mc donald.doc

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A

PROJECT REPORT

ON

MC DONALD

Submitted in the partial fulfillment of the requirement for the award of theDegree of Bachelors of Business Administration

SUBMITTED BY: UNDER GUIDANCE OF:

___________________

BBA (4TH SEMESTER)

BHARATI VIDYAPEETHs

INSTITUTE OF MANAGEMENT & RESEARCH, NEW DELHI


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Student Undertaking

I ________________ have completed the Summer Training Project titled

Mc Donald under the guidance of ____________________in the partial fulfillment

of the requirement for the award of degree of Bachelor of Business Administration of

BVU, SDE, Academic Study Center BVIMR,New Delhi. This is an original piece

of work & I have neither copied and nor submitted it earlier elsewhere.

_______________

Students Signature


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ACKNOWLEDGEMENT

The present work is an effort to throw some light on Mc Donald. The work would

not have been possible to come to the present shape without the able guidance,

supervision and help to me by number of people.

With deep sense of gratitude I acknowledge the encouragement and guidance received

by my project guide _____________and other staff members ofMc Donald.

I convey my heartful affection to all those people who helped and supported me

during the course, for completion of my Project Report.


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PREFACE

A hallmark of any premier business school is its willingness and ability to constantlyexplore and implement new ideas and practices in the field of management education.

Institute constantly reorients their programs in order to keep abreast of changing

development.

The initial interaction between school students and industry takes place when the

students undergo project is usually for knowing the process for recruitment, selection,

industrial relations & training of that institution. It is often the exposure to corporate

culture that a student receives, particularly true for students without prior work

experience.

During my training at Mc donald, I was taken project on recruitment, selection

& training policy of Mc donald.

The main purpose of the study is to know the policies of the bank regarding

recruitment, selection & training, which helped me in gaining knowledge about the

different working pattern of different departments of the company.


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CONTENTS

CHAPTER 1: INTRODUCTION

OVERVIEW OF INDIAN ECONOMY AND ITS GROWTH

OVERVIEW OF INDUSTRY

INDUSTRY INTRODUCTION

COMPANIES CONTRIBUTION WITH IN THE INDUSTRY

PROFILE OF THE ORGANISATION

HISTORY OF THE COMPANY

VISION AND MISSION STATEMENT OF COMPANY

ORGANISATION STRUCTURE

CHAPTER 2: COMPANY ANALYSIS

PEST ANALYSIS

PORTERS 5 FORCES MODEL

SWOT ANALYSIS

USP OF ANY DEPARTMENT

CHAPTER3: MARKETING STRATEGIES

INTRODUCTION AND IMPORTANCE OF MARKETING STRATEGIES

MARKETING MIX OF THE COMPANY

STP ANALYSIS OF THE COMPANY

BCG MATRIX OF THE COMPANY

CHAPTER4: FINANCIAL ANALYSIS

SOURCES OF FINANCE

KEY INVESTMENTS

RATIO

CHAPTER5: HR-POLICIES AND STRATEGIES

SOURCES OF RECRUITMENT

PROCESS OF RECRUITMENT

TRANING AND DEVLOPEMENT

BENEFITS OF COMPANSATION SYSTEM

CHAPTER6: PRODUCTION POLICIESCHAPTER 7: FINDINGS AND CONCLUSIONS

BIBLIOGRAPHY


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INTRODUCTION


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EXECUTIVE SUMMARY

Mc Donalds is the market leader in fast food industry. The aim of this project is to

get an insight of the frequency of New Product Introduction in Mc Donalds and to

find that whether customers are aware of new products in time and the source of

information of new product introduction. The aim was also to find out the factors that

make customers try new products.

The need of this project arose because a survey which would show that whether the

work which is done by the company in the area of new products is liked by the

customers or not. The major focus of the research conducted, therefore was basically

discovering the factors that people are aware or not and the attribute of product that

attract them for a trial. The study was restricted to only around 50-60 % of our target

audience, because the respondents included in the study are people who are the

regular visitors of McDonalds.

The methodology adopted to conduct the research involved structured questionnaires,

telephonic & personal interviews & observation.


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THE INDIAN FAST FOOD MARKET - AN OVERVIEW

Up to the year 1995 the traditional dhabas, potential restaurants in the customers

colony and some restaurants in a five star hotel predominantly dominated 1995 Indian

food market. Having fast food i.e., burgers, pizzas etc., was considered to be an option

for eating out. It was not at all synonymous with the American concept of fast food as

a quick takeaway bite or a substitute for lunch.

Apart from fast food being available at the local colony restaurants and at some five

star restaurants, Nirulas was the only fast food chain existing in the country with its

restaurants expanding with every passing year since its inception. It has been almost

50 years now since its set up and there is hardly any one who doesnt know that

Nirulas exists. Nirulas was the first one to bring fast food to India back in the 50s

since then it has evolved into an eating-place with tremendous brand equity and brand

recognition. It proved to be a perfect eating place for an average middle class who

wants to eat out at an affordable price who cant afford the five-star restaurants and

would not want to go to the local dhabas.

Nirulas almost had a monopoly for decades due to the way it has been placed. It is a

place where a person from an average middle class group to upper class group can goto eat out. Its popularity has increased over the decades. With the trends changing and

the incomes raising almost anybody who can afford to eat out could go for a snack at

Nirulas.

However the year 1995-96 witnessed a drastic change. 1996 is considered to be the

year of Indias entry into the world food market. International giants such as

McDonalds, KFC, TGIF, Dominos, and Pizza Hut all bombarded the Indian food

market.

Before these, UK-based joint called Wimpys had established its chain in the country

in 1990. By year 1996 it had about three to four joints established in Delhi. However

it did not pose much of a threat to Nirulas reason being lack of variety and that

Wimpy was looked at more of a hangout place rather than eating out with the family.

Its been the American international giants i.e., McDonalds, Pizza Hut etc., who have

targeted their restaurants to the families. Apart from the foreign and Indian fast food


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chains setting up shop, there is a range of specialty restaurants offering varied fare

such as Chinese, Mexican, French, Italian etc. These places however offer range of

items different from burgers, pizzas etc, but they definitely are competition to both

foreign and Indian fast food chains.

However, restaurant business is such which is surrounded by threat from everywhere

be it Indian joints or foreign joints.

It is only these international joints and specialty restaurants that are gradually coming

up and some Indian restaurants that have made up the food market. Prior to this it was

only the local restaurant that became visible while passing by or through local banners

etc., and the five star restaurants were for the elite class out of reach by the average

middle class customer. There was hardly any awareness or promotion to beat

competition.

Each of the foreign food joints that have come into the country has their own strategy

lined up to differ from the rest. Each of these studied the Indian tastes and style and

thereby targeted the Indian customer. An average Indian restaurant goers is no

convenience eater, unlike the Americans.

If he is paying, he is paying for food that tastes good (Spicy, soft, savory etc.), not for

how pleasantly the stuff is served or how spotless the widows are. He wants food for

that can make him come back to the restaurant. Customer loyalty in a restaurant

business is essentially low. A customer when he comes to a restaurant usually looks at

the quality of food, variety, ambience, speed of delivery and the location. The variety

would influence the frequency of visits since taste is a dominating factor to the Indian

customers.

Almost all the fast food chains both Indian i.e., Nirulas and foreign i.e., McDonalds

etc., are targeting the families. This serves to be an advantage because the turnaround

time is short and family has higher propensity to spend because different members

order larger variety of dishes.

Each of these restaurants delivers quality, value and services in its own way through

its line of strategies. The emphasis is on the value that the restaurant is delivering to

the customers.

COMPANY PROFILE


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History and Background of Mc Donald

In 1955, Ray Kroc, a 52-year old salesman of milkshake mixing machines, became

interested in a string of seven restaurants owned by Richard and Maurice McDonald.

These two founded the quick service restaurant industry when they converted their

barbecue drive in with car hops into the worlds first McDonands limited menu, self

service drive-in in 1958, in California. Kroc liked their fast-food restaurant concept

and bought the Chain for $2.7 million.

He opened his first McDonalds in Illinois in April 1955 and founded the company that

evolved into McDonalds Corporation. He decided to expand the chain by selling

Franchises, and the number of restaurants grew rapidly.

Worldwide Operations

MCDONALDS IS THE LARGEST AND BEST-KNOWN GLOBALFOODSERVICE RETAILER WITH MORE THAN 30,000 RESTAURANTS IN 121COUNTRIES. THEIR OUTSTANDING BRAND RECOGNITION,EXPERIENCED MANAGEMENT, HIGH-QUALITY FOOD, SITEDEVELOPMENT EXPERTISE, ADVANCED OPERATIONAL SYSTEMS ANDUNIQUE GLOBAL INFRASTRUCTURE POSITION THEM TO CAPITALIZE ONGLOBAL OPPORTUNITIES. THEY PLAN TO EXPAND THEIR LEADERSHIP

POSITION THROUGH GREAT TASTING FOOD, SUPERIOR SERVICE,EVERYDAY VALUE AND CONVENIENCE. THEIR EFFORTS TO INCREASEMARKET SHARE, PROFITABILITY AND CUSTOMER SATISFACTION HAVEPRODUCED GOOD RETURN TO SHAREHOLDERS A COMPOUNDANNUAL TOTAL RETURN OF 12 PERCENT FOR THE TEN YEARS ENDEDDECEMBER 31,2001.

McDonalds is the largest and the best-known global food service retailer. Its global

market potential is enormous seeing the member of restaurants it has. On any day

McDonalds serves less than one percent of the worlds population. Its outstandingbrand

recognition. (It is one of the most recognized brand all over the world), experienced

management, high quality food, site development, high quality food, site development

expertise, advanced operational systems and unique global infrastructure position it to

capitalize on global opportunities.


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Number of Restaurants

Country 2004 1998

USA 12804 11,368

Europe 5,460 2,597Asia Pacific 6,260 2,735

Latin America 1,510 584

Canada, Middle East

And Africa

1,665 1,105

Other 1,008 0Total 28,707 18,299

Vision of Mc Donald

McDonalds Vision is to dominate the global food service industry. Global dominance

means setting the performance standard for customer satisfaction and increasing

market share and profitability through successfully implementing convenience value

and exception strategies.

In order to expand its operation McDonalds goes by a simple thumb rule to estimate

haw many outlets it wants: One restaurant for every 25,000 people with new markets

sprouting in so many parts of the would, the chain is expanding at a breathtaking pace

of one restaurant every three hours. This can be known from the following:


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McDonalds franchises restaurants in many international markets, and decisions

relating to the selection of candidates are made local by the management in the

country where the restaurant is located.

Mc DONALDS INDIA -A locally Owned Company

McDonalds India is a locally owned company managed by Indians. In Mumbai Amit

Jatias company, Hard castle restaurants Pvt. Ltd., owns and manages McDonalds

restaurants. In Delhi, McDonalds restaurants are owned and managed by Vikram

Bakshis Connaught Plaza restaurants Pvt. Ltd. Both these individuals are responsible

for the running of McDonalds India.

Local Sourcing is Key for Truly Indian Products

Around the world, McDonalds traditionally operates with local partners or local

management. In India too, McDonalds purchases from local suppliers. McDonalds

constructs its restaurants using local architects, contractors, labour and - where

possible - local materials. McDonalds hires local personnel for all positions withinthe restaurants and contributes a portion of its success to communities in the form of

municipal taxes and reinvestment. Its 98% of the inputs are obtained domestically.

McDonalds sources food products from local companies. Mutton patties are supplied

by Al-Kabeer, Hyderabad, Andhra Pradesh; fresh lettuce comes from Pune, Ooty,

Maharashtra and Dehradun; cheese from Dynamix Dairies, Baramati, Maharashtra;

sesame seed buns and sauces from Cremica Industries Phillaur, Punjab, and pickles

from VST Natural Foods, Hyderabad, Andhra Pradesh.

Setting Up of an Extensive Food Chain

For three years before the opening of the first McDonalds restaurant in India,


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McDonalds 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 regulation on food, health

and hygiene. Part of this development involves the transfer of state-of-the-art food

processing technology, which has enabled Indian business to grow by improving their

ability to compete in todays international markets.

For instance, Ceramic Industries worked with another McDonalds supplier from

Europe to develop technology and expertise that allowed Ceramic to expand it

business from baking to also providing breading and batters to McDonalds Indian

and other companies. Another benefit is expertise in the areas of agriculture that

allowed McDonalds and its suppliers to work with farmers in Ooty, Pune and

Dehradun and other regions to cultivate high quality lettuce. This includes sharing

advanced agricultural technology and expertise like utilization of drip irrigation

systems, which reduce overall water consumption and 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. The two companies entered into a business relationship resulting in an

initial export order of approximately US $ 12 million per year - with the potential to

increase. McDonalds local supply networks through Radhakrishna Foodland, to get

products from the various suppliers to restaurants in Delhi and Mumbai.

Respect for the Indian Customs and Culture

McDonalds worldwide is well known for the high degree of respect to the local

culture. McDonalds has developed a menu especially for India with vegetarian

selections to suit Indian tastes and culture. Keeping in line with this McDonalds does

not offer any beef or pork items in India. McDonalds has also re-engineered its

operations to address the special requirements of a vegetarian menu. Vegetable

products are prepared separately, using dedicated equipment and utensils. This


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separation of vegetarian and non-vegetarian food products is maintained throughout

the various stages of procurement, cooking and serving.

Quality, Service, Cleanliness and Value

The McDonalds philosophy of QSC & V is the guiding force behind its service to the

customers.

McDonalds India serves only the highest qualityproducts. All McDonalds suppliers

adhere to Indian government regulations on food, health and hygiene while

continuously maintaining McDonalds own recognized standards. All McDonalds

products are prepared using the most current, state-of-the-art cooking equipment to

ensure quality and safety.

At McDonalds the customer always comes first. McDonalds India provides fast,

friendly service - the hallmark of McDonalds, which sets its restaurants apart from

others.

McDonalds restaurants provide a clean, comfortable environment especially suited

for families. This is achieved through McDonalds stringent cleaning standards,

carefully adhered to.

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

can afford. McDonalds does not sacrifice quality for price - rather McDonalds

leverages economies of scale to minimize costs while maximizing value to customers.

McDonalds has a 20-year profitability plan for India and it intends having at least 50

restaurants here by the year 2000. The company has already invested Rs. 50 crore in

its Indian operations, and each of the two joint venture partners has invested about Rs.

17.56 crore.


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MARKETING FUNCTIONS

Mc Donalds started its operations in India in October 1996 and by July 1998 it has

served about 10 million customers in the country.

Mc Donalds marketing philosophy is captured in its motto of Q.S.C.V., which is

the guiding force behind its service to the customers.

Mc Donalds India serves only the highest QUALITY products. All Mc Donalds

suppliers adhere to Indian government regulations on food, health and hygiene while

maintaining Mc Donalds own recognized standards. All its products are prepared

using the most current, state of the art cooking equipment to ensure quality and safety.

At Mc Donalds, the customers always come first. Mc Donalds India provides fast

friendly SERVICE the hallmark of Mc Donalds that sets its restaurants apart from

others.

Its restaurants provide a CLEAN, comfortable environment especially suited for

families. This is achieved through Mc Donalds stringent cleaning standards, carefully

adhered to.

Mc Donalds menu is priced at a VALUE that the largest segment of Indian customers

can afford.

Its strategy in India is to target the plain and simple mass market. The target

consumers for Mc Donalds are the family and the kids. Mc Donalds has been

positioned as a Family Restaurant.

Product Information

The Original Menu

The original McDonalds menu was simplicity itself-hamburgers (15

cents), cheeseburgers (19 cents), fries (10 cents), soft drinks (10

and 15 cents), coffee (10 cents), and shakes (20 cents). This limited

menu concept triggered the fast food concept because focusing

on just a few items that were prepared with standardized

procedures made food service a model of efficiency.

McDonalds Taste Around the World.


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Internationally, our restaurants offer our standard menu items, and

occasionally develop other items, which appeal to our host countrys

cultural preferences. Some McDonalds restaurants service items

such as: rice dishes and fried chicken in Japan; beer in Germany;Kiwi burgers in New Zealand; spaghetti in the Philippines; and in

Islamic countries, like Saudi Arabia, our restaurants offer a Halal

menu.

Canada

Cheese, vegetable, pepperoni and deluxe pizza

Uruguay

McHuevo - A hamburger with a poached egg on top

Thailand

Samurai Pork burger- a sandwich marinated with teriyaki sauce

Philippines

McSpaghetti- Pasta in a sauce with frankfurter bits

New Zealand

Kiwiburger- A hamburger with a fried egg and slice of beet

Japan

Chicken Tatsuta A fried chicken sandwich spiced with soy sauce

and ginger

Frankfurters, beer and a cold four-course meal

The Big Idea Called Big Mac

This sandwich was the brainchild of Jim Delligatti, one of McDonalds

earliest owner/operators. Delligattis restaurants near Pittsburgh,

Pennsylvania, struggled with sub-par volume and he was

convinced the way to broaden his customer base was to broaden

the menu. In 1967, McDonalds agreed to let him test a large

sandwich that featured two 10:1 patties, which he called the Big

Mac. Ralph Lanphar, then Regional Manager in Columbus, helpedgarner support for the Big Mac test from McDonalds top


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management. Test results in each of Delligattis restaurants showed

at least a 12 percent sales increase. Soon, the product was added to

other test markets, and when it scored 10 percent or better salesgains in every test, the Big Mac was put into national distribution by

late 1968. It is now our flagship sandwich.

Happy meal

Since 1979 the Happy Meal has been making kids visits that much

more special. Clubs the world over collect Happy Meals toys and

boxes.

New Products

Desserts:

Fruit n Yogurt Parfait

Salads:

Chef Salad

Garden Salad

Griolled Chicken Caesar Salad

Salad Dressings:

Caesar Dressing

Fat Free Herb Vinaigrette Dressing

Honey Mustard Dressing

Ranch Dressing

Red French Reduced Calorie Dressing

1000 island Dressing


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INDIAN SCIENARIO

Happy Birthday, Maharaja Mac!McDonald in India

Oak Brook, IL- Where in the world can you get a Maharaja Mac

Since the opening of Indias first restaurant in New Delhi, one year

ago McDonalds has served more than 350,000 Maharaja Macs,

Indias signature McDonalds sandwich

During its first twelve months in India, McDonalds has openedseven restaurants four in Delhi and three in Mumbai- to meet the

demands of the six million customers who visited the restaurants in

McDonalds inaugural year. The company plans to more than double

its presence in Indian in 1998, ending the year with 20 restaurants.

When McDonalds opened in India, it came up against the

obvious problem; their profits were founded on selling billions ofbeef patties how could it succeed in a Hindu country ? No problem,

said McDonalds corporate chefs, we will invent a mutton burger.

And thus was born the Maharaja Mac, alias the Goat Burger.

McDonalds worked with its local, Indian partners to adapt the menu

to meet local tastes and needs. As the old advertising jingle goes,

the Maharaja Mac is made of: two all lamb patties, special sauce,

lettuce, cheese pickles, onions on a sesame seed bun. The famous

sandwichs main ingredient, beef, was replaced out of respect for

the local Hindu population of India.

It was a disaster from the beginning. The taste, the smell, and

the texture nothing was right. If you were used to the real thing

the beef hamburger then this variation left you deeply unsatisfied.

Small wonder then that, last month, the Goat Burger uttered its last

bleat and went off into fast food heaven along with such previous


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McFailures as the Roast Beef Sandwich, The Triple Ripple Ice-Cream

and the Deep Sea Dory.

McDonalds now concentrates on selling the kind of fast food thatIndians really like: anything deep-fried and smothered in sauce.

Consumers who dont realize that the chicken burger is breaded and

deep-fried now convince themselves that they are eating healthily

because it is white meat. But then, what can be expected from a

chain whose breakthrough in the dessert market came when a

franchisee decided not deep fry his apple pie? The Hamburger

purists will tell that it is a dish on its last legs. The ideal hamburger

should consist of a patty made from ground fillet mignon and

cooked rare, but its descent into fast-food land has ensured that

most us see it as a slender slice of meat, slathered in condiments,

with no real taste of its own. On the whole the real hamburgers

best days are over. It survives, in its fast-food avatar, largely as a

dish for people who want something to eat with French Fries. In the

Far East, McDonalds has introduced some interesting variations

(such as the Samurai Pork Burger) but it is the fries that taste so

much better in South East Asia.

The changes didnt end with product re-formulations which

also include a specially developed vegetable burger, vegetable

nuggets and locally flavored dipping sauces like chili and macula

the commitment required operational changes as well.

At McDonalds two different menu boards are displayed in

each restaurant green for vegetarian products and purple for non-

vegetarian, making it easier for customers to see their options and

make their choices. Behind the counter, restaurant kitchens have

separate, dedicated preparation areas for the meat and non-meat

products and even crew assigned to the products cooking have

different uniforms to distinguish their roles. These extra steps are


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taken to assure Indian customers of the wholesomeness of both

products and their correct preparation.

McDonalds is the world largest food service organization withmore than 22000 restaurants in 106 countries on five continents.

Product Related Strategies

World over Mc Donalds is known for its juicy beef burgers. But in order to settle in

India the entire concept of beef burgers had to be changed. India is the only country

where Mc Donalds is offering veggie burgers and non-veg burgers without beef (uses

mutton instead).

This is a classic case of Product Adaptation, where Mc Donalds adapted its product

according to the culture and norms of the country in order to position itself in the

market.

There have been other product adaptations too. Mc Donalds sells a spicier Maharaja

Mac in India as its flagship product in place of the globally famed Big Mac. It also

has a large capacity for vegetarian burgers, the production and serving of which is

separated in such a way that the customer can actually see it.

Mc Donalds product line is almost similar to other burger chains in the country.

Burgers

Desserts

Beverages/shakes

Assorted items.

Product standards, packaging, quality, processing are all the same like at any other Mc

Donalds outlet in the world. The quality standards are so stringent that nowhere not

even is its rawest state, is any of the food touched by hand. The typical burger

undergoes 54 checks before it is served. The menu at Mc Donalds has remained more


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or less the same over the past 2 years except a couple of additions in the burgers

variety and inclusion of couple of items in the dessert variety.

Mc Donalds even has the calorie count carefully worked out for its burgers. A veg

burger offers 418 calorie, 10 gm of protein, 22gm of fat and 48 gm of carbohydrate.

All Mc Donalds menu items fit into a balanced diet and it offers certain items that fit

well within a low fat diet (option of burger with or without cheese).

Pricing Strategies

Worldwide Mc Donalds is known for its Purchasing powerpricing. The ability to

pay-of a large section of customers has been the sole criteria. This was assessed

through market research. It wanted to price its products in such a way that it can even

be accessible to a child. For this it examined Indian spending on snacks and other

foods before setting on the prices.

The company continued with the 1996 prices for about a year in order to meet its one

million target audience.

One look at the restaurant and it doesnt seem that the prices of its products would be

this low. Reason being that Mc Donalds gets the materials (55 per cent of an outlets

running expenses) at very cheap rates. Therefore this is one of the reasons that Mc

Donalds products are priced reasonably.

It buys its supplier from 35 suppliers who sell at incredibly low prices. Products at Mc

Donalds are neither elitist in its pricing nor at the dhaba level, they are average in its

pricing.

Mc Donalds was offering a softie at a price of Rs 6/- about few years back. Today

this softie costs only a rupee more at Rs.7/-. No restaurant of this caliber offers a

product at this rate.

Mc Donalds recently has come up with Economeals, in which one can afford to

have a burger and coke for as little as Rs. 29/- and at max for Rs. 49/- (In store


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pamphlet enclosed) Mc Donalds keeps on coming up with such meals almost every

month such that almost anyone can afford to have a Mc Donalds product.

Promotional Strategies

Mc Donalds ad line goes like:

Food Family FunMc Donalds had started its promotional activity with local area banners and posters

and now it has moved on to movie hall commercial. Its commercial is a 60-second

close up which focuses on a burger being prepared in slow motion tantalizing the

audience as though its a strip tease.

It has even started advertising through local channels such as siti cable.

Mudra is the ad agency, which puts up publicity banners in Delhi and Mumbai and

takes up the local T.V. commercials. Newspapers such as Delhi times are also beingused for local advertising. McDonalds plans to advertise in national newspapers such

as Hindustan Times and Times of India in another couple of months.

In addition to this Mc Donalds also has a public relation agency handling its account

that takes care of publicity and press releases.

McDonalds keeps on coming up with sales promotion schemes every now and then.

During World Cup Soccer it came up with this soccer game for Rs.11/- with every

meal combo ordered. Since kids are the prime targets by the restaurant, it has come up

with happy meals especially for the kids along which a game is free.

Also, for the kids Mc Donalds is the most happening place for birthday parties kids

love the place due to all the attention and knick knacks they are showered with. The

restaurant even has playpens displayed especially for the kids.

McDonalds also comes up with special schemes during the festive season Last month

i.e. September, during Navratras it came up with special Shudh Shakahari Meal

where a meal for two was for Rs. 99/- and a meal for four was for Rs. 199/- (In store

pamphlet enclosed). Another way through which Mc Donalds is promoting its image


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is via community services. There are Mc Sermons on maintaining parks, conducting

litter patrols and putting up public trash cans.

At majority of McDonalds restaurants, the management emphasizes on developing

parks for the kids as a playground for them. E.g. At McDonalds G.K. restaurant there

is a playground developed for the kids in front of the restaurant. The management has

put

boards at these parks to put across certain messages for the community as a whole,

such as :

If you see someone without a smile, give them one of yours

Children are the light of our future etc.

In addition to all these promotional measures, McDonalds has boards put all over the

roads to show directions to their restaurant. These boards are put almost two to three

kms before the location of the restaurant. This makes it easier for the customer who is

not familiar with McDonalds restaurant location.


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Mission Statement

Leadership Maintain our relationship of the Indian cement industry

Throughout the continuous modernization and expansion of our Manufacturing

facilities and activities and through establishment of a wide and efficientmarketing network

Profitability-Achieve a fair and reasonable return on capital by promoting

productivity throughout the company

Growth- Ensure a steady growth of business by strengthening our position in the

cement industry.

Quality- Maintain high quality of our products and services and ensure their

supply their supply at fair prices.

Equity- Promote and maintain fair industrial relations and an environment for

the effective involvement, welfare, and development of staff at all levels.

Pioneering- Promote research and development efforts in the areas of product

development and energy, and fuel conservation and to innovate and optimize

productivity.


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INTRODUCTION

Anything that can be offered to a market for attention, acquisition, use, or

consumption that might satisfy a want or need is called a product and the set of all

actual and potential buyers of a product or service comprise its market.

A product may include physical objects, services, persons, places, organizations, and

ideas. Then, it is quite obvious that a product is of no use unless & until it has a

market for itself & a market cannot thrive without products.

The market for Fast food joints include all age people who believe in moving out forfun and have enough deposable income. That is the reason most of the fast food joint

are situated in the cities where the income level is high.

The aim of McDonalds- India is to target the plain and simple mass market. The target

consumers for Mc Donalds are the family and the kids. Mc Donalds has been

positioned as a Family Restaurant.

Any Company goes for innovations according to the taste and demand of the

customers to exist in the competitive environment. McDonald is into continuous

innovation and introduction of new products in the market.

Product Development Strategies of McDonalds

The variety influences the frequency of visits since taste is a dominating factor to theIndian customers.

Almost all the fast food chains are targeting the families. This serves to be an

advantage because the turnaround time is short and family has higher propensity to

spend because different members order larger variety of dishes.


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As Mc Donald is a Standardized company and is famous for its standard product

through out the world. It generally does not go for innovations on large scale. The

New Product Development Strategies of Mc Donald is based on the area or region it

caters to.

The product development in Mc Donald is in three steps-

International Level

International Level Product Development is based on the idea and taste of the

whole world. This development is done to cater the whole world.

Regional Level

Few products are developed on regional level keeping in mind the taste and

preference of the customers according to the area. For instance Mc Donalds camein India with the burgers containing beef but keeping the Indian customers in

mind they had to change it to chicken burgers.

Local Level

Product Development in local level is rarely seen in Mc Donalds. This

development is done keeping in mind the taste of the customers in that area. For

instance it introduced Mc Aloo Tikki according to the taste of North Indians.


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PROBLEM AND NEED OF RESEARCH

Everything good and positive has a sour side to it. The same for this concept ventured

by Mc Donald is that, the company is into continuous introduction of new products inthe market but many people restrict to the menus that they do not like to change.

A consolidation of these and a lot of other factors has hindered the awareness and trial

of new products offered by Mc Donalds. Out of the above said, a need was there to

conduct a survey which would show that whether customers are aware of the products

offered by Mc Donalds and what are the attributes of the products which attract

them. The major focus of the research conducted, therefore was basically discovering

the other factors which act as attracting agent.


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OBJECTIVES OF RESEARCH

To find the frequency of New Product Introduction.

To find that whether customers are aware of new products in time and the

source of information.

To find out the factors that make customers try new products.

Market Research is a systematic and objective study of problems pertaining to the

marketing of goods and services. It is not restricted to any particular area of marketing

but is applicable to all its phases and aspects. In other words it is the function that

links the consumer, customer and the general public that comes under the purview of

the target audience.

The objective of this research definitely goes in sync with the above definition

because the respondents included in the study are the people who are regular customer

of McDonald

Research Design

The research conducted was of the Descriptive type because first the objective of the

research was clear and specific and second the motive was to determine the awareness

of new products among the customers of Mc Donald.

Sources of Data

Primary Data

Questionnaires

Interviews

For the purpose of collecting maximum primary data, a structured questionnaire was

used wherein questions pertaining to the general awareness of people about

McDonalds


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Products, the attribute of the products, which make them try the product etc, were

incorporated.

Also, people from the company and Mc Donald outlets were interviewedtelephonically & personally to study the products of Mc Donald and the frequency of

new product introduction in the market.

Secondary Data

Internet

Articles, Newspapers

The data that were gathered for the prior information of the details about Mc Donald

and its products were through the company website, the articles and newspapers.

Sample Design

Convenient Sampling

Sample Size

No of People Approached: 70

No of respondents: 54

Thereby, the sample size surveyed was 54.

Scope

This study is restricted to only 50-60% of our target audience; the respondents

included in the study are people who are the regular visitors of McDonald.


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DESIGNING AND ADMINISTRATION OF QUESTIONNAIRE

The questionnaire was designed keeping in mind many bases. I have kept 8 questions

for the fulfillment of our objective. Questionnaire was one of the primary data about

information.

I wanted to get familiar with certain general information like age and

profession of the respondent because the psychology of a person varies with their age

and their level of thinking differs with their profession. By knowing the age and

profession of the respondents it will be easy to know that which kind of people are

interested in trying different products frequently.

By knowing the frequency of visit of the respondents it will be easier to know

that whether the people who are visiting Mc Donald frequently are aware of new

product introduction or not.

Question no2 was asked to know about the liking of people for new products.

It was necessary to know that people who like product innovations are aware of the

introduction of new products or not. It was also important to know that people who

are aware of new products in the fast food market are interested in the products or

they want to restrict themselves to certain products.

Knowing about the customers knowledge of the innovation in the products

will through light on their awareness of new products in time. Question No 3 and 4

through light on this aspect.


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Whenever a company launches a product in the market it tries to communicate

this message to the target audience properly otherwise no on will come to know about

any introduction. To know about the source of awareness of new products was also

one of the major concerns of the research. Few parameters are given in the question,

which has to be ticked. These were:

o Advertisement Advertisement is the source of information to the people as

most of the information regarding the products offered by Mc Donald is

advertised.

o Friends There are a lot of people who try different new products. It is quite

possible that they must have spread information among their friends.

o Visit to Mc Donald Visit to a Mc Donald is one of the major sources of

information about the products.

o Pamphlets Pamphlets are also one of the sources of information about the

products launched in the market.


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It was important to know the position of Mc Donald in the area of new

products according to customers preference. The major players in the fast food

industry in India including Mc Donald are Nirulas, Pizza Hut, Wimpy and Subway.

There are certain attributes of a product that attracts customers to go for it. To

find out the factors that make customers try new products was one of the objectives of

research. Certain parameters were found on the basis of secondary data collection and

after pre testing that attract customers to try new products. These are-

o Price

o Look

o The way it is served

o Quantity

o Advertisements

o Scheme & Promotion


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MARKETING STRATEGIES


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INTRODUCTION AND IMPORTANCE OF MARKETING

STRATEGIES

Marketing strategy is a process that can allow an organization to concentrate its

limited resources on the greatest opportunities to increase sales and achieve a

sustainable advantage. A marketing strategy should be centred on the key concept

that customer satisfaction is the main goal.Marketing strategy is a method of focusing

an organization's energies and resources on a course of action which can lead to

increased sales and dominance of a targeted market niche. A marketing strategy

combines product development, promotion, distribution, pricing, relationship

management and other elements; identifies the firm's marketing goals, and explains

how they will be achieved, ideally within a stated timeframe. Marketing strategy

determines the choice of target market segments, positioning,marketing mix, and

allocation of resources. It is most effective when it is an integral component of overall

firm strategy, defining how the organization will successfully engage customers,

prospects, and competitors in the market arena. Corporate strategies, corporate

missions, and corporate goals. As the customer constitutes the source of a company's

revenue, marketing strategy is closely linked withsales. A key component of

marketing strategy is often to keep marketing in line with a company's

overarching mission statement.
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Importance of Marketing Strategy

The importance of marketing plans outweighs any other decision that can be

taken in the realm of marketing strategies. Yes, marketing plan is essential to

grab the market segment before any other player captures the market. Whatare the target groups? Which segment of the market presents higher revenue

generating opportunities? These are some of the questions that marketing

teams ponder over, in the pursuit of achieving a good plan.

This is where the importance of marketing research comes into picture.

The market research team analyzes and understands the requirements of the

consumers. Conducts polls and researches and comes up with data and

statistics that help to logically target a market.

Another factor that governs the marketing plans is the marketing mix

elements. Marketing mix elements are the sets of factors that help firms to

achieve their targets of reaching the products to the consumers and also

achieve organizational objectives. The importance of marketing mix is, that it

takes into MCDONALDount the four P's of marketing, that

are Product, Price, Promotion and Place of distribution.

MARKETING MIX OF THE COMPANY


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MARKETING MIX

The term "marketing mix" was first used in 1953 when Neil Borden, in his American

Marketing Association presidential address, took the recipe idea one step further and

coined the term "marketing-mix". A prominent marketer, E. Jerome McCarthy,

proposed a 4 P classification in 1960, which has seen wide use. The four Ps concept is

explained in most marketing textbooks and classes.

Four P's

Elements of the marketing mix are often referred to as 'the four Ps':

Product - A tangible object or an intangible service that is mass produced or

manufactured on a large scale with a specific volume of units. Intangible

products are service based like the tourism industry & the hotel industry or

codes-based products like cellphone load and credits. Typical examples of a

mass produced tangible object are the motor carand the disposable razor. A

less obvious but ubiquitous mass produced service is a computer operating

system. Packaging also needs to be taken into consideration. Every product is

subject to a life-cycle including a growth phase followed by an eventual period

of decline as the product approaches market saturation. To retain its

competitiveness in the market,product differentiation is required and is one of

the strategy to differentiate from its competitors.

Price The price is the amount a customer pays for the product. It is

determined by a number of factors including market share, competition,

material costs, product identity and the customer's perceived value of the

product. The business may increase or decrease the price of product if other

stores have the same product.

PlacePlace represents the location where a product can be purchased. It is

often referred to as the distribution channel. It can include any physical store

as well as virtual stores on the Internet. Place is not exactly a physical store

where it is available Place is nothing but how the product takes place or create

image in the mind of customers. It depends upon the perception of customers.

Promotion represents all of the communications that a marketer may use in

the marketplace. Promotion has four distinct elements: advertising, public

relations,personal selling and sales promotion. A certain amount of crossover
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occurs when promotion uses the four principal elements together, which is

common in film promotion. Advertising covers any communication that is

paid for, from cinema commercials, radio and Internet adverts through print

media and billboards. Public relations are where the communication is not

directly paid for and includes press releases, sponsorship deals, exhibitions,

conferences, seminars or trade fairs and events. Word of mouth is any

apparently informal communication about the product by ordinary individuals,

satisfied customers or people specifically engaged to create word of mouth

momentum. Sales staff often plays an important role in word of mouth and

Public Relations (see Product above).

STP ANALYSIS OF THE COMPANY

Segmentation

MCDONALD cement has segmented its customer in the following

ways:-

Understanding needs and preferences of consumers -- Having housing,

infrastructure, and commercial construction, as demand drivers, the company

analyze the needs and preferences of consumers in these sectors.

Grouping customers based on their needs and preferences -- Customers

with similar needs and preferences are included in this segment.

Targeting the segment that the company can best meet the needs and

preferences of- The Company targets the customers, of which it can meet the

needs and preferences. I.e. customer needs higher- strength or low price.

Branding the commodity -- Though being a commodity product, branding is

important for a cement company. The company positions its brand among

Architects and Builders rather than household individuals.

Provide required product to meet targeted customers' needs and

preferences -- Delivering up to the expectations of the targeted segment.


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Targeting

Its customer base represents the masses of India - individual homebuilders insmall towns, rural and semi-urban India.

The company targets on the important projects like dams, roads in the country

It targets the Manufacturing companies like L&T etc

It Targets Indian Railways.

It targets an individual building his home(Retail Marketing)

Positioning

A good brand positioning help guide marketing strategy by clarifying the brands

essence but goals it help the consumer achieve and how it does so in a unique way.

The result of the positioning is the successful creation of a customer focused value

proposition, a cogent reason why the target market should buy the product.

BCG MATRIX OF THE COMPANY


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MCDONALDordingly, the BCG matrix divides products/businesses into

fourCategories:

Stars: These high growth products in a fast growing market need more

resource commitments.

Cash Cows: These are low growth, high market share products, where

minimal investments are envisaged. Indeed, cash cows provide the cash flows

that support other businesses.

Question Marks: These are low market share business units in high growth

markets. Investment is needed to build them into stars

Dogs: These are low growth and low market share businesses which generate

just enough cash to maintain themselves. They are businesses from which the

company is likely to withdraw in the near future.


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PEST ANALYSIS

Political

Taxation policy

Environmental protection laws

Employment laws

Economical

Inflation

Employment

Disposable income

Business cycles

Energy availability and cost

Social

Demographics


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Distribution of income

Social mobility

Lifestyle changes

Consumerism

Levels of education

Technology

New discoveries and innovations

Speed of technology transfer

Rates of obsolescence

Internet

Information technology

PORTERS 5 FORCES MODEL


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Market segmentation

It is the act of dividing a market into distinct groups of buyers who require

separate products.

Its market research division has segmented consumers on the basis offollowing:

1. Geographic variables

2. Demographic variables

3. User status and lifestyle

Market targeting

Act of developing measures of segment attractiveness.

Involves evaluating various market segments.

It targets different segments of population of all categories of age groups.

Also targets the population outside India.

Market positioning

Indias largest company.

MCDONALD MOTORS is market capital and no.5 in sales and profit.

MCDONALD is the market leader.

They are the highest contributor in revenue.

Marketing strategy adopted

Advertisement

1. Television

2. Radio

3. Internet

4. Newspaper/magazines

5. Hoardings


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BCG MATRIX

In the early 1970's, BCG Matrix first propounded by Bruce Henderson of the Boston

Consulting Group. It is also known as BCG matrix, Boston Consulting Group Matrix,

BCG Growth-Share Matrix orMatrix Quadrants.

Using the Product Portfolio Matrix approach, a company classified all its SBUs orProducts/Markets MCDONALDording to Growth-Share Matrix. Therefore, it is best

describe as Portfolio planning model.

In this Matrix Quadrants, the plate is divided 4 categories named

A. Star

B. Cash Cow

C. Question Mark

D. Dog

The division is based on Market Share and Growth rate. A brief discussion comes

follow:

A. Star: Leader [i.e. high market share] of high growth market is called star.

These SBUs are net user of cash, because they always require heavy investment to

finance rapid growth and to sustain market share. When the product comes to mature
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stage, then the growth slow down and they turn to cash cow.

B. Cash Cow: Cash cows are low growth but high market share (Market leader)

businesses or products.

Their high earnings, coupled with their depreciation, represent high cash inflows and

they need very little in the way of reinvestment. And thus, they are the net provider of

cash. Surplus cash are used for Research and Development and to support other SBUs

that need investment.

C. Question mark: Products in a growth market with low market share are

categorized as Question Mark.

Because of growth, these SBUs require a lot of cash to hold their market share and let

alone to increase it. If nothing is done to increase the market share, a Question mark

will simply absorb large amount of cash in the short run and later, as growth slow

down, become a dog. Thus, unless something is done to change its perspective, it

becomes a cash trap.

Management has to decide which question marks should try to build into stars and

which should be phased out.

D. Dog: Dog are low growths, low market share SBUs. They may generate enough

cash to maintain themselves, but do not promise to be large source of cash.

Most often case, it should be liquidate and try with Question mark SBUs for

investment.

Market Growth Rate and Relative Market Share play important roll in BCG Matrix.

Market Growth Rate is the measure of industry attractiveness and Relative Market

Share is the measure of Competitive advantage. Therefore, these two are most

important factors to consider organizations profitability and strategic plan.

Extended Marketing Mix (3 Ps)

Now a days three more Ps have been added to the marketing mix namely People,

Process and Physical Evidence. This marketing mix is known as Extended Marketing

Mix.
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People: All people involved with consumption of a service are important. For

example workers, management, consumers etc

Process: Procedure, mechanism and flow of activities by which services are

used.

Physical Evidence: The environment in which the service or product is

delivered, tangible are the one which helps to communicate and intangible is

the knowledge of the people around us.

UNIQUE SELLING PROPOSITION

To best position your practice, you need to develop a powerful and compelling

unique selling proposition (USP).

What is a USP? A unique selling proposition is a proposition that competitors

cannot make or have not made.

MARKETING PROCESS

Understand the Marketing Place, Needs, Wants & Demand

Designing a Customer Driven Strategies

Prepare a Marketing Plan

Building Customer Relationship

Capture value from customers in return

1. Designing a Customer Driven Marketing Strategy:

Their main strategy that they still follow today is the diversification of

products they offer.

MCDONALDording to customers demand they make their strategies by

keeping following points in mind;

Which customer they will serve?

Which customer they will serve?


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They serve their customers on the bases of income level, age through market

segmentation.

Their main segment which they has captured are combination of higher

incomes & dual career families.

How will they serve these customers?

They fulfill their customers demand through;

Value proposition

Positioning

Unique selling proposition (USP)

3. CAPTURE VALUE FROM CUSTOMER IN RETURN:

Committed to providing uncompromising product quality offering customers

the highest value for money & giving service that is warm, friendly &

personal.

They also follow social factors to maintain their image through corporate

social responsibility.

4. Designing a Customer Driven Marketing Strategy:

Their main strategy that they still follow today is the diversification of

products they offer.

MCDONALDording to customers demand they make their strategies by

keeping following points in mind;


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FINANCIAL ANALYSIS


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SOURCES OF FINANCE

Share holders Fund

Shareholder funds is all the money belonging to common stock shareholders which

includes the balance of share capital, all profits retained and money classified as

reserves.

Loan Funds

A Loan Fund is a source of money from which loans are made for small business

development projects. A loan is made to one person or business at a time and, as

repayments are made, funds become available for new loans to other businesses.

Hence, the money revolves from one person or business to another.

Deferred Tax Liabilities

An MCDONALDount on a company's balance sheet that is a result of temporary

differences between the company's MCDONALDounting and tax carrying values,

the anticipated and enacted income tax rate, and estimated taxes payable for the

current year. This liability may or may not be realized during any given year, which

makes the deferred status appropriate.

RATIO ANALYSIS

Current Ratio shows an average ratio of 1.21which is less than the ideal ratiois 2:1.

Cash Ratio shows as average greater than its ideal ratio that is 0.5.

Debtors Turnover Ratio shows the amount of credit sales has been increased,

collection period is derived as 18 days

In the calculation of Working capital Turnover Ratio there is an adequacy of

fund except the year 2009-2010.

Gross profit ratio is fluctuating during the period of study.


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Inventory Turnover ratio implies that the Inventory has been utilized

efficiently.

RATIO FY09 FY10CURRENT RATIO 1.31 1.07

QUICK RATIO 0.91 0.72

CASH RATIO 0.95 0.76

DEBTORS TURNOVER RATIO 27.12 24.22

NETASSETS TURNOVER RATIO 1.33 1.41

CURRENT ASSETS TURNOVER RATIO 2.89 3.18

INVENTORY TURNOVER RATIO 7.49 6.79

DEBT EQUITY RATIO 0.49 0.50

EQUITY RATIO 0.72 0.84

NET PROFIT RATIO 20.92 20.53


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1.


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Methods or Devices of Financial Analysis:

A Number of methods or devices are used to study the relationship between

different statements. The following methods of analysis are generally used:

i. Comparative statements

ii. Trend analysis

iii. Common size statements

iv. Funds flow analysis

v. Cash flow analysis

vi. Ratio analysis

vii. Cost-volume-profit analysis

In this project the Comparative Statement and Ratio Analysis is used to study

the financial statement of Orissa State Co-operative Bank Ltd.

Comparative statements:

The comparative financial statements are statements of the financial position at

different periods of time. The elements of financial position are shown in a

comparative form so as to give an idea of financial position at two or more periods.

Any statement prepared in a comparative form will be covered in comparative

statements. From practical point of view generally, two financial statements

1. Balance Sheet

2. Income Statement

Comparative balance sheet

The comparative balance sheet analysis is the study of the trend of the same

items, group of items and computed items, group of items and computed items in two

or more balance sheets of the same business enterprise on different dates. The changes

in periodic balance sheet items reflect the conduct of a business. The changes can be


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observed by comparison of the balance sheet at the beginning and at the end of a

period and these changes can help in forming an opinion about the progress of an

enterprise. The comparative balance sheet has two columns for the data of original

balance sheets. A third column is used to show this increase in figures. The fourth

column may be added for giving percentage of increases and decreases.

Guidelines for Interpretation of Comparative Balance Sheet:

While interpreting comparative balance sheet the interpreter is expected to study

the following aspects:

1. Current Financial Position and Liquidity Position

2. Long term Financial Position

3. Profitability of the Concern

1. For studying the Financial Position and short term Financial Position of a

concern, one sees the working capital in both the years. The excess of current

assets over current liabilities will give the figure of working capital. The

increase in working capital means improvement in the current financial

position of the business. An increase in current assets MCDONALDompanied

by the increase in current liabilities of the same amount will not show any

improvement in short term financial position. One should study the increase or

decrease in current assets and current liabilities and this will enable him to

analyse the current financial position.

The second aspect which should be studied in current financial position

is the liquidity position of the concern. If liquid assets like cash in hand, cash

at bank, bills receivable, debtors, etc. show an increase in the second year over

the first year, this will improve the liquidity position of the concern. The

increase in inventory can be on MCDONALDount of MCDONALDumulation

of stocks for want of customers, decrease in demand or inadequate sales

promotion efforts. An increase in inventory may increase working capital of

the business but it will not be good for business.

2. The long term financial position of the concern can be analysed by studying

the changes in fixed assets, long term liabilities and capital. The proper


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financial policy of concern will be to finance fixed assets by the issue of either

long-term securities such as debentures, bonds, loans from financial

institutions or issue of fresh share capital. An increase in fixed assets should

be compared to the increase in long term loans and capital. If the increase in

fixed assets is more than the long term securities then parts of fixed assets

have not only been financed from long term sources. A wise policy will be to

finance fixed assets by raising long term funds.

3. The new aspects to be studied in a comparative balance sheet questions is the

profitability of the concern. The study of increase or decrease in retained

earnings, various resources and surpluses, etc. will enable the interpreter to see

whether the profitability has improved or not. An increase in the balance of

profit and loss MCDONALDount and the other resources created from profits

will mean an increase in profitability to the concern. The decrease in such

MCDONALDounts may mean issue dividend, issue of bonus share or

deterioration in profitability of the concern.

4. After studying various assets and liabilities an opinion should be formed about

the financial position of the concern. One cannot say if short term financial

position is good then long term financial position will also be good or vice

versa. A concluding word about the overall financial position must be given at

the end.

Comparative Income Statement:

The income statement gives the results of the operation of a business. The

comparative income statement gives an idea of the progress of a business over a

period of time. The changes in absolute data in money values and percentages can be

determined to analyse the profitability of the business. Like comparative balance sheet

income statement also has four columns. First two columns give figures of various

items for two years. Third and fourth columns are used to show increase or decrease

in figures in absolute amounts and percentages respectively.

Guidelines for Interpretation of Comparative Income Statement:

The analysis and interpretation of income statement will involve the following steps:


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1. The increase or decrease in sales should be compared with the increase or

decrease in costs of goods sold. An increase in sales will not always mean an

increase in profit. The profitability will improve if increase in sales is more

than increase in costs of goods sold. The amount of gross profit should be

studied in the first step.

2. The second step of analysis should be the operational profits. The operating

expenses such as office and administrative expenses, selling and distribution

expenses should be deducted from gross profit to find out operating profits.

An increase in operating profit will result from the increase in sales position

and control of operating expenses. A decrease in operating profit may be due

to an increase in operating expenses or decrease in sales. The change in

individual expenses should also be studied. Some expenses may increase due

to the expansion of business activities while others may go up due to

managerial inefficiency.

3. The increase or decrease in net profit will give an idea about the overall

profitability of the concern. Non operating expenses such as interest paid,

losses from sales of assets, writing off deferred expenses, payment of tax, etc.

decrease the figure of operating profit. When all non-operating expenses are

deducted from operational profit, we get a figure of net profit. Some non

operating incomes may also be there which will increase net profit. An

increase in net profit will gave us an idea about the progress of the concern.

4. An opinion should be formed about profitability of the concern and it should

be given at the end. It should be mentioned whether the overall profitability of

the concern is good or not.

Focus of Financial Statement Analysis:

Financial statement analysis involves evaluating different aspects of a business

enterprise, which are of great importance to different users such as management,

investors, creditors, bankers, analyst, investment advisers, etc. generally, the

following analyses are made while making Financial Statement Analysis.

1. Liquidity or short term solvency analysis


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2. Profitability analysis

3. Capital structure or gearing analysis

4. Market strength or investor analysis

5. Growth and stability analysis

Application of Financial Analysis:

Following are the application of financial analysis:

1. Assessing Corporate Excellence

2. Judging credit worthiness

3. Forecasting bankruptcy

4. Valuing equity shares

5. Predicting bonds ratings

6. Estimating market risk

Limitations of Financial Statement Analysis:

Financial analysis is a powerful mechanism of determining financial strengths and

weakness of a firm. But, the analysis is based on the information available in the

financial statements. Thus, the financial analysis suffers from serious inherent

limitations of financial statements. The financial analyst has also be careful about the

impact of price level changes, windows dressing of financial statements, changes in

the MCDONALDounting policies of a firm, MCDONALDounting concepts and

conventions, and personal judgement, etc. The readers are advised to relate the

limitations of financial statements as given in the previous chapter and also the

limitations of ratios as a tool of financial analysis as discussed in Ratio Analysis.

Some of the important limitations of financial analysis are, however, summed up as

below:

i. It is only a study of interim reports.

ii. Financial analysis is based upon only monetary information and non-

monetary factors are ignored.

iii. It does not consider changes in price levels.


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iv. As the financial statements are prepared on the basis of a going concern, it

does not give exact position. Thus MCDONALDounting concepts and

conventions cause a serious limitation to financial analysis.

v. Changes in MCDONALDounting procedure by a firm may often make

financial analysis misleading.

vi. Analysis is only a means and not an end in itself. The analyst has to make

interpretation and draw his own conclusions. Different people may

interpret the same analysis in different ways.

Overview of Ratio Analysis

Introduction:Ratio analysis is one of the techniques used to analyse the financial statements. It

is one of the most powerful tools of financial analysis. It is the process of establishing

and interpreting various ratios (quantitative relationship between figures and group of

figures). Through ratio analysis financial statement can analyse more clearly and

decision made from such analysis.

MCDONALDording to MCDONALDountants Handbook by Wixon Kell and

Bedford, a ratio is an expression, of the quantitative relationship between the

numbers.

Nature of Ratio Analysis:

Ratio analysis is a technique of analysis and interpretation of financial statements.

It is the process of establishing and interpreting various ratios for helping in making

certain decision. However, ratio analysis is not an end in itself. It is only a means of

better understanding of financial strength and weaknesses of affirm. Calculation of

mere ratios does not serve any purpose, unless several appropriate ratio are analysed

and interpreted. There are a number of ratios which can be calculated from the

information given in the financial statements, but the analyst select the appropriate

data and calculate only a few appropriate ratios from the same keeping in mind the

objective of analysis. The ratios may be used as a symptom like blood pressure, the

pulse rate or the body temperature and their interpretation depends upon the caliber

and competence of the analyst. The following are the four steps involved in the ratio

analysis:


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i. Selection of relevant data from the financial statements depending upon the

objective of the analysis.

ii. Calculation of appropriate ratios from the above data.

iii. Comparison of the calculated ratios with the ratios of the same firm in the

past, or the ratios developed from projected financial statements or the ratio

of some other firms or the comparison with ratios of the industry to which the

firm belongs.

iv. Interpretation of the ratios.

Use and Significance of Ratio Analysis:

Helpful in decision making.

Helpful in financial forecasting and planning.

Helpful in communication.

Helpful in co-ordination.

Helpful in Control.

Helpful in efficiency appraisal.

Helpful in evaluation of financial position.

Helpful to investors, financial institution, employee.


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HR POLICIES & STRATEGIES


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SOURCES OF RECRUITMENT

MCDONALD offers employment opportunities in a wide range of functions. The

process of recruitment in MCDONALD is fair and transparent, with adequate

opportunities to look for suitable candidates both internally and from outside.

Recruitment is a continuous process in MCDONALD. They regularly hold walk-in

interviews in principal cities. Campus interviews are arranged in leading institutes and

universities. In other cases, applications are invited for specific vacancies announced

through advertisements in leading newspapers or announced in this website. However

some of the sources are as follows:-

TRANSFERS

The employees are transferred from one department to another MCDONALDording to their efficiency and experience in MCDONALD limited

PROMOTIONS

the employees are promoted from one department to another with more

benefits and greater responsibility based on efficiency and experience.

PRESS ADVERTISEMENTS

Advertisements of the vacancy in newspapers and journals are a widely usedsource of recruitment in the company. The main advantage of this method is

that it has a wide reach, so it is used by MCDONALD limited

EDUCATIONAL INSTITUTES

various management institutes, engineering colleges, medical Colleges etc. are

a good source of recruiting well qualified executives, engineers, etc. They

provide facilities for campus interviews and placements. This source is known

as Campus Recruitment and it is also used by the company

LABOUR CONTRACTORS

Manual workers can be recruited through contractors who maintain close

contacts with the sources of such workers. This source is used to recruit labor

for construction jobs. however child labor is not used by the company


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RECRUITMENT

Recruitment in MCDONALD is a very fair and transparent process with adequate

opportunities to look for suitable candidates internally as well as from outside.

Applicants are generally invited on the basis of specific advertisements in newspapers

and websites. A Committee of officers called the Central Recruitment Committee

handles the entire recruitment process comprising screening of applications,

preliminary short-listing, interviews and final selection. Every attempt is made to

make the selection process as objective as possible by incorporating tests of

competence. In some cases, outside consultants are retained. All decisions of the

recruitment committee are recorded in respect of each candidate. Candidates are

informed of their short-listing and selection immediately after the interview or at theearliest thereafter.

The process of Recruitment in MCDONALD Ltd

1. Identify

vacancy

2. Prepare

job

description and person specification

3. Advertising the vacancy

4. Managing the response

5. Short-listing

6. Arrange interviews

TRAINING AND DEVELOPMENT PROGRAMME OF

THE COMPANY


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Our new Performance Management System incorporates a process called Competency

Assessment and Training and Developmental Needs wherein appraisers are

specifically called upon to identify and assess training needs of employees at specific

intervals that do not coincide with Performance Appraisals. This is so that training

needs can be assessed objectively. Training is imparted to take care of an individuals

career development as well as functional and skill enhancement. Competency and

Development training inputs include Skill and general performance enhancement,

communication skills and Career development. Functional training needs are

identified and conducted by functional departments while Corporate HR organizes

competency and developmental inputs.

BENEFITS OF COMPENSATION SYSTEM

Employee welfare receives prime attention at MCDONALD. We have several

schemes for general welfare of employees and their families. These cover education,

healthcare, retirement benefits, loans and financial assistance and recreation facilities.

Education

Education is imparted not only to children of MCDONALD employees but also

more importantly to children from rural areas who do not have MCDONALDess

to any medium of information or education. MCDONALD schools maintain high

standards and are open to other children of the vicinity. Often these schools are

the most preferred centres of learning in the district and adjoining areas. Wherever

possible, MCDONALD provides funds and infrastructure to help set up local

schools, colleges and centres for learning and education.MCDONALD townships

have excellent schools that are often the best in the district. Education at these

schools is subsidized for employees wards. They offer attractive scholarship

allowances for children studying at places away from their parents, merit

scholarships for outstanding children and financial assistance for employees

children to pursue higher professional education.

Health Care


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Liberal medical benefits are made available to employees and their family members

by way of reimbursements towards normal medical treatment, domiciliary treatments

and special sanctions for serious illness. Each of their townships has well-equipped

health care centres with qualified medical staff and facilities, ambulance, referrals and

tie-ups with reputed hospitals for specialised treatment. In addition, there are regular

health checkups, camps and programmes.MCDONALD takes pride in providing

various forms of medical assistance to the families of their employees and also to all

those living in surrounding villages. Each factory has a medical centre with full-

fledged doctors and the latest of basic equipment. Mobile medical services are

provided in the vicinity and regular medical camps are held to eradicate diseases,

offer medical help, treatment and preventive care.

Financial Assistance

Employees are eligible to apply for loans and financial assistance for various purposes

such as purchase of assets, residential premises as well as a scheme that provides for

supply of cement at subsidized rates to those building their own houses.

MCDONALDommodation

At our cement plants and factories, employees are provided furnished and unfurnished

MCDONALDommodation based on their entitlements. At many locations, the

employees are given free electricity, free water supply and free bus facility for nearby

places and schools. These houses are well-maintained and periodically upgraded.

Employee Satisfaction

In addition to periodic internal Employee Satisfaction Surveys, They participate in

Employee Satisfaction and Work Places Surveys conducted by reputed external

agencies and organisations like Hewitt Associates Grow Talent. And from time to

time, MCDONALD has also retained reputed firms like Mercer and Boston

Consulting Group to study our internal work environment and employee policies and

suggest areas of improvement.

They share below salient points of the latest survey of employees:


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People are treated fairly regardless of religion and gender

MCDONALD is a safe place to work

Management is competent in running business

Employees feel good about what we do for society

Proud to tell others I work here

Management thinks positively

The overall findings show significant job satisfaction at all levels as also deep respect

for the company, its performance management system and its overall business

performance.

Recruitment for MCDONALD

The recruitment and selection is the major function of the human resource department

and recruitment process is the first step towards creating the competitive strength and

the recruitment strategicadvantage for the organisations.Recruitment process

involves a systematic procedure from sourcing the candidates to arranging and

conducting the interviews and requires many resources and time. A general

recruitment process is as follows:

Identifying the vacancy:

The recruitment process begins with the human resource department receiving

requisitions forrecruitment from any department of the company. These contain:

Posts to be filled

Number of persons

Duties to be performed

Qualifications required Preparing the job description and person specification.

Locating and developing the sources of required number and type of employees

(Advertising etc).

Short-listing and identifying the prospective employee with required

characteristics.

Arranging the interviews with the selected candidates.

Conducting the interview and decision making
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