McDonald’s

Case Study

About McDonald’sBrief History of McDonald’s

The first McDonalds was built in 1940 by the McDonald brothers (Dick and Mac) . Started off as a hot dog stand in CA [1937] The McDonald brothers realized that hamburgers were their most profitable menu item, and changed their business to serve a limited menu.

About McDonald’sMcDonald’s is World’s Leading Hamburger Company

The motto of the organization ,i.e., Quality, Service, Cleanliness and Value

Supporting social issues and believes in sustainable development

The Head Quarters of The McDonalds Corporation is at Oak brook, Illinois.

Figures Pertaining To McDonald’sExpanded Across 118 countries with over

more than 36,000 restaurants, 2nd Largest Employer in USA Just After Walmart

More than 75% Restaurants Running on Franchisees serving simple, fast and enjoyable food experience over 58 Million of People each day globally

Location

Revenue statistics For McDonald’s For FY 2009Revenue worldwide :- US $ 22.6 Billions.

[Rs.994 Crores]Operating Income :- US $ 6.51 Billions.

[Rs.286 Crores]Net Income :- US $ 4.31 Billions.

[Rs.189Crores]Total Asset value :- US $ 29.2 Billions.

[Rs.1284 Crores]Total Equity :- US $ 13.2 Billions.

[Rs.580Crores] [NASDAQ and Dow Jones.]

Key People’s at McDonald’s Enrique Hernandez, Jr. [Chairman of

McDonald’s Corporation ] Stephen J. Easterbrook[President and Chief

Executive Officer] Mr. Amit. Jatia [JV Partner, McDonald’s

India] (West and South) Mr. Vikram. Bakshi [JV Partner McDonald’s

India] (North and East)

McDonald’s IndiaMcDonald’s in India works on a Joint Venture

agreements between the McDonald corporation and the Franchisee.

Connaught Plaza Restaurants Pvt. Ltd is the franchisee partner for North and East region.

Hard Castle Restaurants Pvt. Ltd is the franchisee partner for West and South region.

Products

Target Segments And Positioning

Types of Restaurants "McDrive" locations near highway offer no counter service or

seating

McCafé is a café-style accompaniment to McDonald's restaurants and is a concept created by McDonald's Australia (also known, and marketed, as "Macca's" in Australia), starting with Melbourne in 1993.At the end of 2003 there were over 600 McCafés worldwide.

Create Your Taste restaurants:Using the dedicated Create Your Taste (CYT) kiosks a person can choose all ingredients including type of bun and meat along with additional extras. The CYT food is presented on wooden boards, fries in wire baskets and Salads in china bowls and metal cutlery. These services are a slightly higher price due to the gourmet ingredients and cost of labor.

Sustainability McDonald's is putting people, processes and

practices into place to make sustainability the new normal – for business, society and the world at large.

Sustainable Packaging of Food Products.Animal Health And WelfareCare about changing Global ClimateSustainable Dependency on Beef

Sustainability & Charity

McDonald’s Core Brand ValuesSimple, easy and enjoyable food experience

for its customers.Focus on high quality food, faster home

delivery service while maintaining hygienic food conditions.

 

What Happened to Those Values Over Years? The company’s aggressive deployment policy

during 1990s and early 2000s of opening around 2000 new restaurants, lost focus and direction resulting in untrained employees, dirty condition of restaurants and irresponsive customer service. This led to sharp decline in brand equity and huge setback to company’s brand image .

Hence, company Could not keep pace with its expansion and forgot its core values.

What Happened Afterwards?

The company analyzed all their faults and implemented a strategic effort called “Plan To Win”.

The new framework refocuses on offering a better higher quality consumer experience rather than a quick and cheap fast-food option.

Refurbished restaurants , colorful Packaging and aware customers about McDonald’s health consciousness by adding green vegetables and salads in meals.

Better implementation of 5 Ps- People, Products, Promotion, Price and Place and adapted to different environment and cultures to reflect different tastes in different regions.

The famous “Supersize “product placed in Guineas Book of World Record – sold like hot cakes.

As a result stock prize increased to 170% and sales continued to increase and topped $23.5 billion in 2008. Hence, McDonald’s did very well in recession through the strategic planning to win.

Probable Risks that Company Face Going Forward

McDonald’s expanding strategy should be a balance between quantity as well as maintaining proper quality of products.

There may be huge financial loss if the plans and strategy doesn’t work properly due to ineffective management or unfamiliar terrain.

McDonald’s plan of expansion requires huge investments and training of employees as well as maintaining quality foods and on-time delivery.

Company have to tackle against unscrupulous people who are illegally selling fake products under McDonald’s brand.

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RECAP

RECAP

Summary McDonald’s- A brief Introduction McDonald’s Products Target Segments And Positioning Sustainability Core Brand Values, Was It Remain Consistent

Over Years Marketing Strategy After The Setback–Leads

to increased Brand Positioning & Profit to the Company

Future Risks

DISCLAIMER

This Slide Is Based On The Knowledge and Experience Gained By Mr. Prashant Kumar , Jadavpur University, during An Internship on “Marketing Management” Under Prof. Sameer Mathur, IIM-L