PowerPoint Presentation

McDonalds Presented By: Wajiha Asad | Waseem Ahmed

ContentsIntroductionBusiness ModelHistorical backgroundSWOT AnalysisFinancial AnalysisStrategic IssuesStrategic AlternativesRecommendations ImplementationStrategy Evaluation.

Company IntroductionWorlds largest foodservice retailing chain.Founder Dick & Mac McDonaldandRay Kroc (1940)Headquartered in Oak Brook, Illinois.

CONTOperates in 36,000 locations with approximately 69 million customers in over 100 countries each day. Approximately 440,000 employee world wide (2013)More than 80% of McDonald's restaurants worldwide are owned and operated by independent local business men and women.Total McDonalds restaurants worldwide:Over 57% are conventional franchiseesApproximately 24% are licensed to foreign affiliates or developmental licenseesOver 18% are Company-operated

ProductsBurgers SandwichesChicken & FishSaladsSnacksBreakfastMcCafeBeveragesDesserts & Shakes

Competitors

Mission & Vision Statement McDonald's brand mission is to be our customers' favorite place and way to eat and drink. 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.

McDonalds ValuesWe 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.

Ray Kroc Business ModelRay Kroc- Developed a business model known as The Three Legged Stool Owner/Operator, Suppliers and Employees

All three legs of a stool need to be equal to support the weight, all three elements of the McDonalds system are equally important partners in McDonalds success.Formula of SuccessQuality + Service +Cleanliness + Value

History

19841986199720002007-0820092011StrengthsMcDonalds is well recognized brand valued at over $85 Billion.McDonald is the first in fast food chain which provide nutrition information printed on all packaging.Large number of clients: 69 million daily customers with global range more then 36000 restaurants in 119 countries.McDonalds assembly line method which guarantees high quality & consistency. Resource innovation and lots of charity activities.

WeaknessMcDonalds have high employee turnover rate, bad press associated with low salary and high efficiency pressureFast-food is often perceived as unhealthy due high calories products and large amount of sugar & fats.Lack of healthy food line for more demanding customers.McDonald's management issues due to enormous size of company.Drive-thru time have slowed down as customers are complaining.

Opportunities Expanding delivery system and online ordering.Growing market for low-cost menu in poorer societies.Personalization of client meal with local ingredients.Adding more healthy food to the menu with low amount of calories and sugar.Remodeling of old restaurants.

ThreatsGrowing healthy food consciousnessLawsuits against McDonaldsEnvironmental issues might generate bad press (unrecyclable materials)New eating trends (Food chain to local slow food)Downturn or recession in economy also affecting the McDonalds sales.

Financial AnalysisMcDonald is still successful as a market leader despite of the global recession and tough competition offered by Yum brands and Subway. Efficient operations, high profitability, highly loyal customer, broader network expansion and the value adding menu are major factors of its success.

Financial Strength AnalysisYear20102011201220132014Sales24,07527,00627,56728,10527,441Net Earning4,9465,5035,4655,5854,757Total Assets31,97532,99035,38736,62634,281Market Price76.76100.3388.2189.0190.34

CONT.McDonalds problems stem from operational mishaps across the world. In particular, its business in Asia.China Scandal.Japanese customers have reported finding bits of plastic and even a tooth in their food.Russian outlets were temporarily closed.Increased Competition. Increase in interest and impairment expenses.

CONTFinancial RatiosMcDonalds CorporationIndustry AverageSubwayCurrent Ratio1.451.370.87Quick Ratio1.091.010.73Inventory Turnover231.1730.7123.32Debt to Equity1.320.872.97Net Profit Margin19.8214.2011.71Interest Coverage16.6614.1815.39Total Asset Turnover0.780.951.51

Strategic IssuesWin back customers who have fallen out of love with McDonalds:Once loyal customers have had their heads turned by more upmarket rivals such as Shake Shack, Five Guys and Chipotle. Tackle the bad PR by paying staff more:McDonalds has moved to raise the pay of workers at 1500 outlets it directly operates in U.S to at least $1 above the local legal minimum rate.

CONTSort out China, where it has been rocked by food safety scandalsLast summer, a supplier to the chains restaurants in China was accused of supplying rotting meat and falsifying meat expiry dates. Adding more and more items in menu and making it imbalancedBigger menus have made kitchen operations more complex, giving some customers a longer wait for their fast food fix.

Strategic AlternativesSlim down the menuThere is need to slim down the menu to increase the kitchen system efficiency. There must be a balanced and customized menu for customers and employees.Close down underperforming restaurants McDonalds decided to close about 350 underperforming restaurants last quarter, primarily in U.S, China and Japan, on top of another 350 previously planned closing worldwide Raise the pay of Workers

CONTOffer the best value"Value is one of our grand pillars," Thompson said. "So we must continue to fortify our position within this key consumer attribute."Customer serviceMcDonalds acknowledged this problem and said that the company was sending corporate representatives in for a "service reset." This could include adding more workers and assigning new tasks to existing ones.MarketingTo improve public perception of the company, McDonald's is doing a global audit of the marketing department.

RecommendationProper Employees TrainingTraining is key. Skimping on franchisee and employee training is ignoring the most difficult element in your formula for success.Get InternationalMcDonald's needs to spice up its menu by developing new offerings or differentiating its existing menu items to incorporate Tex-Mex/Latin; Oriental; Indian and Russian flavors in a more aggressive and permanent manner.

CONTSocial NetworkingMcDonald's willexpand new in-restaurant, website and mobile communications, and marketing vehicles, making access to this information even easier. To begin, McDonald's is now making available its first mobile app so customers can access nutrition information on-the-go.Remodeling To win more diners, McDonalds said today its trying a new global strategy that includes investing in store remodels and technology as well as mobile ordering and payments.

ImplementationThere is a basic need to make some meaningful changes in organizational structure for the implementation of proposed strategies.McDonalds decided to close about 350 underperforming restaurants in U.S, China , Japan, on top of another 350 world wide.Use those $267 millions in its operating income, and restructuring charges.

Conclusion McDonalds continues to satisfy customers all across the globe, efforts are continually being made to enhance all aspects of the corporation. With a new emphasis on catering to local tastes, creative talent focused on improving food and dining experience, and compliance with the green movement of the 21st century.

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