Upload
ejazrd
View
224
Download
0
Embed Size (px)
Citation preview
7/29/2019 McDonalds Final PowerPoint.ppt
1/88
7/29/2019 McDonalds Final PowerPoint.ppt
2/88
7/29/2019 McDonalds Final PowerPoint.ppt
3/88
7/29/2019 McDonalds Final PowerPoint.ppt
4/88
7/29/2019 McDonalds Final PowerPoint.ppt
5/88
7/29/2019 McDonalds Final PowerPoint.ppt
6/88
7/29/2019 McDonalds Final PowerPoint.ppt
7/88
7/29/2019 McDonalds Final PowerPoint.ppt
8/88
7/29/2019 McDonalds Final PowerPoint.ppt
9/88
7/29/2019 McDonalds Final PowerPoint.ppt
10/88
7/29/2019 McDonalds Final PowerPoint.ppt
11/88
7/29/2019 McDonalds Final PowerPoint.ppt
12/88
7/29/2019 McDonalds Final PowerPoint.ppt
13/88
7/29/2019 McDonalds Final PowerPoint.ppt
14/88
7/29/2019 McDonalds Final PowerPoint.ppt
15/88
7/29/2019 McDonalds Final PowerPoint.ppt
16/88
7/29/2019 McDonalds Final PowerPoint.ppt
17/88
7/29/2019 McDonalds Final PowerPoint.ppt
18/88
7/29/2019 McDonalds Final PowerPoint.ppt
19/88
7/29/2019 McDonalds Final PowerPoint.ppt
20/88
7/29/2019 McDonalds Final PowerPoint.ppt
21/88
7/29/2019 McDonalds Final PowerPoint.ppt
22/88
7/29/2019 McDonalds Final PowerPoint.ppt
23/88
7/29/2019 McDonalds Final PowerPoint.ppt
24/88
7/29/2019 McDonalds Final PowerPoint.ppt
25/88
7/29/2019 McDonalds Final PowerPoint.ppt
26/88
7/29/2019 McDonalds Final PowerPoint.ppt
27/88
7/29/2019 McDonalds Final PowerPoint.ppt
28/88
7/29/2019 McDonalds Final PowerPoint.ppt
29/88
7/29/2019 McDonalds Final PowerPoint.ppt
30/88
7/29/2019 McDonalds Final PowerPoint.ppt
31/88
7/29/2019 McDonalds Final PowerPoint.ppt
32/88
7/29/2019 McDonalds Final PowerPoint.ppt
33/88
7/29/2019 McDonalds Final PowerPoint.ppt
34/88
7/29/2019 McDonalds Final PowerPoint.ppt
35/88
7/29/2019 McDonalds Final PowerPoint.ppt
36/88
7/29/2019 McDonalds Final PowerPoint.ppt
37/88
7/29/2019 McDonalds Final PowerPoint.ppt
38/88
7/29/2019 McDonalds Final PowerPoint.ppt
39/88
7/29/2019 McDonalds Final PowerPoint.ppt
40/88
7/29/2019 McDonalds Final PowerPoint.ppt
41/88
7/29/2019 McDonalds Final PowerPoint.ppt
42/88
7/29/2019 McDonalds Final PowerPoint.ppt
43/88
7/29/2019 McDonalds Final PowerPoint.ppt
44/88
7/29/2019 McDonalds Final PowerPoint.ppt
45/88
7/29/2019 McDonalds Final PowerPoint.ppt
46/88
7/29/2019 McDonalds Final PowerPoint.ppt
47/88
7/29/2019 McDonalds Final PowerPoint.ppt
48/88
7/29/2019 McDonalds Final PowerPoint.ppt
49/88
7/29/2019 McDonalds Final PowerPoint.ppt
50/88
7/29/2019 McDonalds Final PowerPoint.ppt
51/88
7/29/2019 McDonalds Final PowerPoint.ppt
52/88
7/29/2019 McDonalds Final PowerPoint.ppt
53/88
7/29/2019 McDonalds Final PowerPoint.ppt
54/88
7/29/2019 McDonalds Final PowerPoint.ppt
55/88
7/29/2019 McDonalds Final PowerPoint.ppt
56/88
7/29/2019 McDonalds Final PowerPoint.ppt
57/88
7/29/2019 McDonalds Final PowerPoint.ppt
58/88
7/29/2019 McDonalds Final PowerPoint.ppt
59/88
OMalley, Ouellette, Plourde, & Roy2009 59
FinancialCondition Debt/Equity Ratio 0.69 1.19Current Ratio 0.4 0.9Quick Ratio 0.4 0.7
Interest Coverage 13.9 43.3Leverage Ratio 1.7 4
Book Value/Share 3.58 16.25
InvestmentReturns % Return On Equity 15.1 20.8Return On Assets 4 5.8Return On Capital 5.4 7.7
Return On Equity(5-Year Avg.) 11.1 14.5
Return On Assets(5-Year Avg.) 3.1 5.1
Return On Capital(5-Year Avg.) 4.3 6.8
ManagementEfficiencyIncome/Employee 3,150 37,696Revenue/Employee 48,925 343,930ReceivableTurnover 29.9 9.5
InventoryTurnover 34.5 5.6
Asset Turnover 0.7 0.6
IndustryRatios(Cont.)
7/29/2019 McDonalds Final PowerPoint.ppt
60/88
OMalley, Ouellette, Plourde, & Roy2009 60
Net Worth Analysis
1. Stockholders' Equity + Good Will = 15458.30 + 2073.6 $3,531.90
2. Net Income X 5 = 3544.20 X 5 $17,721.00
3. Share Price = 44.33/EPS 2.44 = 18.16 X Net Income 3544.2 $64,362.67
4. Number of Shares Outstanding X Share Price = 1204 X 44.33 $53,373.32
Method Average $34,747.22
7/29/2019 McDonalds Final PowerPoint.ppt
61/88
OMalley, Ouellette, Plourde, & Roy2009 61
Internal Audit- Strengths
1. Strong Global Presence (located in over-100 countries)
2. Strong Real Estate Portfolio3. Brand Recognition4. Revenue Growth 9% (Above Industry
Average of 7.5%)5. The Ronald McDonald House (Children
Charity)6. Systemization and Duplication
(Consistency)
7/29/2019 McDonalds Final PowerPoint.ppt
62/88
OMalley, Ouellette, Plourde, & Roy2009 62
Internal Audit-Weaknesses
1.Public Perception (perceived as acontributor to societies obesity problem)
2.Product Innovation
3.Advertising (targets young children)4.Customer Service5.Market Saturation (more difficult to add
new stores)
6.Labor Turnover
7/29/2019 McDonalds Final PowerPoint.ppt
63/88
OMalley, Ouellette, Plourde, & Roy2009 63
Key Internal Factors Weights Rating Weighted Score0.0 to 1.0 1, 2, 3 or 4
Internal Strength s 3 or 4
Strong Global Presence (located in over 100 countries) 0.09 4 0.36
Strong Real Estate Portfolio (franchises, land, buildings) 0.09 4 0.36
Brand Recognition (Ronald McDonald is as famous as Mickey Mouse) 0.11 4 0.44
Revenue Growth 9% (Above Industry Average of 7.5%) 0.11 4 0.44
The Ronald McDonald House (Children Charity) 0.06 4 0.24
Systemization and Duplication Process (consistency) 0.09 4 0.36
0
00
0
Internal Weaknesses 1 or 2
Public Perception (perceived as a contributor to societies obesity problem) 0.09 1 0.09
Product Innovation 0.08 2 0.16
Advertising- targets young children (many countries ban unhealthy advertisements) 0.07 2 0.14
Customer Service 0.08 2 0.16
Market Saturation (more difficult to add new stores) 0.07 2 0.14
Labor Turnover 0.06 1 0.06
0
0
0
0
0
Totals 1 2.95
Internal Factor Evaluation Matrix
McDonald's
7/29/2019 McDonalds Final PowerPoint.ppt
64/88
OMalley, Ouellette, Plourde, & Roy2009 64
Strategic Formulation
7/29/2019 McDonalds Final PowerPoint.ppt
65/88
OMalley, Ouellette, Plourde, & Roy2009 65
SWOT Matrix
SO Strategies WO Strategies ST Strategies WT Strategies
1. Develop NewProducts & ServicesFor Global Markets.
(S1, O1)
1. Advertise OrganicProducts to Older
Demographic. (W3, O4,
O6)
1. Launch Marketing Campaignfor Ronald McDonald House toincrease Brand Recognition and
Customer Loyalty. (S5, S3, T3,
T5)
1. Research and Developproducts that quell
Growing Health Concerns.
(W1, T2, T4)
2. Develop GreenPackaging for allStores. (S6, O6)
2. Spend more money onResearch and
Development to createnew products andservices. (W2, O1)
2. Develop alternatives toexisting menu that can be easilyimplemented and don't rely onmore expensive commodities.
(S6, T1)
2. Increase spending onCustomer Service efforts todecrease legal challenges.
(W4, T6)
3. Integrate into newterritories. (S1, S4, O5)
3. Create an organicmenu. (W2, O1)
M D ld SPACE M t i
7/29/2019 McDonalds Final PowerPoint.ppt
66/88
OMalley, Ouellette, Plourde, & Roy2009 66
McDonalds SPACE Matrix FS
+6
+1
+5+4+3
+2
-6
-5
-4-3
-2
-1-6 -5 -4 -3 -2 -1 +1 +2 +3 +4 +5 +6
ES
CA IS
Conservative Aggressive
Defensive Competitive
7/29/2019 McDonalds Final PowerPoint.ppt
67/88
OMalley, Ouellette, Plourde, & Roy2009 67
Grand Strategy Matrix
7/29/2019 McDonalds Final PowerPoint.ppt
68/88
OMalley, Ouellette, Plourde, & Roy2009 68
BCG Matrix
McDonalds stores compete in thesame market whether they arecorporate owned or franchised.
No Value in producing a BCG Matrix
McDonalds would be considered a
Star.
7/29/2019 McDonalds Final PowerPoint.ppt
69/88
OMalley, Ouellette, Plourde, & Roy2009 69
IE MatrixIFE Scores
Hold And Maintain Strong Average Weak
3-4 2-2.99 1-1.99
High 3-4
I II III
E F E S c o r e s
Medium 2-2.99
IV V VI
Low 1-1.99
VII VIII IX
7/29/2019 McDonalds Final PowerPoint.ppt
70/88
OMalley, Ouellette, Plourde, & Roy2009 70
Matrix AnalysisAlternative Strategies IE SPACE GRAND COUNT
Forward Integration X 1
Backwards Integration X 1
Horizontal Integration X 1
Market Penetration X X 2
Market Development X 1
Product Development X X 2Concentric Diversification X X 2
Conglomerate Diversification X X 2
Horizontal Diversification X X 2
Joint Venture X 2
Retrenchment 0
Divestiture 0
Liquidation 0
7/29/2019 McDonalds Final PowerPoint.ppt
71/88
OMalley, Ouellette, Plourde, & Roy2009 71
Possible Strategies1) Create an Organic Menu.
A. Market PenetrationB. Product development & relateddiversification
2) Spend more money on research anddevelopment to create new products andservices and increase the efficiency of operation.
A. Product development & relateddiversification
7/29/2019 McDonalds Final PowerPoint.ppt
72/88
OMalley, Ouellette, Plourde, & Roy2009 72
Option 1 Option2
Create an OrganicSpend more money on R&D to create newproducts
menu.and services and increase the efficiency of operations
Key External Factors Weight AS TAS AS TASOpportunities 1 to 4 1 to 4New Products and Services 0.1 4 0.4 4 0.4Beverage Market (frosties) 0.08 3 0.24 2 0.16Growth of Franchise Restaurants 0.09 0 0Demand for Organic Products 0.06 4 0.24 2 0.12InternationalExpansion 0.1 0 0Conservation (Going Green) 0.07 4 0.28 3 0.21ThreatsChange in Commodity Prices 0.07 2 0.14 2 0.14Food Safety and Food Borne Illness Concerns 0.07 0 0Economic Slowdown 0.1 2 0.2 3 0.3Growing Health Consciousness 0.08 4 0.32 3 0.24
Intense Competition (Dine-In Restaurants, Wendy's) 0.09 4 0.36 3 0.27Legal Challenges (8.8millionlawsuits) 0.09 0 0
total should be 1.0 1
Quantitative Strategic Planning Matrix-QSPM
7/29/2019 McDonalds Final PowerPoint.ppt
73/88
OMalley, Ouellette, Plourde, & Roy2009 73
Key Internal FactorsOrganic Menu
Increase $ on Research & DevelopmentStrengths 1 to 4 1 to 4Strong Global Presence (located in over 100 countries) 0.09 4 0.36 4 0.36Strong Real Estate Portfolio (land, buildings) 0.09 0 0Brand Recognition (Ronald McDonald is as famous as MickeyMouse) 0.11 4 0.44 4 0.44Revenue Growth 9% (Above industry average 7.5% 0.11 0 0The Ronald McDonald House (Children Charity) 0.06 0 0Systemization & Duplication Process (consistency) 0.09 0 0
eaknessesPublic Perception (perceived as a contributor to societies obesityproblem) 0.09 4 3 0.27Product Innovation 0.08 4 0.32 4 0.32
Advertising (targets youngchildren) 0.07 0 0Customer Service 0.08 0 0Market Saturation (more difficult to add new stores) 0.07 0 0Labor Turnover 0.06 0 0
totalshould be1.0 1
3.3 3.23
QSPM (Cont.)
7/29/2019 McDonalds Final PowerPoint.ppt
74/88
OMalley, Ouellette, Plourde, & Roy2009 74
Future Plans
7/29/2019 McDonalds Final PowerPoint.ppt
75/88
OMalley, Ouellette, Plourde, & Roy2009 75
Objectives
Objectives for 2007 and the next three years are:
Better restaurant operations
Branded affordability
Menu variety and beverage choice
Grow market share
Maintain debt-to-capital levels to 35-40%
Create long-term profitable growthfor shareholders
Recommendations
7/29/2019 McDonalds Final PowerPoint.ppt
76/88
OMalley, Ouellette, Plourde, & Roy2009 76
RecommendationsCreate an organic menu to satisfy the growing hunger forhealthier foods. This will increase McDonalds sales andbe a positive effective on its public image.
$15,000,000
Spend more money on Research & Development to createnew products and services and increase the efficiency of operations.
$10,000,000
Advertise organic products to the older demographic.$10,000,000
Increase spending on customer service efforts to decreaselegal challenges.
$5,000,000
Develop green packaging for all stores. This will decreaseMcDonalds operations expenses and create a betteratmosphere in the long run.
$25,000,000
Total Costs= $65,000,000
7/29/2019 McDonalds Final PowerPoint.ppt
77/88
OMalley, Ouellette, Plourde, & Roy2009 77
Going Organic
Organic Food sales are anticipated to increase an averageof 18 percent each year from 2007 to 2010.
Organic food represents approximately 2.8% of overallfood and beverage sales in 2006. The organic sector grew20.9% in 2006.
Total US organic sales, including food and non-foodproducts, were $17.7 billion in 2006 up 21% from 2005.
7/29/2019 McDonalds Final PowerPoint.ppt
78/88
OMalley, Ouellette, Plourde, & Roy2009 78
O'Naturals Organic Fast Food
McDonalds competition in the organic segment.
Privately owned company.
Locations: 2 in Maine, 1 in Massachusetts, 1 inArizona, 1 in Kansas.
Serves only organic food and beverages.
Easy acquisition for McDonalds if they pursue theorganic segment of the fast food industry.
7/29/2019 McDonalds Final PowerPoint.ppt
79/88
OMalley, Ouellette, Plourde, & Roy2009 79
Implementation
7/29/2019 McDonalds Final PowerPoint.ppt
80/88
OMalley, Ouellette, Plourde, & Roy2009 80
EPS/EBIT Analysis
Amount of money needed: $65,000,000Stock Price as of 12/31/06: $41.61Tax Rate: 35%Interest Rate: 7%# Shares Outstanding: 1,204,000,000# Shares needed: 1,562,124
7/29/2019 McDonalds Final PowerPoint.ppt
81/88
OMalley, Ouellette, Plourde, & Roy2009 81
EBS/EBIT Analysis (Cont.)
Common Stock Financing Debt FinancingRecession Normal Boom Recession Normal Boom
EBIT 65,000,000 250,000,000 600,000,000 65,000,000 250,000,000 600,000,000
Interest 0 0 0 4,550,000 4,550,000 4,550,000
EBT 65,000,000 250,000,000 600,000,000 60,450,000 245,450,000 595,450,000
Taxes 22,750,000 87,500,000 210,000,000 21,157,500 85,907,500 208,407,500
EAT 42,250,000 162,500,000 390,000,000 39,292,500 159,542,500 387,042,500
#Shares 1,205,562,124 1,205,562,124 1,205,562,124 1,205,562,124 1,205,562,124 1,205,562,124
EPS 0.035045892 0.134791892 0.323500542 0.03259268 0.13233868 0.321047329
70 Percent Stock- 30 Percent Debt 70 Percent Debt- 30 Percent Stock
Recession Normal Boom Recession Normal Boom
EBIT 65,000,000 250,000,000 600,000,000 65,000,000 250,000,000 600,000,000
Interest 4,550,000 4,550,000 4,550,000 3,185,000 3,185,000 3,185,000
EBT 60,450,000 245,450,000 595,450,000 61,815,000 246,815,000 596,815,000Taxes 21,157,500 85,907,500 208,407,500 21,635,250 86,385,250 208,885,250
EAT 39,292,500 159,542,500 387,042,500 40,179,750 160,429,750 387,929,750
#Shares 1,205,093,487 1,205,093,487 1,205,093,487 1,204,468,637 1,204,468,637 1,204,468,637
EPS 0.032605354 0.132390144 0.321172178 0.033358901 0.133195457 0.322075427
h
7/29/2019 McDonalds Final PowerPoint.ppt
82/88
OMalley, Ouellette, Plourde, & Roy2009 82
Other Issues Labor Turnover
Employee Retention
Cultural differences in internationalcountries
Laws and regulations in internationalcountries
Currency
Public Relation
7/29/2019 McDonalds Final PowerPoint.ppt
83/88
OMalley, Ouellette, Plourde, & Roy2009 83
Evaluation
7/29/2019 McDonalds Final PowerPoint.ppt
84/88
OMalley, Ouellette, Plourde, & Roy2009 84
Update-Current Strategyand Objectives 2007-2008
Our Plan to Win , with its strategic focus on "beingbetter, not just bigger," has delivered even betterrestaurant experiences to customers and superior valueto shareholders. We have the world's best owner/operators, suppliers,and employees united in our commitment to customers. We are leveraging greater consumer insight to deliversustainable business results for the long-term benefit of our shareholders.
7/29/2019 McDonalds Final PowerPoint.ppt
85/88
OMalley, Ouellette, Plourde, & Roy2009 85
McDonalds Performance Chart
2006-2009
http://moneycentral.msn.com/investor/charts/chartdl.aspx?iax=1&Symbol=MCD
http://moneycentral.msn.com/investor/charts/chartdl.aspx?iax=1&Symbol=MCDhttp://moneycentral.msn.com/investor/charts/chartdl.aspx?iax=1&Symbol=MCDhttp://moneycentral.msn.com/investor/charts/chartdl.aspx?iax=1&Symbol=MCDhttp://moneycentral.msn.com/investor/charts/chartdl.aspx?iax=1&Symbol=MCDhttp://moneycentral.msn.com/investor/charts/chartdl.aspx?iax=1&Symbol=MCD7/29/2019 McDonalds Final PowerPoint.ppt
86/88
OMalley, Ouellette, Plourde, & Roy2009 86
McDonalds Trivia McDonalds sell more than 1/3 of all the French fries sold
in restaurants in the U.S.
McDonalds restaurant will buy 54,000,000 pounds of freshapples this year.
Nearly one in eight workers in the US has at some timebeen employed by McDonalds.
More than 50,000 students from all over the world havegraduated with Bachelor of Hamburgerlogy degrees fromMcDonalds from Hamburger University.
Since its founding in 1955, McDonalds has sold well over
100 billion hamburgers. There is about 178 sesame seeds on a Big Mac bun.
7/29/2019 McDonalds Final PowerPoint.ppt
87/88
OMalley, Ouellette, Plourde, & Roy2009 87
7/29/2019 McDonalds Final PowerPoint.ppt
88/88
Bibliography McDonalds Corporation -2007 Case Notes by Vijaya Narapareddy of University of Denver
McDonalds Online www. mcdonalds .com/ o 2006 Annual Report
o Graphics
Datamonitor
o Global Fast Food Industry Profile 2008
o US Fast Food Industry Profile 2008
Tony Gauvin
o Wendys 2007 - Strategic Management Case Study
Analyst Reports
o Yahoofinance.com
o moneycentral.msn.com
o Organic Trade Association http://www.ota.com
O'Naturals
o www. onatural s.com/ Business & Company Resource Center
o McDonalds Corp. Notable Corporate Chronologies. Online Edition. Thomson Gale, 2007.
Reproduced in Business and Company Resource Center. Farmington Hills, Mich.: Gale Group.
2009 http://galenet.galegroup.com/servlet/BCRC
http://www.mcdonalds.com/http://www.mcdonalds.com/http://www.mcdonalds.com/http://www.ota.com/http://www.onaturals.com/http://www.onaturals.com/http://www.onaturals.com/http://www.onaturals.com/http://www.onaturals.com/http://www.onaturals.com/http://www.onaturals.com/http://www.ota.com/http://www.mcdonalds.com/http://www.mcdonalds.com/http://www.mcdonalds.com/