Mcdonald's
Mcdonald's
McDonald’s is the world largest chain of fats food restaurants with more than 30000 local
restaurant serving 52 million customers in more than 100 countries each day.
breakfast items, soft drinks, milkshakes and desserts. More recently, it has begun to offer
The corporation revenues come from the rent, royalties and fees paid by the franchisees, as
well as sales in company-operated restaurants. McDonald’s revenues grew 27% over the three
years ending in 2007 to $22.8 billion, and 9% growth in operating income to $ 3.9 billion.
History:
The business began in 1940 with a restaurant opened by brothers Dick and Mac Donald in
San Bernardino, California. Their introduction of the “speedee service system” in 1948
established the principles of the modern fast-food restaurant. The original mascot of
McDonald’s was man with a chef’s hat on top of hamburger shaped head whose name was
The present corporation dates its founding to the opening of a franchised restaurant by Ray
Kroc,( in Des Plaines, Illinois on April 15,1955) who took over the small scale McDonald’s
corporation franchise in 1954 and built it into the most successfully fast food operation in the
world. Kroc later purchased the McDonald brother’s equity in the company and led its
worldwide expansion and the company became listed on the public stock markets in 1965. (a
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hundred shares of stock costing $ 2.250 dollars that day would have multiplied into 74,360
shares today, worth approximately $ 3.3 million on December 31,2006). In 1985 McDonald’s
With the expansion of McDonald’s into many international markets, the company has become
There were three factors that were chosen to outline the success of McDonald’s corporation.
The first factor is globalization, which is define as closer contact between different parts of
the world, with increasing possibilities of personal exchange, mutual understanding and
friendship between "world citizens". Diversity, the difference among people and cultures, is
the second factor. The final factor is ethics, which can be defined as a set of principles of right
conduct. This paper explains how the McDonald Corporations uses the factors to conduct
In today’s society, corporations and enterprises are expanding their businesses in the global
markets. Globalization is necessary for success and survival in the worldwide market;
however, global competition is not easy. By the end of the twentieth century, the list of
Fortune 500 companies was no longer only United States corporations due to an increase in
international companies joining the list. As a leading food service retailer, McDonald’s joins
those corporations with restaurants in 119 countries. Important strategic decisions are a key
factor to their success with consideration for both internal and external factors. When
considering the foreign market, companies need to consider there are risks. There must be
local marketing to appeal to the local consumers and also to build relationships and trust.
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Therefore, the strategic planning for marketing has to be effective. McDonald’s caters its
menu in other countries to the cultures of the regions. For example, in India, the non-
vegetarian menu includes chicken and fish items only. Beef is not on the menu in India
because are considered sacred. Global marketing decisions are no different than those made
domestically but the decisions are unique to each country. Furthermore, operating on a global
environments. This is a good marketing strategy for recruiting employees. McDonald’s has a
not just a moral and ethical issue, but also a business issue. Due to the global expanse of
McDonald’s business, diversity has become an integral part of the internal company culture.
McDonald’s has over 30,000 restaurants around the world, which means franchise
owner/operators, employees, and customers represent just about every culture, religion or
ethnicity on earth. In addition, McDonald’s promotes the use of local suppliers and based on
their policies of diversity, expects and retains suppliers that have a similar diversity culture.
Knowing and understanding the local customs and traditions of the communities where
McDonald’s has established businesses, integrating people from these communities into the
company, and adapting locally to the tastes and cuisines of the community, has made
In the United States alone, McDonald’s has won numerous awards and received national
include; PUSH-Excel Corporate Partner Award, Corporate Achievement and Image Award,
Nullities Corporate Award, Corporate Vision Award, and the Circle of Inclusion Award.
These awards and recognitions are not the result of a surface attempt to appease the critics.
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They are the result of McDonald’s embracing and integrating diversity into their company
McDonald’s realizes that having diversity as an asset greatly enhances the profitability of the
negative, the company’s morale declines and if not addressed, leads to the deterioration of the
company. This deterioration directly impacts the company’s income and the community’s
their policies and programs. McDonald’s proven success with leveraging the advantages of
McDonald’s success is built on the foundation of personal and professional integrity. From
the beginning, McDonald’s has based its reputation on trust and dependability, and their
commitment to the community made them a household name. Founder Ray Kroc, believed in
giving something back to the community in order to make the world a better place.
Throughout the 1970’s, McDonald’s became involved with a lot of charity work. In 1974
established a charity called Ronald McDonald House. The purpose of this program was to
provide temporary housing for the families of seriously ill children receiving treatment at
nearby hospitals. Since the 70s, more than 10 million families around the world benefited
environmental protection. Restaurants around the world have innovative programs for
this corporation have been recognized by organizations such as the Audubon Society,
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Conservation International, Keep America Beautiful, the National Recycling Coalition, and
McDonald’s ensures that employees and job applicants are selected, trained, and promoted
without discrimination to race, gender, sexual orientation, age or disability. The company
promotes their employees based on their relevant skill, talents, and performance. In support of
this McDonald's promotes and sustains a working environment, which is free from unlawful
where everyone's opinion is valued and respected. The Human Resources department
monitors the effectiveness of the discrimination policies at regular intervals and takes
corrective action as necessary to ensure that they being complied with. Employees who feel
that they have been treated unfairly are encouraged to use the remedies outlined in the
globalization and diversity are instrumental to the overall success of the company.
(http://www.freeonlineresearchpapers.com/external-internal-factors-affecting-mcdonalds)
SWOT analysis:
1.Strengths: -McDonalds has built up huge brand equity. It is the No. 1 fast-food
company by sales, with more than 31,000 restaurants serving burgers and fries in
almost 120 countries. Sales, 2007 (11, 4009 million), 5.6% sales growth.
-Good innovation and product development. It continually innovates to retain customers in the
business.
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- The McDonalds brand offers consumers choice, reasonable value and great service.
- Large amounts of investment have gone into supporting its franchise network, 75% of stores
are franchises.
2.Weaknesses: - Core product line out of line with the trend towards healthier
lifestyles for adults and children. Product line heavily focused towards hot food and
burgers.
-Seasonal
-Respond to social changes - by innovation within healthier lifestyle foods. Its move into
hot baguettes and healthier snacks (fruit) has supported its new positioning.
-Use of CRM, database marketing to more accurately market to its consumer target
groups. It could identify likely customers (based on modelling and profiles of shoppers)
-Strengthen its value proposition and offering, to encourage customers who visit coffee
- The new “formats”, McCafe, having Wi-Fi internet links should help in attracting
segments. Also installing children’s play-parks and its focus on educating consumers
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4.Threats: - Social changes - Government, consumer groups encouraging balanced
-Competitive pressures on the high street as new entrants offering value and greater
product ranges and healthier lifestyles products. E.g. subway, supermarkets, M&S…
- Recession or down turn in economy may affect the retailer sales, as household
Performance objectives:
1. Speed: the target time taken by McDonalds for serving customers is 90 seconds
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4. Flexibility: - McDonald’s restaurants in the world can satisfy every kind of
5. Cost: - an appropriate price for the level of the quality of the product.
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Order is
Placed
Of raw materials
Storage of raw
Materials
Prior
Preparation of
The varieties
Taking of order
Cash payment
Customers wait
Packaging
Done
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Supply network:
Second-tier first-tier first-tier second-
Suppliers Suppliers customers tier
Customers
Ink suppliers
Packaging
suppliers
Paper and
Cardboard
Supplier
Vegetables; fruits;
McDonalds restaurant franchisee consumers
Farmers cheese… suppliers
Water suppliers
Coke suppliers
Sugar suppliers
nestle…
expands its operations into industries that produce inputs to the McDonald’s products.
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4 V’s profile McDonalds VS Freezer Meals Company:
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McDonalds:
- Variety: only sandwiches but by different ingredients (with beef; egg; chicken;
- Variety: medium-low; customers (supermarkets) choose only few different kind of meal.
-visibility: very low (the personnel never meet the end consumers).
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Type of business process of McDonalds:
- It is a batch process because there are a moderate volume, moderate variety, less flexible
Capabilities:
- McDonalds doesn’t have the same capacity of production all over the year; McDonalds is
Conclusion:
-Even if McDonalds is the largest fast food in the world, it faces some problems like the bad
image that consumers have on their foods, especially when there are a new competitors who
- I think that this a huge problem for McDonalds because it will affect clearly it sells.
-McDonalds should advertise more and more their products and show the best quality to the
customers, and preserve good relations with Medias which can affect badly the image of
McDonalds if they start by writing or doing movies when they show bad things about
McDonalds.
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Outlines
- Introduction
- History of McDonalds
- SWOT analysis
- Performance objectives
- Supply network
- Capability
- Conclusion
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BM204 – Managing the Business
Assignment 1of 1
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References
- en.wikipedia.org/wiki/McDonald's
-http://www.mcdonalds.com/corp.html
- http://www.mcdonalds.com/corp/about.html
- http://www.mcdonalds.com/corp/about/mcd_history_pg1.html
- http://en.wikipedia.org/wiki/History_of_McDonald%27s
- Operations Management (4th edition) by Nigel Slack; Stuart
Chambers and Robert Johnston.
-http://www.mcdonalds.ca/en/aboutus/suppliers.aspx
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