McDonalds SM
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Transcript of McDonalds SM
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McDonalds
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Introduction
The corporation was founded by businessman RayKroc in 1955.
McDonald's Corporation is the world's largest chain ofhamburger fast food restaurants, serving around 64million customers daily.
McDonald's is the leading global foodservice retailerwith more than 33,000 local restaurants serving morethan 64 million people in 118 countries each day.
More than 80% of McDonald's restaurants worldwideare owned and operated by independent local men andwomen.
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Mission & Vision
Vision: McDonald's vision is to be the world's best quickservice restaurant experience. Being the best meansproviding outstanding quality, service, cleanliness, andvalue, so that we make every customer in every restaurantsmile."
Mission:
Be the best employer for our people in each communityaround the world
Deliver operational excellence to our customers in each of
our restaurants; and Achieve enduring profitable growth by expanding the brand
and leveraging the strengths of the McDonald's systemthrough innovation and technology.
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Values
McDonald's, worldwide, stands for QSC&V, where "V" stands forvalue and therefore the value proposition assumes specialsignificance.
At McDonald's, costs are kept low by increasing efficiency andcutting wastage at all levels.
Customers, who walk into a McDonald's restaurant, expect to beserved food that is hot and fresh, made from the highest qualityingredients, served within minutes of placing their order and at aprice, which is affordable.
Attention is given to minute details and things are done the rightway.
Continually review and improve menu offerings to make sure thatnot only customers' expectations are met, but also exceed them.
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Industry
Competitors
Rivalryamong
existingFirms
PotentialEntrants
Suppliers
Substitutes
Buyers
Moderate to Strong
Relatively Weak
Very Strong
Weak
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Supplier Power:
Willingness of Supplier
Supplier-seller collaboration
Supplies are mostly commodities
Customers- industry leaders
Barriers to Entry:
Economies of scale
Unattractive market growth
Competitors strong offensive movesCompetitors expertise in marketing
and efficiency
Threat of Substitutes:
Readily available
Attractively priced
Satisfactory in terms of quality
Buyers power
A large number of small operators
High fixed costs
Undifferentiated and replaced
Switching cost low
Consumer-price-sensitive
Produce the product
Purchases in small volumes
Well-informed about sellers
products,prices, and costs
Degree of Rivalry
Several competing companies.
Product and service differentiation inadequacy.
Aggressive in making fresh moves
-Domestic demand is growing slowly
-- Competitors often rely on price cuts to boost volume
-- Low switching costs for consumers
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SWOT Analysis
Strengths Weakness
Strong Brand name, image & reputation
Large market share
Strong global presence
Specialized training for managersknown as hamburger university
Plan to win focuses on 4ps
Strong financial performance& position
Proven production methods & countless
new innovation ( breakfast, caf etc)
Customer focusThe company has favorable access to
distribution networks
Strong MCD performance in the global
market place
Unhealthy food image
High staff turnover including top
management
Customer losses due to fiercecompetition
Legal actions related to health issues
:use of trans fat & beef oil
Uses HCFC22 to make polystyrene
that is contributing to ozone depletion
Lack of product offerings to meetvaried customer tastes and preferences
Many restaurants are outdated
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Opportunities Weakness
Growing health trends among the
customer
Falling global trade barriers in
attractive markets
Globalization , expansion in other
countries
Diversification & Acquisition of other
quick- service restaurants
Growth of fast food industry
Worldwide deregulation
Low Cost menu that will attract the
customers
Expansion of menu to meet healthier
consumer preferences
Freebies & discounts
Health professional& Consumer
activist accuse MCD of contributing of
high cholesterol, heart attacks, diabetes
& obesity
Relationship B/W MCD Corporate &
Its franchisee
Anti- American Sentiments
Global recession & Fluctuating
foreign currencies
Industry to struggle to meet the
customers towards health &
environmental issues
Rivals copy McDonalds innovations
fairly quickly, eliminating first-mover
advantages
The company has the propensity to
induces shifts in consumer tastes away
from the firm's products
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core competency
Able to produce and sell quick and cheap food toa large number of customers.
McDonalds is well-known for its consistency in
the production. With this concept, they have been able to expand
into other countries, and they currently are thelargest global fast-food chain in the world.
Since they already hold this lucrative position,they should continue expansion in an effort todrive out competition.
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Porter generic strategies
Cost Leadership Strategy.
This generic strategy calls for being the low costproducer in an industry for a given level of quality.
A leading cost strategy for McDonalds is the ability to
purchase the land and buildings of its restaurants McDonalds also developed a strong division of labor
for its production processes, tight management controland product development strategy. Creating a strong
top-down style of management is another leading coststrategy for McDonalds
Using fewer in-store managers allows the company tohire lower-wage workers to complete tasks.
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PORTER VALUE CHAIN ANALYSIS OF
McDONALDS
The goal of these activities is to offer the
customer a level of value that exceeds the cost
of the activities, thereby resulting in a profit
margin for McDonald's.
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Inbound
Logist
ics
Organizing the supply
of food and materials to
restaurants through
approved third partylogistics operators.
Production in huge
plants denoted
exclusive to McDonalds
control fooddistribution and
packaging system
Inbound
logistics
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Technological Development
Human Resource Management
Firm Infrastructure
Procurement
Inboun
d
Logistics
Operations
Outbou
nd
Logistics
Service
Relatively Few
Management Layers toReduce Overhead
Effective Training Programs
to Improve Worker
Efficiency and Effectiveness
Timing of Asset
Purchases
Efficient Plant
Scale to Minimize
Manufacturing
CostsSelection of Low
Cost Transport
Carriers
Delivery Schedule
that Reduces
Costs
Products Priced to
Generate Sales
Volume
Small, Highly
Trained Sales
Force
Investments in Technology in order
to Reduce Costs Associated with
Manufacturing Processes
Frequent Evaluation Processes to
Monitor Suppliers Performances
Policy Choice of
Plant Technology
Organizational
Learning
Efficient Order
Sizes
Operations
R&D in field research
needs of end users.
quality development in
collaboration with good
suppliers
Forward integration:
through franchisees with
control over store
presentation, menu items
etc. and enhance
participation in process
improvement
Operations
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Technological Development
Human Resource Management
Firm Infrastructure
Procurement
Outbou
nd
Logistics
Marketing
&Sales
Se
rvice
Selection of Low
Cost Transport
Carriers
Delivery Schedule
that Reduces
Costs
National Scale
Advertising
Products Priced to
Generate Sales
Volume
Small, Highly
Trained Sales
Force
Effective Product
Installations to
Reduce Frequency
and Severity
of Recalls
Frequent Evaluation Processes to
Monitor Suppliers Performances
Efficient Order
Sizes
Interrelationships
with Sister Units
Outbound
Logisti
cs
Is the concern of the
franchisee.
Outbound logistics
are growing as a part
of McDonalds
recycling system
integrating in the
logistics ofdistribution center
Outbound
logistics
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Technological Development
Human Resource Management
Firm Infrastructure
Procurement
Inboun
d
Logisti
cs
Operations
Outbou
nd
Logistics
Marketing
&Sales
Se
rvice
Marketing
&Sales
Long term marketing
objectives are broken
down into shorter term
measurable targets, which
McDonald uses asmilestones.
Country teams are given
autonomy in marketing
mix decision.
Advertising & PR is
outsourced
(Mudra agency
in India)
Marketing
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Technological Development
Human Resource Management
Firm Infrastructure
Procurement
Inboun
d
Logistics
Operations
Outbou
nd
Logistics
Marketing
&Sales
Se
rvice
Service
Services
provided by thecompanies
enrollment
standards
Service
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Technological Development
Human Resource Management
Firm Infrastructure
Procurement
Inboun
d
Logistics
Operations
Outbou
nd
Logistics
Marketing
&Sales
Se
rvice
Procurement
Sought partners with expertise on down trade distribution
Procurement
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Technological Development
Human Resource Management
Firm Infrastructure
Procurement
Inboun
d
Logisti
cs
Operations
Outbou
nd
Logistics
Marketing
&Sale
s
Se
rvice
Technological Development
Technology and development research in quality assurance, and packing
readdressed at lower cost, faster delivery chain system and process control
equipments, recycling system.
R & D
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Technological Development
Human Resource Management
Firm Infrastructure
Procurement
Inboun
d
Logisti
cs
Operations
Outbou
nd
Logistics
Marketing
&Sale
s
Se
rvice
Human Resource Management
HRM specialists in R&D and expertise in food formulation, education to
raise awareness of issues and raise demand. The addressing
environmental issues and CRS.
HRM
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Support
Activities
Technological Development
Human Resource Management
Firm Infrastructure
Inboun
d
Logisti
cs
Operations
Outbou
nd
Logistics
Marketing
&Sales
Se
rvice
Firm Infrastructure
Strong real estate portfolio.International organization more than 50000 employees works in more
than 50 countries,
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BCG Matrix
APMEA
Others
Europe
USA
Relative Position (Market Share)
BusinessGrowthRate
4 High 0 Low 0.2
High
5%
Low
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STAR- APMEA,OTHER COUNTRIES.
The growth rate of this SBUs is 17% for APMEA region and
12% for other countries.
The Relative market share is 2 and 1.7 respectivelyconsidering the revenue earned in year 2010.
CASH COW-USA ,EUROPE.
The growth rate of this SBUs is 2% for USA region and 3%
for Europe.
The Relative market share is 1.79 and 2.5 respectively
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Structure
McDonalds Corporation franchises and operatesMcDonalds restaurants in the global restaurant industry.
All restaurants are operated either by it or by franchisees,including conventional franchisees under franchisearrangements, and foreign affiliated markets anddevelopmental licensees under license agreements.
The Company and its franchisees purchase food, packaging,equipment and other goods from various independentsuppliers.
Independently owned and operated distribution centers,approved by it, distribute products and supplies toMcDonalds restaurants. s
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Key Ratios
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Management Efficency
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Financial condition
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RECOMMENDATIONS
Maintain alignment among the Company, itsfranchisees and suppliers (collectively referred toas the System) has been key to McDonaldssuccess.
locally-relevant restaurant experiences tocustomers
Focus on the plan to win to attract customers &
expansion in other countries Expansion in the market share by more
investments in Asia
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Provide new product & keep innovation.
Minimize customers losses by providing low
cost menu & discounts.
Reinforce the affordability of menu to
consumers
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