“One world, One Burger”McDonald’s

HISTORY

• Founded in 1940

• By Dick and Mac McDonald in California

• Introduction of “speedee service system” in 1948

• Ronald McDonald introduced in 1963

• Ray Kroc gives the idea of franchising.

COMPANY’S OBJECTIVE

• Achieving sustainable ,profitable growth

• Designed to increase restaurant visits and grow brand loyalty among new & existing customers

• McDonalds is committed to maintaining and developing the best food products in the quick service restaurant market.

• Complete commitment to quality, service, cleanliness and value

EXTERNAL ANALYSIS

PESTLE

Political Factors

Economical

Factors

Social -Culture

Factors

Technological Factors

Legal Factors

Environmental Factors

Political factors

Religious Laws

Tax Obligations

Employment Laws

Economic factors

Inflation

Changes in Exchange Rates

Socio-culture factors

Cultural Norms

Population Changes

Education Levels

Consumer Individuality

Technological factorsAdverti

sements

Inventory Manage

ment

Supply Chain

Management

Daily Operations

Legal factors

Religious Laws

Tax Obligations

Labor and employment

laws

Quality Certification

Environmental Factors

Green House Effect

Slaughter of Animals

Use of Polystyrene

in past

Excessive Plantation

Extinction of Animals

Abuse of Environment

Styrofoam

5 FORCES FRAMEWORK

COMPETITIVE RIVALRY: There is intense rivalry in fast food.Although, McDonald’s, with more than 32,000 local restaurants serving more than 60 million people in 117 countries .

THREAT OF NEW ENTRANTS: The threat is high as there are no legal barriers to enter. However, its difficult to enter the market because new entrants are faced with price competition from existing chain restaurants

SUPPLIER BARGAINNING POWER: It is high because McDonald’s restaurants use the same products from the same suppliers and it doesn’t matter if you are in Rochester, MN or Beijing, China you can get the same Big Mac everywhere.

BUYER BARGAINNING POWER: Bargaining power of customers of McDonald’s is low because of low customer switching costs which are nearly zero. quality of the product or service in the fast food industry is very important as customers have full information of the products they buy and consume.

THREAT OF SUBSTITUES: As there is intense competition between rival sellers in the fast food industry, the competition between firms selling substitute products is intense as well.

COMPETITIVE

ANALYSIS

INTERNAL ANALYSIS

Resources

• Tangible

• Physical - Restaurant Location

• Technological– Touch Based Screens

• Financial - CIMB and May Bank and its own sales

• Organizational Structure

• Intangible

• Human

• Innovation

• Reputation

Capabilities

• Systemization

Competencies

• Product Variety

• Unique flavors and taste

• Core Competency

• Customer oriented policy

STRATEGIES ADOPTED BY

MCDONALD

Hummer of a Summer PR strategy:•In August 2006, McDonald’s in US launched a PR effort by the

name of ‘Hummer of a Summer.”

•McDonald's staged a three-mile long parade down Chicago's

Michigan Avenue during lunch hour. Ronald McDonald led the

parade on the hood of a HUMMER and was followed by the life-

size versions of the trucks that will be available in the Happy

Meals.

•The strategy proved to be a win-win one for both GM and McDonald’s because it not only attracted the kids to the happy meal even more than before but also magnified the iconic brand status that HUMMER has acquired over the years.

STRATEGIES ADOPTED BY

MCDONALD

McMommy Blogging Society:• In December’ 2007, McDonald's opened up its kitchens to an

army of mother bloggers, who will be reporting their allegedly

unedited findings on McDonald's website, and their verifiably

unedited findings on blogs around the Internet

• The burger giant apparently also was hoping that the program will help contradict stories of fattening, unhealthy food that have been detailed in books such as "Fast Food Nation" and movies such as "Super Size Me."

• Selected moms were expected to participate in as many as three

"field trips" lasting two to three days, and received payment for

"reasonable travel expenses."

STRATEGIES ADOPTED BY

MCDONALD

Tier Pricing Strategy:• For McDonald’s, tier-pricing is becoming part of its global

strategy. To stay competitive in an era of food inflation, the US

franchise is abandoning its ‘one price fits all’ approach.

• McDonald's has implemented a tier-pricing system in Taiwan,

partitioning the island into three districts to counter the impact of

food price inflation.

• Future prices will be adjusted according to income levels, the

consumer price index and other factors for each district.

STRATEGIES ADOPTED BY

MCDONALD

Global Best of Green:• McDonald’s has also been trying to show consumers

its “greener” side with a new institutional marketing

effort, “Global Best of Green.” McDonald’s around

the world has taken a number of initiatives around the

world as a part of this marketing effort which include

the following.

• About 80 percent of packaging used by McDonald’s

Europe comes from renewable resources.

• In Canada, switching from bleached white napkins to

plain brown has saved $1.3 million annually, while

reducing energy, wood and water use.

• U.S. restaurant locations recycle about 13,000 pounds

of used cooking oil per year, on average.

• Using a fryer that requires less oil allows restaurants to

cook the same product with 40 percent less oil, saving

4 percent in energy over other fryer models.

STRATEGIES ADOPTED BY

MCDONALD

Increasing sales at existing restaurants by Remodelling:•McDonald's, whose restaurants are visited by more than 40 million people every day, has moved aggressively over the past three years to revamp its menu and attract a new breed of customer. •The traditional McDonald's yellow and red colors will remain, but the red will be muted to terra cotta and olive and sage green will be added to the mix. •To warm up their look, the restaurants will have less plastic and more brick and wood, with modern hanging lights to produce a softer glow. •The dining area will be separated into three sections with distinct personalities.•The "linger" zone will offer comfortable armchairs, sofas, and Wi-Fi connections.•The focus is on young adults who want to socialize, hang out, and linger.

• BYE BYE SEE U AT McDonald’S