MCDONALD’S CASE STUDY

By:

John Fraser R (215115011)

Peram Srinath (215115023)

Sasikanth Thota (215115022)

Anju Ajaykumar (215115009)

MCDONALD’S INCEPTION

• McDonald’s first restaurant was opened in the year 1955 by Ray Kroc.

• It operated on the principle of (QSC&V), (Quality, Service, Cleanliness and Value)

• By 1983, it had over 6000 restaurants in U.S.A and by 1995, it had more than 18,000 restaurants in 89 countries.

• As per latest reports it has nearly 32,737 restaurants

What opportunities and threats did McDonald’s face? How did it handle them? What alternatives

could it have chosen?

Opportunities

The McDonald’s logo ranks 7th in the list of 50 most identifiable logos in the world. It also has a bigger revenue than its competitors. The sheer popularity of McDonalds world over has led to the creation of the Big Mac Index, which is used to analyse the PPP( purchasing power parity) of a nation.

• When McDonalds expanded its operation in 1967, It was the first fast-food chain to do so.

Opportunities

• McDonalds had few competitors in the Global Market, when it began. This enabled McDonalds to establish itself strongly.

It had first mover advantage

• Many restaurants at that time did not cater to the younger generation

Threats

• Many of its restaurants faced quality issues.

• McDonalds faced, and still faces stiff competition from BurgerKing, Kfc, PizzaHut Dominos, Wendys and Subway.

• Though McDonald’s has a strong market presence and is a global leader, its popularity is waning in many countries.

• Customer Satisfaction Index was found to be more for its competitors

Threats

• Apart from large fast-food giants, McDonald also faces competition from local restaurants which are slowly widening their menu and quality.

• In the middle east, meat products had to be halal. Hence the preparation of McDonald’s recipes had to be changed.

How it handled

• McDonald made full use of its first mover advantage.

• Through franchising it became the largest food chain in the world

• It made its restaurants attractive to children and even made changes in its menu. Ronald McDonald was created to entertain small children

How it Handled

• McDonald adopted aggressive marketing strategies to beat its competitors. It changed its menu to suit to the local culture.

• It revoked the first French franchise when it failed to meet McDonald’s quality standards

• In the middle east, McDonalds prepared its dishes to suit to the religious sentiments of the local population.

How it could have handled

• McDonald could have expanded its business in Asia slowly.

• It could have setup a quality team to frequently analyse the quality of food products across McDonald’s restaurant. Since most of McDonald’s restaurants are franchise owned, profit is usually chosen over quality by the respective franchise owners. This contributes overall decrease in McDonald’s brand value

Before McDonald’s entered the European market, few people

believed that fast food could be successful in Europe. Why do you

think McDonald’s succeeded ? What strategies did it follow? How did these differ from its strategies

in Asia?

European Market

• McDonalds entry into the European market was after 14 years of planning.

• McDonalds planted its new restaurants at major cities. The concept of fast food restaurants was not popular in Europe. McDonalds also changed people’s perception on fast food

• It promoted its burgers and popularized “McDonalds” to an extent people were drawn into trying out the McDonalds.

Popularity

• Opening of McDonalds in Russia

Asian market

• Since Burgers are essentially from the western cuisine, McDonalds had to customize their burgers to suit their Asian customers.

• This involved changing the menu to suit to the tastes of the local population.

Japanese McDonald’s Burgers

Indian Menu

What is McDonald’s basic philosophy? How does it enforce

the philosophy and adapt to different environments

Philosophy

• McDonalds philosophy was to promote the fast food culture around the world

• It succeeded by adapting its menu based on the geographical location and keeping its (QSC&V) principle

• McDonalds also focussed on different age groups and made its restaurant children-friendly.

Should McDonald’s expand its menu? If you say no, then why

not? If you say yes, what kinds of products should it add?

McDonald’s Menu

• McDonalds should expand its menu. It has already incorporated many changes sensing the need.

• This involved changing the menu to suit to the tastes of the local population

• McDonald’s success in Japan is hugely because of their menu which blended with the local culture.

• McDonald should focus on popularizing other dishes apart from burger. This would certainly attract more customers.

McKebab

Sakura Burger(Japan) and Mos Burger

Why is McDonald’s successful in many

countries around the world?

Success of McDonalds

• McDonalds followed its (QSC&V) principle closely.

• It established Quality Assurance centres to monitor the quality of food products at it franchises.

• It advertised smartly and made its brand popular globally.

Well planned advertising & Focus on younger customers

Customized menu

Strategic partnership with popular brands