leadership of local ownersrsquo This commitment has translated

into enduring benefits to the businesses at the grass root level in the areas of

introduction of new crops new agricultural practices and food processing methods

and procedures

McDonalds unique cold chain on which the QSR major has spent more than six

years setting up in India has brought about a veritable revolution immensely

benefiting the farmers at one end and enabling customers at retail counters get the

highest quality food products absolutely fresh and at great value

Setting up this extensive cold chain distribution system has involved the transfer of

state-of-the-art food processing technology by McDonalds and its international

suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain

From Field to -2⁰C in 90 Minutes

Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be

grown during the winter months but with McDonalds expertise in the area of

agriculture they are now able to grow this crop through the year

Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room

to remove field heat a large cold room and a refrigerated van for transportation where

the temperature and the relative humidity of the crop is maintained between 1ordm C and

4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room

within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling

to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at

the farms itself ensuring no delay between harvesting pre-cooling packaging and

cold storage

Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd

Flavour and Freshness locked in at - 35degC

Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable

range of products is another important player in this cold chain This includes hi-tech

refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C

This is vital to ensure that the frozen food retains it freshness for a long time and the

cold chain is maintained The frozen product is immediately moved to cold storage

rooms

31

Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes

McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for

quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk

coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -

thus maintaining the cold chain

All leading to the Consumer

McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The

DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity

of the products throughout the entire cold chain

Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the

McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C

as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state

All these suppliers share McDonalds commitment and dedication to satisfying

customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently

each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental

effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn

more

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 30: Entrepreneurship m com a

30

McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash

lsquoto be driven by the leadership of local ownersrsquo This commitment has translated

into enduring benefits to the businesses at the grass root level in the areas of

introduction of new crops new agricultural practices and food processing methods

and procedures

McDonalds unique cold chain on which the QSR major has spent more than six

years setting up in India has brought about a veritable revolution immensely

benefiting the farmers at one end and enabling customers at retail counters get the

highest quality food products absolutely fresh and at great value

Setting up this extensive cold chain distribution system has involved the transfer of

state-of-the-art food processing technology by McDonalds and its international

suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain

From Field to -2⁰C in 90 Minutes

Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be

grown during the winter months but with McDonalds expertise in the area of

agriculture they are now able to grow this crop through the year

Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room

to remove field heat a large cold room and a refrigerated van for transportation where

the temperature and the relative humidity of the crop is maintained between 1ordm C and

4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room

within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling

to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at

the farms itself ensuring no delay between harvesting pre-cooling packaging and

cold storage

Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd

Flavour and Freshness locked in at - 35degC

Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable

range of products is another important player in this cold chain This includes hi-tech

refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C

This is vital to ensure that the frozen food retains it freshness for a long time and the

cold chain is maintained The frozen product is immediately moved to cold storage

rooms

31

Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes

McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for

quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk

coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -

thus maintaining the cold chain

All leading to the Consumer

McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The

DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity

of the products throughout the entire cold chain

Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the

McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C

as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state

All these suppliers share McDonalds commitment and dedication to satisfying

customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently

each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental

effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn

more

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 31: Entrepreneurship m com a

31

Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes

McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for

quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk

coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -

thus maintaining the cold chain

All leading to the Consumer

McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The

DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity

of the products throughout the entire cold chain

Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the

McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C

as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state

All these suppliers share McDonalds commitment and dedication to satisfying

customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently

each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental

effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn

more

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 32: Entrepreneurship m com a

32

QUESTIONNAIRE

1 How often do you visit fast food restaurants

Everyday Alternate days Weekends Once in a

month Once every three months

2 Which of the following fast food chain do you visit the most

Subway McDonaldrsquos KFC Pizza Hut

Burger King

3 Are you satisfied with the services provided by them

Yes Sometimes Not at all satisfied

4 How often do you eat at McDonaldrsquos

Everyday Alternate days Weekends Once in a

month Once every three months

5 Which among the following is your favourite product at McDonaldrsquos

Big Mac Burger Mac Veggie Big Mac Chicken Burger

Maharaja Mac Mac Fileto Fish

6 Is the product line of McDonaldrsquos adequate

Yes No Havenrsquot Thought About That

7 What time of the day do you prefer to eat at McDonaldrsquos

Morning Noon Evening Night

8 What is the main problem you faced at McDonaldrsquos

Long queues Wrong orders Hygienic problems

Other problems No problems

9 What are the unique selling prepositions of McDonaldrsquos

Product variety Hygiene Ambience Quick service

Location Other

10 Do you think McDonaldrsquos will be triumphant over all its competitors

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 33: Entrepreneurship m com a

33

Yes Maybe Havenrsquot Thought About That Never Thank You

SURVEY RESPONSE ANALYSIS

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 34: Entrepreneurship m com a

34

THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO

POPULAR

Frequency of visits made to fast food

centers

Everyday

Alternate

days

Weekends

Once in a

month

Fast food chain visited the most

Subway

MacDonalds

KFC

Pizza Hut

Burger King

Favourite product at Macdonaldrsquos

Big Mac

Burger

Mac

Veggie

Big Mac

Chicken

Burger

Maharaj

Mac

Mac Fileto

Fish

Time of the day prefered to eat at

Macdonaldrsquos

Morning

Noon

Evening

Night

Main problem faced at McDonaldrsquos

Long queues

Wrong orders

Hygienic

problems

Other

problems

No problems

The unique selling prepositions of MacDonaldrsquos

Product

variety

Hygiene

Ambience

Quick service

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 35: Entrepreneurship m com a

35

1 The System This is the first thing that makes McDonalds so successful by

having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers

who are just looking to make some cash or pick up fundamental job skills

2 Convenience

The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at

every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have

a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes

it so popular around the globe 3 Likability and Familiarity

The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it

so familiar by being so familiar to all age groups and to everybody

4 The Menu McDonalds has one of the most diverse menus targeting all ages

from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little

The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to

watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)

5 Consistency The last reason is McDonalds is so successful because of its

consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide

worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid

reputation to uphold

Findings

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 36: Entrepreneurship m com a

36

At McDonalds the corporate culture and management system are strictly

imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards

The organizational development focused upon generating revenues from

the existing operations

They give different trainings to their employees managers to work in

more productive way and to achieve the goals of the organisation

The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was

possible only due to expansion and positive comparable sales

McDonalds develop a deep connection between McDonaldrsquos and the

local communities in which it operates

McDonalds believes that the success of the restaurants and the company is achieved through the people it employs

The company aims to recruit the best people to retain them by offering

ongoing training relevant to their position and to promote them when they

are ready

CONCLUSION

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 37: Entrepreneurship m com a

37

What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos

second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years

The credits of building it into one of worldrsquos largest fast food operation can be

given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net

worth of $1515 billion

Through this project report and market survey we saw the how McDonaldrsquos was

formed its history and the present position We also its list of various products offered and the corporate profile

Through the marketing mix we saw how they make use of their product price

place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got

The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear

picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the

services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular

I gladly hope that this project has met its aim

Let me conclude by quoting this quote by Ray Kroc

Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~

Page 38: Entrepreneurship m com a

38

BIBLIOGRAPHY

wwwgooglecom

wwwwikiped iaorg

wwwmacdonaldscom

wwwmarketing91com

wwwaboutmacdonaldscom

~~~~~~~~~~~~