WELCOME

GROUP MEMBERS

TALHA RIAZ MINHAS(LEADER)

L1F09BBAM0224

M. FAROOQ IJAZ RAJPOOT L1F09BBAM2235

AHMAD ABDUL RAUF L1F09BBAM2204

GHULAM RASOOL L1F09BBAM0210

SYED HAMID SHAH L1F09BBAM213

WASEEM MALIK L1F09BBAM2225

A brief history of McDonald's

• McDonald's is a restaurant that everybody knows. The first McDonald's was built in 1940 by the McDonald brothers (Dick and Mac), who opened a drive-in restaurant that specialized in hamburgers and milkshakes.

The McDonald brothers (Dick right and Mac center) discussing plans with an executive

• They later met Ray Kroc, who bought out their hamburger business and renamed the franchise McDonald's System Incorporated.

• In 1954, Ray Kroc became the first franchisee appointed by Mac and Dick McDonald in San Bernardino, California. McDonald's franchises grew swiftly: by the end of the 1960s, there were more than 1,000 across the U.S. The first international franchise opened in 1967 in British Columbia

• In 1957, Quality, Service, Cleanliness and Value (Q.S.C. & V.) became the company motto.

RAY KROC

• In 1963, Ronald McDonald made his debut as a way to attract more children and families.

• In 1970, McDonald's created more characters; the Ham burglar, Grimace.

INTRODUCTION

• This wonderful phrase echoes around the world 50 millions times a day, in 30,000 locations, in multitude of languages, in more than 120 countries around the globe.

• And this simple thought sums up the reason McDonald's has become the best known and most popular quick service restaurant around the world, quite a tribute to Ray Kroc, who founded this company nearly 50 years ago with the simple vision expressed by his phrase 'Take good care of those who work for you, and you will float to greatness on their achievements‘.

We provide our customers with the quality of our great tasting food; our fast, friendly service; our clean restaurants and facilities; the value of our food and the McDonald's experience.

• McDonald's restaurant still in operation• Key people James A. Skinner (Chairman) & (CEO).

• Revenue US$ 22.6 billion (▲ FY 2008)

• Operating income US$ 6.51 billion (▲ FY 2008)

• Net income US$ 4.31 billion (▲ FY 2008)

• Total assets US$ 29.2 billion (▲ Q2 2009)

• Total equity US$ 13.2 billion (▲ Q2 2009)

• Employee s 400,000 (2008)

McDonalds first opened a store in Pakistan in September 1998, in Lahore. Since then they have opened seventeen new stores through Pakistan. Today millions of Pakistanis place their trust in McDonald's everyday to provide them with food of a very high standard as well as good service. In the past five years, the response to McDonalds coming to Pakistan has been overwhelming.

McDonald’s Pakistan

Lakson Group Companies Today has taken over McDonalds Corporation, USA and a local partner

making it a 100% owned and operated Pakistani company. McDonalds located in Pakistan are currently employing about 1,000 Pakistanis and each store is managed by Pakistani managers. They have also contributed in other ways than food service. McDonalds has investment of over Rs 300 crore in the country and payment of taxes and duties amounting to more than Rs 100 crore. Since McDonalds is doing so well in Pakistan they will continue to grow and add more stores in more cities in the future.

Islamabad: • A lush green park location in the beautiful F-9 Sector in Islamabad has

been designed and developed and is maintained by McDonald’s. Covering an area of about 5 acres, the park was inaugurated in residents of the capital city, who visit it regularly for jogging and sightseeing, while kids have a great time on the swings.

Lahore: • McDonald’s has developed and maintain Defence Recreational Park in

DHA, Lahore, making it one of the city’s most popular and attractively landscaped parks.

• Karachi: McDonald’s, along with Defence Housing Authority, has adopted the park around

Corniche, Seaview. Its maintenance and beautification is done by McDonald’s as a social responsibility and community service. A beautiful additional to the Clifton beach, it has become a recreational facility and an option for people who don’t want to go out on the sand.

• Ronald McDonald Field Programs The world’s most popular character, Ronald McDonald, frequently visits the

paediatrics department of local hospitals to entertain sick children and distribute gift among them. His visits to various schools and orphanages are always eagerly awaited by children.

• McSaviors Public Awareness Program• To make people realize that the world’s natural resources are fast diminishing and

something must be done about it, McDonald’s has created a public awareness program called ‘McSaviors’. Launched as a special initiative on the part of McDonald’s to protect the environment, ‘McSaviors’ involves children as they are going to be in charge of the future.

• ‘McSaviors’ children are empowered to penalize adults found wasting water and electricity. The minimum penalty amount is Rs. 10. McDonald’s will use the penalty money to promote measures that will prevent further wastage, such as replacing regular bulbs with energy savers, repairing leaking water supply lines, etc. The program has been launched in association with the express news.

McDONALD’s OTHER ACTIVITIES • McDONALD’s CELEBRATES TEACHERS DAY

McDONALD’s celebrates teacher’s day.

RAMADAN OFFERSMcDONALD’s offers his costumers with great deals in ramadan.

OCCASIONAL ACTIVITIESMcDONALD’s celebrates eid day with his costumers like his family.

GOALS AND OBJECTIVES

• McDonald’s vision is to be the world’s best quick service restaurants experience.• McDonalds is committed to maintaining and developing the best food products in

the quick service restaurant market.• In order to deliver this, the company has made a number of commitments to food

safety and nutrition.• Lead the Quick Service Restaurant market by a program of site development and

profitable restaurant openings, and by attracting new customers. Increasing sales through promotions will enable them to continue their program of expansion.

• McDonalds have an objective to continual enhance and improve their menu. This will better satisfy their customers and give customers more reason to visit. Many ideas for new items on the menu come from the franchisees responding to customer demand. Consumer tastes change over time and McDonalds has to respond to these changes.

• MISSION STATEMENT "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."

• CORE COMPETENCY AND SUSTAINABLE COMPETITIVE ADVANTAGE

McDonald’s core competency is providing convenience when people need and want to eat fast food at prices that are competitive and provide best value for the customer’s money. One of McDonald’s competitive advantages is its focus on consistency of quality, production of food and use of raw materials all around the world. The world recognition associated with the brand McDonald’s itself is also one of McDonald’s competitive advantages.

• KEY SUCCESS FACTORS McDonald's Pakistan has an aggressive plan to expand in all other cities of Pakistan

and is rapidly growing with the focus to provide friendly and a quick service restaurant experience to its customers.

• McDonald’s FRANCHISES• Becoming a McDonald's franchisee is not for everyone. You'll need a significant

financial investment, a habit of hard work, a long term commitment and a hands-on approach to running a customer-orientated business.

• Although your work will be rewarding both financially and personally, don't think of a McDonald's franchise as a licence to print money. The rewards are certainly there, but they're for the earning, not the taking. And if you're looking for an investment where you can sit back and not be involved, this isn't for you. We're not trying to put you off - we just want you to be aware of some of the realities before you go further.

• Like we said, a career as a McDonald's franchisee is not by any means for everyone. Equally, we don't accept just anyone either. Ideally, you'll already have a successful business or career and will have demonstrated significant team leadership.

• There's more to running a McDonald's franchise than serving burgers and french fries - much more. You'll need a remarkable aptitude for connecting and communicating with people. You'll be completely committed for at least 20 years, with no other business interests. And we only offer franchises to individuals although many of our franchisees run their businesses as husband-and-wife teams.

McDonald’s FRANCHISE COST As a guide, the cost of an average restaurant is £200,000. You will need to provide at

least 25% of the value as unencumbered funds, the remaining 75% can be funded through a bank loan with favourable funding terms.There's also a one-off franchise fee of £30,000 and a training deposit of £5,000 which will be refunded when you complete your training.

There are also ongoing fees. These include:- Monthly rent on the premises, based on sales and profitability (usually about 12%)- Service Fee for use of the McDonald's system - 5% of sales- Contribution to national marketing spend, currently 4.5% of sales.

• Other Requirements to Open a McDonald's• Significant business experience - Individuals who have demonstrated successful

ownership or management of multiple business units or have managed multiple departments.

• Rapid growth - Individuals who possess the capability to grow rapidly with McDonald's.

• Business plan - The ability to develop and execute a business plan. • Manage finances well - Ability to manage finances including a thorough

understanding of business financial statements. • Good management skills - Commitment to personally manage the day-to-day

operations of the restaurant business. • Training - Willingness to complete a comprehensive world class training

program and become proficient in all aspects of operating a McDonald's restaurant business.

• Exceptional customer experience - The capability to effectively manage an organization that recruits, trains, and motivates restaurant employees who deliver an exceptional customer experience.

• Good credit history - An acceptable credit history

Ongoing Fees to McDonald's During the term of the franchise, you pay McDonald’s the following fees: Service fee- A monthly fee based upon the restaurant’s sales performance (currently a service fee of 4.0% of monthly sales). Rent - A monthly base rent or percentage rent that is a percentage of monthly sales. McDonald's usually owns the property and also acts as the landlord.

• McDonald’s COMPETITORS

• McDonalds doesn’t offer just burgers. Their well diversified menu is also one of the key success factors as most of McDonald’s competitors are quite specialized:

• KFC in chicken• Pizza Hut in pizzas etc.• When it comes to eating out during Ramadan in any fast food

restaurant, the name that clicks to the customers is McDonald’s. The reason is the affordable deals that they offer, that seem to beat all others when it comes to prices.

• Another advantage that McDonald’s has on its competitors is the location of its franchises.

• Its main advantage is that it is located in vicinity that is easily approachable. Secondly it has got in its surroundings other very attractive places to be visited by people who want to enjoy their life to the full. These places are a source of attraction not for the services they provide but for McDonald’s as well.

McDONALD’s VS PIZZA HUTAt one time, the biggest marketing problem Pizza Hut faced was lunch. As compared to McDonald’s, its restaurants had virtually no lunch time sales, and neither did any of it’s pizza competitors. The reason, of course, is that it takes 20 minutes to cook a pizza from scratch in a traditional pizza oven, and most people won’t spend that long at lunch time waiting to be served.

McDONALD’s VS KFC•The increased health concerns of the masses has put KFC at a great disadvantage because of the word 'fried' attached to it's brand name which gives an instant idea that the food would be oily and unhealthy. •Because of the nature of the chicken segment of the fast food industry, innovation was never a primary strategy for KFC. However, during the late 1980's, other fast food chains, such as McDonald's, began to offer chicken as a menu option. During this time, McDonald's had already introduced the McChicken while KFC was still testing its own chicken sandwich. •This delay significantly increased the cost of developing consumer awareness for the KFC sandwich.

McDONALD’s VS SUBWAY• One of the major problems that can be identified with Subway right now is

related to the franchises. Although Subway has long been named as the number one franchise opportunity by The Entrepreneur magazine but it seems that Subway has developed a myopic focus regarding the franchises. Subway has regional managers who have the opening of new franchises as their sole aim and their bonuses and incentives are tied to the opening of new franchises. These managers at Subway even don't care if the new franchises are detrimental for the existing ones and because of this; many of the franchises are becoming a victim of internal competition or cannibalization. For example, in Lahore alone, Subway has 20 outlets. Instead of this, Subway could have targeted Cities like Faisalabad and explored a new market. Franchise owners believe that Subway has been irresponsible with allocating the franchises and uses bloated store sales projections as part of their sales pitch for encouraging new franchises.

• The opening up of a lot of new stores in close proximities are also resulting in decline in sales per store because of which the franchisees are not very satisfies with Subway.

•The environment at the Subway stores cannot be compared with that of McDonald's, KFC or Pizza Hut. The Stores are small and suffocating and do not even provide the necessary privacy to the people eating there. Subway has no standard size for any of its store because of which the sales oriented Franchisees try to fix them at as smaller a place as possible. This is tarnishing the image of Subway as an international brand.

•The quality of the sandwiches and standards of cleanliness at Subway are going down day by day due to the greater and greater autonomy that franchisees enjoy. The Subway at Rawalpindi was recently closed down due to quality issues as well.

The quality of the sandwiches and standards of cleanliness at Subway are going down day by day due to the greater and greater autonomy that franchisees enjoy. The Subway at Rawalpindi was recently closed down due to quality issues as well

• It is easily visible that both the burgers are of same size , but the quality and cleanliness is different from each other .

McDONALD’s VS HARDEE’S

• McDonald’s PLAY PLACE Many McDonald's restaurants have included a playground for children and

advertising geared toward children, and some have been redesigned in a more 'natural' style, with a particular emphasis on comfort: introducing lounge areas and fireplaces, and eliminating hard plastic chairs and tables. This has given a new outlook to the McDonald’s as a quick service restaurant that is still not be seen on other fast food restaurants.

REMODELING OF LOCATIONS• An estimated 7,000 U.S restaurants will be rebuilt, relocated or refreshed

as part of the far reaching plan to upgrade its public persona with updated restaurant designs intended to boost the bottom line.

LOCAL PERFECTION GLOBAL RECOGNITION• McDONALD’s Pakistan wins 3 international awards and gives the nation

a reason to smile.

• Food quality & safety

McDonald's buys and serves the same wholesome foods our customers use at home, supplied by brand name companies Canadians know and trust. Essentially, we shop where you shop - our shopping basket is just a little bit bigger. It has to be when you're serving millions of hungry Canadians every day.

McDonald's serves a wide range of quality foods that can easily fit into individual diet needs based on the principles of balance, variety and moderation. Our varied menu and range of serving sizes make it easy to fit our food into a balanced diet and to create a range of meal combinations that fall within recommended guidelines for calories, fat and other nutrients.

PEOPLE’S COMMITMENT

At McDonald's, we are committed to doing what is right, to being a good neighbour and a valued partner in every community in which we live and work. At McDonald's, giving back to the community is more than simply a commitment -- it is the foundation upon which our company has been built. McDONALD’s is a place where people are free to talk , weather they are muslims or non-muslims.

RESTURANTS CLEANLINESS & HYGIENE

Firstly we would like to point out that maintaining hygiene and cleanliness in McDonald's restaurants is a top priority.

Cleanliness and hygiene is one thing. Exceeding the standards of cleanliness and hygiene required by law is another. Fulfilling the standards expected by our customers is another, yet again! Therefore, a full understanding of hygiene requirements and wholehearted commitment to these responsibilities is essential. Don't worry though; you'll be given thorough training on this before you start your first shift. To achieve our high standards, you'll use of a variety of cleaning utensils and equipment together with a range of chemical cleaning products. Where necessary, protective equipment will be provided and some work will require the use of a stepladder (even those hard to reach places must be spotless!).

• BCG Matrix • According to BCG Matrix McDonald’s is a star. The reason for this is its high

market growth and high market share in the Pakistani market. On the other hand KFC and Pizza Hut are the cash cows because of their low growth rate and high market share. During past some years KFC and Pizza Hut have lost their market growth because of the fact that they lost their standard war to their competitor i-e McDonald’s.

• Another direct competitor of McDonald’s is Subway. According to BCG Matrix it is a dog. Some of the reasons that are responsible for its low market share and low market growth are the less expansion strategies being followed by the company. Secondly they are not focusing at all on all the major cities; rather they are only focused on the target segments of Lahore and Karachi.

Product life Cycle Analysis:

In the Pakistani market McDonald’s has been placed in the growth phase as it is still growing and has the potential to grow further. There are many strategies that have been employed in the other countries but are still to be made a part of the McDonald’s franchises in Pakistan.Following are some of the strategies that can be made a part of the Pakistani market so as to increase its market growth:•McDonald’s in Pakistan can introduce breakfast in its menu to cater to the needs of those who are in a hurry to get to office in time. This will give them an edge on its competitors and its growth will increase.•To gain advantage in the local market, McDonald’s should introduce coffee at all the franchises.•To maintain its brand image as a twenty four seven customer restaurant, McDonald’s must make its timings more flexible to the needs of those who are usually very busy with their work schedules.

SWOT ANALYSIS

STRENGHTS• McDonalds has been able to maintain its market share in the QSR market of

Pakistan since 1998 and this is actually the major strength of McDonalds that has made it so popular. Other major strengths are listed below:

PRODUCTS• The reputation of the various products each season has made it

possible for the company to attract customers having different tastes and to try out the season specialties. A major strength is the various deals that McDonalds offers so that it could be made affordable. Recently McDonalds offered a deal for Rs.85 only, containing a beef burger along with a drink.

• McDonald’s offers many flavors of Mcflurry ice cream from a mix of M&Ms to Oreo cookies. The M&Ms flavor was introduced about a year back and is still popular among the M&Ms lovers. McDonald’s has also customized its meal according to the tastes of Pakistan. People in Pakistan do not eat bacon so McDonalds does not offer such sort of meals in the country.

•Social Responsibility:The social responsibility acts of McDonald’s are commendable. It has been able to maintain a reputation as a socially responsible and aware enterprise all over the world. Its practice of going green and serving in an environment friendly way has made it possible for McDonald’s to gain fame.On 27th March’ 2008, McDonald's announced that it is giving further backing to Rainforest Alliance certification by offering a cup of tea with a conscience in all of its 1,200 restaurants in the UK.In Pakistan however, McDonald’s has not yet come up with an effort that can show the company’s goodwill towards the masses here. Like KFC, McDonald’s should also involve itself in educational and social activities so that people should know that McDonald’s isn’t yet another business oriented corporation aimed at just making money but it actually careEmployment Opportunities:The equal employment opportunities regardless of race, color, sex, national region, age, disability etc are offered to people. People looking for jobs can also upload their CVs online..

BRAND RECOGNITIONMcDonalds has gained recognition worldwide. The chain is present all over the world in more than 122 countries. In Pakistan a large number of franchises are present, majority of them in Karachi and Lahore and McDonald’s is regarded as a symbol of value and quality for your money. GOOD COMMUNICATION AND FRIENDLY ENVIORONMENTMcDonalds has always ensured a friendly environment to offer to its customers. Children love going there, having a happy meal and the toys that they get as a gift. Play places also serve as a significant attraction where children can go and make friends and play. Employees are also very polite and they are always ready to serve you in every best possible way that they can.Party celebrationsMcDonald’s offers its clients, especially children to celebrate their birthdays there. One can invite friends, they decorate the party area, various party games are organized along with face painting activity etc. Children are provided with an opportunity to celebrate their day in the way that they want

• GOOD COMMUNICATION AND FRIENDLY ENVIORONMENT McDonalds has always ensured a friendly environment to offer to its

customers. Children love going there, having a happy meal and the toys that they get as a gift. Play places also serve as a significant attraction where children can go and make friends and play. Employees are also very polite and they are always ready to serve you in every best possible way that they can.

PARTNERSHIP WITH COCA COLA McDonalds and Coca Cola are official global partners. Coca cola is a big brand

nameserving people all over the world with beverages.

PARTNERSHIP WITH TELECOM COMPANY McDonalds offered special deals to its clients with up size meals who are the

users of a particular company such as Warid.

WEAKNESSESProduct Variety:McDonalds needs to develop more and more products to stay in the competition. After the opening of international QSRs in Pakistan, many local QSRs have also been opened in various cities. The tastes are a bit different but they too are offering chicken and cheese burgers, drinks and fries at competitive prices. This situation requires McDonald’s to be more innovative and price competitive.More advertising:In Pakistan, McDonald’s rarely advertises at TV, however billboards often show off juicy McDonald’s burgers but this could affect its popularity in future. It definitely needs to advertise more to reach the target and the potential customers.

Drive-ins:The service at McDonald’s drive-ins has been subject to criticism all over the world and a lot of people complaint that the orders are either missing some of the items or are entirely wrong. The service time at the drive ins is also subject to great variations and needs to be improved

OPPORTUNITIES Reasonable Prices: McDonalds can broaden its market by offering meals at more competitive

prices in comparison to other local QSRs such as AFC, Al Maida etc. This way it could get hold of the potential customers too

Opportunity to be innovative McDonalds could make itself more innovative by offering deals that appeal

more to Pakistani consumer’s e-g it can introduce desi flavors in the present products such as Barbeque, Tandoori, Masala and other spicy tastes which are staple of the country.

Breakfast and special noon meals:• Now in Pakistan most the trend of women going to work and opting for

profession is increasing as a result of which they are running short of time to carry out all the home chores along with their work. McDonalds can offer deals to such market by catering them in the morning for breakfast.

• During the office hours people mostly go out for their lunch to restaurants. McDonalds can avail this potential market too.

Growing dinning out MarketIn Pakistan the dining out trend is increasing especially in youngsters and upper middle class. McDonalds has the opportunity to grasp this market quite well. It is already doing well by serving them but it could arrange various activities for the people of this age.Dine in CafesMcDonalds can open up with small-sized cafes for the teenagers in their universities and colleges. McCafe’s: McDonalds has opened coffee shops by the name of McCafe’s in UK. Pakistan can serve as a new potential market for these cafes.

THREATSMore health conscious customers: With increasing awareness about food and the importance of a balanced diet, people are opting

for low calorie food e-g salads and food with high fiber content. To remain in the scope, McDonalds needs to serve this market as well as the present customers, this could be posed as a threat to McDonalds. Subway is offering its low fat veggie and chicken sandwiches at prices almost the same as McDonalds. For McDonalds diet meals could be a way out of this situation. Until now, McDonald’s in Pakistan has nothing to offer to health conscious customers.

Foreign as well as local competitors: In the growing market QSR market of Pakistan McDonalds competitors are

entering not only from other countries but from within the country too. Their competitive prices could be a reason due to which McDonalds can lose its share in the Pakistani market.

Changing customer styles: Pakistani culture has been changing for years now with new technologies and

trends. People who are not brand loyal move with the changing times. Some competitor can easily enter into the market and make better offers to its consumers by focusing on their needs and the satisfaction that they want. To remain competitive, McDonalds needs to be innovative and should change along with the Pakistani consumer styles.

CONCLUSION McDonald’s is one of the best fast food restaurant in the whole world. It provides a

good quality and hygienic food to its customers daily. If a person has enough resources to meet the requirements of McDonald’s he must get its franchise, it will be a financially rewarding and life-changing experience

OBSTACLES• Public purchasing power is less.•Security Concerns.•Religious Concern, that McDonalds are backed by Jews Zionist.•People make rumors that they are not providing Halal meat.