Mc Donald Analysis

Analysis of 500 biggest company in the World (Fortune)

Tatit Kurniasih

20125216013

McDonalds
consist of :
1. McDonalds Restaurant 2. McCafe 3. McDrive 4. McDonalds Drive Trough 5. McExpress 6. McStops

McDONALDs History

7. Hamburger University (HU)

The world's largest chain of Hamburger Fast Food serving around 68 million customers daily in 119 countries. Headquartered in the United States, the company began in 1940 as a barbecue restaurant operated by Richard and Maurice McDonald and in 1948 they reorganized their business as a hamburger stand. Ray Kroc joined the company as a franchise agent in 1955. He subsequently purchased the chain from the McDonald brothers and oversaw its worldwide growth.

From the start, we've been committed to doing the right thing. And we've got the policies, programs and practices in place that allow us to use our size and scope to help make a difference. Because what's good for us, is good for us all. - Ray Kroc -

1. McDonalds Restaurant
McDonald Rank : 107 of 500 Largest Companies in USA, 2012 *

The McDonalds restaurants are operated by MacDonalds Corp, franchisees, or affiliates under joint venture agreements. At March 31, 2010 there were 21,306 franchised restaurants (generating 60% of 2009 system wide sales), 10,091 company operated restaurants (27%) and 6,111 affiliated restaurants (13%).
*McDonalds is listed as one of 500 Largest Companies based on Fortune Magazine 2012. This company become the 107 largest corporation in USA. McDonalds which is leading by James A. Skinner revenue increase about 12,2% in 2012 become US$ 27,006 million.

2. McCafe

McCaf is a coffee-house-style food and drink chain, owned by McDonalds, Created and launched in Melbourne, Australia in 1993 by McDonald's Licensee Ann Brown. Reports indicated that McCaf outlets generated 15% more revenue than a regular McDonalds and by 2003, it was the largest coffee shop brand in Australia and New Zealand.

3. McDrive

In some countries, "McDrive" locations near or in the side of highways.

McDrive offer no counter service or seating. It firstly open in Fallowfield, Manchester, Britain in 1986.

4. McDonalds Drive Trough

Most standalone McDonald's restaurants offer both counter stand or drive through, it often has separate stations for placing, paying for, and picking up orders, though the latter two steps are frequently combined it was first introduced in Arizona in 1975, following the lead of other fast-food chains.

5. McExpress

McExpress have limited seating and/or menu or may be located in a Shopping Mall and Wal-Mart. It usually provide a take-awal meals for a fast moving customers.

6. McStop

McStop is McDonalds counter that targeted at truckers and travelers which may have services found at some locations are connected to gas station and convenience store

7. Hamburger University (HU)

Hamburger University is a 130,000-squarefoot (12,000 m2) training facility of McDonalds Corporation, located in 2715 Jorie Boulevard, Oak Brook, IL 60523. This corporate university was designed to instruct personnel employed by McDonalds in the various aspects of restaurant management. More than 80,000 restaurant managers, mid-managers and owner/operators have graduated from this facility and more than 275,000 McDonalds franchisees, employees and suppliers have graduated from Hamburger University worldwide.

Hamburger University

The facility comprises 13 teaching rooms, a 300 seat auditorium, 12 interactive education team rooms, and 3 kitchen labs. Hamburger University interpreters can provide simultaneous interpretation, and the faculty has the ability to teach in 28 different languages. Restaurant employees receive approximately 32 hours of training in their first month with McDonald's and more than 5,000 students attend Hamburger University each year. Today, there are 22 regional training teams, and seven total Hamburger University campuses around the world: Oak Brook, Sydney, Munich, London, Tokyo, Brazil & Shanghai. On March 30, 2010, McDonald's opened a Hamburger University location in Shanghai, China.
Sources : http://en.wikipedia.org/wiki/Hamburger_University

DON THOMPSON
As President and Chief Executive Officer of McDonalds Corporation, Don Thompson leads McDonalds as the worlds largest foodservice company. During his 22 years at McDonalds, Thompson has helped drive business results and global strategic innovation across the organization.
Sources : http://www.aboutmcdonalds.com/mcd/our_company/leadership.html

TIM FENTON
As Chief Operating Officer, Tim Fenton oversees business operations for more than 34,000 McDonalds restaurants in 119 countries. He also has responsibility for Global Supply Chain, Franchising and Development. Previously, Fenton served for seven years as President, McDonalds Asia, Pacific, Middle East and Africa, where he was accountable for the 38 countries and more than 8,800 McDonalds restaurants in this region.

Sources : http://www.aboutmcdonalds.com/mcd/our_company/leadership.html

Contents
McDonalds Analysis

1 2 3 4 5 6

INTRODUCTION (VISION, MISSION, VALUES, GOALS) PLAN TO WIN SUSTAINABILITY PROGGRAMME STRATEGY (COMMUNICATION, MARKETING, MANAGEMENT, FINANCE) ANALYSIS (SWOT, PEST) CONCLUSION

INTRODUCTION :
Vision & Mission

McDonald's vision is to be the world's best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile.
McDonald's brand mission is to be our customers' favorite place and way to eat. Our worldwide operations are aligned around a global strategy called the Plan to Win, which center on an exceptional customer experience People, Products, Place, Price and Promotion. We are committed to continuously improving our operations and enhancing our customers' experience.

INTRODUCTION
Values

McDonalds Values We place the customer experience at the core of all we do. We are committed to our people. We believe in the McDonalds System. We operate our business ethically. We give back to our communities. We grow our business profitably. We strive continually to improve.

INTRODUCTION
Goals

The goals of McDonald's are : To serve good food in a friendly and fun environment To be a socially responsible company To provide good returns to its shareholders To provide its customers with food of a high standard, quick service and value for money

INTRODUCTION :
Culture

Think Globally, Act Locally McDonalds has introduced menu choices tailored to local taste and preferences using traditional regional and national products. This has meant new opportunities for local suppliers and there are some great examples of products that are specific to certain markets.

ANALYSIS :
Current Business Performance

Global comparable sales increased 7.3%, and benefited from one additional day due to leap year Consolidated revenues increased 7% (8% in constant currencies) Consolidated operating income increased 8% (9% in constant currencies) Diluted earnings per share of $1.23, up 7% (8% in constant currencies) Returned $1.5 billion to shareholders through share repurchases and dividends

PLAN TO WIN
Consist of : People, Products, Place, Price and Promotion

McDonalds customer-focused Plan to Win provides a common framework for our global business yet allows for local adaptation. we have enhanced the restaurant experience for customers worldwide and grown comparable sales and customer visits in each of the last eight years. This Plan, combined with financial discipline, has delivered strong results for our shareholders.

PLAN TO WIN :
PEOPLE

McDonalds and their independent franchisees employ more than 1.6 million people worldwide. People are the face of their brand and differentiate them from the competition. McDonalds aims to deliver consistent, locallyrelevant restaurant experiences to customers and be an integral part of the communities we serve. So, they have to facilitates their people ability to identify, implement and scale innovative ideas that meet customers changing needs and preferences.

PLAN TO WIN :
PRODUCT

PLAN TO WIN :
PLACE - Internationalization

Setting Up Year McDonalds in different countries

Year
1955 1967 1971 1972 1973 1974 1975 1976 1979 1981 1982 Canada Japan, Australia, Germany France Sweden Britain Hong Kong New Zealand Brazil, Singapore The Philippines Malaysia

Place
United States

Year
1984 1985 1986 1988 1990 1991 1992 1993 1994 1995 1996 Taiwan

Place
Thailand, Mexico Turkey South Korea China (SAR, Shenzen), Russia Indonesia China (Beijing), Poland Israel Saudi Arabia South Africa Croatia

PLAN TO WIN :
PRICE - McDonaldization

Price of McDonald's is different in every country. It is depend on the price of raw material in each market. Since BigMac burger is sold everywhere, it become emblematic of globalization referred to as the McDonaldization of society. The Economist newspaper uses the Big Mac Index : the comparison of a Big Macs cost in various world currencies can be used to informally judge these currencies' purchasing power parity. Norway has the most expensive Big Mac in the world as of July 2011, while the country with the least expensive Big Mac is India

PRODUCT & PROMOTION :

PROMOTION

Press Media : Brochure/Coupon Newspaper Magazines Electronic Media : Television Radio Website Reservation & Delivery Media : Phone Website

Benefit : Playspot Internet Access Toys Meal Animated Depictions Loving it campaign Endorsed by popular celebrity

PRODUCT & PROMOTION :

PROMOTION

ANALYSIS
GOAL & STRATEGY ANALYSIS

Goal Achievement Analysis

Goal To serve good food in a friendly and fun environment. To be a socially responsible company. To provide good returns to its shareholders. Achieved/ not Yes Yes Reason/Proof By setting a playground and giving several facilities. By doing Sustainability program and environment Responsibility. Total Shareholder return 34,7%, Earnings per share 11%.

Yes

To provide its customers with food of a high standard, quick service and value for money.

Yes

By launching a extra value meal and extra value menu.

SUSTAINABILITY PROGGRAME
McDonalds always strive to be better tomorrow than we are today. This, more than anything, speaks to who McDonald's is as a company. The overarching goal of our sustainability efforts is focused on continuous improvement through our five focus areas:
Launched the Nutrition Information Initiative that provides easy-tounderstand and globally relevant bar chart icons to illustrate the amount of calories, fat, sodium, carbohydrates and protein in their core products

Doing More With Less "Less is more" when it comes to the environment less energy, fewer emissions, and less waste. McDonalds aim to use less and spend less through three areas of activity: Sustainable Packaging and Waste Management, Energy Conservation, Green Restaurant Design.

McDonalds committed to using their scope, people and profits to create lasting impact on the communities in which we live and work. Through our support of Ronald McDonalds House Charities involvement by our owner/operators in their local communities; and disaster relief.

We envision a supply chain that profitably yields high-quality, safe products without supply interruption while leveraging our leadership position to create a net benefit by improving ethical, environmental and economic outcomes.

McDonalds develop and retain a diverse, engaged and talented workforce. Thats why they focus on three priority areas: Respect & Inclusion, Employee Value Proposition (EVP), Talent Management.

Environmental Responsibility
Save Energy Packaging Anti-littering Recycling Source & Waste reduction Greening the restaurant Logistic Communication Power-saving Re-use Composting

STRATEGY
McDonalds Strategy consist of :

McDonalds success is built on a foundation of personal and professional integrity. We earn that trust everyday by serving safe food, respecting our customers and employees and delivering outstanding Quality, Service, Cleanliness and Value (QSC&V). We build on this trust by being ethical, truthful and dependable.

Communication Strategy

McDonalds websites Third-party websites Mobile devices Packaging

Brochures Trayliners Toll-free phone lines Voice-activated information

Marketing Strategy

Meal Bundles Favorites Under 400 Dollar Menu Extra Value Menu Extra Value Meals Happy Meals Mighty Kids Meals

MARKETING Analysis

McDonald's has for decades maintained an extensive advertising campaign. In addition to the usual media (television, radio, and newspaper), the company makes significant use of billboards and signage Sponsors sporting events ranging from Little League to the Olympic Games and makes coolers of orange drink with its logo available for local events of all kinds.

FINANCE Analysis Income Statement

ANALYSIS : SWOT Analysis

STRENGTH 1. Being a market leader in both the domestic and international markets. 2. Get benefit from cost reduction through economies of scale because of its enormous size and its huge global presence allows it to diversify risk involved with the economic performance of specific countries. 3. It well placed to expand and take advantage of longterm economic growth. 4. It has 7 hamburger University and a strong real estate portfolio. 5. It has several kinds of outlet that located in areas that are highly known for visibility, traffic volume and ease of access. 6. It has exceptional brand recognition that creates significant opportunities for the company.

WEAKNESESS 1. It has to deal with the prospect of looming market saturation. 2. Rather difficult to add new outlets. 3. Facing an increasing price competition driven by too many competitors. 4. It limiting the negative effect of the intense price competition that was traditionally taking place among the industry leaders. 5. Lack of product innovation

OPPORTUNITIES 1. Increase profitability by doing expansion of McDonalds. 2. Able to penetrate in many countries especially in Europe, Asia and Latin America. 3. Increase profitability the company by refurbish and change the image of current restaurants. 4. Changing trends in eating habits toward more health eating. 5. Doing innovation by producing a new premium salads and Fruit n Yogurt Parfaits.

THREATS 1. Changes in the global economy. 2. International expansion has left it extremely vulnerable to other countries. 3. Economic slowdown and foreign currency fluctuation companies. 4. The Fast food industry is becoming competitive sector. 5. It often receives bad press because of health issues.

ANALYSIS :

Pestle is an analysis of political, economic, social, and environmental factors (the external PESTLE Analysis technology, macro environment in which a business operates).

A. Political Factors The international operations of McDonalds are highly influenced by the individual state policies enforced by each government. The company is controlled by the individual policies and regulations of operations. Specific markets focus on different areas of concern such as that of health, worker protection, and environment. B. Economic Factors Branches and franchises of fast food chains like McDonalds has the tendency to experience hardship in instances where the economy of the respective states is hit by inflation and changes in the exchange rates.

C. Socio-Cultural Factors McDonalds has launched a sensibly valued set of food that tenders a reliable level of quality for the respective market where it operates. They establish a good system in determining the needs of the market because they use concepts of consumer behavior, personality and purchasing power. D. Technology Factors Elements like the inventory system and the management of the value chain of the company allows for easy payments for their suppliers and other vendors which the individual stores in respective markets deal.
E. Environmental Factor McDonalds is committed to protecting the environment for future generations, and that it believes that business leaders must also be environmental leaders.

AWARD & RECOGNITION

BRANDS & SUSTAINABILITY

BRANDS : Fast Company : 2011 Most Innovative Food Companies BrandZ : 2012 #4 Most Valuable Global Brand Forbes : 2012 #7 World's Most Powerful Brand Interbrand :2012 #7 Best Global Brand SUSTAINABILITY : Corporate Responsibility Magazine : 2010 Top 100 Best Corporate Citizens Dow Jones Sustainability Index : McDonalds has been a member of the Dow Jones Sustainability Index since 2005 Newsweek : 2010 Greenest Companies in America

AWARD & RECOGNITION

LEADERSHIPS
Fortune 2012 #11 Most Admired Company in the World Ranked #2 among all companies for Management Quality Ranked #2 among all companies for Global Competitiveness Ranked #1 among all companies for Use of Corporate Assets Ranked #4 among all companies for Best Long-Term Investment Ranked #2 among all companies for Financial Soundness Ranked #4 among all companies for People Management McDonalds also ranked #1 in the Food Services category Forbes 2010 Most Admired Companies Barron's 2012 #3 Most Respected Company 2012 Jim Skinner Named One of Worlds 30 Best CEOs Black Enterprise 2012 Don Thompson Named One of Most Powerful CEOs BusinessWeek 2010 20 Best Companies for Leadership 2010 Jim Skinner Named One of 10 Most Innovative People

History in CHINA
First Mc Donald that established in CHINA

The first McDonald's () in China was established in Shenzhen in 1990. By the first quarter of 2002, there were 460 McDonald's around China. The figure reached 600 at the end of 2004. For 2008, China represents one third of all capital expenditures in the Asia-Pacific, Middle East and Africa region, where the fast-food giant is in 37 markets. China becomes the No 1 growth market for McDonald's, with 960 restaurants and over 60,000 employees.
Sources : http://www.chinadaily.com.cn/business/2008-09/08/content_7007412.htm

Fast Food Industry in CHINA

Brief Decription

Chinese fast food market is divided into such two major categories as Western and Chinese fast food. In recent ten years, with the quickening pace of social life, China's fast food industry has maintained annual growth rate of 10%-20%. In 2010, the market scale of China's fast food industry exceeded CNY 260 billion. The major Western fast food brands in Chinese market are McDonald's, KFC, Burger King, etc. The major Chinese fast food brands are Kungfu, Yonghe King, Da Niang Dumpling, etc. KFC and McDonald's, the two fast-food giants, are always leaving Chinese fast food enterprises far behind
Sources : http://www.researchandmarkets.com/reports/1511788/research_report_on_china_fast_food_industry

Fact about Hamburger University in Shanghai

It is harder than getting into Harvard University

Looks like getting into Harvard is not the ultimate task anymore, Chinas Hamburger University is the new top target for professional managers Only 8 out of a field of 1,000 applicants got the chance to be be selected as McDonalds management trainee and attend the university. Thats really harder than getting into Harvard. McDonalds has 1,300 stores in China and in order to keep all stores running full steam ahead, the fast-food giant needs more capable managers. So, McDonalds last year opened a Hamburger University training center on the outskirts of Shanghai, and successfully trained 1,000 of the nearly 70,000 McDonalds employees in mainland China.

CONCLUSION
McDonald's is the leading global foodservice retailer with more than 34,000 local restaurants serving nearly 69 million people in 119 countries each day. They are determined to continuously improve their social and environmental performance. By doing continuous improvement, growth opportunity, commitment to doing the right thing for our customers, our communities and the planet. McDonalds is working hard, together with their suppliers and independent restaurant franchisees, to strive toward a sustainable future for their company and the communities in which we operate.

Thats all about McDonalds, Thank You