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1
ENTREPRENEURSHIP PROJECT
PROJECT REPORT ON
FRANCISING OF
MCDONALDrsquoS
2
INDEX SL NO TITLE PAGE NO
1
MCDONALDrsquoS
an Introduction
3-4
2
History of Mcdonald rsquos amp Key Landmarks - McDonaldrsquos
India Journey
5-9
3
Goals and Objectives Mission Statement amp Awards 10-11
4 Corporate Social Responsibility 12
5 McDonaldrsquos International amp Business model 13-14
6 Marketing Mix 15-17
7 SWOT Analysis 18-19
8 McDonaldrsquos Role in the Indian Economic Growth amp Consolidated Balance Sheet of McDonaldrsquos
20-24
9 People hellip McDonaldrsquos 1 Resource in India amp The McDonaldrsquos Promise
25-27
10 McDonaldrsquos Indiahellip Culturally Sensitive amp McDonaldrsquos Cold Chain in India
28-30
11 Questionnaire amp Survey Analysis
31-32
3
12 The Top Five Reasons Why McDonaldrsquos is so Popular
33
13 Findings 34
14 Conclusion
35
15 Bibliography 36
MCDONALDrsquoS
AN INTRODUCTION
McDonalds Corporation (NYSE MCD) is the worlds largest chain
of hamburger fast food restaurants serving around 68 million customers daily in
119 countries
Headquartered in the United States the company began in 1940 as a barbecue
restaurant operated by Richard and Maurice McDonald in 1948 they
reorganized their business as a hamburger stand using production
line principles Businessman Ray Kroc joined the company as a franchise
agent in 1955 Ray Kroc subsequently purchased the chain from the McDonald
brothers and oversaw its worldwide growth
A McDonalds restaurant is operated either by a franchisee or an affiliate or the corporation itself The corporations revenues come from the rent royalties
and fees paid by the franchisees as well as sales in company-operated restaurants
4
McDonalds revenues grew 27 percent over the three years ending in 2007 to
$228 billion and 9 percent growth in operating income to $39 billion McDonalds primarily sells hamburgers cheese burgers chicken French
fries breakfast items soft drinks milkshakes and desserts In response to changing consumer tastes the company has expanded its menu to
include salads wraps smoothes and fruits
An exterior view of the worlds largest McDonalds restaurant built on 2012
London Olympics site
In July 2011 McDonalds announced that their largest restaurant in the world
will be built on the 2012 London Olympics site The restaurant will contain over 1500 seats and is half the length of an American Football field Over 470
staff will be employed serving on average (during the 2012 Olympics) 100000 portions of fries 50000 Big Macs and 30000 Milkshakes This restaurant will
overshadow the current largest McDonalds in the world in Moscow Russia In January 2012 the company announced revenue for 2011 reached an all-time
high of $27 billion and that 2400 restaurants would be updated and 1300 new ones opened worldwide
5
History of McDonalds
The McDonalds restaurant concept was introduced in San Bernardino
California by Dick and Mac McDonald of Manchester New Hampshire It was
modified and expanded by their business partner Ray Kroc of Oak Park
Illinois who later bought out the business interests of the McDonald brothers in
the concept and went on to found McDonalds Corporation
McDonalds is the leading global foodservice retailer with more than 32000
local restaurants serving more than 58 million people in around 130 countries
each day 70 percent of our restaurants worldwide are owned and operated by
independent local businessmen and businesswomen
In India the brand is managed by two business entities
Connaught Plaza Restaurants Private Limited led by Mr Vikram Bakshi
JV Partner and Managing Director North amp East India
Hardcastle Restaurants Private Limited led by Ms Smita Jatia Managing
Director South amp West India
McDonalds philosophy of QSCV (Quality Service Cleanliness and Value) is
the guiding force behind its service to the customers in India Following its
philosophy of being sensitive to local food and cultural preferences India was
the first country in the McDonalds system where it served non-beef and non-
pork products More than 70 percent of the menu in India has been locally
developed with complete segregation of vegetarian and non-vegetarian products
right from the food processing plants to the point of serving the customers
McDonalds commitment to its Indian customers is evident even in development
6
of special sauces that use local spices and chillies The mayonnaise and all other
sauces are egg-less McDonalds also pioneered the establishment of Cold Chain
across India which helps maintain freshness and nutrition in every product
McDonalds regular scrumptious menu includes wide range of products like McAloo Tikki Filet-O-Fish Spicy Range Chicken McGrill McVeggie Veg Pizza McPuff Chicken Mcnuggetsreg Fries Wraps an assortment of Sundaes
Soft Serve and refreshing beverages such as Ice Tea amp Cold Coffee with outstanding service in a vibrant and lively ambience for which McDonalds is
known worldwide
McDonalds had further reinforced the branded affordability mantra via the introduction of the Happy Price Menu which starts at Rs 25 only
McAloo Tikki Veg Surprise and Pizza McPuff developed in India are now being exported to the countries in the Middle East
McDonaldrsquos introduced Cokersquos Georgia Gold range of hot beverages which was developed especially for the Indian market in 2002
As a leader in QSR segment (Quick Service Restaurant) McDonaldrsquos has
pioneered various industry benchmark practices over the past decade of serving Indian customers including new concepts such ashellip
Oil Alliances in India by inking with petroleum giants BPCL and HPCL
The two such alliances with BPCL outlets are in Mathura (2000) (UP) and Doraha (2002) (Punjab)
Novel menu formats such as an Express Model with a limited menu and Kiosks with a variety of dessert offerings
Home Delivery (McDeliverytrade) Providing even more convenience to
our customers In Oct 2006 McDelivery on bicycle at Chandni Chowk was launched and in March lsquo07 an all India single delivery number (66
000 666) was introduced
First Drive Thru Restaurant at NOIDA (UP) in 1997
First Restaurant with operational Kitchen at Delhi Domestic
Keeping pace with the customer evolving needs McDonalds also functions on models that drive convenience and create unique differentiation like
McDelivery Drive thru Breakfast Menu high ways and extended hours (Currently available in select cities)
At present there are 300 McDonalds restaurants in India
The strong foundation that Ray Kroc built continues today with McDonalds
7
vision and commitment for its internal as well as external customers Since then it has evolved into a value driven brand and recognizes that affordability of its
products is an attractive proposition for its customers along with taste McDonalds continues to strengthen it business model and progress with
customers evolving needs
Key Landmarks - McDonaldrsquos India Journey
1996 hellipthe first McDonaldrsquos restaurant opened on Oct 13 at Basant Lok
Vasant Vihar New Delhi It was also the first McDonaldrsquos restaurant in the
world not serving beef on its menu
1997hellip
the first Drive ndashThru restaurant at Noida (UP)
the first disabled friendly store at Noida (UP)
1999hellipthe first Mall location restaurant at Ansal Plaza (New Delhi)
2000hellipthe first highway restaurant at Mathura (UP)
2001hellipthe first thematic restaurant at Connaught Place (New Delhi)
2002hellip
The first restaurant in a food court at 3Crsquos Lajpat Nagar (New Delhi)
The first restaurant at the Delhi Metro Station at Inter State Bus Terminus
The first fundraiser in association with ORBIS and Dr Shroffrsquos Charity
Eye hospital(Delhi)
2003 The first Dessert Kiosk ndash Faridabad (Haryana)
2004hellip McDonaldrsquos Delivery Service (McDelivery) introduced in New Delhi
2003-04hellip Indigenous products like McAloo Tikki McVeggie and Pizza
McPuff exported to Middle East countries
8
2006
McDelivery on Bicycles flagged off at Chandni Chowk (Delhi)- another
first initiative by McDonaldrsquos India
100th McDonaldrsquos Restaurant in India
10th Year Anniversary
2007
The first McDonaldrsquos open in Eastern Region at Park Street Kolkata
The first restaurant opened at Airport (Domestic Airport New Delhi)
The first MFY restaurant opened at Greater Noida Uttar Pradesh
2008hellip
The First restaurant to start extended hours procedure at Cyber Greens
Gurgaon and Saket New Delhi
The first restaurant to start Breakfast Menu at Janpath New Delhi
2009hellipThe first McDonaldrsquos Restaurant opens at Old Delhi Railway Station
2010hellipThe first reimaged new look restaurant opened at Ambiance mall
Vasant Kunj 6
2011hellip
McDonaldrsquos introduces premium products in it is menu ndash McSpicy range
of products
McDonaldrsquos introduces Mcflurry (premium desserts) in Oreo and
chocolate crispy flavors
McDonaldrsquos introduces Wi-Fi across DelhiNCR region
McDonaldrsquos currently has 235 restaurants in India
The Northern Region has 110 restaurants ndash
sect Delhi ndash 40
sect Haryana - 15
Faridabad ndash3 Manesar ndash 2 (Highway and Drive - Thru) Gurgaon ndash7
Karnal ndash 1 (Highway and Drive - Thru) Panipat -1 Ambala -1
9
sect Rajasthan -6
Jaipur ndash 3 Jodhpur ndash 1 Kota -1 Udaipur - 1
sect Uttaranchal -1
Dehradun ndash 1
sect Uttar Pradesh ndash29
Noida ndash 5 Greater Noida ndash 1 Ghaziabad ndash 7 Mathura ndash 1 (Highway and
Drive - Thru) Kanpur ndash 2 Meerut ndash 2 Lucknow ndash5 Agra ndash 1 Allahabad
ndash 1 Varanasi -2 Gajraula ndash 1 (Highway amp Drive Thru) Khatauli -
1(Highway and Drive thru)
sect Punjab ndash 13
Chandigarh ndash 2 Ludhiana ndash 2 Doraha ndash 1 (Highway and Drive - Thru)
Jalandhar ndash 2 Patarsi ndash 1 (Highway and Drive - Thru) Dasuya (Highway
and Drive Thru) ndash 1 Amritsar -1 Patiala -1 Zirakpur-2
sect West Bengal-3
Kolkata- 3
sect Himachal Pradesh -1
Jabli-1
sect Madhya Pradesh -2
Gwalior ndash 1 Bhopal -1
----------------------------------------------
The Western Region has 125 restaurants across the following states and cities ndash
Maharashtra - Mumbai Pune Nasik Kolhapur ndash
Gujarat - Ahmedabad Vododara Surat Indore Vapi
Madhya Pradesh ndash Indore
Andhra Pradesh - Hyderabad
Karnataka - Bangalore
Tamil Nadu - Chennai
10
GOALS AND OBJECTIVES
1 McDonaldrsquos vision is to be the worldrsquos best quick service restaurants
experience
2 McDonalds is committed to maintaining and developing the best food
products in the quick service restaurant market
3 In order to deliver this the company has made a number of commitments to
food safety and nutrition
4 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
5 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
McDonalds vision is to be the worlds 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
11
AWARDS
McDonaldrsquos India has received many prestigious awards for its service and
performance including
The lsquoMost Respected Companyrsquo for four consecutive years (2003-2006)
in the Food Services sector by Businessworld
The lsquoMost Preferred Fast Food Outletrsquo 2006 amp 2007 by Awaaz
Consumer Award hosted by CNBC
Star Retailer ndash the lsquoConsumer Way Food Services Retailerrsquo of the
Year 2006 amp 2007 2008 by Franchise India
lsquoRetailer of the Yearrsquo Award for catering services (2004-2006) at the
Images Retail Awards
The lsquoAmity Corporate Excellence Awardrsquo ndashin 2007 amp 2008
The lsquoMost Wanted Brand of the Yearrsquo Award 2003 amp 2004 by
Franchising Holdings India Ltd
The lsquoMost Admired F amp B Retailer of the Year QSRs Foreign
Originrsquo ndash The Golden Spoon Awards by Images Retail
The Company with the Best Corporate Conscience ndash 2008 by Business
amp Economy
lsquoValue for Moneyrsquo brand ndash 2010 by Pitch Magazine
The most trusted family restaurant brand in the country award in
2010 by Readerrsquos Digest
12
Corporate Social Responsibility
Being responsible is at the core of everything that we do at McDonaldstrade It is
a deep-rooted value and a tradition that dates back to our founder Ray Kroc It is also one of our top business priorities
We believe that our continuing success depends on our stakeholders trust in
each and every aspect of our business be it the quality and safety of the food we serve in the way we do our business the way we connect and make the difference in the communities we operate being sensitive to environment and
being sustainable
1 We are committed to doing what is right
2 We are committed to be a good neighbour and partner in the community
3 We are committed to conducting our business ethically and with complete transparency
4 We are committed to treating our entire internal and external stakeholders with respect and dignity
13
McDonaldrsquos International
McDonaldrsquos has over 32000 local restaurants in more than 100 countries
70 percent of our restaurants worldwide are owned and operated by
independent local businessmen and businesswomen
McDonaldrsquos serves nearly 50 million customers each day
McDonaldrsquos first franchised restaurant opened at Des Plaines Illinois in
1955 by the founder Ray Kroc
McDonaldrsquos has its own Hamburger University in Illinois and the first
batch graduated in 1961
12 classes offered at Hamburger University are college accredited
In 1963 McDonaldrsquos sold its one billionth hamburger
McDonaldrsquos is listed on the New York Frankfurt Munich Paris and
Tokyo stock exchanges
McDonaldrsquos aired its first network TV advertisement ldquoMcDonaldrsquos -
Where Quality Starts Fresh Everydayrdquo in 1965
The first McDonaldrsquos Drive-Thru opened in Sierra Vista Arizona in 1975
14
Happy Meals were added to McDonaldrsquos menu in 1979
McDonaldrsquos launched the new worldwide Balanced Active Lifestyles
public awareness campaign in 2005
McDonaldrsquos celebrated its 50th Anniversary on April 15 2005
Business model
McDonalds Corporation earns revenue as an investor in properties
a franchiser of restaurants and an operator of restaurants Approximately 15 of McDonalds restaurants are owned and
operated by McDonalds Corporation directly The remainder are operated by others through a variety of franchise agreements and
joint ventures
The McDonalds Corporations business model is slightly different
from that of most other fast-food chains In addition to ordinary franchise fees and marketing fees which are calculated as
a percentage of sales McDonalds may also collect rent which may also be calculated on the basis of sales
As a condition of many franchise agreements which vary by
contract age country and location the Corporation may own or lease the properties on which McDonalds franchises are located In most if not all cases the franchisee does not own the location of its
restaurants
The United Kingdom and Ireland business model is different than the US in that fewer than 30 of restaurants are franchised with
the majority under the ownership of the company McDonalds trains its franchisees and others at Hamburger Univers ity in Oak
Brook Illino is
In other countries McDonalds restaurants are operated by joint
ventures of McDonalds Corporation and other local entities or governments
15
As a matter of policy McDonalds does not make direct sales of food or materials to franchisees instead organizing the supply of
food and materials to restaurants through approved third party logistics operators
According to Fast Food Nation by Eric Schlosser nearly one in
eight workers in the US have at some time been employed by McDonalds It also states that McDonalds is the largest private
operator of playgrounds in the US as well as the single largest purchaser of beef pork potatoes and apples The selection of
meats McDonalds uses varies with the culture of the host country
MARKETING MIX
The marketing mix of a company consists of the various elements as follows
which form the core of a companyrsquos marketing system and hence helps to
achieve marketing objectives The marketing mix of McDonaldrsquos is as follows-
The McDonald plains its marketing by simple keeping 4Ps in mind
Product
Price
Promotion
Place
Product - McDonaldrsquos places considerable emphasis on developing a menu
which customers want Market research establishes exactly what this is However customersrsquo requirements change over time In order to meet these
changes McDonaldrsquos has introduced new products and phased out old ones and will continue to do so Care is taken not to adversely affect the sales of one choice by introducing a new choice which will cannibalise sales from the
existing one (trade off) McDonaldrsquos knows that items on its menu will vary in popularity Their ability to generate profits will vary at different points in their
cycle In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian
The happy meal for the children is a great seller among others
Price-The customerrsquos perception of value is an important determinant of the price charged Customers draw their own mental picture of what a product is worth A product is more than a physical item it also has psychological
connotations for the customer The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised It is
16
important when deciding on price to be fully aware of the brand and its integrity
In India McDonalds classifies its products into 2 categories namely the branded
affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and
the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price
perceptions
Promotion- The promotions aspect of the marketing mix covers all types of
marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and
in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct
mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that
provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be
supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item
At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart
from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos
Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the
management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities
making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers
17
Other than the main four elements mentioned above there are a few other
elements too in the marketing mix which are as follows-
People -The employees in McDonaldrsquos have a standard uniform and
McDonaldrsquos specially focuses on friendly and prompt service to its customers
from their employees
Process -The food manufacturing process at McDonaldrsquos is completely
transparent ie the whole process is visible to the customers In fact the fast
food joint allows its customers to view and judge the hygienic standards at
McDonaldrsquos by allowing them to enter the area where the process takes place
The customers are invited to check the ingredients used in food
Physical evidence - McDonalds focuses on clean and hygienic interiors of
is outlets and at the same time the interiors are attractive and the fast food joint
maintains a proper decorum at its joints
18
SWOT ANALYSIS
Strengths
McDonaldrsquos holds a very strong brand name worldwide
They have large partnerships with other companies that provide them
with their desired products this increases the goodwill of the company
McDonaldrsquos is one of the most reputed firms who are socially
responsible
Loyal employees amp management amp customer are their biggest strength
19
McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind
while providing food to different countries
Clean environment and play areas for children where they can enjoy their
time
Weakness
The weakness that hits the list of employee turnover rate Every year
many of their employees are fired out of the restaurant
McDonalds mostly advertises products and food items that targets
children
Health conscious people often complain that they do not provide us with
the organic and healthy food This becomes their weakness when they get in the complaints
They also face quality issue at times This affects the business as they are
running the outlet worldwide if one franchise gets affected others also
get a bad name
Opportunities
It can open up online services for their customers so that they can easily
order their desired meals sitting at home
Discounts given on every food item may help them gain more customers
They can go for a joint venture with the retailers they work with
They can introduce healthy hamburgers and healthy drinks for the people who are health conscious
20
In order to be environment friendly they can use packing material which
can be recycled later or material that does not create pollution
Threats
Emerging competition of similar outlets is becoming a problem for McDonalds
Health issue also becomes a problem when it comes to food
As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies
Recession in any country would definitely affect the whole outlet
worldwide
People facing heart problems and obesity accuse McDonalds for not
providing them with the healthy food
They have a threat of local food outlets in different countries
McDonalds is operating in a fully fledged economy where competition is
increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession
McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local
Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government
regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled
Indian businesses to grow by improving their ability to compete in todays international markets
21
Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in
predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first
restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept
has today been adopted by various Indian and International players to deliver quality produce to consumers
For instance Cremica Industries worked with another McDonalds supplier
from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to
McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with
farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water
consumption better seeds amp agricultural management practices which result in greater yields
In some cases these Indian suppliers had the technology - but no market for the
products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk
casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to
restaurants across India
McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations
COMPANYrsquoS FINANCIAL INFORMATION
Company Name McDonalds Corporation
Ticker Symbol MCD
Web Address wwwmcdonaldscom
CEO Mr Donald Thompson
No of Employees 420000
Common Issue Type CS
Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other
22
goods from numerous independent suppliers
Industry Information LEISURE - Restaurants
Price Day Change Bid Ask Open High Low Volume
8718 -002 - - 8743 8743 8676 3658828
Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range
875267 10040 039 527 253 164 35 10222 - 8331
KEY FIGURES (Latest Twelve Months - LTM)
Yesterdays Close 8706 $
PE Ratio - LTM 164
Market Capitalisation 875267 mil
Latest Shares Outstanding 10040 mil
Earnings pS (EPS) 527 $
Dividend pS (DPS) 253 cent
Dividend Yield 35
Dividend Payout Ratio 48
Revenue per Employee 64300 $
Effective Tax Rate 313
Float 10153 mil
Float as of Shares Outstanding 999
Foreign Sales 18478 mil
Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue
910
Research amp Devlopment (RampD) as of Revenue
000
Gross Profit Margin 447
EBITDA Margin 356
Pre-Tax Profit Margin 291
Assets Turnover 08
Return on Assets (ROA) 161
Return on Equity (ROE) 392
Return on Capital Invested (ROCI) 204 Current Ratio 10
Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096
LT DebtTotal Capital 480
Working Capital pS 006 $
Cash pS 217 $
Book-Value pS 1383 $
Balance Sheet (at a glance) in Millions
DIVIDEND INFO
Dividend Declared Date 09202012
Dividend Ex-Date 11282012
Dividend Record Date 12022012
Dividend Pay Date 12162012
Dividend Amount 770
Type of Payment Cash Payment
Dividend Rate 308
Current Dividend Yield 35
5-Y Average Dividend Yield 31
Payout Ratio 480
5-Y Average Payout Ratio 530
Share price performance previous 3 years
Share price performance intraday
23
Tangible Book-Value pS 1110 $
Cash Flow pS 689 $
Free Cash Flow pS 125 $
KEY FIGURES (LTM) Price info PriceBook Ratio 630
PriceTangible Book Ratio 785 PriceCash Flow 126
PriceFree Cash Flow 699
PE as of Industry Group 420
PE as of Sector Segment 770
PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol
1 Week - - - 00 101 54041 66217
4 Weeks 8743 8331 8474 27 101 57129 856929
13 Weeks 9416 8331 9102 -44 98 61288 3554700
26 Weeks 9416 8331 8775 -08 93 59419 7189758
52 Weeks 10222 8331 9803 -112 79 59272 14521666
YTD 10222 8331 - -132 77 59774 13807695
Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)
8661 8631 8825 8931 9174 039 031
GROWTH RATES 5-Year
Growh Rsup2 of 5-Year Growth
3-Year
Growth
Revenue 381 776 666
Income 2017 811 978
Dividend 1536 947 1016
Capital Spending 697 NA 1052
RampD 000 NA 000
Normalized Inc 1158 NA 979
CHANGES YTD vs
Last YTD
Curr Qtr vs
Qtr 1-Yr ago
Annual vs
Last Annual
Revenue 21 -02 122
Earnings -14 -35 113
EPS 10 -14 151
EPS $ 004 -002 069
SOLVENCY RATIOS
SHORT-TERM SOLVENCY RATIOS
(LIQUIDITY)
Net Working Capital Ratio 271
Current Ratio 13
Quick Ratio (Acid Test) 10
Liquidity Ratio (Cash) 067
Receivables Turnover 215
Average Collection Period 17
Working CapitalEquity 62
Working Capital pS 088
Cash-Flow pS 677
Free Cash-Flow pS 209
24
FINANCIAL STRUCTURE RATIOS
Altmans Z-Score Ratio 485
Financial Leverage Ratio (AssetsEquity) 23
Debt Ratio 564
Total DebtEquity (Gearing Ratio) 087
LT DebtEquity 084
LT DebtCapital Invested 569
LT DebtTotal Liabilities 652
Interest Cover 173
InterestCapital Invested 167
25
People hellip McDonaldrsquos 1 Resource in India
26
McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs
around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in
1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with
McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)
The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive
training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course
(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the
Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University
27
The McDonaldrsquos Promise
QUALITY SERVICE CLEANLINESS amp VALUE
When asked to explain McDonalds success founder Ray Kroc used to say We
take the hamburger business more seriously than anyone else
Kroc was a perfectionist From the day he opened his first restaurant he vowed
to give his customers high quality products served quickly --and with a smile
in a clean and pleasant environment and all at a fair price Quality Service
Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds
business
QUALITY
McDonalds India serves only the highest quality products The attention to food
quality started long before the first restaurant opened McDonalds India has
established close relationships with local suppliers who provide McDonalds
with the highest quality freshest ingredients to make its products
All suppliers adhere to Indian government regulations on food health and
hygiene while continuously maintaining McDonalds own recognized standards
McDonalds has established an extensive cold chain distribution system in
India to ensure that the products which arrive at the restaurant from suppliers
all over India are absolutely fresh In the restaurants products and supplies are
used on a first-in first-out basis to ensure freshness All McDonalds products
are prepared using modern state-of-the-art cooking equipment to ensure quality
and safety
SERVICE
McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos
which sets its restaurants apart from others At McDonalds the customer
always comes first Every employee strives to provide 100 percent customer
satisfaction -- for every customer -- every visit This includes friendly and
attentive service accuracy in order taking and anticipation of customers needs
-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun
and youthful spirit we will proudly serve an exceptional McDonaldrsquos
eating experience that makes all people feel special and makes them smile ndash
every customer every timerdquo
28
CLEANLINESS
McDonalds restaurants provide a clean comfortable environment especially
suited for families McDonalds stringent cleaning standards ensure that all
tables seating highchairs and trays are sanitized several times each hour The
attention to cleanliness extends from the lobby to the kitchen to the sidewalk
and immediate areas outside the restaurant
In addition to urging customers to dispose of their litter properly and offering a
number of trash bins (both inside and outside the restaurants) for their
convenience McDonalds Litter Patrols walk around the restaurants several
times each day picking up litter -- even if it isnt from McDonalds
Restaurant managers walk through the dining areas each hour to ensure that it
is clean and well stocked All restaurants provide a variety of comfortable
seating arrangements to accommodate anyone -- from a single individual to a
large family The environment is warm inviting and well lit
VALUE
McDonalds menu is priced at a value that the largest segment of Indian
consumers can afford McDonalds does not sacrifice quality for value -- rather
McDonalds leverages economies of scale to minimize costs while maximizing
value to customers
McDonalds definition of value is broader than most restaurants of its kind -- it
is more than price Value at McDonalds is the sum of the total McDonalds
experience quality food fast friendly service a clean and pleasant
environment and products priced at very affordable prices for the largest
segment of Indian consumers possible That is value at McDonalds
29
McDonaldrsquos Indiahellip Culturally Sensitive
Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much
that is consistent with other McDonaldrsquos restaurants around the world such as
the quality of the food and the attention to service
The dedication to local cultures is not new for McDonaldrsquos For the past 50
years McDonaldrsquos has opened restaurants in more than 120 distinctly different
countries and cultures With guidance from its local partners McDonaldrsquos is
able to adapt- where necessary-its menu and restaurant operations to
complement existing eating-out options McDonaldrsquos local owners understand
what their customers want perhaps more importantly what is acceptable within
local customs and values
There is much too that is very different- such as the first beef-less and pork-
less menu in the world and special product formulations to cater to Indian
culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos
India says ldquoWe know the Indian culture because we were born in it
inherited its richness and respect it greatly It is the respect for this culture
and the sentiments of many of our customersrsquo that we do not serve any
beef and pork items in our restaurantsrdquo
McDonaldrsquos commitment to its Indian customers is evident even in
development of special sauces that use local spices and chillies The
mayonnaise and all other sauces are egg-less
In India vegetarianism is in many cases more than a lifestyle choice Many
people are vegetarians due to religious reasons and in some cases even the
vegetarian product that has come into contact with a non-vegetarian product is
unacceptable Hence McDonaldrsquos India has also changed its operations to
address the special requirements of our vegetarian customers by having
processes that ensure that a physical separation of veg and non-veg products is
maintained right from farm to the customer Vegetable products are prepared
separately using dedicated equipment and utensils Also in India McDonaldrsquos
uses only vegetable oil as a medium for cooking
30
McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash
lsquoto be driven by the leadership of local ownersrsquo This commitment has translated
into enduring benefits to the businesses at the grass root level in the areas of
introduction of new crops new agricultural practices and food processing methods
and procedures
McDonalds unique cold chain on which the QSR major has spent more than six
years setting up in India has brought about a veritable revolution immensely
benefiting the farmers at one end and enabling customers at retail counters get the
highest quality food products absolutely fresh and at great value
Setting up this extensive cold chain distribution system has involved the transfer of
state-of-the-art food processing technology by McDonalds and its international
suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain
From Field to -2⁰C in 90 Minutes
Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be
grown during the winter months but with McDonalds expertise in the area of
agriculture they are now able to grow this crop through the year
Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room
to remove field heat a large cold room and a refrigerated van for transportation where
the temperature and the relative humidity of the crop is maintained between 1ordm C and
4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room
within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling
to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at
the farms itself ensuring no delay between harvesting pre-cooling packaging and
cold storage
Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd
Flavour and Freshness locked in at - 35degC
Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable
range of products is another important player in this cold chain This includes hi-tech
refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C
This is vital to ensure that the frozen food retains it freshness for a long time and the
cold chain is maintained The frozen product is immediately moved to cold storage
rooms
31
Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India
From Farm to Bulk Cooler in less than 90 Minutes
McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for
quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk
coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -
thus maintaining the cold chain
All leading to the Consumer
McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The
DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity
of the products throughout the entire cold chain
Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C
as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state
All these suppliers share McDonalds commitment and dedication to satisfying
customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently
each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental
effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn
more
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
2
INDEX SL NO TITLE PAGE NO
1
MCDONALDrsquoS
an Introduction
3-4
2
History of Mcdonald rsquos amp Key Landmarks - McDonaldrsquos
India Journey
5-9
3
Goals and Objectives Mission Statement amp Awards 10-11
4 Corporate Social Responsibility 12
5 McDonaldrsquos International amp Business model 13-14
6 Marketing Mix 15-17
7 SWOT Analysis 18-19
8 McDonaldrsquos Role in the Indian Economic Growth amp Consolidated Balance Sheet of McDonaldrsquos
20-24
9 People hellip McDonaldrsquos 1 Resource in India amp The McDonaldrsquos Promise
25-27
10 McDonaldrsquos Indiahellip Culturally Sensitive amp McDonaldrsquos Cold Chain in India
28-30
11 Questionnaire amp Survey Analysis
31-32
3
12 The Top Five Reasons Why McDonaldrsquos is so Popular
33
13 Findings 34
14 Conclusion
35
15 Bibliography 36
MCDONALDrsquoS
AN INTRODUCTION
McDonalds Corporation (NYSE MCD) is the worlds largest chain
of hamburger fast food restaurants serving around 68 million customers daily in
119 countries
Headquartered in the United States the company began in 1940 as a barbecue
restaurant operated by Richard and Maurice McDonald in 1948 they
reorganized their business as a hamburger stand using production
line principles Businessman Ray Kroc joined the company as a franchise
agent in 1955 Ray Kroc subsequently purchased the chain from the McDonald
brothers and oversaw its worldwide growth
A McDonalds restaurant is operated either by a franchisee or an affiliate or the corporation itself The corporations revenues come from the rent royalties
and fees paid by the franchisees as well as sales in company-operated restaurants
4
McDonalds revenues grew 27 percent over the three years ending in 2007 to
$228 billion and 9 percent growth in operating income to $39 billion McDonalds primarily sells hamburgers cheese burgers chicken French
fries breakfast items soft drinks milkshakes and desserts In response to changing consumer tastes the company has expanded its menu to
include salads wraps smoothes and fruits
An exterior view of the worlds largest McDonalds restaurant built on 2012
London Olympics site
In July 2011 McDonalds announced that their largest restaurant in the world
will be built on the 2012 London Olympics site The restaurant will contain over 1500 seats and is half the length of an American Football field Over 470
staff will be employed serving on average (during the 2012 Olympics) 100000 portions of fries 50000 Big Macs and 30000 Milkshakes This restaurant will
overshadow the current largest McDonalds in the world in Moscow Russia In January 2012 the company announced revenue for 2011 reached an all-time
high of $27 billion and that 2400 restaurants would be updated and 1300 new ones opened worldwide
5
History of McDonalds
The McDonalds restaurant concept was introduced in San Bernardino
California by Dick and Mac McDonald of Manchester New Hampshire It was
modified and expanded by their business partner Ray Kroc of Oak Park
Illinois who later bought out the business interests of the McDonald brothers in
the concept and went on to found McDonalds Corporation
McDonalds is the leading global foodservice retailer with more than 32000
local restaurants serving more than 58 million people in around 130 countries
each day 70 percent of our restaurants worldwide are owned and operated by
independent local businessmen and businesswomen
In India the brand is managed by two business entities
Connaught Plaza Restaurants Private Limited led by Mr Vikram Bakshi
JV Partner and Managing Director North amp East India
Hardcastle Restaurants Private Limited led by Ms Smita Jatia Managing
Director South amp West India
McDonalds philosophy of QSCV (Quality Service Cleanliness and Value) is
the guiding force behind its service to the customers in India Following its
philosophy of being sensitive to local food and cultural preferences India was
the first country in the McDonalds system where it served non-beef and non-
pork products More than 70 percent of the menu in India has been locally
developed with complete segregation of vegetarian and non-vegetarian products
right from the food processing plants to the point of serving the customers
McDonalds commitment to its Indian customers is evident even in development
6
of special sauces that use local spices and chillies The mayonnaise and all other
sauces are egg-less McDonalds also pioneered the establishment of Cold Chain
across India which helps maintain freshness and nutrition in every product
McDonalds regular scrumptious menu includes wide range of products like McAloo Tikki Filet-O-Fish Spicy Range Chicken McGrill McVeggie Veg Pizza McPuff Chicken Mcnuggetsreg Fries Wraps an assortment of Sundaes
Soft Serve and refreshing beverages such as Ice Tea amp Cold Coffee with outstanding service in a vibrant and lively ambience for which McDonalds is
known worldwide
McDonalds had further reinforced the branded affordability mantra via the introduction of the Happy Price Menu which starts at Rs 25 only
McAloo Tikki Veg Surprise and Pizza McPuff developed in India are now being exported to the countries in the Middle East
McDonaldrsquos introduced Cokersquos Georgia Gold range of hot beverages which was developed especially for the Indian market in 2002
As a leader in QSR segment (Quick Service Restaurant) McDonaldrsquos has
pioneered various industry benchmark practices over the past decade of serving Indian customers including new concepts such ashellip
Oil Alliances in India by inking with petroleum giants BPCL and HPCL
The two such alliances with BPCL outlets are in Mathura (2000) (UP) and Doraha (2002) (Punjab)
Novel menu formats such as an Express Model with a limited menu and Kiosks with a variety of dessert offerings
Home Delivery (McDeliverytrade) Providing even more convenience to
our customers In Oct 2006 McDelivery on bicycle at Chandni Chowk was launched and in March lsquo07 an all India single delivery number (66
000 666) was introduced
First Drive Thru Restaurant at NOIDA (UP) in 1997
First Restaurant with operational Kitchen at Delhi Domestic
Keeping pace with the customer evolving needs McDonalds also functions on models that drive convenience and create unique differentiation like
McDelivery Drive thru Breakfast Menu high ways and extended hours (Currently available in select cities)
At present there are 300 McDonalds restaurants in India
The strong foundation that Ray Kroc built continues today with McDonalds
7
vision and commitment for its internal as well as external customers Since then it has evolved into a value driven brand and recognizes that affordability of its
products is an attractive proposition for its customers along with taste McDonalds continues to strengthen it business model and progress with
customers evolving needs
Key Landmarks - McDonaldrsquos India Journey
1996 hellipthe first McDonaldrsquos restaurant opened on Oct 13 at Basant Lok
Vasant Vihar New Delhi It was also the first McDonaldrsquos restaurant in the
world not serving beef on its menu
1997hellip
the first Drive ndashThru restaurant at Noida (UP)
the first disabled friendly store at Noida (UP)
1999hellipthe first Mall location restaurant at Ansal Plaza (New Delhi)
2000hellipthe first highway restaurant at Mathura (UP)
2001hellipthe first thematic restaurant at Connaught Place (New Delhi)
2002hellip
The first restaurant in a food court at 3Crsquos Lajpat Nagar (New Delhi)
The first restaurant at the Delhi Metro Station at Inter State Bus Terminus
The first fundraiser in association with ORBIS and Dr Shroffrsquos Charity
Eye hospital(Delhi)
2003 The first Dessert Kiosk ndash Faridabad (Haryana)
2004hellip McDonaldrsquos Delivery Service (McDelivery) introduced in New Delhi
2003-04hellip Indigenous products like McAloo Tikki McVeggie and Pizza
McPuff exported to Middle East countries
8
2006
McDelivery on Bicycles flagged off at Chandni Chowk (Delhi)- another
first initiative by McDonaldrsquos India
100th McDonaldrsquos Restaurant in India
10th Year Anniversary
2007
The first McDonaldrsquos open in Eastern Region at Park Street Kolkata
The first restaurant opened at Airport (Domestic Airport New Delhi)
The first MFY restaurant opened at Greater Noida Uttar Pradesh
2008hellip
The First restaurant to start extended hours procedure at Cyber Greens
Gurgaon and Saket New Delhi
The first restaurant to start Breakfast Menu at Janpath New Delhi
2009hellipThe first McDonaldrsquos Restaurant opens at Old Delhi Railway Station
2010hellipThe first reimaged new look restaurant opened at Ambiance mall
Vasant Kunj 6
2011hellip
McDonaldrsquos introduces premium products in it is menu ndash McSpicy range
of products
McDonaldrsquos introduces Mcflurry (premium desserts) in Oreo and
chocolate crispy flavors
McDonaldrsquos introduces Wi-Fi across DelhiNCR region
McDonaldrsquos currently has 235 restaurants in India
The Northern Region has 110 restaurants ndash
sect Delhi ndash 40
sect Haryana - 15
Faridabad ndash3 Manesar ndash 2 (Highway and Drive - Thru) Gurgaon ndash7
Karnal ndash 1 (Highway and Drive - Thru) Panipat -1 Ambala -1
9
sect Rajasthan -6
Jaipur ndash 3 Jodhpur ndash 1 Kota -1 Udaipur - 1
sect Uttaranchal -1
Dehradun ndash 1
sect Uttar Pradesh ndash29
Noida ndash 5 Greater Noida ndash 1 Ghaziabad ndash 7 Mathura ndash 1 (Highway and
Drive - Thru) Kanpur ndash 2 Meerut ndash 2 Lucknow ndash5 Agra ndash 1 Allahabad
ndash 1 Varanasi -2 Gajraula ndash 1 (Highway amp Drive Thru) Khatauli -
1(Highway and Drive thru)
sect Punjab ndash 13
Chandigarh ndash 2 Ludhiana ndash 2 Doraha ndash 1 (Highway and Drive - Thru)
Jalandhar ndash 2 Patarsi ndash 1 (Highway and Drive - Thru) Dasuya (Highway
and Drive Thru) ndash 1 Amritsar -1 Patiala -1 Zirakpur-2
sect West Bengal-3
Kolkata- 3
sect Himachal Pradesh -1
Jabli-1
sect Madhya Pradesh -2
Gwalior ndash 1 Bhopal -1
----------------------------------------------
The Western Region has 125 restaurants across the following states and cities ndash
Maharashtra - Mumbai Pune Nasik Kolhapur ndash
Gujarat - Ahmedabad Vododara Surat Indore Vapi
Madhya Pradesh ndash Indore
Andhra Pradesh - Hyderabad
Karnataka - Bangalore
Tamil Nadu - Chennai
10
GOALS AND OBJECTIVES
1 McDonaldrsquos vision is to be the worldrsquos best quick service restaurants
experience
2 McDonalds is committed to maintaining and developing the best food
products in the quick service restaurant market
3 In order to deliver this the company has made a number of commitments to
food safety and nutrition
4 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
5 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
McDonalds vision is to be the worlds 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
11
AWARDS
McDonaldrsquos India has received many prestigious awards for its service and
performance including
The lsquoMost Respected Companyrsquo for four consecutive years (2003-2006)
in the Food Services sector by Businessworld
The lsquoMost Preferred Fast Food Outletrsquo 2006 amp 2007 by Awaaz
Consumer Award hosted by CNBC
Star Retailer ndash the lsquoConsumer Way Food Services Retailerrsquo of the
Year 2006 amp 2007 2008 by Franchise India
lsquoRetailer of the Yearrsquo Award for catering services (2004-2006) at the
Images Retail Awards
The lsquoAmity Corporate Excellence Awardrsquo ndashin 2007 amp 2008
The lsquoMost Wanted Brand of the Yearrsquo Award 2003 amp 2004 by
Franchising Holdings India Ltd
The lsquoMost Admired F amp B Retailer of the Year QSRs Foreign
Originrsquo ndash The Golden Spoon Awards by Images Retail
The Company with the Best Corporate Conscience ndash 2008 by Business
amp Economy
lsquoValue for Moneyrsquo brand ndash 2010 by Pitch Magazine
The most trusted family restaurant brand in the country award in
2010 by Readerrsquos Digest
12
Corporate Social Responsibility
Being responsible is at the core of everything that we do at McDonaldstrade It is
a deep-rooted value and a tradition that dates back to our founder Ray Kroc It is also one of our top business priorities
We believe that our continuing success depends on our stakeholders trust in
each and every aspect of our business be it the quality and safety of the food we serve in the way we do our business the way we connect and make the difference in the communities we operate being sensitive to environment and
being sustainable
1 We are committed to doing what is right
2 We are committed to be a good neighbour and partner in the community
3 We are committed to conducting our business ethically and with complete transparency
4 We are committed to treating our entire internal and external stakeholders with respect and dignity
13
McDonaldrsquos International
McDonaldrsquos has over 32000 local restaurants in more than 100 countries
70 percent of our restaurants worldwide are owned and operated by
independent local businessmen and businesswomen
McDonaldrsquos serves nearly 50 million customers each day
McDonaldrsquos first franchised restaurant opened at Des Plaines Illinois in
1955 by the founder Ray Kroc
McDonaldrsquos has its own Hamburger University in Illinois and the first
batch graduated in 1961
12 classes offered at Hamburger University are college accredited
In 1963 McDonaldrsquos sold its one billionth hamburger
McDonaldrsquos is listed on the New York Frankfurt Munich Paris and
Tokyo stock exchanges
McDonaldrsquos aired its first network TV advertisement ldquoMcDonaldrsquos -
Where Quality Starts Fresh Everydayrdquo in 1965
The first McDonaldrsquos Drive-Thru opened in Sierra Vista Arizona in 1975
14
Happy Meals were added to McDonaldrsquos menu in 1979
McDonaldrsquos launched the new worldwide Balanced Active Lifestyles
public awareness campaign in 2005
McDonaldrsquos celebrated its 50th Anniversary on April 15 2005
Business model
McDonalds Corporation earns revenue as an investor in properties
a franchiser of restaurants and an operator of restaurants Approximately 15 of McDonalds restaurants are owned and
operated by McDonalds Corporation directly The remainder are operated by others through a variety of franchise agreements and
joint ventures
The McDonalds Corporations business model is slightly different
from that of most other fast-food chains In addition to ordinary franchise fees and marketing fees which are calculated as
a percentage of sales McDonalds may also collect rent which may also be calculated on the basis of sales
As a condition of many franchise agreements which vary by
contract age country and location the Corporation may own or lease the properties on which McDonalds franchises are located In most if not all cases the franchisee does not own the location of its
restaurants
The United Kingdom and Ireland business model is different than the US in that fewer than 30 of restaurants are franchised with
the majority under the ownership of the company McDonalds trains its franchisees and others at Hamburger Univers ity in Oak
Brook Illino is
In other countries McDonalds restaurants are operated by joint
ventures of McDonalds Corporation and other local entities or governments
15
As a matter of policy McDonalds does not make direct sales of food or materials to franchisees instead organizing the supply of
food and materials to restaurants through approved third party logistics operators
According to Fast Food Nation by Eric Schlosser nearly one in
eight workers in the US have at some time been employed by McDonalds It also states that McDonalds is the largest private
operator of playgrounds in the US as well as the single largest purchaser of beef pork potatoes and apples The selection of
meats McDonalds uses varies with the culture of the host country
MARKETING MIX
The marketing mix of a company consists of the various elements as follows
which form the core of a companyrsquos marketing system and hence helps to
achieve marketing objectives The marketing mix of McDonaldrsquos is as follows-
The McDonald plains its marketing by simple keeping 4Ps in mind
Product
Price
Promotion
Place
Product - McDonaldrsquos places considerable emphasis on developing a menu
which customers want Market research establishes exactly what this is However customersrsquo requirements change over time In order to meet these
changes McDonaldrsquos has introduced new products and phased out old ones and will continue to do so Care is taken not to adversely affect the sales of one choice by introducing a new choice which will cannibalise sales from the
existing one (trade off) McDonaldrsquos knows that items on its menu will vary in popularity Their ability to generate profits will vary at different points in their
cycle In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian
The happy meal for the children is a great seller among others
Price-The customerrsquos perception of value is an important determinant of the price charged Customers draw their own mental picture of what a product is worth A product is more than a physical item it also has psychological
connotations for the customer The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised It is
16
important when deciding on price to be fully aware of the brand and its integrity
In India McDonalds classifies its products into 2 categories namely the branded
affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and
the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price
perceptions
Promotion- The promotions aspect of the marketing mix covers all types of
marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and
in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct
mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that
provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be
supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item
At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart
from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos
Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the
management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities
making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers
17
Other than the main four elements mentioned above there are a few other
elements too in the marketing mix which are as follows-
People -The employees in McDonaldrsquos have a standard uniform and
McDonaldrsquos specially focuses on friendly and prompt service to its customers
from their employees
Process -The food manufacturing process at McDonaldrsquos is completely
transparent ie the whole process is visible to the customers In fact the fast
food joint allows its customers to view and judge the hygienic standards at
McDonaldrsquos by allowing them to enter the area where the process takes place
The customers are invited to check the ingredients used in food
Physical evidence - McDonalds focuses on clean and hygienic interiors of
is outlets and at the same time the interiors are attractive and the fast food joint
maintains a proper decorum at its joints
18
SWOT ANALYSIS
Strengths
McDonaldrsquos holds a very strong brand name worldwide
They have large partnerships with other companies that provide them
with their desired products this increases the goodwill of the company
McDonaldrsquos is one of the most reputed firms who are socially
responsible
Loyal employees amp management amp customer are their biggest strength
19
McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind
while providing food to different countries
Clean environment and play areas for children where they can enjoy their
time
Weakness
The weakness that hits the list of employee turnover rate Every year
many of their employees are fired out of the restaurant
McDonalds mostly advertises products and food items that targets
children
Health conscious people often complain that they do not provide us with
the organic and healthy food This becomes their weakness when they get in the complaints
They also face quality issue at times This affects the business as they are
running the outlet worldwide if one franchise gets affected others also
get a bad name
Opportunities
It can open up online services for their customers so that they can easily
order their desired meals sitting at home
Discounts given on every food item may help them gain more customers
They can go for a joint venture with the retailers they work with
They can introduce healthy hamburgers and healthy drinks for the people who are health conscious
20
In order to be environment friendly they can use packing material which
can be recycled later or material that does not create pollution
Threats
Emerging competition of similar outlets is becoming a problem for McDonalds
Health issue also becomes a problem when it comes to food
As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies
Recession in any country would definitely affect the whole outlet
worldwide
People facing heart problems and obesity accuse McDonalds for not
providing them with the healthy food
They have a threat of local food outlets in different countries
McDonalds is operating in a fully fledged economy where competition is
increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession
McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local
Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government
regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled
Indian businesses to grow by improving their ability to compete in todays international markets
21
Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in
predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first
restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept
has today been adopted by various Indian and International players to deliver quality produce to consumers
For instance Cremica Industries worked with another McDonalds supplier
from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to
McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with
farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water
consumption better seeds amp agricultural management practices which result in greater yields
In some cases these Indian suppliers had the technology - but no market for the
products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk
casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to
restaurants across India
McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations
COMPANYrsquoS FINANCIAL INFORMATION
Company Name McDonalds Corporation
Ticker Symbol MCD
Web Address wwwmcdonaldscom
CEO Mr Donald Thompson
No of Employees 420000
Common Issue Type CS
Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other
22
goods from numerous independent suppliers
Industry Information LEISURE - Restaurants
Price Day Change Bid Ask Open High Low Volume
8718 -002 - - 8743 8743 8676 3658828
Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range
875267 10040 039 527 253 164 35 10222 - 8331
KEY FIGURES (Latest Twelve Months - LTM)
Yesterdays Close 8706 $
PE Ratio - LTM 164
Market Capitalisation 875267 mil
Latest Shares Outstanding 10040 mil
Earnings pS (EPS) 527 $
Dividend pS (DPS) 253 cent
Dividend Yield 35
Dividend Payout Ratio 48
Revenue per Employee 64300 $
Effective Tax Rate 313
Float 10153 mil
Float as of Shares Outstanding 999
Foreign Sales 18478 mil
Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue
910
Research amp Devlopment (RampD) as of Revenue
000
Gross Profit Margin 447
EBITDA Margin 356
Pre-Tax Profit Margin 291
Assets Turnover 08
Return on Assets (ROA) 161
Return on Equity (ROE) 392
Return on Capital Invested (ROCI) 204 Current Ratio 10
Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096
LT DebtTotal Capital 480
Working Capital pS 006 $
Cash pS 217 $
Book-Value pS 1383 $
Balance Sheet (at a glance) in Millions
DIVIDEND INFO
Dividend Declared Date 09202012
Dividend Ex-Date 11282012
Dividend Record Date 12022012
Dividend Pay Date 12162012
Dividend Amount 770
Type of Payment Cash Payment
Dividend Rate 308
Current Dividend Yield 35
5-Y Average Dividend Yield 31
Payout Ratio 480
5-Y Average Payout Ratio 530
Share price performance previous 3 years
Share price performance intraday
23
Tangible Book-Value pS 1110 $
Cash Flow pS 689 $
Free Cash Flow pS 125 $
KEY FIGURES (LTM) Price info PriceBook Ratio 630
PriceTangible Book Ratio 785 PriceCash Flow 126
PriceFree Cash Flow 699
PE as of Industry Group 420
PE as of Sector Segment 770
PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol
1 Week - - - 00 101 54041 66217
4 Weeks 8743 8331 8474 27 101 57129 856929
13 Weeks 9416 8331 9102 -44 98 61288 3554700
26 Weeks 9416 8331 8775 -08 93 59419 7189758
52 Weeks 10222 8331 9803 -112 79 59272 14521666
YTD 10222 8331 - -132 77 59774 13807695
Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)
8661 8631 8825 8931 9174 039 031
GROWTH RATES 5-Year
Growh Rsup2 of 5-Year Growth
3-Year
Growth
Revenue 381 776 666
Income 2017 811 978
Dividend 1536 947 1016
Capital Spending 697 NA 1052
RampD 000 NA 000
Normalized Inc 1158 NA 979
CHANGES YTD vs
Last YTD
Curr Qtr vs
Qtr 1-Yr ago
Annual vs
Last Annual
Revenue 21 -02 122
Earnings -14 -35 113
EPS 10 -14 151
EPS $ 004 -002 069
SOLVENCY RATIOS
SHORT-TERM SOLVENCY RATIOS
(LIQUIDITY)
Net Working Capital Ratio 271
Current Ratio 13
Quick Ratio (Acid Test) 10
Liquidity Ratio (Cash) 067
Receivables Turnover 215
Average Collection Period 17
Working CapitalEquity 62
Working Capital pS 088
Cash-Flow pS 677
Free Cash-Flow pS 209
24
FINANCIAL STRUCTURE RATIOS
Altmans Z-Score Ratio 485
Financial Leverage Ratio (AssetsEquity) 23
Debt Ratio 564
Total DebtEquity (Gearing Ratio) 087
LT DebtEquity 084
LT DebtCapital Invested 569
LT DebtTotal Liabilities 652
Interest Cover 173
InterestCapital Invested 167
25
People hellip McDonaldrsquos 1 Resource in India
26
McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs
around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in
1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with
McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)
The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive
training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course
(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the
Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University
27
The McDonaldrsquos Promise
QUALITY SERVICE CLEANLINESS amp VALUE
When asked to explain McDonalds success founder Ray Kroc used to say We
take the hamburger business more seriously than anyone else
Kroc was a perfectionist From the day he opened his first restaurant he vowed
to give his customers high quality products served quickly --and with a smile
in a clean and pleasant environment and all at a fair price Quality Service
Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds
business
QUALITY
McDonalds India serves only the highest quality products The attention to food
quality started long before the first restaurant opened McDonalds India has
established close relationships with local suppliers who provide McDonalds
with the highest quality freshest ingredients to make its products
All suppliers adhere to Indian government regulations on food health and
hygiene while continuously maintaining McDonalds own recognized standards
McDonalds has established an extensive cold chain distribution system in
India to ensure that the products which arrive at the restaurant from suppliers
all over India are absolutely fresh In the restaurants products and supplies are
used on a first-in first-out basis to ensure freshness All McDonalds products
are prepared using modern state-of-the-art cooking equipment to ensure quality
and safety
SERVICE
McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos
which sets its restaurants apart from others At McDonalds the customer
always comes first Every employee strives to provide 100 percent customer
satisfaction -- for every customer -- every visit This includes friendly and
attentive service accuracy in order taking and anticipation of customers needs
-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun
and youthful spirit we will proudly serve an exceptional McDonaldrsquos
eating experience that makes all people feel special and makes them smile ndash
every customer every timerdquo
28
CLEANLINESS
McDonalds restaurants provide a clean comfortable environment especially
suited for families McDonalds stringent cleaning standards ensure that all
tables seating highchairs and trays are sanitized several times each hour The
attention to cleanliness extends from the lobby to the kitchen to the sidewalk
and immediate areas outside the restaurant
In addition to urging customers to dispose of their litter properly and offering a
number of trash bins (both inside and outside the restaurants) for their
convenience McDonalds Litter Patrols walk around the restaurants several
times each day picking up litter -- even if it isnt from McDonalds
Restaurant managers walk through the dining areas each hour to ensure that it
is clean and well stocked All restaurants provide a variety of comfortable
seating arrangements to accommodate anyone -- from a single individual to a
large family The environment is warm inviting and well lit
VALUE
McDonalds menu is priced at a value that the largest segment of Indian
consumers can afford McDonalds does not sacrifice quality for value -- rather
McDonalds leverages economies of scale to minimize costs while maximizing
value to customers
McDonalds definition of value is broader than most restaurants of its kind -- it
is more than price Value at McDonalds is the sum of the total McDonalds
experience quality food fast friendly service a clean and pleasant
environment and products priced at very affordable prices for the largest
segment of Indian consumers possible That is value at McDonalds
29
McDonaldrsquos Indiahellip Culturally Sensitive
Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much
that is consistent with other McDonaldrsquos restaurants around the world such as
the quality of the food and the attention to service
The dedication to local cultures is not new for McDonaldrsquos For the past 50
years McDonaldrsquos has opened restaurants in more than 120 distinctly different
countries and cultures With guidance from its local partners McDonaldrsquos is
able to adapt- where necessary-its menu and restaurant operations to
complement existing eating-out options McDonaldrsquos local owners understand
what their customers want perhaps more importantly what is acceptable within
local customs and values
There is much too that is very different- such as the first beef-less and pork-
less menu in the world and special product formulations to cater to Indian
culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos
India says ldquoWe know the Indian culture because we were born in it
inherited its richness and respect it greatly It is the respect for this culture
and the sentiments of many of our customersrsquo that we do not serve any
beef and pork items in our restaurantsrdquo
McDonaldrsquos commitment to its Indian customers is evident even in
development of special sauces that use local spices and chillies The
mayonnaise and all other sauces are egg-less
In India vegetarianism is in many cases more than a lifestyle choice Many
people are vegetarians due to religious reasons and in some cases even the
vegetarian product that has come into contact with a non-vegetarian product is
unacceptable Hence McDonaldrsquos India has also changed its operations to
address the special requirements of our vegetarian customers by having
processes that ensure that a physical separation of veg and non-veg products is
maintained right from farm to the customer Vegetable products are prepared
separately using dedicated equipment and utensils Also in India McDonaldrsquos
uses only vegetable oil as a medium for cooking
30
McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash
lsquoto be driven by the leadership of local ownersrsquo This commitment has translated
into enduring benefits to the businesses at the grass root level in the areas of
introduction of new crops new agricultural practices and food processing methods
and procedures
McDonalds unique cold chain on which the QSR major has spent more than six
years setting up in India has brought about a veritable revolution immensely
benefiting the farmers at one end and enabling customers at retail counters get the
highest quality food products absolutely fresh and at great value
Setting up this extensive cold chain distribution system has involved the transfer of
state-of-the-art food processing technology by McDonalds and its international
suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain
From Field to -2⁰C in 90 Minutes
Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be
grown during the winter months but with McDonalds expertise in the area of
agriculture they are now able to grow this crop through the year
Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room
to remove field heat a large cold room and a refrigerated van for transportation where
the temperature and the relative humidity of the crop is maintained between 1ordm C and
4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room
within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling
to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at
the farms itself ensuring no delay between harvesting pre-cooling packaging and
cold storage
Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd
Flavour and Freshness locked in at - 35degC
Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable
range of products is another important player in this cold chain This includes hi-tech
refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C
This is vital to ensure that the frozen food retains it freshness for a long time and the
cold chain is maintained The frozen product is immediately moved to cold storage
rooms
31
Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India
From Farm to Bulk Cooler in less than 90 Minutes
McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for
quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk
coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -
thus maintaining the cold chain
All leading to the Consumer
McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The
DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity
of the products throughout the entire cold chain
Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C
as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state
All these suppliers share McDonalds commitment and dedication to satisfying
customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently
each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental
effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn
more
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
3
12 The Top Five Reasons Why McDonaldrsquos is so Popular
33
13 Findings 34
14 Conclusion
35
15 Bibliography 36
MCDONALDrsquoS
AN INTRODUCTION
McDonalds Corporation (NYSE MCD) is the worlds largest chain
of hamburger fast food restaurants serving around 68 million customers daily in
119 countries
Headquartered in the United States the company began in 1940 as a barbecue
restaurant operated by Richard and Maurice McDonald in 1948 they
reorganized their business as a hamburger stand using production
line principles Businessman Ray Kroc joined the company as a franchise
agent in 1955 Ray Kroc subsequently purchased the chain from the McDonald
brothers and oversaw its worldwide growth
A McDonalds restaurant is operated either by a franchisee or an affiliate or the corporation itself The corporations revenues come from the rent royalties
and fees paid by the franchisees as well as sales in company-operated restaurants
4
McDonalds revenues grew 27 percent over the three years ending in 2007 to
$228 billion and 9 percent growth in operating income to $39 billion McDonalds primarily sells hamburgers cheese burgers chicken French
fries breakfast items soft drinks milkshakes and desserts In response to changing consumer tastes the company has expanded its menu to
include salads wraps smoothes and fruits
An exterior view of the worlds largest McDonalds restaurant built on 2012
London Olympics site
In July 2011 McDonalds announced that their largest restaurant in the world
will be built on the 2012 London Olympics site The restaurant will contain over 1500 seats and is half the length of an American Football field Over 470
staff will be employed serving on average (during the 2012 Olympics) 100000 portions of fries 50000 Big Macs and 30000 Milkshakes This restaurant will
overshadow the current largest McDonalds in the world in Moscow Russia In January 2012 the company announced revenue for 2011 reached an all-time
high of $27 billion and that 2400 restaurants would be updated and 1300 new ones opened worldwide
5
History of McDonalds
The McDonalds restaurant concept was introduced in San Bernardino
California by Dick and Mac McDonald of Manchester New Hampshire It was
modified and expanded by their business partner Ray Kroc of Oak Park
Illinois who later bought out the business interests of the McDonald brothers in
the concept and went on to found McDonalds Corporation
McDonalds is the leading global foodservice retailer with more than 32000
local restaurants serving more than 58 million people in around 130 countries
each day 70 percent of our restaurants worldwide are owned and operated by
independent local businessmen and businesswomen
In India the brand is managed by two business entities
Connaught Plaza Restaurants Private Limited led by Mr Vikram Bakshi
JV Partner and Managing Director North amp East India
Hardcastle Restaurants Private Limited led by Ms Smita Jatia Managing
Director South amp West India
McDonalds philosophy of QSCV (Quality Service Cleanliness and Value) is
the guiding force behind its service to the customers in India Following its
philosophy of being sensitive to local food and cultural preferences India was
the first country in the McDonalds system where it served non-beef and non-
pork products More than 70 percent of the menu in India has been locally
developed with complete segregation of vegetarian and non-vegetarian products
right from the food processing plants to the point of serving the customers
McDonalds commitment to its Indian customers is evident even in development
6
of special sauces that use local spices and chillies The mayonnaise and all other
sauces are egg-less McDonalds also pioneered the establishment of Cold Chain
across India which helps maintain freshness and nutrition in every product
McDonalds regular scrumptious menu includes wide range of products like McAloo Tikki Filet-O-Fish Spicy Range Chicken McGrill McVeggie Veg Pizza McPuff Chicken Mcnuggetsreg Fries Wraps an assortment of Sundaes
Soft Serve and refreshing beverages such as Ice Tea amp Cold Coffee with outstanding service in a vibrant and lively ambience for which McDonalds is
known worldwide
McDonalds had further reinforced the branded affordability mantra via the introduction of the Happy Price Menu which starts at Rs 25 only
McAloo Tikki Veg Surprise and Pizza McPuff developed in India are now being exported to the countries in the Middle East
McDonaldrsquos introduced Cokersquos Georgia Gold range of hot beverages which was developed especially for the Indian market in 2002
As a leader in QSR segment (Quick Service Restaurant) McDonaldrsquos has
pioneered various industry benchmark practices over the past decade of serving Indian customers including new concepts such ashellip
Oil Alliances in India by inking with petroleum giants BPCL and HPCL
The two such alliances with BPCL outlets are in Mathura (2000) (UP) and Doraha (2002) (Punjab)
Novel menu formats such as an Express Model with a limited menu and Kiosks with a variety of dessert offerings
Home Delivery (McDeliverytrade) Providing even more convenience to
our customers In Oct 2006 McDelivery on bicycle at Chandni Chowk was launched and in March lsquo07 an all India single delivery number (66
000 666) was introduced
First Drive Thru Restaurant at NOIDA (UP) in 1997
First Restaurant with operational Kitchen at Delhi Domestic
Keeping pace with the customer evolving needs McDonalds also functions on models that drive convenience and create unique differentiation like
McDelivery Drive thru Breakfast Menu high ways and extended hours (Currently available in select cities)
At present there are 300 McDonalds restaurants in India
The strong foundation that Ray Kroc built continues today with McDonalds
7
vision and commitment for its internal as well as external customers Since then it has evolved into a value driven brand and recognizes that affordability of its
products is an attractive proposition for its customers along with taste McDonalds continues to strengthen it business model and progress with
customers evolving needs
Key Landmarks - McDonaldrsquos India Journey
1996 hellipthe first McDonaldrsquos restaurant opened on Oct 13 at Basant Lok
Vasant Vihar New Delhi It was also the first McDonaldrsquos restaurant in the
world not serving beef on its menu
1997hellip
the first Drive ndashThru restaurant at Noida (UP)
the first disabled friendly store at Noida (UP)
1999hellipthe first Mall location restaurant at Ansal Plaza (New Delhi)
2000hellipthe first highway restaurant at Mathura (UP)
2001hellipthe first thematic restaurant at Connaught Place (New Delhi)
2002hellip
The first restaurant in a food court at 3Crsquos Lajpat Nagar (New Delhi)
The first restaurant at the Delhi Metro Station at Inter State Bus Terminus
The first fundraiser in association with ORBIS and Dr Shroffrsquos Charity
Eye hospital(Delhi)
2003 The first Dessert Kiosk ndash Faridabad (Haryana)
2004hellip McDonaldrsquos Delivery Service (McDelivery) introduced in New Delhi
2003-04hellip Indigenous products like McAloo Tikki McVeggie and Pizza
McPuff exported to Middle East countries
8
2006
McDelivery on Bicycles flagged off at Chandni Chowk (Delhi)- another
first initiative by McDonaldrsquos India
100th McDonaldrsquos Restaurant in India
10th Year Anniversary
2007
The first McDonaldrsquos open in Eastern Region at Park Street Kolkata
The first restaurant opened at Airport (Domestic Airport New Delhi)
The first MFY restaurant opened at Greater Noida Uttar Pradesh
2008hellip
The First restaurant to start extended hours procedure at Cyber Greens
Gurgaon and Saket New Delhi
The first restaurant to start Breakfast Menu at Janpath New Delhi
2009hellipThe first McDonaldrsquos Restaurant opens at Old Delhi Railway Station
2010hellipThe first reimaged new look restaurant opened at Ambiance mall
Vasant Kunj 6
2011hellip
McDonaldrsquos introduces premium products in it is menu ndash McSpicy range
of products
McDonaldrsquos introduces Mcflurry (premium desserts) in Oreo and
chocolate crispy flavors
McDonaldrsquos introduces Wi-Fi across DelhiNCR region
McDonaldrsquos currently has 235 restaurants in India
The Northern Region has 110 restaurants ndash
sect Delhi ndash 40
sect Haryana - 15
Faridabad ndash3 Manesar ndash 2 (Highway and Drive - Thru) Gurgaon ndash7
Karnal ndash 1 (Highway and Drive - Thru) Panipat -1 Ambala -1
9
sect Rajasthan -6
Jaipur ndash 3 Jodhpur ndash 1 Kota -1 Udaipur - 1
sect Uttaranchal -1
Dehradun ndash 1
sect Uttar Pradesh ndash29
Noida ndash 5 Greater Noida ndash 1 Ghaziabad ndash 7 Mathura ndash 1 (Highway and
Drive - Thru) Kanpur ndash 2 Meerut ndash 2 Lucknow ndash5 Agra ndash 1 Allahabad
ndash 1 Varanasi -2 Gajraula ndash 1 (Highway amp Drive Thru) Khatauli -
1(Highway and Drive thru)
sect Punjab ndash 13
Chandigarh ndash 2 Ludhiana ndash 2 Doraha ndash 1 (Highway and Drive - Thru)
Jalandhar ndash 2 Patarsi ndash 1 (Highway and Drive - Thru) Dasuya (Highway
and Drive Thru) ndash 1 Amritsar -1 Patiala -1 Zirakpur-2
sect West Bengal-3
Kolkata- 3
sect Himachal Pradesh -1
Jabli-1
sect Madhya Pradesh -2
Gwalior ndash 1 Bhopal -1
----------------------------------------------
The Western Region has 125 restaurants across the following states and cities ndash
Maharashtra - Mumbai Pune Nasik Kolhapur ndash
Gujarat - Ahmedabad Vododara Surat Indore Vapi
Madhya Pradesh ndash Indore
Andhra Pradesh - Hyderabad
Karnataka - Bangalore
Tamil Nadu - Chennai
10
GOALS AND OBJECTIVES
1 McDonaldrsquos vision is to be the worldrsquos best quick service restaurants
experience
2 McDonalds is committed to maintaining and developing the best food
products in the quick service restaurant market
3 In order to deliver this the company has made a number of commitments to
food safety and nutrition
4 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
5 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
McDonalds vision is to be the worlds 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
11
AWARDS
McDonaldrsquos India has received many prestigious awards for its service and
performance including
The lsquoMost Respected Companyrsquo for four consecutive years (2003-2006)
in the Food Services sector by Businessworld
The lsquoMost Preferred Fast Food Outletrsquo 2006 amp 2007 by Awaaz
Consumer Award hosted by CNBC
Star Retailer ndash the lsquoConsumer Way Food Services Retailerrsquo of the
Year 2006 amp 2007 2008 by Franchise India
lsquoRetailer of the Yearrsquo Award for catering services (2004-2006) at the
Images Retail Awards
The lsquoAmity Corporate Excellence Awardrsquo ndashin 2007 amp 2008
The lsquoMost Wanted Brand of the Yearrsquo Award 2003 amp 2004 by
Franchising Holdings India Ltd
The lsquoMost Admired F amp B Retailer of the Year QSRs Foreign
Originrsquo ndash The Golden Spoon Awards by Images Retail
The Company with the Best Corporate Conscience ndash 2008 by Business
amp Economy
lsquoValue for Moneyrsquo brand ndash 2010 by Pitch Magazine
The most trusted family restaurant brand in the country award in
2010 by Readerrsquos Digest
12
Corporate Social Responsibility
Being responsible is at the core of everything that we do at McDonaldstrade It is
a deep-rooted value and a tradition that dates back to our founder Ray Kroc It is also one of our top business priorities
We believe that our continuing success depends on our stakeholders trust in
each and every aspect of our business be it the quality and safety of the food we serve in the way we do our business the way we connect and make the difference in the communities we operate being sensitive to environment and
being sustainable
1 We are committed to doing what is right
2 We are committed to be a good neighbour and partner in the community
3 We are committed to conducting our business ethically and with complete transparency
4 We are committed to treating our entire internal and external stakeholders with respect and dignity
13
McDonaldrsquos International
McDonaldrsquos has over 32000 local restaurants in more than 100 countries
70 percent of our restaurants worldwide are owned and operated by
independent local businessmen and businesswomen
McDonaldrsquos serves nearly 50 million customers each day
McDonaldrsquos first franchised restaurant opened at Des Plaines Illinois in
1955 by the founder Ray Kroc
McDonaldrsquos has its own Hamburger University in Illinois and the first
batch graduated in 1961
12 classes offered at Hamburger University are college accredited
In 1963 McDonaldrsquos sold its one billionth hamburger
McDonaldrsquos is listed on the New York Frankfurt Munich Paris and
Tokyo stock exchanges
McDonaldrsquos aired its first network TV advertisement ldquoMcDonaldrsquos -
Where Quality Starts Fresh Everydayrdquo in 1965
The first McDonaldrsquos Drive-Thru opened in Sierra Vista Arizona in 1975
14
Happy Meals were added to McDonaldrsquos menu in 1979
McDonaldrsquos launched the new worldwide Balanced Active Lifestyles
public awareness campaign in 2005
McDonaldrsquos celebrated its 50th Anniversary on April 15 2005
Business model
McDonalds Corporation earns revenue as an investor in properties
a franchiser of restaurants and an operator of restaurants Approximately 15 of McDonalds restaurants are owned and
operated by McDonalds Corporation directly The remainder are operated by others through a variety of franchise agreements and
joint ventures
The McDonalds Corporations business model is slightly different
from that of most other fast-food chains In addition to ordinary franchise fees and marketing fees which are calculated as
a percentage of sales McDonalds may also collect rent which may also be calculated on the basis of sales
As a condition of many franchise agreements which vary by
contract age country and location the Corporation may own or lease the properties on which McDonalds franchises are located In most if not all cases the franchisee does not own the location of its
restaurants
The United Kingdom and Ireland business model is different than the US in that fewer than 30 of restaurants are franchised with
the majority under the ownership of the company McDonalds trains its franchisees and others at Hamburger Univers ity in Oak
Brook Illino is
In other countries McDonalds restaurants are operated by joint
ventures of McDonalds Corporation and other local entities or governments
15
As a matter of policy McDonalds does not make direct sales of food or materials to franchisees instead organizing the supply of
food and materials to restaurants through approved third party logistics operators
According to Fast Food Nation by Eric Schlosser nearly one in
eight workers in the US have at some time been employed by McDonalds It also states that McDonalds is the largest private
operator of playgrounds in the US as well as the single largest purchaser of beef pork potatoes and apples The selection of
meats McDonalds uses varies with the culture of the host country
MARKETING MIX
The marketing mix of a company consists of the various elements as follows
which form the core of a companyrsquos marketing system and hence helps to
achieve marketing objectives The marketing mix of McDonaldrsquos is as follows-
The McDonald plains its marketing by simple keeping 4Ps in mind
Product
Price
Promotion
Place
Product - McDonaldrsquos places considerable emphasis on developing a menu
which customers want Market research establishes exactly what this is However customersrsquo requirements change over time In order to meet these
changes McDonaldrsquos has introduced new products and phased out old ones and will continue to do so Care is taken not to adversely affect the sales of one choice by introducing a new choice which will cannibalise sales from the
existing one (trade off) McDonaldrsquos knows that items on its menu will vary in popularity Their ability to generate profits will vary at different points in their
cycle In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian
The happy meal for the children is a great seller among others
Price-The customerrsquos perception of value is an important determinant of the price charged Customers draw their own mental picture of what a product is worth A product is more than a physical item it also has psychological
connotations for the customer The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised It is
16
important when deciding on price to be fully aware of the brand and its integrity
In India McDonalds classifies its products into 2 categories namely the branded
affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and
the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price
perceptions
Promotion- The promotions aspect of the marketing mix covers all types of
marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and
in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct
mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that
provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be
supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item
At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart
from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos
Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the
management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities
making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers
17
Other than the main four elements mentioned above there are a few other
elements too in the marketing mix which are as follows-
People -The employees in McDonaldrsquos have a standard uniform and
McDonaldrsquos specially focuses on friendly and prompt service to its customers
from their employees
Process -The food manufacturing process at McDonaldrsquos is completely
transparent ie the whole process is visible to the customers In fact the fast
food joint allows its customers to view and judge the hygienic standards at
McDonaldrsquos by allowing them to enter the area where the process takes place
The customers are invited to check the ingredients used in food
Physical evidence - McDonalds focuses on clean and hygienic interiors of
is outlets and at the same time the interiors are attractive and the fast food joint
maintains a proper decorum at its joints
18
SWOT ANALYSIS
Strengths
McDonaldrsquos holds a very strong brand name worldwide
They have large partnerships with other companies that provide them
with their desired products this increases the goodwill of the company
McDonaldrsquos is one of the most reputed firms who are socially
responsible
Loyal employees amp management amp customer are their biggest strength
19
McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind
while providing food to different countries
Clean environment and play areas for children where they can enjoy their
time
Weakness
The weakness that hits the list of employee turnover rate Every year
many of their employees are fired out of the restaurant
McDonalds mostly advertises products and food items that targets
children
Health conscious people often complain that they do not provide us with
the organic and healthy food This becomes their weakness when they get in the complaints
They also face quality issue at times This affects the business as they are
running the outlet worldwide if one franchise gets affected others also
get a bad name
Opportunities
It can open up online services for their customers so that they can easily
order their desired meals sitting at home
Discounts given on every food item may help them gain more customers
They can go for a joint venture with the retailers they work with
They can introduce healthy hamburgers and healthy drinks for the people who are health conscious
20
In order to be environment friendly they can use packing material which
can be recycled later or material that does not create pollution
Threats
Emerging competition of similar outlets is becoming a problem for McDonalds
Health issue also becomes a problem when it comes to food
As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies
Recession in any country would definitely affect the whole outlet
worldwide
People facing heart problems and obesity accuse McDonalds for not
providing them with the healthy food
They have a threat of local food outlets in different countries
McDonalds is operating in a fully fledged economy where competition is
increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession
McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local
Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government
regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled
Indian businesses to grow by improving their ability to compete in todays international markets
21
Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in
predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first
restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept
has today been adopted by various Indian and International players to deliver quality produce to consumers
For instance Cremica Industries worked with another McDonalds supplier
from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to
McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with
farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water
consumption better seeds amp agricultural management practices which result in greater yields
In some cases these Indian suppliers had the technology - but no market for the
products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk
casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to
restaurants across India
McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations
COMPANYrsquoS FINANCIAL INFORMATION
Company Name McDonalds Corporation
Ticker Symbol MCD
Web Address wwwmcdonaldscom
CEO Mr Donald Thompson
No of Employees 420000
Common Issue Type CS
Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other
22
goods from numerous independent suppliers
Industry Information LEISURE - Restaurants
Price Day Change Bid Ask Open High Low Volume
8718 -002 - - 8743 8743 8676 3658828
Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range
875267 10040 039 527 253 164 35 10222 - 8331
KEY FIGURES (Latest Twelve Months - LTM)
Yesterdays Close 8706 $
PE Ratio - LTM 164
Market Capitalisation 875267 mil
Latest Shares Outstanding 10040 mil
Earnings pS (EPS) 527 $
Dividend pS (DPS) 253 cent
Dividend Yield 35
Dividend Payout Ratio 48
Revenue per Employee 64300 $
Effective Tax Rate 313
Float 10153 mil
Float as of Shares Outstanding 999
Foreign Sales 18478 mil
Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue
910
Research amp Devlopment (RampD) as of Revenue
000
Gross Profit Margin 447
EBITDA Margin 356
Pre-Tax Profit Margin 291
Assets Turnover 08
Return on Assets (ROA) 161
Return on Equity (ROE) 392
Return on Capital Invested (ROCI) 204 Current Ratio 10
Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096
LT DebtTotal Capital 480
Working Capital pS 006 $
Cash pS 217 $
Book-Value pS 1383 $
Balance Sheet (at a glance) in Millions
DIVIDEND INFO
Dividend Declared Date 09202012
Dividend Ex-Date 11282012
Dividend Record Date 12022012
Dividend Pay Date 12162012
Dividend Amount 770
Type of Payment Cash Payment
Dividend Rate 308
Current Dividend Yield 35
5-Y Average Dividend Yield 31
Payout Ratio 480
5-Y Average Payout Ratio 530
Share price performance previous 3 years
Share price performance intraday
23
Tangible Book-Value pS 1110 $
Cash Flow pS 689 $
Free Cash Flow pS 125 $
KEY FIGURES (LTM) Price info PriceBook Ratio 630
PriceTangible Book Ratio 785 PriceCash Flow 126
PriceFree Cash Flow 699
PE as of Industry Group 420
PE as of Sector Segment 770
PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol
1 Week - - - 00 101 54041 66217
4 Weeks 8743 8331 8474 27 101 57129 856929
13 Weeks 9416 8331 9102 -44 98 61288 3554700
26 Weeks 9416 8331 8775 -08 93 59419 7189758
52 Weeks 10222 8331 9803 -112 79 59272 14521666
YTD 10222 8331 - -132 77 59774 13807695
Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)
8661 8631 8825 8931 9174 039 031
GROWTH RATES 5-Year
Growh Rsup2 of 5-Year Growth
3-Year
Growth
Revenue 381 776 666
Income 2017 811 978
Dividend 1536 947 1016
Capital Spending 697 NA 1052
RampD 000 NA 000
Normalized Inc 1158 NA 979
CHANGES YTD vs
Last YTD
Curr Qtr vs
Qtr 1-Yr ago
Annual vs
Last Annual
Revenue 21 -02 122
Earnings -14 -35 113
EPS 10 -14 151
EPS $ 004 -002 069
SOLVENCY RATIOS
SHORT-TERM SOLVENCY RATIOS
(LIQUIDITY)
Net Working Capital Ratio 271
Current Ratio 13
Quick Ratio (Acid Test) 10
Liquidity Ratio (Cash) 067
Receivables Turnover 215
Average Collection Period 17
Working CapitalEquity 62
Working Capital pS 088
Cash-Flow pS 677
Free Cash-Flow pS 209
24
FINANCIAL STRUCTURE RATIOS
Altmans Z-Score Ratio 485
Financial Leverage Ratio (AssetsEquity) 23
Debt Ratio 564
Total DebtEquity (Gearing Ratio) 087
LT DebtEquity 084
LT DebtCapital Invested 569
LT DebtTotal Liabilities 652
Interest Cover 173
InterestCapital Invested 167
25
People hellip McDonaldrsquos 1 Resource in India
26
McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs
around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in
1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with
McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)
The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive
training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course
(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the
Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University
27
The McDonaldrsquos Promise
QUALITY SERVICE CLEANLINESS amp VALUE
When asked to explain McDonalds success founder Ray Kroc used to say We
take the hamburger business more seriously than anyone else
Kroc was a perfectionist From the day he opened his first restaurant he vowed
to give his customers high quality products served quickly --and with a smile
in a clean and pleasant environment and all at a fair price Quality Service
Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds
business
QUALITY
McDonalds India serves only the highest quality products The attention to food
quality started long before the first restaurant opened McDonalds India has
established close relationships with local suppliers who provide McDonalds
with the highest quality freshest ingredients to make its products
All suppliers adhere to Indian government regulations on food health and
hygiene while continuously maintaining McDonalds own recognized standards
McDonalds has established an extensive cold chain distribution system in
India to ensure that the products which arrive at the restaurant from suppliers
all over India are absolutely fresh In the restaurants products and supplies are
used on a first-in first-out basis to ensure freshness All McDonalds products
are prepared using modern state-of-the-art cooking equipment to ensure quality
and safety
SERVICE
McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos
which sets its restaurants apart from others At McDonalds the customer
always comes first Every employee strives to provide 100 percent customer
satisfaction -- for every customer -- every visit This includes friendly and
attentive service accuracy in order taking and anticipation of customers needs
-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun
and youthful spirit we will proudly serve an exceptional McDonaldrsquos
eating experience that makes all people feel special and makes them smile ndash
every customer every timerdquo
28
CLEANLINESS
McDonalds restaurants provide a clean comfortable environment especially
suited for families McDonalds stringent cleaning standards ensure that all
tables seating highchairs and trays are sanitized several times each hour The
attention to cleanliness extends from the lobby to the kitchen to the sidewalk
and immediate areas outside the restaurant
In addition to urging customers to dispose of their litter properly and offering a
number of trash bins (both inside and outside the restaurants) for their
convenience McDonalds Litter Patrols walk around the restaurants several
times each day picking up litter -- even if it isnt from McDonalds
Restaurant managers walk through the dining areas each hour to ensure that it
is clean and well stocked All restaurants provide a variety of comfortable
seating arrangements to accommodate anyone -- from a single individual to a
large family The environment is warm inviting and well lit
VALUE
McDonalds menu is priced at a value that the largest segment of Indian
consumers can afford McDonalds does not sacrifice quality for value -- rather
McDonalds leverages economies of scale to minimize costs while maximizing
value to customers
McDonalds definition of value is broader than most restaurants of its kind -- it
is more than price Value at McDonalds is the sum of the total McDonalds
experience quality food fast friendly service a clean and pleasant
environment and products priced at very affordable prices for the largest
segment of Indian consumers possible That is value at McDonalds
29
McDonaldrsquos Indiahellip Culturally Sensitive
Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much
that is consistent with other McDonaldrsquos restaurants around the world such as
the quality of the food and the attention to service
The dedication to local cultures is not new for McDonaldrsquos For the past 50
years McDonaldrsquos has opened restaurants in more than 120 distinctly different
countries and cultures With guidance from its local partners McDonaldrsquos is
able to adapt- where necessary-its menu and restaurant operations to
complement existing eating-out options McDonaldrsquos local owners understand
what their customers want perhaps more importantly what is acceptable within
local customs and values
There is much too that is very different- such as the first beef-less and pork-
less menu in the world and special product formulations to cater to Indian
culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos
India says ldquoWe know the Indian culture because we were born in it
inherited its richness and respect it greatly It is the respect for this culture
and the sentiments of many of our customersrsquo that we do not serve any
beef and pork items in our restaurantsrdquo
McDonaldrsquos commitment to its Indian customers is evident even in
development of special sauces that use local spices and chillies The
mayonnaise and all other sauces are egg-less
In India vegetarianism is in many cases more than a lifestyle choice Many
people are vegetarians due to religious reasons and in some cases even the
vegetarian product that has come into contact with a non-vegetarian product is
unacceptable Hence McDonaldrsquos India has also changed its operations to
address the special requirements of our vegetarian customers by having
processes that ensure that a physical separation of veg and non-veg products is
maintained right from farm to the customer Vegetable products are prepared
separately using dedicated equipment and utensils Also in India McDonaldrsquos
uses only vegetable oil as a medium for cooking
30
McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash
lsquoto be driven by the leadership of local ownersrsquo This commitment has translated
into enduring benefits to the businesses at the grass root level in the areas of
introduction of new crops new agricultural practices and food processing methods
and procedures
McDonalds unique cold chain on which the QSR major has spent more than six
years setting up in India has brought about a veritable revolution immensely
benefiting the farmers at one end and enabling customers at retail counters get the
highest quality food products absolutely fresh and at great value
Setting up this extensive cold chain distribution system has involved the transfer of
state-of-the-art food processing technology by McDonalds and its international
suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain
From Field to -2⁰C in 90 Minutes
Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be
grown during the winter months but with McDonalds expertise in the area of
agriculture they are now able to grow this crop through the year
Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room
to remove field heat a large cold room and a refrigerated van for transportation where
the temperature and the relative humidity of the crop is maintained between 1ordm C and
4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room
within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling
to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at
the farms itself ensuring no delay between harvesting pre-cooling packaging and
cold storage
Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd
Flavour and Freshness locked in at - 35degC
Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable
range of products is another important player in this cold chain This includes hi-tech
refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C
This is vital to ensure that the frozen food retains it freshness for a long time and the
cold chain is maintained The frozen product is immediately moved to cold storage
rooms
31
Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India
From Farm to Bulk Cooler in less than 90 Minutes
McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for
quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk
coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -
thus maintaining the cold chain
All leading to the Consumer
McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The
DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity
of the products throughout the entire cold chain
Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C
as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state
All these suppliers share McDonalds commitment and dedication to satisfying
customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently
each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental
effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn
more
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
4
McDonalds revenues grew 27 percent over the three years ending in 2007 to
$228 billion and 9 percent growth in operating income to $39 billion McDonalds primarily sells hamburgers cheese burgers chicken French
fries breakfast items soft drinks milkshakes and desserts In response to changing consumer tastes the company has expanded its menu to
include salads wraps smoothes and fruits
An exterior view of the worlds largest McDonalds restaurant built on 2012
London Olympics site
In July 2011 McDonalds announced that their largest restaurant in the world
will be built on the 2012 London Olympics site The restaurant will contain over 1500 seats and is half the length of an American Football field Over 470
staff will be employed serving on average (during the 2012 Olympics) 100000 portions of fries 50000 Big Macs and 30000 Milkshakes This restaurant will
overshadow the current largest McDonalds in the world in Moscow Russia In January 2012 the company announced revenue for 2011 reached an all-time
high of $27 billion and that 2400 restaurants would be updated and 1300 new ones opened worldwide
5
History of McDonalds
The McDonalds restaurant concept was introduced in San Bernardino
California by Dick and Mac McDonald of Manchester New Hampshire It was
modified and expanded by their business partner Ray Kroc of Oak Park
Illinois who later bought out the business interests of the McDonald brothers in
the concept and went on to found McDonalds Corporation
McDonalds is the leading global foodservice retailer with more than 32000
local restaurants serving more than 58 million people in around 130 countries
each day 70 percent of our restaurants worldwide are owned and operated by
independent local businessmen and businesswomen
In India the brand is managed by two business entities
Connaught Plaza Restaurants Private Limited led by Mr Vikram Bakshi
JV Partner and Managing Director North amp East India
Hardcastle Restaurants Private Limited led by Ms Smita Jatia Managing
Director South amp West India
McDonalds philosophy of QSCV (Quality Service Cleanliness and Value) is
the guiding force behind its service to the customers in India Following its
philosophy of being sensitive to local food and cultural preferences India was
the first country in the McDonalds system where it served non-beef and non-
pork products More than 70 percent of the menu in India has been locally
developed with complete segregation of vegetarian and non-vegetarian products
right from the food processing plants to the point of serving the customers
McDonalds commitment to its Indian customers is evident even in development
6
of special sauces that use local spices and chillies The mayonnaise and all other
sauces are egg-less McDonalds also pioneered the establishment of Cold Chain
across India which helps maintain freshness and nutrition in every product
McDonalds regular scrumptious menu includes wide range of products like McAloo Tikki Filet-O-Fish Spicy Range Chicken McGrill McVeggie Veg Pizza McPuff Chicken Mcnuggetsreg Fries Wraps an assortment of Sundaes
Soft Serve and refreshing beverages such as Ice Tea amp Cold Coffee with outstanding service in a vibrant and lively ambience for which McDonalds is
known worldwide
McDonalds had further reinforced the branded affordability mantra via the introduction of the Happy Price Menu which starts at Rs 25 only
McAloo Tikki Veg Surprise and Pizza McPuff developed in India are now being exported to the countries in the Middle East
McDonaldrsquos introduced Cokersquos Georgia Gold range of hot beverages which was developed especially for the Indian market in 2002
As a leader in QSR segment (Quick Service Restaurant) McDonaldrsquos has
pioneered various industry benchmark practices over the past decade of serving Indian customers including new concepts such ashellip
Oil Alliances in India by inking with petroleum giants BPCL and HPCL
The two such alliances with BPCL outlets are in Mathura (2000) (UP) and Doraha (2002) (Punjab)
Novel menu formats such as an Express Model with a limited menu and Kiosks with a variety of dessert offerings
Home Delivery (McDeliverytrade) Providing even more convenience to
our customers In Oct 2006 McDelivery on bicycle at Chandni Chowk was launched and in March lsquo07 an all India single delivery number (66
000 666) was introduced
First Drive Thru Restaurant at NOIDA (UP) in 1997
First Restaurant with operational Kitchen at Delhi Domestic
Keeping pace with the customer evolving needs McDonalds also functions on models that drive convenience and create unique differentiation like
McDelivery Drive thru Breakfast Menu high ways and extended hours (Currently available in select cities)
At present there are 300 McDonalds restaurants in India
The strong foundation that Ray Kroc built continues today with McDonalds
7
vision and commitment for its internal as well as external customers Since then it has evolved into a value driven brand and recognizes that affordability of its
products is an attractive proposition for its customers along with taste McDonalds continues to strengthen it business model and progress with
customers evolving needs
Key Landmarks - McDonaldrsquos India Journey
1996 hellipthe first McDonaldrsquos restaurant opened on Oct 13 at Basant Lok
Vasant Vihar New Delhi It was also the first McDonaldrsquos restaurant in the
world not serving beef on its menu
1997hellip
the first Drive ndashThru restaurant at Noida (UP)
the first disabled friendly store at Noida (UP)
1999hellipthe first Mall location restaurant at Ansal Plaza (New Delhi)
2000hellipthe first highway restaurant at Mathura (UP)
2001hellipthe first thematic restaurant at Connaught Place (New Delhi)
2002hellip
The first restaurant in a food court at 3Crsquos Lajpat Nagar (New Delhi)
The first restaurant at the Delhi Metro Station at Inter State Bus Terminus
The first fundraiser in association with ORBIS and Dr Shroffrsquos Charity
Eye hospital(Delhi)
2003 The first Dessert Kiosk ndash Faridabad (Haryana)
2004hellip McDonaldrsquos Delivery Service (McDelivery) introduced in New Delhi
2003-04hellip Indigenous products like McAloo Tikki McVeggie and Pizza
McPuff exported to Middle East countries
8
2006
McDelivery on Bicycles flagged off at Chandni Chowk (Delhi)- another
first initiative by McDonaldrsquos India
100th McDonaldrsquos Restaurant in India
10th Year Anniversary
2007
The first McDonaldrsquos open in Eastern Region at Park Street Kolkata
The first restaurant opened at Airport (Domestic Airport New Delhi)
The first MFY restaurant opened at Greater Noida Uttar Pradesh
2008hellip
The First restaurant to start extended hours procedure at Cyber Greens
Gurgaon and Saket New Delhi
The first restaurant to start Breakfast Menu at Janpath New Delhi
2009hellipThe first McDonaldrsquos Restaurant opens at Old Delhi Railway Station
2010hellipThe first reimaged new look restaurant opened at Ambiance mall
Vasant Kunj 6
2011hellip
McDonaldrsquos introduces premium products in it is menu ndash McSpicy range
of products
McDonaldrsquos introduces Mcflurry (premium desserts) in Oreo and
chocolate crispy flavors
McDonaldrsquos introduces Wi-Fi across DelhiNCR region
McDonaldrsquos currently has 235 restaurants in India
The Northern Region has 110 restaurants ndash
sect Delhi ndash 40
sect Haryana - 15
Faridabad ndash3 Manesar ndash 2 (Highway and Drive - Thru) Gurgaon ndash7
Karnal ndash 1 (Highway and Drive - Thru) Panipat -1 Ambala -1
9
sect Rajasthan -6
Jaipur ndash 3 Jodhpur ndash 1 Kota -1 Udaipur - 1
sect Uttaranchal -1
Dehradun ndash 1
sect Uttar Pradesh ndash29
Noida ndash 5 Greater Noida ndash 1 Ghaziabad ndash 7 Mathura ndash 1 (Highway and
Drive - Thru) Kanpur ndash 2 Meerut ndash 2 Lucknow ndash5 Agra ndash 1 Allahabad
ndash 1 Varanasi -2 Gajraula ndash 1 (Highway amp Drive Thru) Khatauli -
1(Highway and Drive thru)
sect Punjab ndash 13
Chandigarh ndash 2 Ludhiana ndash 2 Doraha ndash 1 (Highway and Drive - Thru)
Jalandhar ndash 2 Patarsi ndash 1 (Highway and Drive - Thru) Dasuya (Highway
and Drive Thru) ndash 1 Amritsar -1 Patiala -1 Zirakpur-2
sect West Bengal-3
Kolkata- 3
sect Himachal Pradesh -1
Jabli-1
sect Madhya Pradesh -2
Gwalior ndash 1 Bhopal -1
----------------------------------------------
The Western Region has 125 restaurants across the following states and cities ndash
Maharashtra - Mumbai Pune Nasik Kolhapur ndash
Gujarat - Ahmedabad Vododara Surat Indore Vapi
Madhya Pradesh ndash Indore
Andhra Pradesh - Hyderabad
Karnataka - Bangalore
Tamil Nadu - Chennai
10
GOALS AND OBJECTIVES
1 McDonaldrsquos vision is to be the worldrsquos best quick service restaurants
experience
2 McDonalds is committed to maintaining and developing the best food
products in the quick service restaurant market
3 In order to deliver this the company has made a number of commitments to
food safety and nutrition
4 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
5 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
McDonalds vision is to be the worlds 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
11
AWARDS
McDonaldrsquos India has received many prestigious awards for its service and
performance including
The lsquoMost Respected Companyrsquo for four consecutive years (2003-2006)
in the Food Services sector by Businessworld
The lsquoMost Preferred Fast Food Outletrsquo 2006 amp 2007 by Awaaz
Consumer Award hosted by CNBC
Star Retailer ndash the lsquoConsumer Way Food Services Retailerrsquo of the
Year 2006 amp 2007 2008 by Franchise India
lsquoRetailer of the Yearrsquo Award for catering services (2004-2006) at the
Images Retail Awards
The lsquoAmity Corporate Excellence Awardrsquo ndashin 2007 amp 2008
The lsquoMost Wanted Brand of the Yearrsquo Award 2003 amp 2004 by
Franchising Holdings India Ltd
The lsquoMost Admired F amp B Retailer of the Year QSRs Foreign
Originrsquo ndash The Golden Spoon Awards by Images Retail
The Company with the Best Corporate Conscience ndash 2008 by Business
amp Economy
lsquoValue for Moneyrsquo brand ndash 2010 by Pitch Magazine
The most trusted family restaurant brand in the country award in
2010 by Readerrsquos Digest
12
Corporate Social Responsibility
Being responsible is at the core of everything that we do at McDonaldstrade It is
a deep-rooted value and a tradition that dates back to our founder Ray Kroc It is also one of our top business priorities
We believe that our continuing success depends on our stakeholders trust in
each and every aspect of our business be it the quality and safety of the food we serve in the way we do our business the way we connect and make the difference in the communities we operate being sensitive to environment and
being sustainable
1 We are committed to doing what is right
2 We are committed to be a good neighbour and partner in the community
3 We are committed to conducting our business ethically and with complete transparency
4 We are committed to treating our entire internal and external stakeholders with respect and dignity
13
McDonaldrsquos International
McDonaldrsquos has over 32000 local restaurants in more than 100 countries
70 percent of our restaurants worldwide are owned and operated by
independent local businessmen and businesswomen
McDonaldrsquos serves nearly 50 million customers each day
McDonaldrsquos first franchised restaurant opened at Des Plaines Illinois in
1955 by the founder Ray Kroc
McDonaldrsquos has its own Hamburger University in Illinois and the first
batch graduated in 1961
12 classes offered at Hamburger University are college accredited
In 1963 McDonaldrsquos sold its one billionth hamburger
McDonaldrsquos is listed on the New York Frankfurt Munich Paris and
Tokyo stock exchanges
McDonaldrsquos aired its first network TV advertisement ldquoMcDonaldrsquos -
Where Quality Starts Fresh Everydayrdquo in 1965
The first McDonaldrsquos Drive-Thru opened in Sierra Vista Arizona in 1975
14
Happy Meals were added to McDonaldrsquos menu in 1979
McDonaldrsquos launched the new worldwide Balanced Active Lifestyles
public awareness campaign in 2005
McDonaldrsquos celebrated its 50th Anniversary on April 15 2005
Business model
McDonalds Corporation earns revenue as an investor in properties
a franchiser of restaurants and an operator of restaurants Approximately 15 of McDonalds restaurants are owned and
operated by McDonalds Corporation directly The remainder are operated by others through a variety of franchise agreements and
joint ventures
The McDonalds Corporations business model is slightly different
from that of most other fast-food chains In addition to ordinary franchise fees and marketing fees which are calculated as
a percentage of sales McDonalds may also collect rent which may also be calculated on the basis of sales
As a condition of many franchise agreements which vary by
contract age country and location the Corporation may own or lease the properties on which McDonalds franchises are located In most if not all cases the franchisee does not own the location of its
restaurants
The United Kingdom and Ireland business model is different than the US in that fewer than 30 of restaurants are franchised with
the majority under the ownership of the company McDonalds trains its franchisees and others at Hamburger Univers ity in Oak
Brook Illino is
In other countries McDonalds restaurants are operated by joint
ventures of McDonalds Corporation and other local entities or governments
15
As a matter of policy McDonalds does not make direct sales of food or materials to franchisees instead organizing the supply of
food and materials to restaurants through approved third party logistics operators
According to Fast Food Nation by Eric Schlosser nearly one in
eight workers in the US have at some time been employed by McDonalds It also states that McDonalds is the largest private
operator of playgrounds in the US as well as the single largest purchaser of beef pork potatoes and apples The selection of
meats McDonalds uses varies with the culture of the host country
MARKETING MIX
The marketing mix of a company consists of the various elements as follows
which form the core of a companyrsquos marketing system and hence helps to
achieve marketing objectives The marketing mix of McDonaldrsquos is as follows-
The McDonald plains its marketing by simple keeping 4Ps in mind
Product
Price
Promotion
Place
Product - McDonaldrsquos places considerable emphasis on developing a menu
which customers want Market research establishes exactly what this is However customersrsquo requirements change over time In order to meet these
changes McDonaldrsquos has introduced new products and phased out old ones and will continue to do so Care is taken not to adversely affect the sales of one choice by introducing a new choice which will cannibalise sales from the
existing one (trade off) McDonaldrsquos knows that items on its menu will vary in popularity Their ability to generate profits will vary at different points in their
cycle In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian
The happy meal for the children is a great seller among others
Price-The customerrsquos perception of value is an important determinant of the price charged Customers draw their own mental picture of what a product is worth A product is more than a physical item it also has psychological
connotations for the customer The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised It is
16
important when deciding on price to be fully aware of the brand and its integrity
In India McDonalds classifies its products into 2 categories namely the branded
affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and
the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price
perceptions
Promotion- The promotions aspect of the marketing mix covers all types of
marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and
in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct
mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that
provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be
supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item
At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart
from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos
Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the
management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities
making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers
17
Other than the main four elements mentioned above there are a few other
elements too in the marketing mix which are as follows-
People -The employees in McDonaldrsquos have a standard uniform and
McDonaldrsquos specially focuses on friendly and prompt service to its customers
from their employees
Process -The food manufacturing process at McDonaldrsquos is completely
transparent ie the whole process is visible to the customers In fact the fast
food joint allows its customers to view and judge the hygienic standards at
McDonaldrsquos by allowing them to enter the area where the process takes place
The customers are invited to check the ingredients used in food
Physical evidence - McDonalds focuses on clean and hygienic interiors of
is outlets and at the same time the interiors are attractive and the fast food joint
maintains a proper decorum at its joints
18
SWOT ANALYSIS
Strengths
McDonaldrsquos holds a very strong brand name worldwide
They have large partnerships with other companies that provide them
with their desired products this increases the goodwill of the company
McDonaldrsquos is one of the most reputed firms who are socially
responsible
Loyal employees amp management amp customer are their biggest strength
19
McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind
while providing food to different countries
Clean environment and play areas for children where they can enjoy their
time
Weakness
The weakness that hits the list of employee turnover rate Every year
many of their employees are fired out of the restaurant
McDonalds mostly advertises products and food items that targets
children
Health conscious people often complain that they do not provide us with
the organic and healthy food This becomes their weakness when they get in the complaints
They also face quality issue at times This affects the business as they are
running the outlet worldwide if one franchise gets affected others also
get a bad name
Opportunities
It can open up online services for their customers so that they can easily
order their desired meals sitting at home
Discounts given on every food item may help them gain more customers
They can go for a joint venture with the retailers they work with
They can introduce healthy hamburgers and healthy drinks for the people who are health conscious
20
In order to be environment friendly they can use packing material which
can be recycled later or material that does not create pollution
Threats
Emerging competition of similar outlets is becoming a problem for McDonalds
Health issue also becomes a problem when it comes to food
As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies
Recession in any country would definitely affect the whole outlet
worldwide
People facing heart problems and obesity accuse McDonalds for not
providing them with the healthy food
They have a threat of local food outlets in different countries
McDonalds is operating in a fully fledged economy where competition is
increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession
McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local
Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government
regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled
Indian businesses to grow by improving their ability to compete in todays international markets
21
Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in
predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first
restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept
has today been adopted by various Indian and International players to deliver quality produce to consumers
For instance Cremica Industries worked with another McDonalds supplier
from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to
McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with
farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water
consumption better seeds amp agricultural management practices which result in greater yields
In some cases these Indian suppliers had the technology - but no market for the
products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk
casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to
restaurants across India
McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations
COMPANYrsquoS FINANCIAL INFORMATION
Company Name McDonalds Corporation
Ticker Symbol MCD
Web Address wwwmcdonaldscom
CEO Mr Donald Thompson
No of Employees 420000
Common Issue Type CS
Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other
22
goods from numerous independent suppliers
Industry Information LEISURE - Restaurants
Price Day Change Bid Ask Open High Low Volume
8718 -002 - - 8743 8743 8676 3658828
Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range
875267 10040 039 527 253 164 35 10222 - 8331
KEY FIGURES (Latest Twelve Months - LTM)
Yesterdays Close 8706 $
PE Ratio - LTM 164
Market Capitalisation 875267 mil
Latest Shares Outstanding 10040 mil
Earnings pS (EPS) 527 $
Dividend pS (DPS) 253 cent
Dividend Yield 35
Dividend Payout Ratio 48
Revenue per Employee 64300 $
Effective Tax Rate 313
Float 10153 mil
Float as of Shares Outstanding 999
Foreign Sales 18478 mil
Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue
910
Research amp Devlopment (RampD) as of Revenue
000
Gross Profit Margin 447
EBITDA Margin 356
Pre-Tax Profit Margin 291
Assets Turnover 08
Return on Assets (ROA) 161
Return on Equity (ROE) 392
Return on Capital Invested (ROCI) 204 Current Ratio 10
Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096
LT DebtTotal Capital 480
Working Capital pS 006 $
Cash pS 217 $
Book-Value pS 1383 $
Balance Sheet (at a glance) in Millions
DIVIDEND INFO
Dividend Declared Date 09202012
Dividend Ex-Date 11282012
Dividend Record Date 12022012
Dividend Pay Date 12162012
Dividend Amount 770
Type of Payment Cash Payment
Dividend Rate 308
Current Dividend Yield 35
5-Y Average Dividend Yield 31
Payout Ratio 480
5-Y Average Payout Ratio 530
Share price performance previous 3 years
Share price performance intraday
23
Tangible Book-Value pS 1110 $
Cash Flow pS 689 $
Free Cash Flow pS 125 $
KEY FIGURES (LTM) Price info PriceBook Ratio 630
PriceTangible Book Ratio 785 PriceCash Flow 126
PriceFree Cash Flow 699
PE as of Industry Group 420
PE as of Sector Segment 770
PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol
1 Week - - - 00 101 54041 66217
4 Weeks 8743 8331 8474 27 101 57129 856929
13 Weeks 9416 8331 9102 -44 98 61288 3554700
26 Weeks 9416 8331 8775 -08 93 59419 7189758
52 Weeks 10222 8331 9803 -112 79 59272 14521666
YTD 10222 8331 - -132 77 59774 13807695
Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)
8661 8631 8825 8931 9174 039 031
GROWTH RATES 5-Year
Growh Rsup2 of 5-Year Growth
3-Year
Growth
Revenue 381 776 666
Income 2017 811 978
Dividend 1536 947 1016
Capital Spending 697 NA 1052
RampD 000 NA 000
Normalized Inc 1158 NA 979
CHANGES YTD vs
Last YTD
Curr Qtr vs
Qtr 1-Yr ago
Annual vs
Last Annual
Revenue 21 -02 122
Earnings -14 -35 113
EPS 10 -14 151
EPS $ 004 -002 069
SOLVENCY RATIOS
SHORT-TERM SOLVENCY RATIOS
(LIQUIDITY)
Net Working Capital Ratio 271
Current Ratio 13
Quick Ratio (Acid Test) 10
Liquidity Ratio (Cash) 067
Receivables Turnover 215
Average Collection Period 17
Working CapitalEquity 62
Working Capital pS 088
Cash-Flow pS 677
Free Cash-Flow pS 209
24
FINANCIAL STRUCTURE RATIOS
Altmans Z-Score Ratio 485
Financial Leverage Ratio (AssetsEquity) 23
Debt Ratio 564
Total DebtEquity (Gearing Ratio) 087
LT DebtEquity 084
LT DebtCapital Invested 569
LT DebtTotal Liabilities 652
Interest Cover 173
InterestCapital Invested 167
25
People hellip McDonaldrsquos 1 Resource in India
26
McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs
around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in
1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with
McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)
The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive
training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course
(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the
Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University
27
The McDonaldrsquos Promise
QUALITY SERVICE CLEANLINESS amp VALUE
When asked to explain McDonalds success founder Ray Kroc used to say We
take the hamburger business more seriously than anyone else
Kroc was a perfectionist From the day he opened his first restaurant he vowed
to give his customers high quality products served quickly --and with a smile
in a clean and pleasant environment and all at a fair price Quality Service
Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds
business
QUALITY
McDonalds India serves only the highest quality products The attention to food
quality started long before the first restaurant opened McDonalds India has
established close relationships with local suppliers who provide McDonalds
with the highest quality freshest ingredients to make its products
All suppliers adhere to Indian government regulations on food health and
hygiene while continuously maintaining McDonalds own recognized standards
McDonalds has established an extensive cold chain distribution system in
India to ensure that the products which arrive at the restaurant from suppliers
all over India are absolutely fresh In the restaurants products and supplies are
used on a first-in first-out basis to ensure freshness All McDonalds products
are prepared using modern state-of-the-art cooking equipment to ensure quality
and safety
SERVICE
McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos
which sets its restaurants apart from others At McDonalds the customer
always comes first Every employee strives to provide 100 percent customer
satisfaction -- for every customer -- every visit This includes friendly and
attentive service accuracy in order taking and anticipation of customers needs
-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun
and youthful spirit we will proudly serve an exceptional McDonaldrsquos
eating experience that makes all people feel special and makes them smile ndash
every customer every timerdquo
28
CLEANLINESS
McDonalds restaurants provide a clean comfortable environment especially
suited for families McDonalds stringent cleaning standards ensure that all
tables seating highchairs and trays are sanitized several times each hour The
attention to cleanliness extends from the lobby to the kitchen to the sidewalk
and immediate areas outside the restaurant
In addition to urging customers to dispose of their litter properly and offering a
number of trash bins (both inside and outside the restaurants) for their
convenience McDonalds Litter Patrols walk around the restaurants several
times each day picking up litter -- even if it isnt from McDonalds
Restaurant managers walk through the dining areas each hour to ensure that it
is clean and well stocked All restaurants provide a variety of comfortable
seating arrangements to accommodate anyone -- from a single individual to a
large family The environment is warm inviting and well lit
VALUE
McDonalds menu is priced at a value that the largest segment of Indian
consumers can afford McDonalds does not sacrifice quality for value -- rather
McDonalds leverages economies of scale to minimize costs while maximizing
value to customers
McDonalds definition of value is broader than most restaurants of its kind -- it
is more than price Value at McDonalds is the sum of the total McDonalds
experience quality food fast friendly service a clean and pleasant
environment and products priced at very affordable prices for the largest
segment of Indian consumers possible That is value at McDonalds
29
McDonaldrsquos Indiahellip Culturally Sensitive
Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much
that is consistent with other McDonaldrsquos restaurants around the world such as
the quality of the food and the attention to service
The dedication to local cultures is not new for McDonaldrsquos For the past 50
years McDonaldrsquos has opened restaurants in more than 120 distinctly different
countries and cultures With guidance from its local partners McDonaldrsquos is
able to adapt- where necessary-its menu and restaurant operations to
complement existing eating-out options McDonaldrsquos local owners understand
what their customers want perhaps more importantly what is acceptable within
local customs and values
There is much too that is very different- such as the first beef-less and pork-
less menu in the world and special product formulations to cater to Indian
culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos
India says ldquoWe know the Indian culture because we were born in it
inherited its richness and respect it greatly It is the respect for this culture
and the sentiments of many of our customersrsquo that we do not serve any
beef and pork items in our restaurantsrdquo
McDonaldrsquos commitment to its Indian customers is evident even in
development of special sauces that use local spices and chillies The
mayonnaise and all other sauces are egg-less
In India vegetarianism is in many cases more than a lifestyle choice Many
people are vegetarians due to religious reasons and in some cases even the
vegetarian product that has come into contact with a non-vegetarian product is
unacceptable Hence McDonaldrsquos India has also changed its operations to
address the special requirements of our vegetarian customers by having
processes that ensure that a physical separation of veg and non-veg products is
maintained right from farm to the customer Vegetable products are prepared
separately using dedicated equipment and utensils Also in India McDonaldrsquos
uses only vegetable oil as a medium for cooking
30
McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash
lsquoto be driven by the leadership of local ownersrsquo This commitment has translated
into enduring benefits to the businesses at the grass root level in the areas of
introduction of new crops new agricultural practices and food processing methods
and procedures
McDonalds unique cold chain on which the QSR major has spent more than six
years setting up in India has brought about a veritable revolution immensely
benefiting the farmers at one end and enabling customers at retail counters get the
highest quality food products absolutely fresh and at great value
Setting up this extensive cold chain distribution system has involved the transfer of
state-of-the-art food processing technology by McDonalds and its international
suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain
From Field to -2⁰C in 90 Minutes
Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be
grown during the winter months but with McDonalds expertise in the area of
agriculture they are now able to grow this crop through the year
Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room
to remove field heat a large cold room and a refrigerated van for transportation where
the temperature and the relative humidity of the crop is maintained between 1ordm C and
4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room
within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling
to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at
the farms itself ensuring no delay between harvesting pre-cooling packaging and
cold storage
Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd
Flavour and Freshness locked in at - 35degC
Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable
range of products is another important player in this cold chain This includes hi-tech
refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C
This is vital to ensure that the frozen food retains it freshness for a long time and the
cold chain is maintained The frozen product is immediately moved to cold storage
rooms
31
Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India
From Farm to Bulk Cooler in less than 90 Minutes
McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for
quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk
coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -
thus maintaining the cold chain
All leading to the Consumer
McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The
DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity
of the products throughout the entire cold chain
Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C
as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state
All these suppliers share McDonalds commitment and dedication to satisfying
customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently
each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental
effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn
more
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
5
History of McDonalds
The McDonalds restaurant concept was introduced in San Bernardino
California by Dick and Mac McDonald of Manchester New Hampshire It was
modified and expanded by their business partner Ray Kroc of Oak Park
Illinois who later bought out the business interests of the McDonald brothers in
the concept and went on to found McDonalds Corporation
McDonalds is the leading global foodservice retailer with more than 32000
local restaurants serving more than 58 million people in around 130 countries
each day 70 percent of our restaurants worldwide are owned and operated by
independent local businessmen and businesswomen
In India the brand is managed by two business entities
Connaught Plaza Restaurants Private Limited led by Mr Vikram Bakshi
JV Partner and Managing Director North amp East India
Hardcastle Restaurants Private Limited led by Ms Smita Jatia Managing
Director South amp West India
McDonalds philosophy of QSCV (Quality Service Cleanliness and Value) is
the guiding force behind its service to the customers in India Following its
philosophy of being sensitive to local food and cultural preferences India was
the first country in the McDonalds system where it served non-beef and non-
pork products More than 70 percent of the menu in India has been locally
developed with complete segregation of vegetarian and non-vegetarian products
right from the food processing plants to the point of serving the customers
McDonalds commitment to its Indian customers is evident even in development
6
of special sauces that use local spices and chillies The mayonnaise and all other
sauces are egg-less McDonalds also pioneered the establishment of Cold Chain
across India which helps maintain freshness and nutrition in every product
McDonalds regular scrumptious menu includes wide range of products like McAloo Tikki Filet-O-Fish Spicy Range Chicken McGrill McVeggie Veg Pizza McPuff Chicken Mcnuggetsreg Fries Wraps an assortment of Sundaes
Soft Serve and refreshing beverages such as Ice Tea amp Cold Coffee with outstanding service in a vibrant and lively ambience for which McDonalds is
known worldwide
McDonalds had further reinforced the branded affordability mantra via the introduction of the Happy Price Menu which starts at Rs 25 only
McAloo Tikki Veg Surprise and Pizza McPuff developed in India are now being exported to the countries in the Middle East
McDonaldrsquos introduced Cokersquos Georgia Gold range of hot beverages which was developed especially for the Indian market in 2002
As a leader in QSR segment (Quick Service Restaurant) McDonaldrsquos has
pioneered various industry benchmark practices over the past decade of serving Indian customers including new concepts such ashellip
Oil Alliances in India by inking with petroleum giants BPCL and HPCL
The two such alliances with BPCL outlets are in Mathura (2000) (UP) and Doraha (2002) (Punjab)
Novel menu formats such as an Express Model with a limited menu and Kiosks with a variety of dessert offerings
Home Delivery (McDeliverytrade) Providing even more convenience to
our customers In Oct 2006 McDelivery on bicycle at Chandni Chowk was launched and in March lsquo07 an all India single delivery number (66
000 666) was introduced
First Drive Thru Restaurant at NOIDA (UP) in 1997
First Restaurant with operational Kitchen at Delhi Domestic
Keeping pace with the customer evolving needs McDonalds also functions on models that drive convenience and create unique differentiation like
McDelivery Drive thru Breakfast Menu high ways and extended hours (Currently available in select cities)
At present there are 300 McDonalds restaurants in India
The strong foundation that Ray Kroc built continues today with McDonalds
7
vision and commitment for its internal as well as external customers Since then it has evolved into a value driven brand and recognizes that affordability of its
products is an attractive proposition for its customers along with taste McDonalds continues to strengthen it business model and progress with
customers evolving needs
Key Landmarks - McDonaldrsquos India Journey
1996 hellipthe first McDonaldrsquos restaurant opened on Oct 13 at Basant Lok
Vasant Vihar New Delhi It was also the first McDonaldrsquos restaurant in the
world not serving beef on its menu
1997hellip
the first Drive ndashThru restaurant at Noida (UP)
the first disabled friendly store at Noida (UP)
1999hellipthe first Mall location restaurant at Ansal Plaza (New Delhi)
2000hellipthe first highway restaurant at Mathura (UP)
2001hellipthe first thematic restaurant at Connaught Place (New Delhi)
2002hellip
The first restaurant in a food court at 3Crsquos Lajpat Nagar (New Delhi)
The first restaurant at the Delhi Metro Station at Inter State Bus Terminus
The first fundraiser in association with ORBIS and Dr Shroffrsquos Charity
Eye hospital(Delhi)
2003 The first Dessert Kiosk ndash Faridabad (Haryana)
2004hellip McDonaldrsquos Delivery Service (McDelivery) introduced in New Delhi
2003-04hellip Indigenous products like McAloo Tikki McVeggie and Pizza
McPuff exported to Middle East countries
8
2006
McDelivery on Bicycles flagged off at Chandni Chowk (Delhi)- another
first initiative by McDonaldrsquos India
100th McDonaldrsquos Restaurant in India
10th Year Anniversary
2007
The first McDonaldrsquos open in Eastern Region at Park Street Kolkata
The first restaurant opened at Airport (Domestic Airport New Delhi)
The first MFY restaurant opened at Greater Noida Uttar Pradesh
2008hellip
The First restaurant to start extended hours procedure at Cyber Greens
Gurgaon and Saket New Delhi
The first restaurant to start Breakfast Menu at Janpath New Delhi
2009hellipThe first McDonaldrsquos Restaurant opens at Old Delhi Railway Station
2010hellipThe first reimaged new look restaurant opened at Ambiance mall
Vasant Kunj 6
2011hellip
McDonaldrsquos introduces premium products in it is menu ndash McSpicy range
of products
McDonaldrsquos introduces Mcflurry (premium desserts) in Oreo and
chocolate crispy flavors
McDonaldrsquos introduces Wi-Fi across DelhiNCR region
McDonaldrsquos currently has 235 restaurants in India
The Northern Region has 110 restaurants ndash
sect Delhi ndash 40
sect Haryana - 15
Faridabad ndash3 Manesar ndash 2 (Highway and Drive - Thru) Gurgaon ndash7
Karnal ndash 1 (Highway and Drive - Thru) Panipat -1 Ambala -1
9
sect Rajasthan -6
Jaipur ndash 3 Jodhpur ndash 1 Kota -1 Udaipur - 1
sect Uttaranchal -1
Dehradun ndash 1
sect Uttar Pradesh ndash29
Noida ndash 5 Greater Noida ndash 1 Ghaziabad ndash 7 Mathura ndash 1 (Highway and
Drive - Thru) Kanpur ndash 2 Meerut ndash 2 Lucknow ndash5 Agra ndash 1 Allahabad
ndash 1 Varanasi -2 Gajraula ndash 1 (Highway amp Drive Thru) Khatauli -
1(Highway and Drive thru)
sect Punjab ndash 13
Chandigarh ndash 2 Ludhiana ndash 2 Doraha ndash 1 (Highway and Drive - Thru)
Jalandhar ndash 2 Patarsi ndash 1 (Highway and Drive - Thru) Dasuya (Highway
and Drive Thru) ndash 1 Amritsar -1 Patiala -1 Zirakpur-2
sect West Bengal-3
Kolkata- 3
sect Himachal Pradesh -1
Jabli-1
sect Madhya Pradesh -2
Gwalior ndash 1 Bhopal -1
----------------------------------------------
The Western Region has 125 restaurants across the following states and cities ndash
Maharashtra - Mumbai Pune Nasik Kolhapur ndash
Gujarat - Ahmedabad Vododara Surat Indore Vapi
Madhya Pradesh ndash Indore
Andhra Pradesh - Hyderabad
Karnataka - Bangalore
Tamil Nadu - Chennai
10
GOALS AND OBJECTIVES
1 McDonaldrsquos vision is to be the worldrsquos best quick service restaurants
experience
2 McDonalds is committed to maintaining and developing the best food
products in the quick service restaurant market
3 In order to deliver this the company has made a number of commitments to
food safety and nutrition
4 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
5 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
McDonalds vision is to be the worlds 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
11
AWARDS
McDonaldrsquos India has received many prestigious awards for its service and
performance including
The lsquoMost Respected Companyrsquo for four consecutive years (2003-2006)
in the Food Services sector by Businessworld
The lsquoMost Preferred Fast Food Outletrsquo 2006 amp 2007 by Awaaz
Consumer Award hosted by CNBC
Star Retailer ndash the lsquoConsumer Way Food Services Retailerrsquo of the
Year 2006 amp 2007 2008 by Franchise India
lsquoRetailer of the Yearrsquo Award for catering services (2004-2006) at the
Images Retail Awards
The lsquoAmity Corporate Excellence Awardrsquo ndashin 2007 amp 2008
The lsquoMost Wanted Brand of the Yearrsquo Award 2003 amp 2004 by
Franchising Holdings India Ltd
The lsquoMost Admired F amp B Retailer of the Year QSRs Foreign
Originrsquo ndash The Golden Spoon Awards by Images Retail
The Company with the Best Corporate Conscience ndash 2008 by Business
amp Economy
lsquoValue for Moneyrsquo brand ndash 2010 by Pitch Magazine
The most trusted family restaurant brand in the country award in
2010 by Readerrsquos Digest
12
Corporate Social Responsibility
Being responsible is at the core of everything that we do at McDonaldstrade It is
a deep-rooted value and a tradition that dates back to our founder Ray Kroc It is also one of our top business priorities
We believe that our continuing success depends on our stakeholders trust in
each and every aspect of our business be it the quality and safety of the food we serve in the way we do our business the way we connect and make the difference in the communities we operate being sensitive to environment and
being sustainable
1 We are committed to doing what is right
2 We are committed to be a good neighbour and partner in the community
3 We are committed to conducting our business ethically and with complete transparency
4 We are committed to treating our entire internal and external stakeholders with respect and dignity
13
McDonaldrsquos International
McDonaldrsquos has over 32000 local restaurants in more than 100 countries
70 percent of our restaurants worldwide are owned and operated by
independent local businessmen and businesswomen
McDonaldrsquos serves nearly 50 million customers each day
McDonaldrsquos first franchised restaurant opened at Des Plaines Illinois in
1955 by the founder Ray Kroc
McDonaldrsquos has its own Hamburger University in Illinois and the first
batch graduated in 1961
12 classes offered at Hamburger University are college accredited
In 1963 McDonaldrsquos sold its one billionth hamburger
McDonaldrsquos is listed on the New York Frankfurt Munich Paris and
Tokyo stock exchanges
McDonaldrsquos aired its first network TV advertisement ldquoMcDonaldrsquos -
Where Quality Starts Fresh Everydayrdquo in 1965
The first McDonaldrsquos Drive-Thru opened in Sierra Vista Arizona in 1975
14
Happy Meals were added to McDonaldrsquos menu in 1979
McDonaldrsquos launched the new worldwide Balanced Active Lifestyles
public awareness campaign in 2005
McDonaldrsquos celebrated its 50th Anniversary on April 15 2005
Business model
McDonalds Corporation earns revenue as an investor in properties
a franchiser of restaurants and an operator of restaurants Approximately 15 of McDonalds restaurants are owned and
operated by McDonalds Corporation directly The remainder are operated by others through a variety of franchise agreements and
joint ventures
The McDonalds Corporations business model is slightly different
from that of most other fast-food chains In addition to ordinary franchise fees and marketing fees which are calculated as
a percentage of sales McDonalds may also collect rent which may also be calculated on the basis of sales
As a condition of many franchise agreements which vary by
contract age country and location the Corporation may own or lease the properties on which McDonalds franchises are located In most if not all cases the franchisee does not own the location of its
restaurants
The United Kingdom and Ireland business model is different than the US in that fewer than 30 of restaurants are franchised with
the majority under the ownership of the company McDonalds trains its franchisees and others at Hamburger Univers ity in Oak
Brook Illino is
In other countries McDonalds restaurants are operated by joint
ventures of McDonalds Corporation and other local entities or governments
15
As a matter of policy McDonalds does not make direct sales of food or materials to franchisees instead organizing the supply of
food and materials to restaurants through approved third party logistics operators
According to Fast Food Nation by Eric Schlosser nearly one in
eight workers in the US have at some time been employed by McDonalds It also states that McDonalds is the largest private
operator of playgrounds in the US as well as the single largest purchaser of beef pork potatoes and apples The selection of
meats McDonalds uses varies with the culture of the host country
MARKETING MIX
The marketing mix of a company consists of the various elements as follows
which form the core of a companyrsquos marketing system and hence helps to
achieve marketing objectives The marketing mix of McDonaldrsquos is as follows-
The McDonald plains its marketing by simple keeping 4Ps in mind
Product
Price
Promotion
Place
Product - McDonaldrsquos places considerable emphasis on developing a menu
which customers want Market research establishes exactly what this is However customersrsquo requirements change over time In order to meet these
changes McDonaldrsquos has introduced new products and phased out old ones and will continue to do so Care is taken not to adversely affect the sales of one choice by introducing a new choice which will cannibalise sales from the
existing one (trade off) McDonaldrsquos knows that items on its menu will vary in popularity Their ability to generate profits will vary at different points in their
cycle In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian
The happy meal for the children is a great seller among others
Price-The customerrsquos perception of value is an important determinant of the price charged Customers draw their own mental picture of what a product is worth A product is more than a physical item it also has psychological
connotations for the customer The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised It is
16
important when deciding on price to be fully aware of the brand and its integrity
In India McDonalds classifies its products into 2 categories namely the branded
affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and
the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price
perceptions
Promotion- The promotions aspect of the marketing mix covers all types of
marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and
in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct
mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that
provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be
supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item
At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart
from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos
Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the
management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities
making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers
17
Other than the main four elements mentioned above there are a few other
elements too in the marketing mix which are as follows-
People -The employees in McDonaldrsquos have a standard uniform and
McDonaldrsquos specially focuses on friendly and prompt service to its customers
from their employees
Process -The food manufacturing process at McDonaldrsquos is completely
transparent ie the whole process is visible to the customers In fact the fast
food joint allows its customers to view and judge the hygienic standards at
McDonaldrsquos by allowing them to enter the area where the process takes place
The customers are invited to check the ingredients used in food
Physical evidence - McDonalds focuses on clean and hygienic interiors of
is outlets and at the same time the interiors are attractive and the fast food joint
maintains a proper decorum at its joints
18
SWOT ANALYSIS
Strengths
McDonaldrsquos holds a very strong brand name worldwide
They have large partnerships with other companies that provide them
with their desired products this increases the goodwill of the company
McDonaldrsquos is one of the most reputed firms who are socially
responsible
Loyal employees amp management amp customer are their biggest strength
19
McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind
while providing food to different countries
Clean environment and play areas for children where they can enjoy their
time
Weakness
The weakness that hits the list of employee turnover rate Every year
many of their employees are fired out of the restaurant
McDonalds mostly advertises products and food items that targets
children
Health conscious people often complain that they do not provide us with
the organic and healthy food This becomes their weakness when they get in the complaints
They also face quality issue at times This affects the business as they are
running the outlet worldwide if one franchise gets affected others also
get a bad name
Opportunities
It can open up online services for their customers so that they can easily
order their desired meals sitting at home
Discounts given on every food item may help them gain more customers
They can go for a joint venture with the retailers they work with
They can introduce healthy hamburgers and healthy drinks for the people who are health conscious
20
In order to be environment friendly they can use packing material which
can be recycled later or material that does not create pollution
Threats
Emerging competition of similar outlets is becoming a problem for McDonalds
Health issue also becomes a problem when it comes to food
As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies
Recession in any country would definitely affect the whole outlet
worldwide
People facing heart problems and obesity accuse McDonalds for not
providing them with the healthy food
They have a threat of local food outlets in different countries
McDonalds is operating in a fully fledged economy where competition is
increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession
McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local
Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government
regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled
Indian businesses to grow by improving their ability to compete in todays international markets
21
Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in
predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first
restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept
has today been adopted by various Indian and International players to deliver quality produce to consumers
For instance Cremica Industries worked with another McDonalds supplier
from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to
McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with
farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water
consumption better seeds amp agricultural management practices which result in greater yields
In some cases these Indian suppliers had the technology - but no market for the
products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk
casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to
restaurants across India
McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations
COMPANYrsquoS FINANCIAL INFORMATION
Company Name McDonalds Corporation
Ticker Symbol MCD
Web Address wwwmcdonaldscom
CEO Mr Donald Thompson
No of Employees 420000
Common Issue Type CS
Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other
22
goods from numerous independent suppliers
Industry Information LEISURE - Restaurants
Price Day Change Bid Ask Open High Low Volume
8718 -002 - - 8743 8743 8676 3658828
Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range
875267 10040 039 527 253 164 35 10222 - 8331
KEY FIGURES (Latest Twelve Months - LTM)
Yesterdays Close 8706 $
PE Ratio - LTM 164
Market Capitalisation 875267 mil
Latest Shares Outstanding 10040 mil
Earnings pS (EPS) 527 $
Dividend pS (DPS) 253 cent
Dividend Yield 35
Dividend Payout Ratio 48
Revenue per Employee 64300 $
Effective Tax Rate 313
Float 10153 mil
Float as of Shares Outstanding 999
Foreign Sales 18478 mil
Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue
910
Research amp Devlopment (RampD) as of Revenue
000
Gross Profit Margin 447
EBITDA Margin 356
Pre-Tax Profit Margin 291
Assets Turnover 08
Return on Assets (ROA) 161
Return on Equity (ROE) 392
Return on Capital Invested (ROCI) 204 Current Ratio 10
Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096
LT DebtTotal Capital 480
Working Capital pS 006 $
Cash pS 217 $
Book-Value pS 1383 $
Balance Sheet (at a glance) in Millions
DIVIDEND INFO
Dividend Declared Date 09202012
Dividend Ex-Date 11282012
Dividend Record Date 12022012
Dividend Pay Date 12162012
Dividend Amount 770
Type of Payment Cash Payment
Dividend Rate 308
Current Dividend Yield 35
5-Y Average Dividend Yield 31
Payout Ratio 480
5-Y Average Payout Ratio 530
Share price performance previous 3 years
Share price performance intraday
23
Tangible Book-Value pS 1110 $
Cash Flow pS 689 $
Free Cash Flow pS 125 $
KEY FIGURES (LTM) Price info PriceBook Ratio 630
PriceTangible Book Ratio 785 PriceCash Flow 126
PriceFree Cash Flow 699
PE as of Industry Group 420
PE as of Sector Segment 770
PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol
1 Week - - - 00 101 54041 66217
4 Weeks 8743 8331 8474 27 101 57129 856929
13 Weeks 9416 8331 9102 -44 98 61288 3554700
26 Weeks 9416 8331 8775 -08 93 59419 7189758
52 Weeks 10222 8331 9803 -112 79 59272 14521666
YTD 10222 8331 - -132 77 59774 13807695
Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)
8661 8631 8825 8931 9174 039 031
GROWTH RATES 5-Year
Growh Rsup2 of 5-Year Growth
3-Year
Growth
Revenue 381 776 666
Income 2017 811 978
Dividend 1536 947 1016
Capital Spending 697 NA 1052
RampD 000 NA 000
Normalized Inc 1158 NA 979
CHANGES YTD vs
Last YTD
Curr Qtr vs
Qtr 1-Yr ago
Annual vs
Last Annual
Revenue 21 -02 122
Earnings -14 -35 113
EPS 10 -14 151
EPS $ 004 -002 069
SOLVENCY RATIOS
SHORT-TERM SOLVENCY RATIOS
(LIQUIDITY)
Net Working Capital Ratio 271
Current Ratio 13
Quick Ratio (Acid Test) 10
Liquidity Ratio (Cash) 067
Receivables Turnover 215
Average Collection Period 17
Working CapitalEquity 62
Working Capital pS 088
Cash-Flow pS 677
Free Cash-Flow pS 209
24
FINANCIAL STRUCTURE RATIOS
Altmans Z-Score Ratio 485
Financial Leverage Ratio (AssetsEquity) 23
Debt Ratio 564
Total DebtEquity (Gearing Ratio) 087
LT DebtEquity 084
LT DebtCapital Invested 569
LT DebtTotal Liabilities 652
Interest Cover 173
InterestCapital Invested 167
25
People hellip McDonaldrsquos 1 Resource in India
26
McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs
around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in
1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with
McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)
The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive
training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course
(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the
Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University
27
The McDonaldrsquos Promise
QUALITY SERVICE CLEANLINESS amp VALUE
When asked to explain McDonalds success founder Ray Kroc used to say We
take the hamburger business more seriously than anyone else
Kroc was a perfectionist From the day he opened his first restaurant he vowed
to give his customers high quality products served quickly --and with a smile
in a clean and pleasant environment and all at a fair price Quality Service
Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds
business
QUALITY
McDonalds India serves only the highest quality products The attention to food
quality started long before the first restaurant opened McDonalds India has
established close relationships with local suppliers who provide McDonalds
with the highest quality freshest ingredients to make its products
All suppliers adhere to Indian government regulations on food health and
hygiene while continuously maintaining McDonalds own recognized standards
McDonalds has established an extensive cold chain distribution system in
India to ensure that the products which arrive at the restaurant from suppliers
all over India are absolutely fresh In the restaurants products and supplies are
used on a first-in first-out basis to ensure freshness All McDonalds products
are prepared using modern state-of-the-art cooking equipment to ensure quality
and safety
SERVICE
McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos
which sets its restaurants apart from others At McDonalds the customer
always comes first Every employee strives to provide 100 percent customer
satisfaction -- for every customer -- every visit This includes friendly and
attentive service accuracy in order taking and anticipation of customers needs
-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun
and youthful spirit we will proudly serve an exceptional McDonaldrsquos
eating experience that makes all people feel special and makes them smile ndash
every customer every timerdquo
28
CLEANLINESS
McDonalds restaurants provide a clean comfortable environment especially
suited for families McDonalds stringent cleaning standards ensure that all
tables seating highchairs and trays are sanitized several times each hour The
attention to cleanliness extends from the lobby to the kitchen to the sidewalk
and immediate areas outside the restaurant
In addition to urging customers to dispose of their litter properly and offering a
number of trash bins (both inside and outside the restaurants) for their
convenience McDonalds Litter Patrols walk around the restaurants several
times each day picking up litter -- even if it isnt from McDonalds
Restaurant managers walk through the dining areas each hour to ensure that it
is clean and well stocked All restaurants provide a variety of comfortable
seating arrangements to accommodate anyone -- from a single individual to a
large family The environment is warm inviting and well lit
VALUE
McDonalds menu is priced at a value that the largest segment of Indian
consumers can afford McDonalds does not sacrifice quality for value -- rather
McDonalds leverages economies of scale to minimize costs while maximizing
value to customers
McDonalds definition of value is broader than most restaurants of its kind -- it
is more than price Value at McDonalds is the sum of the total McDonalds
experience quality food fast friendly service a clean and pleasant
environment and products priced at very affordable prices for the largest
segment of Indian consumers possible That is value at McDonalds
29
McDonaldrsquos Indiahellip Culturally Sensitive
Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much
that is consistent with other McDonaldrsquos restaurants around the world such as
the quality of the food and the attention to service
The dedication to local cultures is not new for McDonaldrsquos For the past 50
years McDonaldrsquos has opened restaurants in more than 120 distinctly different
countries and cultures With guidance from its local partners McDonaldrsquos is
able to adapt- where necessary-its menu and restaurant operations to
complement existing eating-out options McDonaldrsquos local owners understand
what their customers want perhaps more importantly what is acceptable within
local customs and values
There is much too that is very different- such as the first beef-less and pork-
less menu in the world and special product formulations to cater to Indian
culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos
India says ldquoWe know the Indian culture because we were born in it
inherited its richness and respect it greatly It is the respect for this culture
and the sentiments of many of our customersrsquo that we do not serve any
beef and pork items in our restaurantsrdquo
McDonaldrsquos commitment to its Indian customers is evident even in
development of special sauces that use local spices and chillies The
mayonnaise and all other sauces are egg-less
In India vegetarianism is in many cases more than a lifestyle choice Many
people are vegetarians due to religious reasons and in some cases even the
vegetarian product that has come into contact with a non-vegetarian product is
unacceptable Hence McDonaldrsquos India has also changed its operations to
address the special requirements of our vegetarian customers by having
processes that ensure that a physical separation of veg and non-veg products is
maintained right from farm to the customer Vegetable products are prepared
separately using dedicated equipment and utensils Also in India McDonaldrsquos
uses only vegetable oil as a medium for cooking
30
McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash
lsquoto be driven by the leadership of local ownersrsquo This commitment has translated
into enduring benefits to the businesses at the grass root level in the areas of
introduction of new crops new agricultural practices and food processing methods
and procedures
McDonalds unique cold chain on which the QSR major has spent more than six
years setting up in India has brought about a veritable revolution immensely
benefiting the farmers at one end and enabling customers at retail counters get the
highest quality food products absolutely fresh and at great value
Setting up this extensive cold chain distribution system has involved the transfer of
state-of-the-art food processing technology by McDonalds and its international
suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain
From Field to -2⁰C in 90 Minutes
Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be
grown during the winter months but with McDonalds expertise in the area of
agriculture they are now able to grow this crop through the year
Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room
to remove field heat a large cold room and a refrigerated van for transportation where
the temperature and the relative humidity of the crop is maintained between 1ordm C and
4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room
within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling
to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at
the farms itself ensuring no delay between harvesting pre-cooling packaging and
cold storage
Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd
Flavour and Freshness locked in at - 35degC
Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable
range of products is another important player in this cold chain This includes hi-tech
refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C
This is vital to ensure that the frozen food retains it freshness for a long time and the
cold chain is maintained The frozen product is immediately moved to cold storage
rooms
31
Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India
From Farm to Bulk Cooler in less than 90 Minutes
McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for
quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk
coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -
thus maintaining the cold chain
All leading to the Consumer
McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The
DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity
of the products throughout the entire cold chain
Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C
as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state
All these suppliers share McDonalds commitment and dedication to satisfying
customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently
each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental
effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn
more
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
6
of special sauces that use local spices and chillies The mayonnaise and all other
sauces are egg-less McDonalds also pioneered the establishment of Cold Chain
across India which helps maintain freshness and nutrition in every product
McDonalds regular scrumptious menu includes wide range of products like McAloo Tikki Filet-O-Fish Spicy Range Chicken McGrill McVeggie Veg Pizza McPuff Chicken Mcnuggetsreg Fries Wraps an assortment of Sundaes
Soft Serve and refreshing beverages such as Ice Tea amp Cold Coffee with outstanding service in a vibrant and lively ambience for which McDonalds is
known worldwide
McDonalds had further reinforced the branded affordability mantra via the introduction of the Happy Price Menu which starts at Rs 25 only
McAloo Tikki Veg Surprise and Pizza McPuff developed in India are now being exported to the countries in the Middle East
McDonaldrsquos introduced Cokersquos Georgia Gold range of hot beverages which was developed especially for the Indian market in 2002
As a leader in QSR segment (Quick Service Restaurant) McDonaldrsquos has
pioneered various industry benchmark practices over the past decade of serving Indian customers including new concepts such ashellip
Oil Alliances in India by inking with petroleum giants BPCL and HPCL
The two such alliances with BPCL outlets are in Mathura (2000) (UP) and Doraha (2002) (Punjab)
Novel menu formats such as an Express Model with a limited menu and Kiosks with a variety of dessert offerings
Home Delivery (McDeliverytrade) Providing even more convenience to
our customers In Oct 2006 McDelivery on bicycle at Chandni Chowk was launched and in March lsquo07 an all India single delivery number (66
000 666) was introduced
First Drive Thru Restaurant at NOIDA (UP) in 1997
First Restaurant with operational Kitchen at Delhi Domestic
Keeping pace with the customer evolving needs McDonalds also functions on models that drive convenience and create unique differentiation like
McDelivery Drive thru Breakfast Menu high ways and extended hours (Currently available in select cities)
At present there are 300 McDonalds restaurants in India
The strong foundation that Ray Kroc built continues today with McDonalds
7
vision and commitment for its internal as well as external customers Since then it has evolved into a value driven brand and recognizes that affordability of its
products is an attractive proposition for its customers along with taste McDonalds continues to strengthen it business model and progress with
customers evolving needs
Key Landmarks - McDonaldrsquos India Journey
1996 hellipthe first McDonaldrsquos restaurant opened on Oct 13 at Basant Lok
Vasant Vihar New Delhi It was also the first McDonaldrsquos restaurant in the
world not serving beef on its menu
1997hellip
the first Drive ndashThru restaurant at Noida (UP)
the first disabled friendly store at Noida (UP)
1999hellipthe first Mall location restaurant at Ansal Plaza (New Delhi)
2000hellipthe first highway restaurant at Mathura (UP)
2001hellipthe first thematic restaurant at Connaught Place (New Delhi)
2002hellip
The first restaurant in a food court at 3Crsquos Lajpat Nagar (New Delhi)
The first restaurant at the Delhi Metro Station at Inter State Bus Terminus
The first fundraiser in association with ORBIS and Dr Shroffrsquos Charity
Eye hospital(Delhi)
2003 The first Dessert Kiosk ndash Faridabad (Haryana)
2004hellip McDonaldrsquos Delivery Service (McDelivery) introduced in New Delhi
2003-04hellip Indigenous products like McAloo Tikki McVeggie and Pizza
McPuff exported to Middle East countries
8
2006
McDelivery on Bicycles flagged off at Chandni Chowk (Delhi)- another
first initiative by McDonaldrsquos India
100th McDonaldrsquos Restaurant in India
10th Year Anniversary
2007
The first McDonaldrsquos open in Eastern Region at Park Street Kolkata
The first restaurant opened at Airport (Domestic Airport New Delhi)
The first MFY restaurant opened at Greater Noida Uttar Pradesh
2008hellip
The First restaurant to start extended hours procedure at Cyber Greens
Gurgaon and Saket New Delhi
The first restaurant to start Breakfast Menu at Janpath New Delhi
2009hellipThe first McDonaldrsquos Restaurant opens at Old Delhi Railway Station
2010hellipThe first reimaged new look restaurant opened at Ambiance mall
Vasant Kunj 6
2011hellip
McDonaldrsquos introduces premium products in it is menu ndash McSpicy range
of products
McDonaldrsquos introduces Mcflurry (premium desserts) in Oreo and
chocolate crispy flavors
McDonaldrsquos introduces Wi-Fi across DelhiNCR region
McDonaldrsquos currently has 235 restaurants in India
The Northern Region has 110 restaurants ndash
sect Delhi ndash 40
sect Haryana - 15
Faridabad ndash3 Manesar ndash 2 (Highway and Drive - Thru) Gurgaon ndash7
Karnal ndash 1 (Highway and Drive - Thru) Panipat -1 Ambala -1
9
sect Rajasthan -6
Jaipur ndash 3 Jodhpur ndash 1 Kota -1 Udaipur - 1
sect Uttaranchal -1
Dehradun ndash 1
sect Uttar Pradesh ndash29
Noida ndash 5 Greater Noida ndash 1 Ghaziabad ndash 7 Mathura ndash 1 (Highway and
Drive - Thru) Kanpur ndash 2 Meerut ndash 2 Lucknow ndash5 Agra ndash 1 Allahabad
ndash 1 Varanasi -2 Gajraula ndash 1 (Highway amp Drive Thru) Khatauli -
1(Highway and Drive thru)
sect Punjab ndash 13
Chandigarh ndash 2 Ludhiana ndash 2 Doraha ndash 1 (Highway and Drive - Thru)
Jalandhar ndash 2 Patarsi ndash 1 (Highway and Drive - Thru) Dasuya (Highway
and Drive Thru) ndash 1 Amritsar -1 Patiala -1 Zirakpur-2
sect West Bengal-3
Kolkata- 3
sect Himachal Pradesh -1
Jabli-1
sect Madhya Pradesh -2
Gwalior ndash 1 Bhopal -1
----------------------------------------------
The Western Region has 125 restaurants across the following states and cities ndash
Maharashtra - Mumbai Pune Nasik Kolhapur ndash
Gujarat - Ahmedabad Vododara Surat Indore Vapi
Madhya Pradesh ndash Indore
Andhra Pradesh - Hyderabad
Karnataka - Bangalore
Tamil Nadu - Chennai
10
GOALS AND OBJECTIVES
1 McDonaldrsquos vision is to be the worldrsquos best quick service restaurants
experience
2 McDonalds is committed to maintaining and developing the best food
products in the quick service restaurant market
3 In order to deliver this the company has made a number of commitments to
food safety and nutrition
4 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
5 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
McDonalds vision is to be the worlds 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
11
AWARDS
McDonaldrsquos India has received many prestigious awards for its service and
performance including
The lsquoMost Respected Companyrsquo for four consecutive years (2003-2006)
in the Food Services sector by Businessworld
The lsquoMost Preferred Fast Food Outletrsquo 2006 amp 2007 by Awaaz
Consumer Award hosted by CNBC
Star Retailer ndash the lsquoConsumer Way Food Services Retailerrsquo of the
Year 2006 amp 2007 2008 by Franchise India
lsquoRetailer of the Yearrsquo Award for catering services (2004-2006) at the
Images Retail Awards
The lsquoAmity Corporate Excellence Awardrsquo ndashin 2007 amp 2008
The lsquoMost Wanted Brand of the Yearrsquo Award 2003 amp 2004 by
Franchising Holdings India Ltd
The lsquoMost Admired F amp B Retailer of the Year QSRs Foreign
Originrsquo ndash The Golden Spoon Awards by Images Retail
The Company with the Best Corporate Conscience ndash 2008 by Business
amp Economy
lsquoValue for Moneyrsquo brand ndash 2010 by Pitch Magazine
The most trusted family restaurant brand in the country award in
2010 by Readerrsquos Digest
12
Corporate Social Responsibility
Being responsible is at the core of everything that we do at McDonaldstrade It is
a deep-rooted value and a tradition that dates back to our founder Ray Kroc It is also one of our top business priorities
We believe that our continuing success depends on our stakeholders trust in
each and every aspect of our business be it the quality and safety of the food we serve in the way we do our business the way we connect and make the difference in the communities we operate being sensitive to environment and
being sustainable
1 We are committed to doing what is right
2 We are committed to be a good neighbour and partner in the community
3 We are committed to conducting our business ethically and with complete transparency
4 We are committed to treating our entire internal and external stakeholders with respect and dignity
13
McDonaldrsquos International
McDonaldrsquos has over 32000 local restaurants in more than 100 countries
70 percent of our restaurants worldwide are owned and operated by
independent local businessmen and businesswomen
McDonaldrsquos serves nearly 50 million customers each day
McDonaldrsquos first franchised restaurant opened at Des Plaines Illinois in
1955 by the founder Ray Kroc
McDonaldrsquos has its own Hamburger University in Illinois and the first
batch graduated in 1961
12 classes offered at Hamburger University are college accredited
In 1963 McDonaldrsquos sold its one billionth hamburger
McDonaldrsquos is listed on the New York Frankfurt Munich Paris and
Tokyo stock exchanges
McDonaldrsquos aired its first network TV advertisement ldquoMcDonaldrsquos -
Where Quality Starts Fresh Everydayrdquo in 1965
The first McDonaldrsquos Drive-Thru opened in Sierra Vista Arizona in 1975
14
Happy Meals were added to McDonaldrsquos menu in 1979
McDonaldrsquos launched the new worldwide Balanced Active Lifestyles
public awareness campaign in 2005
McDonaldrsquos celebrated its 50th Anniversary on April 15 2005
Business model
McDonalds Corporation earns revenue as an investor in properties
a franchiser of restaurants and an operator of restaurants Approximately 15 of McDonalds restaurants are owned and
operated by McDonalds Corporation directly The remainder are operated by others through a variety of franchise agreements and
joint ventures
The McDonalds Corporations business model is slightly different
from that of most other fast-food chains In addition to ordinary franchise fees and marketing fees which are calculated as
a percentage of sales McDonalds may also collect rent which may also be calculated on the basis of sales
As a condition of many franchise agreements which vary by
contract age country and location the Corporation may own or lease the properties on which McDonalds franchises are located In most if not all cases the franchisee does not own the location of its
restaurants
The United Kingdom and Ireland business model is different than the US in that fewer than 30 of restaurants are franchised with
the majority under the ownership of the company McDonalds trains its franchisees and others at Hamburger Univers ity in Oak
Brook Illino is
In other countries McDonalds restaurants are operated by joint
ventures of McDonalds Corporation and other local entities or governments
15
As a matter of policy McDonalds does not make direct sales of food or materials to franchisees instead organizing the supply of
food and materials to restaurants through approved third party logistics operators
According to Fast Food Nation by Eric Schlosser nearly one in
eight workers in the US have at some time been employed by McDonalds It also states that McDonalds is the largest private
operator of playgrounds in the US as well as the single largest purchaser of beef pork potatoes and apples The selection of
meats McDonalds uses varies with the culture of the host country
MARKETING MIX
The marketing mix of a company consists of the various elements as follows
which form the core of a companyrsquos marketing system and hence helps to
achieve marketing objectives The marketing mix of McDonaldrsquos is as follows-
The McDonald plains its marketing by simple keeping 4Ps in mind
Product
Price
Promotion
Place
Product - McDonaldrsquos places considerable emphasis on developing a menu
which customers want Market research establishes exactly what this is However customersrsquo requirements change over time In order to meet these
changes McDonaldrsquos has introduced new products and phased out old ones and will continue to do so Care is taken not to adversely affect the sales of one choice by introducing a new choice which will cannibalise sales from the
existing one (trade off) McDonaldrsquos knows that items on its menu will vary in popularity Their ability to generate profits will vary at different points in their
cycle In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian
The happy meal for the children is a great seller among others
Price-The customerrsquos perception of value is an important determinant of the price charged Customers draw their own mental picture of what a product is worth A product is more than a physical item it also has psychological
connotations for the customer The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised It is
16
important when deciding on price to be fully aware of the brand and its integrity
In India McDonalds classifies its products into 2 categories namely the branded
affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and
the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price
perceptions
Promotion- The promotions aspect of the marketing mix covers all types of
marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and
in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct
mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that
provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be
supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item
At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart
from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos
Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the
management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities
making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers
17
Other than the main four elements mentioned above there are a few other
elements too in the marketing mix which are as follows-
People -The employees in McDonaldrsquos have a standard uniform and
McDonaldrsquos specially focuses on friendly and prompt service to its customers
from their employees
Process -The food manufacturing process at McDonaldrsquos is completely
transparent ie the whole process is visible to the customers In fact the fast
food joint allows its customers to view and judge the hygienic standards at
McDonaldrsquos by allowing them to enter the area where the process takes place
The customers are invited to check the ingredients used in food
Physical evidence - McDonalds focuses on clean and hygienic interiors of
is outlets and at the same time the interiors are attractive and the fast food joint
maintains a proper decorum at its joints
18
SWOT ANALYSIS
Strengths
McDonaldrsquos holds a very strong brand name worldwide
They have large partnerships with other companies that provide them
with their desired products this increases the goodwill of the company
McDonaldrsquos is one of the most reputed firms who are socially
responsible
Loyal employees amp management amp customer are their biggest strength
19
McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind
while providing food to different countries
Clean environment and play areas for children where they can enjoy their
time
Weakness
The weakness that hits the list of employee turnover rate Every year
many of their employees are fired out of the restaurant
McDonalds mostly advertises products and food items that targets
children
Health conscious people often complain that they do not provide us with
the organic and healthy food This becomes their weakness when they get in the complaints
They also face quality issue at times This affects the business as they are
running the outlet worldwide if one franchise gets affected others also
get a bad name
Opportunities
It can open up online services for their customers so that they can easily
order their desired meals sitting at home
Discounts given on every food item may help them gain more customers
They can go for a joint venture with the retailers they work with
They can introduce healthy hamburgers and healthy drinks for the people who are health conscious
20
In order to be environment friendly they can use packing material which
can be recycled later or material that does not create pollution
Threats
Emerging competition of similar outlets is becoming a problem for McDonalds
Health issue also becomes a problem when it comes to food
As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies
Recession in any country would definitely affect the whole outlet
worldwide
People facing heart problems and obesity accuse McDonalds for not
providing them with the healthy food
They have a threat of local food outlets in different countries
McDonalds is operating in a fully fledged economy where competition is
increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession
McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local
Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government
regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled
Indian businesses to grow by improving their ability to compete in todays international markets
21
Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in
predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first
restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept
has today been adopted by various Indian and International players to deliver quality produce to consumers
For instance Cremica Industries worked with another McDonalds supplier
from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to
McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with
farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water
consumption better seeds amp agricultural management practices which result in greater yields
In some cases these Indian suppliers had the technology - but no market for the
products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk
casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to
restaurants across India
McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations
COMPANYrsquoS FINANCIAL INFORMATION
Company Name McDonalds Corporation
Ticker Symbol MCD
Web Address wwwmcdonaldscom
CEO Mr Donald Thompson
No of Employees 420000
Common Issue Type CS
Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other
22
goods from numerous independent suppliers
Industry Information LEISURE - Restaurants
Price Day Change Bid Ask Open High Low Volume
8718 -002 - - 8743 8743 8676 3658828
Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range
875267 10040 039 527 253 164 35 10222 - 8331
KEY FIGURES (Latest Twelve Months - LTM)
Yesterdays Close 8706 $
PE Ratio - LTM 164
Market Capitalisation 875267 mil
Latest Shares Outstanding 10040 mil
Earnings pS (EPS) 527 $
Dividend pS (DPS) 253 cent
Dividend Yield 35
Dividend Payout Ratio 48
Revenue per Employee 64300 $
Effective Tax Rate 313
Float 10153 mil
Float as of Shares Outstanding 999
Foreign Sales 18478 mil
Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue
910
Research amp Devlopment (RampD) as of Revenue
000
Gross Profit Margin 447
EBITDA Margin 356
Pre-Tax Profit Margin 291
Assets Turnover 08
Return on Assets (ROA) 161
Return on Equity (ROE) 392
Return on Capital Invested (ROCI) 204 Current Ratio 10
Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096
LT DebtTotal Capital 480
Working Capital pS 006 $
Cash pS 217 $
Book-Value pS 1383 $
Balance Sheet (at a glance) in Millions
DIVIDEND INFO
Dividend Declared Date 09202012
Dividend Ex-Date 11282012
Dividend Record Date 12022012
Dividend Pay Date 12162012
Dividend Amount 770
Type of Payment Cash Payment
Dividend Rate 308
Current Dividend Yield 35
5-Y Average Dividend Yield 31
Payout Ratio 480
5-Y Average Payout Ratio 530
Share price performance previous 3 years
Share price performance intraday
23
Tangible Book-Value pS 1110 $
Cash Flow pS 689 $
Free Cash Flow pS 125 $
KEY FIGURES (LTM) Price info PriceBook Ratio 630
PriceTangible Book Ratio 785 PriceCash Flow 126
PriceFree Cash Flow 699
PE as of Industry Group 420
PE as of Sector Segment 770
PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol
1 Week - - - 00 101 54041 66217
4 Weeks 8743 8331 8474 27 101 57129 856929
13 Weeks 9416 8331 9102 -44 98 61288 3554700
26 Weeks 9416 8331 8775 -08 93 59419 7189758
52 Weeks 10222 8331 9803 -112 79 59272 14521666
YTD 10222 8331 - -132 77 59774 13807695
Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)
8661 8631 8825 8931 9174 039 031
GROWTH RATES 5-Year
Growh Rsup2 of 5-Year Growth
3-Year
Growth
Revenue 381 776 666
Income 2017 811 978
Dividend 1536 947 1016
Capital Spending 697 NA 1052
RampD 000 NA 000
Normalized Inc 1158 NA 979
CHANGES YTD vs
Last YTD
Curr Qtr vs
Qtr 1-Yr ago
Annual vs
Last Annual
Revenue 21 -02 122
Earnings -14 -35 113
EPS 10 -14 151
EPS $ 004 -002 069
SOLVENCY RATIOS
SHORT-TERM SOLVENCY RATIOS
(LIQUIDITY)
Net Working Capital Ratio 271
Current Ratio 13
Quick Ratio (Acid Test) 10
Liquidity Ratio (Cash) 067
Receivables Turnover 215
Average Collection Period 17
Working CapitalEquity 62
Working Capital pS 088
Cash-Flow pS 677
Free Cash-Flow pS 209
24
FINANCIAL STRUCTURE RATIOS
Altmans Z-Score Ratio 485
Financial Leverage Ratio (AssetsEquity) 23
Debt Ratio 564
Total DebtEquity (Gearing Ratio) 087
LT DebtEquity 084
LT DebtCapital Invested 569
LT DebtTotal Liabilities 652
Interest Cover 173
InterestCapital Invested 167
25
People hellip McDonaldrsquos 1 Resource in India
26
McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs
around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in
1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with
McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)
The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive
training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course
(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the
Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University
27
The McDonaldrsquos Promise
QUALITY SERVICE CLEANLINESS amp VALUE
When asked to explain McDonalds success founder Ray Kroc used to say We
take the hamburger business more seriously than anyone else
Kroc was a perfectionist From the day he opened his first restaurant he vowed
to give his customers high quality products served quickly --and with a smile
in a clean and pleasant environment and all at a fair price Quality Service
Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds
business
QUALITY
McDonalds India serves only the highest quality products The attention to food
quality started long before the first restaurant opened McDonalds India has
established close relationships with local suppliers who provide McDonalds
with the highest quality freshest ingredients to make its products
All suppliers adhere to Indian government regulations on food health and
hygiene while continuously maintaining McDonalds own recognized standards
McDonalds has established an extensive cold chain distribution system in
India to ensure that the products which arrive at the restaurant from suppliers
all over India are absolutely fresh In the restaurants products and supplies are
used on a first-in first-out basis to ensure freshness All McDonalds products
are prepared using modern state-of-the-art cooking equipment to ensure quality
and safety
SERVICE
McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos
which sets its restaurants apart from others At McDonalds the customer
always comes first Every employee strives to provide 100 percent customer
satisfaction -- for every customer -- every visit This includes friendly and
attentive service accuracy in order taking and anticipation of customers needs
-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun
and youthful spirit we will proudly serve an exceptional McDonaldrsquos
eating experience that makes all people feel special and makes them smile ndash
every customer every timerdquo
28
CLEANLINESS
McDonalds restaurants provide a clean comfortable environment especially
suited for families McDonalds stringent cleaning standards ensure that all
tables seating highchairs and trays are sanitized several times each hour The
attention to cleanliness extends from the lobby to the kitchen to the sidewalk
and immediate areas outside the restaurant
In addition to urging customers to dispose of their litter properly and offering a
number of trash bins (both inside and outside the restaurants) for their
convenience McDonalds Litter Patrols walk around the restaurants several
times each day picking up litter -- even if it isnt from McDonalds
Restaurant managers walk through the dining areas each hour to ensure that it
is clean and well stocked All restaurants provide a variety of comfortable
seating arrangements to accommodate anyone -- from a single individual to a
large family The environment is warm inviting and well lit
VALUE
McDonalds menu is priced at a value that the largest segment of Indian
consumers can afford McDonalds does not sacrifice quality for value -- rather
McDonalds leverages economies of scale to minimize costs while maximizing
value to customers
McDonalds definition of value is broader than most restaurants of its kind -- it
is more than price Value at McDonalds is the sum of the total McDonalds
experience quality food fast friendly service a clean and pleasant
environment and products priced at very affordable prices for the largest
segment of Indian consumers possible That is value at McDonalds
29
McDonaldrsquos Indiahellip Culturally Sensitive
Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much
that is consistent with other McDonaldrsquos restaurants around the world such as
the quality of the food and the attention to service
The dedication to local cultures is not new for McDonaldrsquos For the past 50
years McDonaldrsquos has opened restaurants in more than 120 distinctly different
countries and cultures With guidance from its local partners McDonaldrsquos is
able to adapt- where necessary-its menu and restaurant operations to
complement existing eating-out options McDonaldrsquos local owners understand
what their customers want perhaps more importantly what is acceptable within
local customs and values
There is much too that is very different- such as the first beef-less and pork-
less menu in the world and special product formulations to cater to Indian
culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos
India says ldquoWe know the Indian culture because we were born in it
inherited its richness and respect it greatly It is the respect for this culture
and the sentiments of many of our customersrsquo that we do not serve any
beef and pork items in our restaurantsrdquo
McDonaldrsquos commitment to its Indian customers is evident even in
development of special sauces that use local spices and chillies The
mayonnaise and all other sauces are egg-less
In India vegetarianism is in many cases more than a lifestyle choice Many
people are vegetarians due to religious reasons and in some cases even the
vegetarian product that has come into contact with a non-vegetarian product is
unacceptable Hence McDonaldrsquos India has also changed its operations to
address the special requirements of our vegetarian customers by having
processes that ensure that a physical separation of veg and non-veg products is
maintained right from farm to the customer Vegetable products are prepared
separately using dedicated equipment and utensils Also in India McDonaldrsquos
uses only vegetable oil as a medium for cooking
30
McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash
lsquoto be driven by the leadership of local ownersrsquo This commitment has translated
into enduring benefits to the businesses at the grass root level in the areas of
introduction of new crops new agricultural practices and food processing methods
and procedures
McDonalds unique cold chain on which the QSR major has spent more than six
years setting up in India has brought about a veritable revolution immensely
benefiting the farmers at one end and enabling customers at retail counters get the
highest quality food products absolutely fresh and at great value
Setting up this extensive cold chain distribution system has involved the transfer of
state-of-the-art food processing technology by McDonalds and its international
suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain
From Field to -2⁰C in 90 Minutes
Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be
grown during the winter months but with McDonalds expertise in the area of
agriculture they are now able to grow this crop through the year
Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room
to remove field heat a large cold room and a refrigerated van for transportation where
the temperature and the relative humidity of the crop is maintained between 1ordm C and
4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room
within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling
to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at
the farms itself ensuring no delay between harvesting pre-cooling packaging and
cold storage
Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd
Flavour and Freshness locked in at - 35degC
Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable
range of products is another important player in this cold chain This includes hi-tech
refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C
This is vital to ensure that the frozen food retains it freshness for a long time and the
cold chain is maintained The frozen product is immediately moved to cold storage
rooms
31
Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India
From Farm to Bulk Cooler in less than 90 Minutes
McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for
quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk
coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -
thus maintaining the cold chain
All leading to the Consumer
McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The
DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity
of the products throughout the entire cold chain
Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C
as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state
All these suppliers share McDonalds commitment and dedication to satisfying
customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently
each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental
effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn
more
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
7
vision and commitment for its internal as well as external customers Since then it has evolved into a value driven brand and recognizes that affordability of its
products is an attractive proposition for its customers along with taste McDonalds continues to strengthen it business model and progress with
customers evolving needs
Key Landmarks - McDonaldrsquos India Journey
1996 hellipthe first McDonaldrsquos restaurant opened on Oct 13 at Basant Lok
Vasant Vihar New Delhi It was also the first McDonaldrsquos restaurant in the
world not serving beef on its menu
1997hellip
the first Drive ndashThru restaurant at Noida (UP)
the first disabled friendly store at Noida (UP)
1999hellipthe first Mall location restaurant at Ansal Plaza (New Delhi)
2000hellipthe first highway restaurant at Mathura (UP)
2001hellipthe first thematic restaurant at Connaught Place (New Delhi)
2002hellip
The first restaurant in a food court at 3Crsquos Lajpat Nagar (New Delhi)
The first restaurant at the Delhi Metro Station at Inter State Bus Terminus
The first fundraiser in association with ORBIS and Dr Shroffrsquos Charity
Eye hospital(Delhi)
2003 The first Dessert Kiosk ndash Faridabad (Haryana)
2004hellip McDonaldrsquos Delivery Service (McDelivery) introduced in New Delhi
2003-04hellip Indigenous products like McAloo Tikki McVeggie and Pizza
McPuff exported to Middle East countries
8
2006
McDelivery on Bicycles flagged off at Chandni Chowk (Delhi)- another
first initiative by McDonaldrsquos India
100th McDonaldrsquos Restaurant in India
10th Year Anniversary
2007
The first McDonaldrsquos open in Eastern Region at Park Street Kolkata
The first restaurant opened at Airport (Domestic Airport New Delhi)
The first MFY restaurant opened at Greater Noida Uttar Pradesh
2008hellip
The First restaurant to start extended hours procedure at Cyber Greens
Gurgaon and Saket New Delhi
The first restaurant to start Breakfast Menu at Janpath New Delhi
2009hellipThe first McDonaldrsquos Restaurant opens at Old Delhi Railway Station
2010hellipThe first reimaged new look restaurant opened at Ambiance mall
Vasant Kunj 6
2011hellip
McDonaldrsquos introduces premium products in it is menu ndash McSpicy range
of products
McDonaldrsquos introduces Mcflurry (premium desserts) in Oreo and
chocolate crispy flavors
McDonaldrsquos introduces Wi-Fi across DelhiNCR region
McDonaldrsquos currently has 235 restaurants in India
The Northern Region has 110 restaurants ndash
sect Delhi ndash 40
sect Haryana - 15
Faridabad ndash3 Manesar ndash 2 (Highway and Drive - Thru) Gurgaon ndash7
Karnal ndash 1 (Highway and Drive - Thru) Panipat -1 Ambala -1
9
sect Rajasthan -6
Jaipur ndash 3 Jodhpur ndash 1 Kota -1 Udaipur - 1
sect Uttaranchal -1
Dehradun ndash 1
sect Uttar Pradesh ndash29
Noida ndash 5 Greater Noida ndash 1 Ghaziabad ndash 7 Mathura ndash 1 (Highway and
Drive - Thru) Kanpur ndash 2 Meerut ndash 2 Lucknow ndash5 Agra ndash 1 Allahabad
ndash 1 Varanasi -2 Gajraula ndash 1 (Highway amp Drive Thru) Khatauli -
1(Highway and Drive thru)
sect Punjab ndash 13
Chandigarh ndash 2 Ludhiana ndash 2 Doraha ndash 1 (Highway and Drive - Thru)
Jalandhar ndash 2 Patarsi ndash 1 (Highway and Drive - Thru) Dasuya (Highway
and Drive Thru) ndash 1 Amritsar -1 Patiala -1 Zirakpur-2
sect West Bengal-3
Kolkata- 3
sect Himachal Pradesh -1
Jabli-1
sect Madhya Pradesh -2
Gwalior ndash 1 Bhopal -1
----------------------------------------------
The Western Region has 125 restaurants across the following states and cities ndash
Maharashtra - Mumbai Pune Nasik Kolhapur ndash
Gujarat - Ahmedabad Vododara Surat Indore Vapi
Madhya Pradesh ndash Indore
Andhra Pradesh - Hyderabad
Karnataka - Bangalore
Tamil Nadu - Chennai
10
GOALS AND OBJECTIVES
1 McDonaldrsquos vision is to be the worldrsquos best quick service restaurants
experience
2 McDonalds is committed to maintaining and developing the best food
products in the quick service restaurant market
3 In order to deliver this the company has made a number of commitments to
food safety and nutrition
4 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
5 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
McDonalds vision is to be the worlds 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
11
AWARDS
McDonaldrsquos India has received many prestigious awards for its service and
performance including
The lsquoMost Respected Companyrsquo for four consecutive years (2003-2006)
in the Food Services sector by Businessworld
The lsquoMost Preferred Fast Food Outletrsquo 2006 amp 2007 by Awaaz
Consumer Award hosted by CNBC
Star Retailer ndash the lsquoConsumer Way Food Services Retailerrsquo of the
Year 2006 amp 2007 2008 by Franchise India
lsquoRetailer of the Yearrsquo Award for catering services (2004-2006) at the
Images Retail Awards
The lsquoAmity Corporate Excellence Awardrsquo ndashin 2007 amp 2008
The lsquoMost Wanted Brand of the Yearrsquo Award 2003 amp 2004 by
Franchising Holdings India Ltd
The lsquoMost Admired F amp B Retailer of the Year QSRs Foreign
Originrsquo ndash The Golden Spoon Awards by Images Retail
The Company with the Best Corporate Conscience ndash 2008 by Business
amp Economy
lsquoValue for Moneyrsquo brand ndash 2010 by Pitch Magazine
The most trusted family restaurant brand in the country award in
2010 by Readerrsquos Digest
12
Corporate Social Responsibility
Being responsible is at the core of everything that we do at McDonaldstrade It is
a deep-rooted value and a tradition that dates back to our founder Ray Kroc It is also one of our top business priorities
We believe that our continuing success depends on our stakeholders trust in
each and every aspect of our business be it the quality and safety of the food we serve in the way we do our business the way we connect and make the difference in the communities we operate being sensitive to environment and
being sustainable
1 We are committed to doing what is right
2 We are committed to be a good neighbour and partner in the community
3 We are committed to conducting our business ethically and with complete transparency
4 We are committed to treating our entire internal and external stakeholders with respect and dignity
13
McDonaldrsquos International
McDonaldrsquos has over 32000 local restaurants in more than 100 countries
70 percent of our restaurants worldwide are owned and operated by
independent local businessmen and businesswomen
McDonaldrsquos serves nearly 50 million customers each day
McDonaldrsquos first franchised restaurant opened at Des Plaines Illinois in
1955 by the founder Ray Kroc
McDonaldrsquos has its own Hamburger University in Illinois and the first
batch graduated in 1961
12 classes offered at Hamburger University are college accredited
In 1963 McDonaldrsquos sold its one billionth hamburger
McDonaldrsquos is listed on the New York Frankfurt Munich Paris and
Tokyo stock exchanges
McDonaldrsquos aired its first network TV advertisement ldquoMcDonaldrsquos -
Where Quality Starts Fresh Everydayrdquo in 1965
The first McDonaldrsquos Drive-Thru opened in Sierra Vista Arizona in 1975
14
Happy Meals were added to McDonaldrsquos menu in 1979
McDonaldrsquos launched the new worldwide Balanced Active Lifestyles
public awareness campaign in 2005
McDonaldrsquos celebrated its 50th Anniversary on April 15 2005
Business model
McDonalds Corporation earns revenue as an investor in properties
a franchiser of restaurants and an operator of restaurants Approximately 15 of McDonalds restaurants are owned and
operated by McDonalds Corporation directly The remainder are operated by others through a variety of franchise agreements and
joint ventures
The McDonalds Corporations business model is slightly different
from that of most other fast-food chains In addition to ordinary franchise fees and marketing fees which are calculated as
a percentage of sales McDonalds may also collect rent which may also be calculated on the basis of sales
As a condition of many franchise agreements which vary by
contract age country and location the Corporation may own or lease the properties on which McDonalds franchises are located In most if not all cases the franchisee does not own the location of its
restaurants
The United Kingdom and Ireland business model is different than the US in that fewer than 30 of restaurants are franchised with
the majority under the ownership of the company McDonalds trains its franchisees and others at Hamburger Univers ity in Oak
Brook Illino is
In other countries McDonalds restaurants are operated by joint
ventures of McDonalds Corporation and other local entities or governments
15
As a matter of policy McDonalds does not make direct sales of food or materials to franchisees instead organizing the supply of
food and materials to restaurants through approved third party logistics operators
According to Fast Food Nation by Eric Schlosser nearly one in
eight workers in the US have at some time been employed by McDonalds It also states that McDonalds is the largest private
operator of playgrounds in the US as well as the single largest purchaser of beef pork potatoes and apples The selection of
meats McDonalds uses varies with the culture of the host country
MARKETING MIX
The marketing mix of a company consists of the various elements as follows
which form the core of a companyrsquos marketing system and hence helps to
achieve marketing objectives The marketing mix of McDonaldrsquos is as follows-
The McDonald plains its marketing by simple keeping 4Ps in mind
Product
Price
Promotion
Place
Product - McDonaldrsquos places considerable emphasis on developing a menu
which customers want Market research establishes exactly what this is However customersrsquo requirements change over time In order to meet these
changes McDonaldrsquos has introduced new products and phased out old ones and will continue to do so Care is taken not to adversely affect the sales of one choice by introducing a new choice which will cannibalise sales from the
existing one (trade off) McDonaldrsquos knows that items on its menu will vary in popularity Their ability to generate profits will vary at different points in their
cycle In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian
The happy meal for the children is a great seller among others
Price-The customerrsquos perception of value is an important determinant of the price charged Customers draw their own mental picture of what a product is worth A product is more than a physical item it also has psychological
connotations for the customer The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised It is
16
important when deciding on price to be fully aware of the brand and its integrity
In India McDonalds classifies its products into 2 categories namely the branded
affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and
the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price
perceptions
Promotion- The promotions aspect of the marketing mix covers all types of
marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and
in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct
mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that
provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be
supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item
At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart
from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos
Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the
management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities
making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers
17
Other than the main four elements mentioned above there are a few other
elements too in the marketing mix which are as follows-
People -The employees in McDonaldrsquos have a standard uniform and
McDonaldrsquos specially focuses on friendly and prompt service to its customers
from their employees
Process -The food manufacturing process at McDonaldrsquos is completely
transparent ie the whole process is visible to the customers In fact the fast
food joint allows its customers to view and judge the hygienic standards at
McDonaldrsquos by allowing them to enter the area where the process takes place
The customers are invited to check the ingredients used in food
Physical evidence - McDonalds focuses on clean and hygienic interiors of
is outlets and at the same time the interiors are attractive and the fast food joint
maintains a proper decorum at its joints
18
SWOT ANALYSIS
Strengths
McDonaldrsquos holds a very strong brand name worldwide
They have large partnerships with other companies that provide them
with their desired products this increases the goodwill of the company
McDonaldrsquos is one of the most reputed firms who are socially
responsible
Loyal employees amp management amp customer are their biggest strength
19
McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind
while providing food to different countries
Clean environment and play areas for children where they can enjoy their
time
Weakness
The weakness that hits the list of employee turnover rate Every year
many of their employees are fired out of the restaurant
McDonalds mostly advertises products and food items that targets
children
Health conscious people often complain that they do not provide us with
the organic and healthy food This becomes their weakness when they get in the complaints
They also face quality issue at times This affects the business as they are
running the outlet worldwide if one franchise gets affected others also
get a bad name
Opportunities
It can open up online services for their customers so that they can easily
order their desired meals sitting at home
Discounts given on every food item may help them gain more customers
They can go for a joint venture with the retailers they work with
They can introduce healthy hamburgers and healthy drinks for the people who are health conscious
20
In order to be environment friendly they can use packing material which
can be recycled later or material that does not create pollution
Threats
Emerging competition of similar outlets is becoming a problem for McDonalds
Health issue also becomes a problem when it comes to food
As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies
Recession in any country would definitely affect the whole outlet
worldwide
People facing heart problems and obesity accuse McDonalds for not
providing them with the healthy food
They have a threat of local food outlets in different countries
McDonalds is operating in a fully fledged economy where competition is
increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession
McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local
Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government
regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled
Indian businesses to grow by improving their ability to compete in todays international markets
21
Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in
predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first
restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept
has today been adopted by various Indian and International players to deliver quality produce to consumers
For instance Cremica Industries worked with another McDonalds supplier
from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to
McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with
farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water
consumption better seeds amp agricultural management practices which result in greater yields
In some cases these Indian suppliers had the technology - but no market for the
products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk
casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to
restaurants across India
McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations
COMPANYrsquoS FINANCIAL INFORMATION
Company Name McDonalds Corporation
Ticker Symbol MCD
Web Address wwwmcdonaldscom
CEO Mr Donald Thompson
No of Employees 420000
Common Issue Type CS
Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other
22
goods from numerous independent suppliers
Industry Information LEISURE - Restaurants
Price Day Change Bid Ask Open High Low Volume
8718 -002 - - 8743 8743 8676 3658828
Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range
875267 10040 039 527 253 164 35 10222 - 8331
KEY FIGURES (Latest Twelve Months - LTM)
Yesterdays Close 8706 $
PE Ratio - LTM 164
Market Capitalisation 875267 mil
Latest Shares Outstanding 10040 mil
Earnings pS (EPS) 527 $
Dividend pS (DPS) 253 cent
Dividend Yield 35
Dividend Payout Ratio 48
Revenue per Employee 64300 $
Effective Tax Rate 313
Float 10153 mil
Float as of Shares Outstanding 999
Foreign Sales 18478 mil
Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue
910
Research amp Devlopment (RampD) as of Revenue
000
Gross Profit Margin 447
EBITDA Margin 356
Pre-Tax Profit Margin 291
Assets Turnover 08
Return on Assets (ROA) 161
Return on Equity (ROE) 392
Return on Capital Invested (ROCI) 204 Current Ratio 10
Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096
LT DebtTotal Capital 480
Working Capital pS 006 $
Cash pS 217 $
Book-Value pS 1383 $
Balance Sheet (at a glance) in Millions
DIVIDEND INFO
Dividend Declared Date 09202012
Dividend Ex-Date 11282012
Dividend Record Date 12022012
Dividend Pay Date 12162012
Dividend Amount 770
Type of Payment Cash Payment
Dividend Rate 308
Current Dividend Yield 35
5-Y Average Dividend Yield 31
Payout Ratio 480
5-Y Average Payout Ratio 530
Share price performance previous 3 years
Share price performance intraday
23
Tangible Book-Value pS 1110 $
Cash Flow pS 689 $
Free Cash Flow pS 125 $
KEY FIGURES (LTM) Price info PriceBook Ratio 630
PriceTangible Book Ratio 785 PriceCash Flow 126
PriceFree Cash Flow 699
PE as of Industry Group 420
PE as of Sector Segment 770
PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol
1 Week - - - 00 101 54041 66217
4 Weeks 8743 8331 8474 27 101 57129 856929
13 Weeks 9416 8331 9102 -44 98 61288 3554700
26 Weeks 9416 8331 8775 -08 93 59419 7189758
52 Weeks 10222 8331 9803 -112 79 59272 14521666
YTD 10222 8331 - -132 77 59774 13807695
Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)
8661 8631 8825 8931 9174 039 031
GROWTH RATES 5-Year
Growh Rsup2 of 5-Year Growth
3-Year
Growth
Revenue 381 776 666
Income 2017 811 978
Dividend 1536 947 1016
Capital Spending 697 NA 1052
RampD 000 NA 000
Normalized Inc 1158 NA 979
CHANGES YTD vs
Last YTD
Curr Qtr vs
Qtr 1-Yr ago
Annual vs
Last Annual
Revenue 21 -02 122
Earnings -14 -35 113
EPS 10 -14 151
EPS $ 004 -002 069
SOLVENCY RATIOS
SHORT-TERM SOLVENCY RATIOS
(LIQUIDITY)
Net Working Capital Ratio 271
Current Ratio 13
Quick Ratio (Acid Test) 10
Liquidity Ratio (Cash) 067
Receivables Turnover 215
Average Collection Period 17
Working CapitalEquity 62
Working Capital pS 088
Cash-Flow pS 677
Free Cash-Flow pS 209
24
FINANCIAL STRUCTURE RATIOS
Altmans Z-Score Ratio 485
Financial Leverage Ratio (AssetsEquity) 23
Debt Ratio 564
Total DebtEquity (Gearing Ratio) 087
LT DebtEquity 084
LT DebtCapital Invested 569
LT DebtTotal Liabilities 652
Interest Cover 173
InterestCapital Invested 167
25
People hellip McDonaldrsquos 1 Resource in India
26
McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs
around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in
1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with
McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)
The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive
training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course
(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the
Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University
27
The McDonaldrsquos Promise
QUALITY SERVICE CLEANLINESS amp VALUE
When asked to explain McDonalds success founder Ray Kroc used to say We
take the hamburger business more seriously than anyone else
Kroc was a perfectionist From the day he opened his first restaurant he vowed
to give his customers high quality products served quickly --and with a smile
in a clean and pleasant environment and all at a fair price Quality Service
Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds
business
QUALITY
McDonalds India serves only the highest quality products The attention to food
quality started long before the first restaurant opened McDonalds India has
established close relationships with local suppliers who provide McDonalds
with the highest quality freshest ingredients to make its products
All suppliers adhere to Indian government regulations on food health and
hygiene while continuously maintaining McDonalds own recognized standards
McDonalds has established an extensive cold chain distribution system in
India to ensure that the products which arrive at the restaurant from suppliers
all over India are absolutely fresh In the restaurants products and supplies are
used on a first-in first-out basis to ensure freshness All McDonalds products
are prepared using modern state-of-the-art cooking equipment to ensure quality
and safety
SERVICE
McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos
which sets its restaurants apart from others At McDonalds the customer
always comes first Every employee strives to provide 100 percent customer
satisfaction -- for every customer -- every visit This includes friendly and
attentive service accuracy in order taking and anticipation of customers needs
-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun
and youthful spirit we will proudly serve an exceptional McDonaldrsquos
eating experience that makes all people feel special and makes them smile ndash
every customer every timerdquo
28
CLEANLINESS
McDonalds restaurants provide a clean comfortable environment especially
suited for families McDonalds stringent cleaning standards ensure that all
tables seating highchairs and trays are sanitized several times each hour The
attention to cleanliness extends from the lobby to the kitchen to the sidewalk
and immediate areas outside the restaurant
In addition to urging customers to dispose of their litter properly and offering a
number of trash bins (both inside and outside the restaurants) for their
convenience McDonalds Litter Patrols walk around the restaurants several
times each day picking up litter -- even if it isnt from McDonalds
Restaurant managers walk through the dining areas each hour to ensure that it
is clean and well stocked All restaurants provide a variety of comfortable
seating arrangements to accommodate anyone -- from a single individual to a
large family The environment is warm inviting and well lit
VALUE
McDonalds menu is priced at a value that the largest segment of Indian
consumers can afford McDonalds does not sacrifice quality for value -- rather
McDonalds leverages economies of scale to minimize costs while maximizing
value to customers
McDonalds definition of value is broader than most restaurants of its kind -- it
is more than price Value at McDonalds is the sum of the total McDonalds
experience quality food fast friendly service a clean and pleasant
environment and products priced at very affordable prices for the largest
segment of Indian consumers possible That is value at McDonalds
29
McDonaldrsquos Indiahellip Culturally Sensitive
Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much
that is consistent with other McDonaldrsquos restaurants around the world such as
the quality of the food and the attention to service
The dedication to local cultures is not new for McDonaldrsquos For the past 50
years McDonaldrsquos has opened restaurants in more than 120 distinctly different
countries and cultures With guidance from its local partners McDonaldrsquos is
able to adapt- where necessary-its menu and restaurant operations to
complement existing eating-out options McDonaldrsquos local owners understand
what their customers want perhaps more importantly what is acceptable within
local customs and values
There is much too that is very different- such as the first beef-less and pork-
less menu in the world and special product formulations to cater to Indian
culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos
India says ldquoWe know the Indian culture because we were born in it
inherited its richness and respect it greatly It is the respect for this culture
and the sentiments of many of our customersrsquo that we do not serve any
beef and pork items in our restaurantsrdquo
McDonaldrsquos commitment to its Indian customers is evident even in
development of special sauces that use local spices and chillies The
mayonnaise and all other sauces are egg-less
In India vegetarianism is in many cases more than a lifestyle choice Many
people are vegetarians due to religious reasons and in some cases even the
vegetarian product that has come into contact with a non-vegetarian product is
unacceptable Hence McDonaldrsquos India has also changed its operations to
address the special requirements of our vegetarian customers by having
processes that ensure that a physical separation of veg and non-veg products is
maintained right from farm to the customer Vegetable products are prepared
separately using dedicated equipment and utensils Also in India McDonaldrsquos
uses only vegetable oil as a medium for cooking
30
McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash
lsquoto be driven by the leadership of local ownersrsquo This commitment has translated
into enduring benefits to the businesses at the grass root level in the areas of
introduction of new crops new agricultural practices and food processing methods
and procedures
McDonalds unique cold chain on which the QSR major has spent more than six
years setting up in India has brought about a veritable revolution immensely
benefiting the farmers at one end and enabling customers at retail counters get the
highest quality food products absolutely fresh and at great value
Setting up this extensive cold chain distribution system has involved the transfer of
state-of-the-art food processing technology by McDonalds and its international
suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain
From Field to -2⁰C in 90 Minutes
Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be
grown during the winter months but with McDonalds expertise in the area of
agriculture they are now able to grow this crop through the year
Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room
to remove field heat a large cold room and a refrigerated van for transportation where
the temperature and the relative humidity of the crop is maintained between 1ordm C and
4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room
within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling
to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at
the farms itself ensuring no delay between harvesting pre-cooling packaging and
cold storage
Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd
Flavour and Freshness locked in at - 35degC
Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable
range of products is another important player in this cold chain This includes hi-tech
refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C
This is vital to ensure that the frozen food retains it freshness for a long time and the
cold chain is maintained The frozen product is immediately moved to cold storage
rooms
31
Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India
From Farm to Bulk Cooler in less than 90 Minutes
McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for
quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk
coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -
thus maintaining the cold chain
All leading to the Consumer
McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The
DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity
of the products throughout the entire cold chain
Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C
as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state
All these suppliers share McDonalds commitment and dedication to satisfying
customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently
each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental
effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn
more
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
8
2006
McDelivery on Bicycles flagged off at Chandni Chowk (Delhi)- another
first initiative by McDonaldrsquos India
100th McDonaldrsquos Restaurant in India
10th Year Anniversary
2007
The first McDonaldrsquos open in Eastern Region at Park Street Kolkata
The first restaurant opened at Airport (Domestic Airport New Delhi)
The first MFY restaurant opened at Greater Noida Uttar Pradesh
2008hellip
The First restaurant to start extended hours procedure at Cyber Greens
Gurgaon and Saket New Delhi
The first restaurant to start Breakfast Menu at Janpath New Delhi
2009hellipThe first McDonaldrsquos Restaurant opens at Old Delhi Railway Station
2010hellipThe first reimaged new look restaurant opened at Ambiance mall
Vasant Kunj 6
2011hellip
McDonaldrsquos introduces premium products in it is menu ndash McSpicy range
of products
McDonaldrsquos introduces Mcflurry (premium desserts) in Oreo and
chocolate crispy flavors
McDonaldrsquos introduces Wi-Fi across DelhiNCR region
McDonaldrsquos currently has 235 restaurants in India
The Northern Region has 110 restaurants ndash
sect Delhi ndash 40
sect Haryana - 15
Faridabad ndash3 Manesar ndash 2 (Highway and Drive - Thru) Gurgaon ndash7
Karnal ndash 1 (Highway and Drive - Thru) Panipat -1 Ambala -1
9
sect Rajasthan -6
Jaipur ndash 3 Jodhpur ndash 1 Kota -1 Udaipur - 1
sect Uttaranchal -1
Dehradun ndash 1
sect Uttar Pradesh ndash29
Noida ndash 5 Greater Noida ndash 1 Ghaziabad ndash 7 Mathura ndash 1 (Highway and
Drive - Thru) Kanpur ndash 2 Meerut ndash 2 Lucknow ndash5 Agra ndash 1 Allahabad
ndash 1 Varanasi -2 Gajraula ndash 1 (Highway amp Drive Thru) Khatauli -
1(Highway and Drive thru)
sect Punjab ndash 13
Chandigarh ndash 2 Ludhiana ndash 2 Doraha ndash 1 (Highway and Drive - Thru)
Jalandhar ndash 2 Patarsi ndash 1 (Highway and Drive - Thru) Dasuya (Highway
and Drive Thru) ndash 1 Amritsar -1 Patiala -1 Zirakpur-2
sect West Bengal-3
Kolkata- 3
sect Himachal Pradesh -1
Jabli-1
sect Madhya Pradesh -2
Gwalior ndash 1 Bhopal -1
----------------------------------------------
The Western Region has 125 restaurants across the following states and cities ndash
Maharashtra - Mumbai Pune Nasik Kolhapur ndash
Gujarat - Ahmedabad Vododara Surat Indore Vapi
Madhya Pradesh ndash Indore
Andhra Pradesh - Hyderabad
Karnataka - Bangalore
Tamil Nadu - Chennai
10
GOALS AND OBJECTIVES
1 McDonaldrsquos vision is to be the worldrsquos best quick service restaurants
experience
2 McDonalds is committed to maintaining and developing the best food
products in the quick service restaurant market
3 In order to deliver this the company has made a number of commitments to
food safety and nutrition
4 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
5 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
McDonalds vision is to be the worlds 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
11
AWARDS
McDonaldrsquos India has received many prestigious awards for its service and
performance including
The lsquoMost Respected Companyrsquo for four consecutive years (2003-2006)
in the Food Services sector by Businessworld
The lsquoMost Preferred Fast Food Outletrsquo 2006 amp 2007 by Awaaz
Consumer Award hosted by CNBC
Star Retailer ndash the lsquoConsumer Way Food Services Retailerrsquo of the
Year 2006 amp 2007 2008 by Franchise India
lsquoRetailer of the Yearrsquo Award for catering services (2004-2006) at the
Images Retail Awards
The lsquoAmity Corporate Excellence Awardrsquo ndashin 2007 amp 2008
The lsquoMost Wanted Brand of the Yearrsquo Award 2003 amp 2004 by
Franchising Holdings India Ltd
The lsquoMost Admired F amp B Retailer of the Year QSRs Foreign
Originrsquo ndash The Golden Spoon Awards by Images Retail
The Company with the Best Corporate Conscience ndash 2008 by Business
amp Economy
lsquoValue for Moneyrsquo brand ndash 2010 by Pitch Magazine
The most trusted family restaurant brand in the country award in
2010 by Readerrsquos Digest
12
Corporate Social Responsibility
Being responsible is at the core of everything that we do at McDonaldstrade It is
a deep-rooted value and a tradition that dates back to our founder Ray Kroc It is also one of our top business priorities
We believe that our continuing success depends on our stakeholders trust in
each and every aspect of our business be it the quality and safety of the food we serve in the way we do our business the way we connect and make the difference in the communities we operate being sensitive to environment and
being sustainable
1 We are committed to doing what is right
2 We are committed to be a good neighbour and partner in the community
3 We are committed to conducting our business ethically and with complete transparency
4 We are committed to treating our entire internal and external stakeholders with respect and dignity
13
McDonaldrsquos International
McDonaldrsquos has over 32000 local restaurants in more than 100 countries
70 percent of our restaurants worldwide are owned and operated by
independent local businessmen and businesswomen
McDonaldrsquos serves nearly 50 million customers each day
McDonaldrsquos first franchised restaurant opened at Des Plaines Illinois in
1955 by the founder Ray Kroc
McDonaldrsquos has its own Hamburger University in Illinois and the first
batch graduated in 1961
12 classes offered at Hamburger University are college accredited
In 1963 McDonaldrsquos sold its one billionth hamburger
McDonaldrsquos is listed on the New York Frankfurt Munich Paris and
Tokyo stock exchanges
McDonaldrsquos aired its first network TV advertisement ldquoMcDonaldrsquos -
Where Quality Starts Fresh Everydayrdquo in 1965
The first McDonaldrsquos Drive-Thru opened in Sierra Vista Arizona in 1975
14
Happy Meals were added to McDonaldrsquos menu in 1979
McDonaldrsquos launched the new worldwide Balanced Active Lifestyles
public awareness campaign in 2005
McDonaldrsquos celebrated its 50th Anniversary on April 15 2005
Business model
McDonalds Corporation earns revenue as an investor in properties
a franchiser of restaurants and an operator of restaurants Approximately 15 of McDonalds restaurants are owned and
operated by McDonalds Corporation directly The remainder are operated by others through a variety of franchise agreements and
joint ventures
The McDonalds Corporations business model is slightly different
from that of most other fast-food chains In addition to ordinary franchise fees and marketing fees which are calculated as
a percentage of sales McDonalds may also collect rent which may also be calculated on the basis of sales
As a condition of many franchise agreements which vary by
contract age country and location the Corporation may own or lease the properties on which McDonalds franchises are located In most if not all cases the franchisee does not own the location of its
restaurants
The United Kingdom and Ireland business model is different than the US in that fewer than 30 of restaurants are franchised with
the majority under the ownership of the company McDonalds trains its franchisees and others at Hamburger Univers ity in Oak
Brook Illino is
In other countries McDonalds restaurants are operated by joint
ventures of McDonalds Corporation and other local entities or governments
15
As a matter of policy McDonalds does not make direct sales of food or materials to franchisees instead organizing the supply of
food and materials to restaurants through approved third party logistics operators
According to Fast Food Nation by Eric Schlosser nearly one in
eight workers in the US have at some time been employed by McDonalds It also states that McDonalds is the largest private
operator of playgrounds in the US as well as the single largest purchaser of beef pork potatoes and apples The selection of
meats McDonalds uses varies with the culture of the host country
MARKETING MIX
The marketing mix of a company consists of the various elements as follows
which form the core of a companyrsquos marketing system and hence helps to
achieve marketing objectives The marketing mix of McDonaldrsquos is as follows-
The McDonald plains its marketing by simple keeping 4Ps in mind
Product
Price
Promotion
Place
Product - McDonaldrsquos places considerable emphasis on developing a menu
which customers want Market research establishes exactly what this is However customersrsquo requirements change over time In order to meet these
changes McDonaldrsquos has introduced new products and phased out old ones and will continue to do so Care is taken not to adversely affect the sales of one choice by introducing a new choice which will cannibalise sales from the
existing one (trade off) McDonaldrsquos knows that items on its menu will vary in popularity Their ability to generate profits will vary at different points in their
cycle In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian
The happy meal for the children is a great seller among others
Price-The customerrsquos perception of value is an important determinant of the price charged Customers draw their own mental picture of what a product is worth A product is more than a physical item it also has psychological
connotations for the customer The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised It is
16
important when deciding on price to be fully aware of the brand and its integrity
In India McDonalds classifies its products into 2 categories namely the branded
affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and
the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price
perceptions
Promotion- The promotions aspect of the marketing mix covers all types of
marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and
in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct
mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that
provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be
supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item
At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart
from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos
Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the
management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities
making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers
17
Other than the main four elements mentioned above there are a few other
elements too in the marketing mix which are as follows-
People -The employees in McDonaldrsquos have a standard uniform and
McDonaldrsquos specially focuses on friendly and prompt service to its customers
from their employees
Process -The food manufacturing process at McDonaldrsquos is completely
transparent ie the whole process is visible to the customers In fact the fast
food joint allows its customers to view and judge the hygienic standards at
McDonaldrsquos by allowing them to enter the area where the process takes place
The customers are invited to check the ingredients used in food
Physical evidence - McDonalds focuses on clean and hygienic interiors of
is outlets and at the same time the interiors are attractive and the fast food joint
maintains a proper decorum at its joints
18
SWOT ANALYSIS
Strengths
McDonaldrsquos holds a very strong brand name worldwide
They have large partnerships with other companies that provide them
with their desired products this increases the goodwill of the company
McDonaldrsquos is one of the most reputed firms who are socially
responsible
Loyal employees amp management amp customer are their biggest strength
19
McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind
while providing food to different countries
Clean environment and play areas for children where they can enjoy their
time
Weakness
The weakness that hits the list of employee turnover rate Every year
many of their employees are fired out of the restaurant
McDonalds mostly advertises products and food items that targets
children
Health conscious people often complain that they do not provide us with
the organic and healthy food This becomes their weakness when they get in the complaints
They also face quality issue at times This affects the business as they are
running the outlet worldwide if one franchise gets affected others also
get a bad name
Opportunities
It can open up online services for their customers so that they can easily
order their desired meals sitting at home
Discounts given on every food item may help them gain more customers
They can go for a joint venture with the retailers they work with
They can introduce healthy hamburgers and healthy drinks for the people who are health conscious
20
In order to be environment friendly they can use packing material which
can be recycled later or material that does not create pollution
Threats
Emerging competition of similar outlets is becoming a problem for McDonalds
Health issue also becomes a problem when it comes to food
As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies
Recession in any country would definitely affect the whole outlet
worldwide
People facing heart problems and obesity accuse McDonalds for not
providing them with the healthy food
They have a threat of local food outlets in different countries
McDonalds is operating in a fully fledged economy where competition is
increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession
McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local
Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government
regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled
Indian businesses to grow by improving their ability to compete in todays international markets
21
Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in
predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first
restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept
has today been adopted by various Indian and International players to deliver quality produce to consumers
For instance Cremica Industries worked with another McDonalds supplier
from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to
McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with
farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water
consumption better seeds amp agricultural management practices which result in greater yields
In some cases these Indian suppliers had the technology - but no market for the
products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk
casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to
restaurants across India
McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations
COMPANYrsquoS FINANCIAL INFORMATION
Company Name McDonalds Corporation
Ticker Symbol MCD
Web Address wwwmcdonaldscom
CEO Mr Donald Thompson
No of Employees 420000
Common Issue Type CS
Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other
22
goods from numerous independent suppliers
Industry Information LEISURE - Restaurants
Price Day Change Bid Ask Open High Low Volume
8718 -002 - - 8743 8743 8676 3658828
Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range
875267 10040 039 527 253 164 35 10222 - 8331
KEY FIGURES (Latest Twelve Months - LTM)
Yesterdays Close 8706 $
PE Ratio - LTM 164
Market Capitalisation 875267 mil
Latest Shares Outstanding 10040 mil
Earnings pS (EPS) 527 $
Dividend pS (DPS) 253 cent
Dividend Yield 35
Dividend Payout Ratio 48
Revenue per Employee 64300 $
Effective Tax Rate 313
Float 10153 mil
Float as of Shares Outstanding 999
Foreign Sales 18478 mil
Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue
910
Research amp Devlopment (RampD) as of Revenue
000
Gross Profit Margin 447
EBITDA Margin 356
Pre-Tax Profit Margin 291
Assets Turnover 08
Return on Assets (ROA) 161
Return on Equity (ROE) 392
Return on Capital Invested (ROCI) 204 Current Ratio 10
Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096
LT DebtTotal Capital 480
Working Capital pS 006 $
Cash pS 217 $
Book-Value pS 1383 $
Balance Sheet (at a glance) in Millions
DIVIDEND INFO
Dividend Declared Date 09202012
Dividend Ex-Date 11282012
Dividend Record Date 12022012
Dividend Pay Date 12162012
Dividend Amount 770
Type of Payment Cash Payment
Dividend Rate 308
Current Dividend Yield 35
5-Y Average Dividend Yield 31
Payout Ratio 480
5-Y Average Payout Ratio 530
Share price performance previous 3 years
Share price performance intraday
23
Tangible Book-Value pS 1110 $
Cash Flow pS 689 $
Free Cash Flow pS 125 $
KEY FIGURES (LTM) Price info PriceBook Ratio 630
PriceTangible Book Ratio 785 PriceCash Flow 126
PriceFree Cash Flow 699
PE as of Industry Group 420
PE as of Sector Segment 770
PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol
1 Week - - - 00 101 54041 66217
4 Weeks 8743 8331 8474 27 101 57129 856929
13 Weeks 9416 8331 9102 -44 98 61288 3554700
26 Weeks 9416 8331 8775 -08 93 59419 7189758
52 Weeks 10222 8331 9803 -112 79 59272 14521666
YTD 10222 8331 - -132 77 59774 13807695
Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)
8661 8631 8825 8931 9174 039 031
GROWTH RATES 5-Year
Growh Rsup2 of 5-Year Growth
3-Year
Growth
Revenue 381 776 666
Income 2017 811 978
Dividend 1536 947 1016
Capital Spending 697 NA 1052
RampD 000 NA 000
Normalized Inc 1158 NA 979
CHANGES YTD vs
Last YTD
Curr Qtr vs
Qtr 1-Yr ago
Annual vs
Last Annual
Revenue 21 -02 122
Earnings -14 -35 113
EPS 10 -14 151
EPS $ 004 -002 069
SOLVENCY RATIOS
SHORT-TERM SOLVENCY RATIOS
(LIQUIDITY)
Net Working Capital Ratio 271
Current Ratio 13
Quick Ratio (Acid Test) 10
Liquidity Ratio (Cash) 067
Receivables Turnover 215
Average Collection Period 17
Working CapitalEquity 62
Working Capital pS 088
Cash-Flow pS 677
Free Cash-Flow pS 209
24
FINANCIAL STRUCTURE RATIOS
Altmans Z-Score Ratio 485
Financial Leverage Ratio (AssetsEquity) 23
Debt Ratio 564
Total DebtEquity (Gearing Ratio) 087
LT DebtEquity 084
LT DebtCapital Invested 569
LT DebtTotal Liabilities 652
Interest Cover 173
InterestCapital Invested 167
25
People hellip McDonaldrsquos 1 Resource in India
26
McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs
around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in
1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with
McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)
The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive
training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course
(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the
Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University
27
The McDonaldrsquos Promise
QUALITY SERVICE CLEANLINESS amp VALUE
When asked to explain McDonalds success founder Ray Kroc used to say We
take the hamburger business more seriously than anyone else
Kroc was a perfectionist From the day he opened his first restaurant he vowed
to give his customers high quality products served quickly --and with a smile
in a clean and pleasant environment and all at a fair price Quality Service
Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds
business
QUALITY
McDonalds India serves only the highest quality products The attention to food
quality started long before the first restaurant opened McDonalds India has
established close relationships with local suppliers who provide McDonalds
with the highest quality freshest ingredients to make its products
All suppliers adhere to Indian government regulations on food health and
hygiene while continuously maintaining McDonalds own recognized standards
McDonalds has established an extensive cold chain distribution system in
India to ensure that the products which arrive at the restaurant from suppliers
all over India are absolutely fresh In the restaurants products and supplies are
used on a first-in first-out basis to ensure freshness All McDonalds products
are prepared using modern state-of-the-art cooking equipment to ensure quality
and safety
SERVICE
McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos
which sets its restaurants apart from others At McDonalds the customer
always comes first Every employee strives to provide 100 percent customer
satisfaction -- for every customer -- every visit This includes friendly and
attentive service accuracy in order taking and anticipation of customers needs
-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun
and youthful spirit we will proudly serve an exceptional McDonaldrsquos
eating experience that makes all people feel special and makes them smile ndash
every customer every timerdquo
28
CLEANLINESS
McDonalds restaurants provide a clean comfortable environment especially
suited for families McDonalds stringent cleaning standards ensure that all
tables seating highchairs and trays are sanitized several times each hour The
attention to cleanliness extends from the lobby to the kitchen to the sidewalk
and immediate areas outside the restaurant
In addition to urging customers to dispose of their litter properly and offering a
number of trash bins (both inside and outside the restaurants) for their
convenience McDonalds Litter Patrols walk around the restaurants several
times each day picking up litter -- even if it isnt from McDonalds
Restaurant managers walk through the dining areas each hour to ensure that it
is clean and well stocked All restaurants provide a variety of comfortable
seating arrangements to accommodate anyone -- from a single individual to a
large family The environment is warm inviting and well lit
VALUE
McDonalds menu is priced at a value that the largest segment of Indian
consumers can afford McDonalds does not sacrifice quality for value -- rather
McDonalds leverages economies of scale to minimize costs while maximizing
value to customers
McDonalds definition of value is broader than most restaurants of its kind -- it
is more than price Value at McDonalds is the sum of the total McDonalds
experience quality food fast friendly service a clean and pleasant
environment and products priced at very affordable prices for the largest
segment of Indian consumers possible That is value at McDonalds
29
McDonaldrsquos Indiahellip Culturally Sensitive
Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much
that is consistent with other McDonaldrsquos restaurants around the world such as
the quality of the food and the attention to service
The dedication to local cultures is not new for McDonaldrsquos For the past 50
years McDonaldrsquos has opened restaurants in more than 120 distinctly different
countries and cultures With guidance from its local partners McDonaldrsquos is
able to adapt- where necessary-its menu and restaurant operations to
complement existing eating-out options McDonaldrsquos local owners understand
what their customers want perhaps more importantly what is acceptable within
local customs and values
There is much too that is very different- such as the first beef-less and pork-
less menu in the world and special product formulations to cater to Indian
culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos
India says ldquoWe know the Indian culture because we were born in it
inherited its richness and respect it greatly It is the respect for this culture
and the sentiments of many of our customersrsquo that we do not serve any
beef and pork items in our restaurantsrdquo
McDonaldrsquos commitment to its Indian customers is evident even in
development of special sauces that use local spices and chillies The
mayonnaise and all other sauces are egg-less
In India vegetarianism is in many cases more than a lifestyle choice Many
people are vegetarians due to religious reasons and in some cases even the
vegetarian product that has come into contact with a non-vegetarian product is
unacceptable Hence McDonaldrsquos India has also changed its operations to
address the special requirements of our vegetarian customers by having
processes that ensure that a physical separation of veg and non-veg products is
maintained right from farm to the customer Vegetable products are prepared
separately using dedicated equipment and utensils Also in India McDonaldrsquos
uses only vegetable oil as a medium for cooking
30
McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash
lsquoto be driven by the leadership of local ownersrsquo This commitment has translated
into enduring benefits to the businesses at the grass root level in the areas of
introduction of new crops new agricultural practices and food processing methods
and procedures
McDonalds unique cold chain on which the QSR major has spent more than six
years setting up in India has brought about a veritable revolution immensely
benefiting the farmers at one end and enabling customers at retail counters get the
highest quality food products absolutely fresh and at great value
Setting up this extensive cold chain distribution system has involved the transfer of
state-of-the-art food processing technology by McDonalds and its international
suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain
From Field to -2⁰C in 90 Minutes
Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be
grown during the winter months but with McDonalds expertise in the area of
agriculture they are now able to grow this crop through the year
Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room
to remove field heat a large cold room and a refrigerated van for transportation where
the temperature and the relative humidity of the crop is maintained between 1ordm C and
4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room
within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling
to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at
the farms itself ensuring no delay between harvesting pre-cooling packaging and
cold storage
Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd
Flavour and Freshness locked in at - 35degC
Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable
range of products is another important player in this cold chain This includes hi-tech
refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C
This is vital to ensure that the frozen food retains it freshness for a long time and the
cold chain is maintained The frozen product is immediately moved to cold storage
rooms
31
Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India
From Farm to Bulk Cooler in less than 90 Minutes
McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for
quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk
coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -
thus maintaining the cold chain
All leading to the Consumer
McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The
DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity
of the products throughout the entire cold chain
Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C
as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state
All these suppliers share McDonalds commitment and dedication to satisfying
customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently
each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental
effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn
more
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
9
sect Rajasthan -6
Jaipur ndash 3 Jodhpur ndash 1 Kota -1 Udaipur - 1
sect Uttaranchal -1
Dehradun ndash 1
sect Uttar Pradesh ndash29
Noida ndash 5 Greater Noida ndash 1 Ghaziabad ndash 7 Mathura ndash 1 (Highway and
Drive - Thru) Kanpur ndash 2 Meerut ndash 2 Lucknow ndash5 Agra ndash 1 Allahabad
ndash 1 Varanasi -2 Gajraula ndash 1 (Highway amp Drive Thru) Khatauli -
1(Highway and Drive thru)
sect Punjab ndash 13
Chandigarh ndash 2 Ludhiana ndash 2 Doraha ndash 1 (Highway and Drive - Thru)
Jalandhar ndash 2 Patarsi ndash 1 (Highway and Drive - Thru) Dasuya (Highway
and Drive Thru) ndash 1 Amritsar -1 Patiala -1 Zirakpur-2
sect West Bengal-3
Kolkata- 3
sect Himachal Pradesh -1
Jabli-1
sect Madhya Pradesh -2
Gwalior ndash 1 Bhopal -1
----------------------------------------------
The Western Region has 125 restaurants across the following states and cities ndash
Maharashtra - Mumbai Pune Nasik Kolhapur ndash
Gujarat - Ahmedabad Vododara Surat Indore Vapi
Madhya Pradesh ndash Indore
Andhra Pradesh - Hyderabad
Karnataka - Bangalore
Tamil Nadu - Chennai
10
GOALS AND OBJECTIVES
1 McDonaldrsquos vision is to be the worldrsquos best quick service restaurants
experience
2 McDonalds is committed to maintaining and developing the best food
products in the quick service restaurant market
3 In order to deliver this the company has made a number of commitments to
food safety and nutrition
4 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
5 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
McDonalds vision is to be the worlds 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
11
AWARDS
McDonaldrsquos India has received many prestigious awards for its service and
performance including
The lsquoMost Respected Companyrsquo for four consecutive years (2003-2006)
in the Food Services sector by Businessworld
The lsquoMost Preferred Fast Food Outletrsquo 2006 amp 2007 by Awaaz
Consumer Award hosted by CNBC
Star Retailer ndash the lsquoConsumer Way Food Services Retailerrsquo of the
Year 2006 amp 2007 2008 by Franchise India
lsquoRetailer of the Yearrsquo Award for catering services (2004-2006) at the
Images Retail Awards
The lsquoAmity Corporate Excellence Awardrsquo ndashin 2007 amp 2008
The lsquoMost Wanted Brand of the Yearrsquo Award 2003 amp 2004 by
Franchising Holdings India Ltd
The lsquoMost Admired F amp B Retailer of the Year QSRs Foreign
Originrsquo ndash The Golden Spoon Awards by Images Retail
The Company with the Best Corporate Conscience ndash 2008 by Business
amp Economy
lsquoValue for Moneyrsquo brand ndash 2010 by Pitch Magazine
The most trusted family restaurant brand in the country award in
2010 by Readerrsquos Digest
12
Corporate Social Responsibility
Being responsible is at the core of everything that we do at McDonaldstrade It is
a deep-rooted value and a tradition that dates back to our founder Ray Kroc It is also one of our top business priorities
We believe that our continuing success depends on our stakeholders trust in
each and every aspect of our business be it the quality and safety of the food we serve in the way we do our business the way we connect and make the difference in the communities we operate being sensitive to environment and
being sustainable
1 We are committed to doing what is right
2 We are committed to be a good neighbour and partner in the community
3 We are committed to conducting our business ethically and with complete transparency
4 We are committed to treating our entire internal and external stakeholders with respect and dignity
13
McDonaldrsquos International
McDonaldrsquos has over 32000 local restaurants in more than 100 countries
70 percent of our restaurants worldwide are owned and operated by
independent local businessmen and businesswomen
McDonaldrsquos serves nearly 50 million customers each day
McDonaldrsquos first franchised restaurant opened at Des Plaines Illinois in
1955 by the founder Ray Kroc
McDonaldrsquos has its own Hamburger University in Illinois and the first
batch graduated in 1961
12 classes offered at Hamburger University are college accredited
In 1963 McDonaldrsquos sold its one billionth hamburger
McDonaldrsquos is listed on the New York Frankfurt Munich Paris and
Tokyo stock exchanges
McDonaldrsquos aired its first network TV advertisement ldquoMcDonaldrsquos -
Where Quality Starts Fresh Everydayrdquo in 1965
The first McDonaldrsquos Drive-Thru opened in Sierra Vista Arizona in 1975
14
Happy Meals were added to McDonaldrsquos menu in 1979
McDonaldrsquos launched the new worldwide Balanced Active Lifestyles
public awareness campaign in 2005
McDonaldrsquos celebrated its 50th Anniversary on April 15 2005
Business model
McDonalds Corporation earns revenue as an investor in properties
a franchiser of restaurants and an operator of restaurants Approximately 15 of McDonalds restaurants are owned and
operated by McDonalds Corporation directly The remainder are operated by others through a variety of franchise agreements and
joint ventures
The McDonalds Corporations business model is slightly different
from that of most other fast-food chains In addition to ordinary franchise fees and marketing fees which are calculated as
a percentage of sales McDonalds may also collect rent which may also be calculated on the basis of sales
As a condition of many franchise agreements which vary by
contract age country and location the Corporation may own or lease the properties on which McDonalds franchises are located In most if not all cases the franchisee does not own the location of its
restaurants
The United Kingdom and Ireland business model is different than the US in that fewer than 30 of restaurants are franchised with
the majority under the ownership of the company McDonalds trains its franchisees and others at Hamburger Univers ity in Oak
Brook Illino is
In other countries McDonalds restaurants are operated by joint
ventures of McDonalds Corporation and other local entities or governments
15
As a matter of policy McDonalds does not make direct sales of food or materials to franchisees instead organizing the supply of
food and materials to restaurants through approved third party logistics operators
According to Fast Food Nation by Eric Schlosser nearly one in
eight workers in the US have at some time been employed by McDonalds It also states that McDonalds is the largest private
operator of playgrounds in the US as well as the single largest purchaser of beef pork potatoes and apples The selection of
meats McDonalds uses varies with the culture of the host country
MARKETING MIX
The marketing mix of a company consists of the various elements as follows
which form the core of a companyrsquos marketing system and hence helps to
achieve marketing objectives The marketing mix of McDonaldrsquos is as follows-
The McDonald plains its marketing by simple keeping 4Ps in mind
Product
Price
Promotion
Place
Product - McDonaldrsquos places considerable emphasis on developing a menu
which customers want Market research establishes exactly what this is However customersrsquo requirements change over time In order to meet these
changes McDonaldrsquos has introduced new products and phased out old ones and will continue to do so Care is taken not to adversely affect the sales of one choice by introducing a new choice which will cannibalise sales from the
existing one (trade off) McDonaldrsquos knows that items on its menu will vary in popularity Their ability to generate profits will vary at different points in their
cycle In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian
The happy meal for the children is a great seller among others
Price-The customerrsquos perception of value is an important determinant of the price charged Customers draw their own mental picture of what a product is worth A product is more than a physical item it also has psychological
connotations for the customer The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised It is
16
important when deciding on price to be fully aware of the brand and its integrity
In India McDonalds classifies its products into 2 categories namely the branded
affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and
the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price
perceptions
Promotion- The promotions aspect of the marketing mix covers all types of
marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and
in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct
mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that
provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be
supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item
At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart
from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos
Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the
management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities
making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers
17
Other than the main four elements mentioned above there are a few other
elements too in the marketing mix which are as follows-
People -The employees in McDonaldrsquos have a standard uniform and
McDonaldrsquos specially focuses on friendly and prompt service to its customers
from their employees
Process -The food manufacturing process at McDonaldrsquos is completely
transparent ie the whole process is visible to the customers In fact the fast
food joint allows its customers to view and judge the hygienic standards at
McDonaldrsquos by allowing them to enter the area where the process takes place
The customers are invited to check the ingredients used in food
Physical evidence - McDonalds focuses on clean and hygienic interiors of
is outlets and at the same time the interiors are attractive and the fast food joint
maintains a proper decorum at its joints
18
SWOT ANALYSIS
Strengths
McDonaldrsquos holds a very strong brand name worldwide
They have large partnerships with other companies that provide them
with their desired products this increases the goodwill of the company
McDonaldrsquos is one of the most reputed firms who are socially
responsible
Loyal employees amp management amp customer are their biggest strength
19
McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind
while providing food to different countries
Clean environment and play areas for children where they can enjoy their
time
Weakness
The weakness that hits the list of employee turnover rate Every year
many of their employees are fired out of the restaurant
McDonalds mostly advertises products and food items that targets
children
Health conscious people often complain that they do not provide us with
the organic and healthy food This becomes their weakness when they get in the complaints
They also face quality issue at times This affects the business as they are
running the outlet worldwide if one franchise gets affected others also
get a bad name
Opportunities
It can open up online services for their customers so that they can easily
order their desired meals sitting at home
Discounts given on every food item may help them gain more customers
They can go for a joint venture with the retailers they work with
They can introduce healthy hamburgers and healthy drinks for the people who are health conscious
20
In order to be environment friendly they can use packing material which
can be recycled later or material that does not create pollution
Threats
Emerging competition of similar outlets is becoming a problem for McDonalds
Health issue also becomes a problem when it comes to food
As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies
Recession in any country would definitely affect the whole outlet
worldwide
People facing heart problems and obesity accuse McDonalds for not
providing them with the healthy food
They have a threat of local food outlets in different countries
McDonalds is operating in a fully fledged economy where competition is
increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession
McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local
Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government
regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled
Indian businesses to grow by improving their ability to compete in todays international markets
21
Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in
predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first
restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept
has today been adopted by various Indian and International players to deliver quality produce to consumers
For instance Cremica Industries worked with another McDonalds supplier
from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to
McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with
farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water
consumption better seeds amp agricultural management practices which result in greater yields
In some cases these Indian suppliers had the technology - but no market for the
products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk
casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to
restaurants across India
McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations
COMPANYrsquoS FINANCIAL INFORMATION
Company Name McDonalds Corporation
Ticker Symbol MCD
Web Address wwwmcdonaldscom
CEO Mr Donald Thompson
No of Employees 420000
Common Issue Type CS
Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other
22
goods from numerous independent suppliers
Industry Information LEISURE - Restaurants
Price Day Change Bid Ask Open High Low Volume
8718 -002 - - 8743 8743 8676 3658828
Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range
875267 10040 039 527 253 164 35 10222 - 8331
KEY FIGURES (Latest Twelve Months - LTM)
Yesterdays Close 8706 $
PE Ratio - LTM 164
Market Capitalisation 875267 mil
Latest Shares Outstanding 10040 mil
Earnings pS (EPS) 527 $
Dividend pS (DPS) 253 cent
Dividend Yield 35
Dividend Payout Ratio 48
Revenue per Employee 64300 $
Effective Tax Rate 313
Float 10153 mil
Float as of Shares Outstanding 999
Foreign Sales 18478 mil
Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue
910
Research amp Devlopment (RampD) as of Revenue
000
Gross Profit Margin 447
EBITDA Margin 356
Pre-Tax Profit Margin 291
Assets Turnover 08
Return on Assets (ROA) 161
Return on Equity (ROE) 392
Return on Capital Invested (ROCI) 204 Current Ratio 10
Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096
LT DebtTotal Capital 480
Working Capital pS 006 $
Cash pS 217 $
Book-Value pS 1383 $
Balance Sheet (at a glance) in Millions
DIVIDEND INFO
Dividend Declared Date 09202012
Dividend Ex-Date 11282012
Dividend Record Date 12022012
Dividend Pay Date 12162012
Dividend Amount 770
Type of Payment Cash Payment
Dividend Rate 308
Current Dividend Yield 35
5-Y Average Dividend Yield 31
Payout Ratio 480
5-Y Average Payout Ratio 530
Share price performance previous 3 years
Share price performance intraday
23
Tangible Book-Value pS 1110 $
Cash Flow pS 689 $
Free Cash Flow pS 125 $
KEY FIGURES (LTM) Price info PriceBook Ratio 630
PriceTangible Book Ratio 785 PriceCash Flow 126
PriceFree Cash Flow 699
PE as of Industry Group 420
PE as of Sector Segment 770
PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol
1 Week - - - 00 101 54041 66217
4 Weeks 8743 8331 8474 27 101 57129 856929
13 Weeks 9416 8331 9102 -44 98 61288 3554700
26 Weeks 9416 8331 8775 -08 93 59419 7189758
52 Weeks 10222 8331 9803 -112 79 59272 14521666
YTD 10222 8331 - -132 77 59774 13807695
Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)
8661 8631 8825 8931 9174 039 031
GROWTH RATES 5-Year
Growh Rsup2 of 5-Year Growth
3-Year
Growth
Revenue 381 776 666
Income 2017 811 978
Dividend 1536 947 1016
Capital Spending 697 NA 1052
RampD 000 NA 000
Normalized Inc 1158 NA 979
CHANGES YTD vs
Last YTD
Curr Qtr vs
Qtr 1-Yr ago
Annual vs
Last Annual
Revenue 21 -02 122
Earnings -14 -35 113
EPS 10 -14 151
EPS $ 004 -002 069
SOLVENCY RATIOS
SHORT-TERM SOLVENCY RATIOS
(LIQUIDITY)
Net Working Capital Ratio 271
Current Ratio 13
Quick Ratio (Acid Test) 10
Liquidity Ratio (Cash) 067
Receivables Turnover 215
Average Collection Period 17
Working CapitalEquity 62
Working Capital pS 088
Cash-Flow pS 677
Free Cash-Flow pS 209
24
FINANCIAL STRUCTURE RATIOS
Altmans Z-Score Ratio 485
Financial Leverage Ratio (AssetsEquity) 23
Debt Ratio 564
Total DebtEquity (Gearing Ratio) 087
LT DebtEquity 084
LT DebtCapital Invested 569
LT DebtTotal Liabilities 652
Interest Cover 173
InterestCapital Invested 167
25
People hellip McDonaldrsquos 1 Resource in India
26
McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs
around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in
1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with
McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)
The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive
training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course
(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the
Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University
27
The McDonaldrsquos Promise
QUALITY SERVICE CLEANLINESS amp VALUE
When asked to explain McDonalds success founder Ray Kroc used to say We
take the hamburger business more seriously than anyone else
Kroc was a perfectionist From the day he opened his first restaurant he vowed
to give his customers high quality products served quickly --and with a smile
in a clean and pleasant environment and all at a fair price Quality Service
Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds
business
QUALITY
McDonalds India serves only the highest quality products The attention to food
quality started long before the first restaurant opened McDonalds India has
established close relationships with local suppliers who provide McDonalds
with the highest quality freshest ingredients to make its products
All suppliers adhere to Indian government regulations on food health and
hygiene while continuously maintaining McDonalds own recognized standards
McDonalds has established an extensive cold chain distribution system in
India to ensure that the products which arrive at the restaurant from suppliers
all over India are absolutely fresh In the restaurants products and supplies are
used on a first-in first-out basis to ensure freshness All McDonalds products
are prepared using modern state-of-the-art cooking equipment to ensure quality
and safety
SERVICE
McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos
which sets its restaurants apart from others At McDonalds the customer
always comes first Every employee strives to provide 100 percent customer
satisfaction -- for every customer -- every visit This includes friendly and
attentive service accuracy in order taking and anticipation of customers needs
-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun
and youthful spirit we will proudly serve an exceptional McDonaldrsquos
eating experience that makes all people feel special and makes them smile ndash
every customer every timerdquo
28
CLEANLINESS
McDonalds restaurants provide a clean comfortable environment especially
suited for families McDonalds stringent cleaning standards ensure that all
tables seating highchairs and trays are sanitized several times each hour The
attention to cleanliness extends from the lobby to the kitchen to the sidewalk
and immediate areas outside the restaurant
In addition to urging customers to dispose of their litter properly and offering a
number of trash bins (both inside and outside the restaurants) for their
convenience McDonalds Litter Patrols walk around the restaurants several
times each day picking up litter -- even if it isnt from McDonalds
Restaurant managers walk through the dining areas each hour to ensure that it
is clean and well stocked All restaurants provide a variety of comfortable
seating arrangements to accommodate anyone -- from a single individual to a
large family The environment is warm inviting and well lit
VALUE
McDonalds menu is priced at a value that the largest segment of Indian
consumers can afford McDonalds does not sacrifice quality for value -- rather
McDonalds leverages economies of scale to minimize costs while maximizing
value to customers
McDonalds definition of value is broader than most restaurants of its kind -- it
is more than price Value at McDonalds is the sum of the total McDonalds
experience quality food fast friendly service a clean and pleasant
environment and products priced at very affordable prices for the largest
segment of Indian consumers possible That is value at McDonalds
29
McDonaldrsquos Indiahellip Culturally Sensitive
Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much
that is consistent with other McDonaldrsquos restaurants around the world such as
the quality of the food and the attention to service
The dedication to local cultures is not new for McDonaldrsquos For the past 50
years McDonaldrsquos has opened restaurants in more than 120 distinctly different
countries and cultures With guidance from its local partners McDonaldrsquos is
able to adapt- where necessary-its menu and restaurant operations to
complement existing eating-out options McDonaldrsquos local owners understand
what their customers want perhaps more importantly what is acceptable within
local customs and values
There is much too that is very different- such as the first beef-less and pork-
less menu in the world and special product formulations to cater to Indian
culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos
India says ldquoWe know the Indian culture because we were born in it
inherited its richness and respect it greatly It is the respect for this culture
and the sentiments of many of our customersrsquo that we do not serve any
beef and pork items in our restaurantsrdquo
McDonaldrsquos commitment to its Indian customers is evident even in
development of special sauces that use local spices and chillies The
mayonnaise and all other sauces are egg-less
In India vegetarianism is in many cases more than a lifestyle choice Many
people are vegetarians due to religious reasons and in some cases even the
vegetarian product that has come into contact with a non-vegetarian product is
unacceptable Hence McDonaldrsquos India has also changed its operations to
address the special requirements of our vegetarian customers by having
processes that ensure that a physical separation of veg and non-veg products is
maintained right from farm to the customer Vegetable products are prepared
separately using dedicated equipment and utensils Also in India McDonaldrsquos
uses only vegetable oil as a medium for cooking
30
McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash
lsquoto be driven by the leadership of local ownersrsquo This commitment has translated
into enduring benefits to the businesses at the grass root level in the areas of
introduction of new crops new agricultural practices and food processing methods
and procedures
McDonalds unique cold chain on which the QSR major has spent more than six
years setting up in India has brought about a veritable revolution immensely
benefiting the farmers at one end and enabling customers at retail counters get the
highest quality food products absolutely fresh and at great value
Setting up this extensive cold chain distribution system has involved the transfer of
state-of-the-art food processing technology by McDonalds and its international
suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain
From Field to -2⁰C in 90 Minutes
Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be
grown during the winter months but with McDonalds expertise in the area of
agriculture they are now able to grow this crop through the year
Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room
to remove field heat a large cold room and a refrigerated van for transportation where
the temperature and the relative humidity of the crop is maintained between 1ordm C and
4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room
within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling
to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at
the farms itself ensuring no delay between harvesting pre-cooling packaging and
cold storage
Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd
Flavour and Freshness locked in at - 35degC
Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable
range of products is another important player in this cold chain This includes hi-tech
refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C
This is vital to ensure that the frozen food retains it freshness for a long time and the
cold chain is maintained The frozen product is immediately moved to cold storage
rooms
31
Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India
From Farm to Bulk Cooler in less than 90 Minutes
McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for
quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk
coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -
thus maintaining the cold chain
All leading to the Consumer
McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The
DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity
of the products throughout the entire cold chain
Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C
as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state
All these suppliers share McDonalds commitment and dedication to satisfying
customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently
each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental
effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn
more
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
10
GOALS AND OBJECTIVES
1 McDonaldrsquos vision is to be the worldrsquos best quick service restaurants
experience
2 McDonalds is committed to maintaining and developing the best food
products in the quick service restaurant market
3 In order to deliver this the company has made a number of commitments to
food safety and nutrition
4 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
5 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
McDonalds vision is to be the worlds 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
11
AWARDS
McDonaldrsquos India has received many prestigious awards for its service and
performance including
The lsquoMost Respected Companyrsquo for four consecutive years (2003-2006)
in the Food Services sector by Businessworld
The lsquoMost Preferred Fast Food Outletrsquo 2006 amp 2007 by Awaaz
Consumer Award hosted by CNBC
Star Retailer ndash the lsquoConsumer Way Food Services Retailerrsquo of the
Year 2006 amp 2007 2008 by Franchise India
lsquoRetailer of the Yearrsquo Award for catering services (2004-2006) at the
Images Retail Awards
The lsquoAmity Corporate Excellence Awardrsquo ndashin 2007 amp 2008
The lsquoMost Wanted Brand of the Yearrsquo Award 2003 amp 2004 by
Franchising Holdings India Ltd
The lsquoMost Admired F amp B Retailer of the Year QSRs Foreign
Originrsquo ndash The Golden Spoon Awards by Images Retail
The Company with the Best Corporate Conscience ndash 2008 by Business
amp Economy
lsquoValue for Moneyrsquo brand ndash 2010 by Pitch Magazine
The most trusted family restaurant brand in the country award in
2010 by Readerrsquos Digest
12
Corporate Social Responsibility
Being responsible is at the core of everything that we do at McDonaldstrade It is
a deep-rooted value and a tradition that dates back to our founder Ray Kroc It is also one of our top business priorities
We believe that our continuing success depends on our stakeholders trust in
each and every aspect of our business be it the quality and safety of the food we serve in the way we do our business the way we connect and make the difference in the communities we operate being sensitive to environment and
being sustainable
1 We are committed to doing what is right
2 We are committed to be a good neighbour and partner in the community
3 We are committed to conducting our business ethically and with complete transparency
4 We are committed to treating our entire internal and external stakeholders with respect and dignity
13
McDonaldrsquos International
McDonaldrsquos has over 32000 local restaurants in more than 100 countries
70 percent of our restaurants worldwide are owned and operated by
independent local businessmen and businesswomen
McDonaldrsquos serves nearly 50 million customers each day
McDonaldrsquos first franchised restaurant opened at Des Plaines Illinois in
1955 by the founder Ray Kroc
McDonaldrsquos has its own Hamburger University in Illinois and the first
batch graduated in 1961
12 classes offered at Hamburger University are college accredited
In 1963 McDonaldrsquos sold its one billionth hamburger
McDonaldrsquos is listed on the New York Frankfurt Munich Paris and
Tokyo stock exchanges
McDonaldrsquos aired its first network TV advertisement ldquoMcDonaldrsquos -
Where Quality Starts Fresh Everydayrdquo in 1965
The first McDonaldrsquos Drive-Thru opened in Sierra Vista Arizona in 1975
14
Happy Meals were added to McDonaldrsquos menu in 1979
McDonaldrsquos launched the new worldwide Balanced Active Lifestyles
public awareness campaign in 2005
McDonaldrsquos celebrated its 50th Anniversary on April 15 2005
Business model
McDonalds Corporation earns revenue as an investor in properties
a franchiser of restaurants and an operator of restaurants Approximately 15 of McDonalds restaurants are owned and
operated by McDonalds Corporation directly The remainder are operated by others through a variety of franchise agreements and
joint ventures
The McDonalds Corporations business model is slightly different
from that of most other fast-food chains In addition to ordinary franchise fees and marketing fees which are calculated as
a percentage of sales McDonalds may also collect rent which may also be calculated on the basis of sales
As a condition of many franchise agreements which vary by
contract age country and location the Corporation may own or lease the properties on which McDonalds franchises are located In most if not all cases the franchisee does not own the location of its
restaurants
The United Kingdom and Ireland business model is different than the US in that fewer than 30 of restaurants are franchised with
the majority under the ownership of the company McDonalds trains its franchisees and others at Hamburger Univers ity in Oak
Brook Illino is
In other countries McDonalds restaurants are operated by joint
ventures of McDonalds Corporation and other local entities or governments
15
As a matter of policy McDonalds does not make direct sales of food or materials to franchisees instead organizing the supply of
food and materials to restaurants through approved third party logistics operators
According to Fast Food Nation by Eric Schlosser nearly one in
eight workers in the US have at some time been employed by McDonalds It also states that McDonalds is the largest private
operator of playgrounds in the US as well as the single largest purchaser of beef pork potatoes and apples The selection of
meats McDonalds uses varies with the culture of the host country
MARKETING MIX
The marketing mix of a company consists of the various elements as follows
which form the core of a companyrsquos marketing system and hence helps to
achieve marketing objectives The marketing mix of McDonaldrsquos is as follows-
The McDonald plains its marketing by simple keeping 4Ps in mind
Product
Price
Promotion
Place
Product - McDonaldrsquos places considerable emphasis on developing a menu
which customers want Market research establishes exactly what this is However customersrsquo requirements change over time In order to meet these
changes McDonaldrsquos has introduced new products and phased out old ones and will continue to do so Care is taken not to adversely affect the sales of one choice by introducing a new choice which will cannibalise sales from the
existing one (trade off) McDonaldrsquos knows that items on its menu will vary in popularity Their ability to generate profits will vary at different points in their
cycle In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian
The happy meal for the children is a great seller among others
Price-The customerrsquos perception of value is an important determinant of the price charged Customers draw their own mental picture of what a product is worth A product is more than a physical item it also has psychological
connotations for the customer The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised It is
16
important when deciding on price to be fully aware of the brand and its integrity
In India McDonalds classifies its products into 2 categories namely the branded
affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and
the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price
perceptions
Promotion- The promotions aspect of the marketing mix covers all types of
marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and
in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct
mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that
provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be
supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item
At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart
from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos
Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the
management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities
making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers
17
Other than the main four elements mentioned above there are a few other
elements too in the marketing mix which are as follows-
People -The employees in McDonaldrsquos have a standard uniform and
McDonaldrsquos specially focuses on friendly and prompt service to its customers
from their employees
Process -The food manufacturing process at McDonaldrsquos is completely
transparent ie the whole process is visible to the customers In fact the fast
food joint allows its customers to view and judge the hygienic standards at
McDonaldrsquos by allowing them to enter the area where the process takes place
The customers are invited to check the ingredients used in food
Physical evidence - McDonalds focuses on clean and hygienic interiors of
is outlets and at the same time the interiors are attractive and the fast food joint
maintains a proper decorum at its joints
18
SWOT ANALYSIS
Strengths
McDonaldrsquos holds a very strong brand name worldwide
They have large partnerships with other companies that provide them
with their desired products this increases the goodwill of the company
McDonaldrsquos is one of the most reputed firms who are socially
responsible
Loyal employees amp management amp customer are their biggest strength
19
McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind
while providing food to different countries
Clean environment and play areas for children where they can enjoy their
time
Weakness
The weakness that hits the list of employee turnover rate Every year
many of their employees are fired out of the restaurant
McDonalds mostly advertises products and food items that targets
children
Health conscious people often complain that they do not provide us with
the organic and healthy food This becomes their weakness when they get in the complaints
They also face quality issue at times This affects the business as they are
running the outlet worldwide if one franchise gets affected others also
get a bad name
Opportunities
It can open up online services for their customers so that they can easily
order their desired meals sitting at home
Discounts given on every food item may help them gain more customers
They can go for a joint venture with the retailers they work with
They can introduce healthy hamburgers and healthy drinks for the people who are health conscious
20
In order to be environment friendly they can use packing material which
can be recycled later or material that does not create pollution
Threats
Emerging competition of similar outlets is becoming a problem for McDonalds
Health issue also becomes a problem when it comes to food
As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies
Recession in any country would definitely affect the whole outlet
worldwide
People facing heart problems and obesity accuse McDonalds for not
providing them with the healthy food
They have a threat of local food outlets in different countries
McDonalds is operating in a fully fledged economy where competition is
increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession
McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local
Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government
regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled
Indian businesses to grow by improving their ability to compete in todays international markets
21
Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in
predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first
restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept
has today been adopted by various Indian and International players to deliver quality produce to consumers
For instance Cremica Industries worked with another McDonalds supplier
from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to
McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with
farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water
consumption better seeds amp agricultural management practices which result in greater yields
In some cases these Indian suppliers had the technology - but no market for the
products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk
casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to
restaurants across India
McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations
COMPANYrsquoS FINANCIAL INFORMATION
Company Name McDonalds Corporation
Ticker Symbol MCD
Web Address wwwmcdonaldscom
CEO Mr Donald Thompson
No of Employees 420000
Common Issue Type CS
Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other
22
goods from numerous independent suppliers
Industry Information LEISURE - Restaurants
Price Day Change Bid Ask Open High Low Volume
8718 -002 - - 8743 8743 8676 3658828
Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range
875267 10040 039 527 253 164 35 10222 - 8331
KEY FIGURES (Latest Twelve Months - LTM)
Yesterdays Close 8706 $
PE Ratio - LTM 164
Market Capitalisation 875267 mil
Latest Shares Outstanding 10040 mil
Earnings pS (EPS) 527 $
Dividend pS (DPS) 253 cent
Dividend Yield 35
Dividend Payout Ratio 48
Revenue per Employee 64300 $
Effective Tax Rate 313
Float 10153 mil
Float as of Shares Outstanding 999
Foreign Sales 18478 mil
Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue
910
Research amp Devlopment (RampD) as of Revenue
000
Gross Profit Margin 447
EBITDA Margin 356
Pre-Tax Profit Margin 291
Assets Turnover 08
Return on Assets (ROA) 161
Return on Equity (ROE) 392
Return on Capital Invested (ROCI) 204 Current Ratio 10
Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096
LT DebtTotal Capital 480
Working Capital pS 006 $
Cash pS 217 $
Book-Value pS 1383 $
Balance Sheet (at a glance) in Millions
DIVIDEND INFO
Dividend Declared Date 09202012
Dividend Ex-Date 11282012
Dividend Record Date 12022012
Dividend Pay Date 12162012
Dividend Amount 770
Type of Payment Cash Payment
Dividend Rate 308
Current Dividend Yield 35
5-Y Average Dividend Yield 31
Payout Ratio 480
5-Y Average Payout Ratio 530
Share price performance previous 3 years
Share price performance intraday
23
Tangible Book-Value pS 1110 $
Cash Flow pS 689 $
Free Cash Flow pS 125 $
KEY FIGURES (LTM) Price info PriceBook Ratio 630
PriceTangible Book Ratio 785 PriceCash Flow 126
PriceFree Cash Flow 699
PE as of Industry Group 420
PE as of Sector Segment 770
PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol
1 Week - - - 00 101 54041 66217
4 Weeks 8743 8331 8474 27 101 57129 856929
13 Weeks 9416 8331 9102 -44 98 61288 3554700
26 Weeks 9416 8331 8775 -08 93 59419 7189758
52 Weeks 10222 8331 9803 -112 79 59272 14521666
YTD 10222 8331 - -132 77 59774 13807695
Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)
8661 8631 8825 8931 9174 039 031
GROWTH RATES 5-Year
Growh Rsup2 of 5-Year Growth
3-Year
Growth
Revenue 381 776 666
Income 2017 811 978
Dividend 1536 947 1016
Capital Spending 697 NA 1052
RampD 000 NA 000
Normalized Inc 1158 NA 979
CHANGES YTD vs
Last YTD
Curr Qtr vs
Qtr 1-Yr ago
Annual vs
Last Annual
Revenue 21 -02 122
Earnings -14 -35 113
EPS 10 -14 151
EPS $ 004 -002 069
SOLVENCY RATIOS
SHORT-TERM SOLVENCY RATIOS
(LIQUIDITY)
Net Working Capital Ratio 271
Current Ratio 13
Quick Ratio (Acid Test) 10
Liquidity Ratio (Cash) 067
Receivables Turnover 215
Average Collection Period 17
Working CapitalEquity 62
Working Capital pS 088
Cash-Flow pS 677
Free Cash-Flow pS 209
24
FINANCIAL STRUCTURE RATIOS
Altmans Z-Score Ratio 485
Financial Leverage Ratio (AssetsEquity) 23
Debt Ratio 564
Total DebtEquity (Gearing Ratio) 087
LT DebtEquity 084
LT DebtCapital Invested 569
LT DebtTotal Liabilities 652
Interest Cover 173
InterestCapital Invested 167
25
People hellip McDonaldrsquos 1 Resource in India
26
McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs
around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in
1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with
McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)
The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive
training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course
(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the
Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University
27
The McDonaldrsquos Promise
QUALITY SERVICE CLEANLINESS amp VALUE
When asked to explain McDonalds success founder Ray Kroc used to say We
take the hamburger business more seriously than anyone else
Kroc was a perfectionist From the day he opened his first restaurant he vowed
to give his customers high quality products served quickly --and with a smile
in a clean and pleasant environment and all at a fair price Quality Service
Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds
business
QUALITY
McDonalds India serves only the highest quality products The attention to food
quality started long before the first restaurant opened McDonalds India has
established close relationships with local suppliers who provide McDonalds
with the highest quality freshest ingredients to make its products
All suppliers adhere to Indian government regulations on food health and
hygiene while continuously maintaining McDonalds own recognized standards
McDonalds has established an extensive cold chain distribution system in
India to ensure that the products which arrive at the restaurant from suppliers
all over India are absolutely fresh In the restaurants products and supplies are
used on a first-in first-out basis to ensure freshness All McDonalds products
are prepared using modern state-of-the-art cooking equipment to ensure quality
and safety
SERVICE
McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos
which sets its restaurants apart from others At McDonalds the customer
always comes first Every employee strives to provide 100 percent customer
satisfaction -- for every customer -- every visit This includes friendly and
attentive service accuracy in order taking and anticipation of customers needs
-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun
and youthful spirit we will proudly serve an exceptional McDonaldrsquos
eating experience that makes all people feel special and makes them smile ndash
every customer every timerdquo
28
CLEANLINESS
McDonalds restaurants provide a clean comfortable environment especially
suited for families McDonalds stringent cleaning standards ensure that all
tables seating highchairs and trays are sanitized several times each hour The
attention to cleanliness extends from the lobby to the kitchen to the sidewalk
and immediate areas outside the restaurant
In addition to urging customers to dispose of their litter properly and offering a
number of trash bins (both inside and outside the restaurants) for their
convenience McDonalds Litter Patrols walk around the restaurants several
times each day picking up litter -- even if it isnt from McDonalds
Restaurant managers walk through the dining areas each hour to ensure that it
is clean and well stocked All restaurants provide a variety of comfortable
seating arrangements to accommodate anyone -- from a single individual to a
large family The environment is warm inviting and well lit
VALUE
McDonalds menu is priced at a value that the largest segment of Indian
consumers can afford McDonalds does not sacrifice quality for value -- rather
McDonalds leverages economies of scale to minimize costs while maximizing
value to customers
McDonalds definition of value is broader than most restaurants of its kind -- it
is more than price Value at McDonalds is the sum of the total McDonalds
experience quality food fast friendly service a clean and pleasant
environment and products priced at very affordable prices for the largest
segment of Indian consumers possible That is value at McDonalds
29
McDonaldrsquos Indiahellip Culturally Sensitive
Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much
that is consistent with other McDonaldrsquos restaurants around the world such as
the quality of the food and the attention to service
The dedication to local cultures is not new for McDonaldrsquos For the past 50
years McDonaldrsquos has opened restaurants in more than 120 distinctly different
countries and cultures With guidance from its local partners McDonaldrsquos is
able to adapt- where necessary-its menu and restaurant operations to
complement existing eating-out options McDonaldrsquos local owners understand
what their customers want perhaps more importantly what is acceptable within
local customs and values
There is much too that is very different- such as the first beef-less and pork-
less menu in the world and special product formulations to cater to Indian
culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos
India says ldquoWe know the Indian culture because we were born in it
inherited its richness and respect it greatly It is the respect for this culture
and the sentiments of many of our customersrsquo that we do not serve any
beef and pork items in our restaurantsrdquo
McDonaldrsquos commitment to its Indian customers is evident even in
development of special sauces that use local spices and chillies The
mayonnaise and all other sauces are egg-less
In India vegetarianism is in many cases more than a lifestyle choice Many
people are vegetarians due to religious reasons and in some cases even the
vegetarian product that has come into contact with a non-vegetarian product is
unacceptable Hence McDonaldrsquos India has also changed its operations to
address the special requirements of our vegetarian customers by having
processes that ensure that a physical separation of veg and non-veg products is
maintained right from farm to the customer Vegetable products are prepared
separately using dedicated equipment and utensils Also in India McDonaldrsquos
uses only vegetable oil as a medium for cooking
30
McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash
lsquoto be driven by the leadership of local ownersrsquo This commitment has translated
into enduring benefits to the businesses at the grass root level in the areas of
introduction of new crops new agricultural practices and food processing methods
and procedures
McDonalds unique cold chain on which the QSR major has spent more than six
years setting up in India has brought about a veritable revolution immensely
benefiting the farmers at one end and enabling customers at retail counters get the
highest quality food products absolutely fresh and at great value
Setting up this extensive cold chain distribution system has involved the transfer of
state-of-the-art food processing technology by McDonalds and its international
suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain
From Field to -2⁰C in 90 Minutes
Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be
grown during the winter months but with McDonalds expertise in the area of
agriculture they are now able to grow this crop through the year
Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room
to remove field heat a large cold room and a refrigerated van for transportation where
the temperature and the relative humidity of the crop is maintained between 1ordm C and
4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room
within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling
to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at
the farms itself ensuring no delay between harvesting pre-cooling packaging and
cold storage
Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd
Flavour and Freshness locked in at - 35degC
Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable
range of products is another important player in this cold chain This includes hi-tech
refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C
This is vital to ensure that the frozen food retains it freshness for a long time and the
cold chain is maintained The frozen product is immediately moved to cold storage
rooms
31
Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India
From Farm to Bulk Cooler in less than 90 Minutes
McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for
quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk
coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -
thus maintaining the cold chain
All leading to the Consumer
McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The
DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity
of the products throughout the entire cold chain
Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C
as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state
All these suppliers share McDonalds commitment and dedication to satisfying
customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently
each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental
effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn
more
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
11
AWARDS
McDonaldrsquos India has received many prestigious awards for its service and
performance including
The lsquoMost Respected Companyrsquo for four consecutive years (2003-2006)
in the Food Services sector by Businessworld
The lsquoMost Preferred Fast Food Outletrsquo 2006 amp 2007 by Awaaz
Consumer Award hosted by CNBC
Star Retailer ndash the lsquoConsumer Way Food Services Retailerrsquo of the
Year 2006 amp 2007 2008 by Franchise India
lsquoRetailer of the Yearrsquo Award for catering services (2004-2006) at the
Images Retail Awards
The lsquoAmity Corporate Excellence Awardrsquo ndashin 2007 amp 2008
The lsquoMost Wanted Brand of the Yearrsquo Award 2003 amp 2004 by
Franchising Holdings India Ltd
The lsquoMost Admired F amp B Retailer of the Year QSRs Foreign
Originrsquo ndash The Golden Spoon Awards by Images Retail
The Company with the Best Corporate Conscience ndash 2008 by Business
amp Economy
lsquoValue for Moneyrsquo brand ndash 2010 by Pitch Magazine
The most trusted family restaurant brand in the country award in
2010 by Readerrsquos Digest
12
Corporate Social Responsibility
Being responsible is at the core of everything that we do at McDonaldstrade It is
a deep-rooted value and a tradition that dates back to our founder Ray Kroc It is also one of our top business priorities
We believe that our continuing success depends on our stakeholders trust in
each and every aspect of our business be it the quality and safety of the food we serve in the way we do our business the way we connect and make the difference in the communities we operate being sensitive to environment and
being sustainable
1 We are committed to doing what is right
2 We are committed to be a good neighbour and partner in the community
3 We are committed to conducting our business ethically and with complete transparency
4 We are committed to treating our entire internal and external stakeholders with respect and dignity
13
McDonaldrsquos International
McDonaldrsquos has over 32000 local restaurants in more than 100 countries
70 percent of our restaurants worldwide are owned and operated by
independent local businessmen and businesswomen
McDonaldrsquos serves nearly 50 million customers each day
McDonaldrsquos first franchised restaurant opened at Des Plaines Illinois in
1955 by the founder Ray Kroc
McDonaldrsquos has its own Hamburger University in Illinois and the first
batch graduated in 1961
12 classes offered at Hamburger University are college accredited
In 1963 McDonaldrsquos sold its one billionth hamburger
McDonaldrsquos is listed on the New York Frankfurt Munich Paris and
Tokyo stock exchanges
McDonaldrsquos aired its first network TV advertisement ldquoMcDonaldrsquos -
Where Quality Starts Fresh Everydayrdquo in 1965
The first McDonaldrsquos Drive-Thru opened in Sierra Vista Arizona in 1975
14
Happy Meals were added to McDonaldrsquos menu in 1979
McDonaldrsquos launched the new worldwide Balanced Active Lifestyles
public awareness campaign in 2005
McDonaldrsquos celebrated its 50th Anniversary on April 15 2005
Business model
McDonalds Corporation earns revenue as an investor in properties
a franchiser of restaurants and an operator of restaurants Approximately 15 of McDonalds restaurants are owned and
operated by McDonalds Corporation directly The remainder are operated by others through a variety of franchise agreements and
joint ventures
The McDonalds Corporations business model is slightly different
from that of most other fast-food chains In addition to ordinary franchise fees and marketing fees which are calculated as
a percentage of sales McDonalds may also collect rent which may also be calculated on the basis of sales
As a condition of many franchise agreements which vary by
contract age country and location the Corporation may own or lease the properties on which McDonalds franchises are located In most if not all cases the franchisee does not own the location of its
restaurants
The United Kingdom and Ireland business model is different than the US in that fewer than 30 of restaurants are franchised with
the majority under the ownership of the company McDonalds trains its franchisees and others at Hamburger Univers ity in Oak
Brook Illino is
In other countries McDonalds restaurants are operated by joint
ventures of McDonalds Corporation and other local entities or governments
15
As a matter of policy McDonalds does not make direct sales of food or materials to franchisees instead organizing the supply of
food and materials to restaurants through approved third party logistics operators
According to Fast Food Nation by Eric Schlosser nearly one in
eight workers in the US have at some time been employed by McDonalds It also states that McDonalds is the largest private
operator of playgrounds in the US as well as the single largest purchaser of beef pork potatoes and apples The selection of
meats McDonalds uses varies with the culture of the host country
MARKETING MIX
The marketing mix of a company consists of the various elements as follows
which form the core of a companyrsquos marketing system and hence helps to
achieve marketing objectives The marketing mix of McDonaldrsquos is as follows-
The McDonald plains its marketing by simple keeping 4Ps in mind
Product
Price
Promotion
Place
Product - McDonaldrsquos places considerable emphasis on developing a menu
which customers want Market research establishes exactly what this is However customersrsquo requirements change over time In order to meet these
changes McDonaldrsquos has introduced new products and phased out old ones and will continue to do so Care is taken not to adversely affect the sales of one choice by introducing a new choice which will cannibalise sales from the
existing one (trade off) McDonaldrsquos knows that items on its menu will vary in popularity Their ability to generate profits will vary at different points in their
cycle In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian
The happy meal for the children is a great seller among others
Price-The customerrsquos perception of value is an important determinant of the price charged Customers draw their own mental picture of what a product is worth A product is more than a physical item it also has psychological
connotations for the customer The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised It is
16
important when deciding on price to be fully aware of the brand and its integrity
In India McDonalds classifies its products into 2 categories namely the branded
affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and
the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price
perceptions
Promotion- The promotions aspect of the marketing mix covers all types of
marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and
in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct
mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that
provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be
supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item
At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart
from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos
Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the
management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities
making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers
17
Other than the main four elements mentioned above there are a few other
elements too in the marketing mix which are as follows-
People -The employees in McDonaldrsquos have a standard uniform and
McDonaldrsquos specially focuses on friendly and prompt service to its customers
from their employees
Process -The food manufacturing process at McDonaldrsquos is completely
transparent ie the whole process is visible to the customers In fact the fast
food joint allows its customers to view and judge the hygienic standards at
McDonaldrsquos by allowing them to enter the area where the process takes place
The customers are invited to check the ingredients used in food
Physical evidence - McDonalds focuses on clean and hygienic interiors of
is outlets and at the same time the interiors are attractive and the fast food joint
maintains a proper decorum at its joints
18
SWOT ANALYSIS
Strengths
McDonaldrsquos holds a very strong brand name worldwide
They have large partnerships with other companies that provide them
with their desired products this increases the goodwill of the company
McDonaldrsquos is one of the most reputed firms who are socially
responsible
Loyal employees amp management amp customer are their biggest strength
19
McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind
while providing food to different countries
Clean environment and play areas for children where they can enjoy their
time
Weakness
The weakness that hits the list of employee turnover rate Every year
many of their employees are fired out of the restaurant
McDonalds mostly advertises products and food items that targets
children
Health conscious people often complain that they do not provide us with
the organic and healthy food This becomes their weakness when they get in the complaints
They also face quality issue at times This affects the business as they are
running the outlet worldwide if one franchise gets affected others also
get a bad name
Opportunities
It can open up online services for their customers so that they can easily
order their desired meals sitting at home
Discounts given on every food item may help them gain more customers
They can go for a joint venture with the retailers they work with
They can introduce healthy hamburgers and healthy drinks for the people who are health conscious
20
In order to be environment friendly they can use packing material which
can be recycled later or material that does not create pollution
Threats
Emerging competition of similar outlets is becoming a problem for McDonalds
Health issue also becomes a problem when it comes to food
As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies
Recession in any country would definitely affect the whole outlet
worldwide
People facing heart problems and obesity accuse McDonalds for not
providing them with the healthy food
They have a threat of local food outlets in different countries
McDonalds is operating in a fully fledged economy where competition is
increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession
McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local
Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government
regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled
Indian businesses to grow by improving their ability to compete in todays international markets
21
Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in
predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first
restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept
has today been adopted by various Indian and International players to deliver quality produce to consumers
For instance Cremica Industries worked with another McDonalds supplier
from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to
McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with
farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water
consumption better seeds amp agricultural management practices which result in greater yields
In some cases these Indian suppliers had the technology - but no market for the
products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk
casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to
restaurants across India
McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations
COMPANYrsquoS FINANCIAL INFORMATION
Company Name McDonalds Corporation
Ticker Symbol MCD
Web Address wwwmcdonaldscom
CEO Mr Donald Thompson
No of Employees 420000
Common Issue Type CS
Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other
22
goods from numerous independent suppliers
Industry Information LEISURE - Restaurants
Price Day Change Bid Ask Open High Low Volume
8718 -002 - - 8743 8743 8676 3658828
Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range
875267 10040 039 527 253 164 35 10222 - 8331
KEY FIGURES (Latest Twelve Months - LTM)
Yesterdays Close 8706 $
PE Ratio - LTM 164
Market Capitalisation 875267 mil
Latest Shares Outstanding 10040 mil
Earnings pS (EPS) 527 $
Dividend pS (DPS) 253 cent
Dividend Yield 35
Dividend Payout Ratio 48
Revenue per Employee 64300 $
Effective Tax Rate 313
Float 10153 mil
Float as of Shares Outstanding 999
Foreign Sales 18478 mil
Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue
910
Research amp Devlopment (RampD) as of Revenue
000
Gross Profit Margin 447
EBITDA Margin 356
Pre-Tax Profit Margin 291
Assets Turnover 08
Return on Assets (ROA) 161
Return on Equity (ROE) 392
Return on Capital Invested (ROCI) 204 Current Ratio 10
Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096
LT DebtTotal Capital 480
Working Capital pS 006 $
Cash pS 217 $
Book-Value pS 1383 $
Balance Sheet (at a glance) in Millions
DIVIDEND INFO
Dividend Declared Date 09202012
Dividend Ex-Date 11282012
Dividend Record Date 12022012
Dividend Pay Date 12162012
Dividend Amount 770
Type of Payment Cash Payment
Dividend Rate 308
Current Dividend Yield 35
5-Y Average Dividend Yield 31
Payout Ratio 480
5-Y Average Payout Ratio 530
Share price performance previous 3 years
Share price performance intraday
23
Tangible Book-Value pS 1110 $
Cash Flow pS 689 $
Free Cash Flow pS 125 $
KEY FIGURES (LTM) Price info PriceBook Ratio 630
PriceTangible Book Ratio 785 PriceCash Flow 126
PriceFree Cash Flow 699
PE as of Industry Group 420
PE as of Sector Segment 770
PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol
1 Week - - - 00 101 54041 66217
4 Weeks 8743 8331 8474 27 101 57129 856929
13 Weeks 9416 8331 9102 -44 98 61288 3554700
26 Weeks 9416 8331 8775 -08 93 59419 7189758
52 Weeks 10222 8331 9803 -112 79 59272 14521666
YTD 10222 8331 - -132 77 59774 13807695
Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)
8661 8631 8825 8931 9174 039 031
GROWTH RATES 5-Year
Growh Rsup2 of 5-Year Growth
3-Year
Growth
Revenue 381 776 666
Income 2017 811 978
Dividend 1536 947 1016
Capital Spending 697 NA 1052
RampD 000 NA 000
Normalized Inc 1158 NA 979
CHANGES YTD vs
Last YTD
Curr Qtr vs
Qtr 1-Yr ago
Annual vs
Last Annual
Revenue 21 -02 122
Earnings -14 -35 113
EPS 10 -14 151
EPS $ 004 -002 069
SOLVENCY RATIOS
SHORT-TERM SOLVENCY RATIOS
(LIQUIDITY)
Net Working Capital Ratio 271
Current Ratio 13
Quick Ratio (Acid Test) 10
Liquidity Ratio (Cash) 067
Receivables Turnover 215
Average Collection Period 17
Working CapitalEquity 62
Working Capital pS 088
Cash-Flow pS 677
Free Cash-Flow pS 209
24
FINANCIAL STRUCTURE RATIOS
Altmans Z-Score Ratio 485
Financial Leverage Ratio (AssetsEquity) 23
Debt Ratio 564
Total DebtEquity (Gearing Ratio) 087
LT DebtEquity 084
LT DebtCapital Invested 569
LT DebtTotal Liabilities 652
Interest Cover 173
InterestCapital Invested 167
25
People hellip McDonaldrsquos 1 Resource in India
26
McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs
around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in
1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with
McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)
The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive
training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course
(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the
Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University
27
The McDonaldrsquos Promise
QUALITY SERVICE CLEANLINESS amp VALUE
When asked to explain McDonalds success founder Ray Kroc used to say We
take the hamburger business more seriously than anyone else
Kroc was a perfectionist From the day he opened his first restaurant he vowed
to give his customers high quality products served quickly --and with a smile
in a clean and pleasant environment and all at a fair price Quality Service
Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds
business
QUALITY
McDonalds India serves only the highest quality products The attention to food
quality started long before the first restaurant opened McDonalds India has
established close relationships with local suppliers who provide McDonalds
with the highest quality freshest ingredients to make its products
All suppliers adhere to Indian government regulations on food health and
hygiene while continuously maintaining McDonalds own recognized standards
McDonalds has established an extensive cold chain distribution system in
India to ensure that the products which arrive at the restaurant from suppliers
all over India are absolutely fresh In the restaurants products and supplies are
used on a first-in first-out basis to ensure freshness All McDonalds products
are prepared using modern state-of-the-art cooking equipment to ensure quality
and safety
SERVICE
McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos
which sets its restaurants apart from others At McDonalds the customer
always comes first Every employee strives to provide 100 percent customer
satisfaction -- for every customer -- every visit This includes friendly and
attentive service accuracy in order taking and anticipation of customers needs
-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun
and youthful spirit we will proudly serve an exceptional McDonaldrsquos
eating experience that makes all people feel special and makes them smile ndash
every customer every timerdquo
28
CLEANLINESS
McDonalds restaurants provide a clean comfortable environment especially
suited for families McDonalds stringent cleaning standards ensure that all
tables seating highchairs and trays are sanitized several times each hour The
attention to cleanliness extends from the lobby to the kitchen to the sidewalk
and immediate areas outside the restaurant
In addition to urging customers to dispose of their litter properly and offering a
number of trash bins (both inside and outside the restaurants) for their
convenience McDonalds Litter Patrols walk around the restaurants several
times each day picking up litter -- even if it isnt from McDonalds
Restaurant managers walk through the dining areas each hour to ensure that it
is clean and well stocked All restaurants provide a variety of comfortable
seating arrangements to accommodate anyone -- from a single individual to a
large family The environment is warm inviting and well lit
VALUE
McDonalds menu is priced at a value that the largest segment of Indian
consumers can afford McDonalds does not sacrifice quality for value -- rather
McDonalds leverages economies of scale to minimize costs while maximizing
value to customers
McDonalds definition of value is broader than most restaurants of its kind -- it
is more than price Value at McDonalds is the sum of the total McDonalds
experience quality food fast friendly service a clean and pleasant
environment and products priced at very affordable prices for the largest
segment of Indian consumers possible That is value at McDonalds
29
McDonaldrsquos Indiahellip Culturally Sensitive
Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much
that is consistent with other McDonaldrsquos restaurants around the world such as
the quality of the food and the attention to service
The dedication to local cultures is not new for McDonaldrsquos For the past 50
years McDonaldrsquos has opened restaurants in more than 120 distinctly different
countries and cultures With guidance from its local partners McDonaldrsquos is
able to adapt- where necessary-its menu and restaurant operations to
complement existing eating-out options McDonaldrsquos local owners understand
what their customers want perhaps more importantly what is acceptable within
local customs and values
There is much too that is very different- such as the first beef-less and pork-
less menu in the world and special product formulations to cater to Indian
culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos
India says ldquoWe know the Indian culture because we were born in it
inherited its richness and respect it greatly It is the respect for this culture
and the sentiments of many of our customersrsquo that we do not serve any
beef and pork items in our restaurantsrdquo
McDonaldrsquos commitment to its Indian customers is evident even in
development of special sauces that use local spices and chillies The
mayonnaise and all other sauces are egg-less
In India vegetarianism is in many cases more than a lifestyle choice Many
people are vegetarians due to religious reasons and in some cases even the
vegetarian product that has come into contact with a non-vegetarian product is
unacceptable Hence McDonaldrsquos India has also changed its operations to
address the special requirements of our vegetarian customers by having
processes that ensure that a physical separation of veg and non-veg products is
maintained right from farm to the customer Vegetable products are prepared
separately using dedicated equipment and utensils Also in India McDonaldrsquos
uses only vegetable oil as a medium for cooking
30
McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash
lsquoto be driven by the leadership of local ownersrsquo This commitment has translated
into enduring benefits to the businesses at the grass root level in the areas of
introduction of new crops new agricultural practices and food processing methods
and procedures
McDonalds unique cold chain on which the QSR major has spent more than six
years setting up in India has brought about a veritable revolution immensely
benefiting the farmers at one end and enabling customers at retail counters get the
highest quality food products absolutely fresh and at great value
Setting up this extensive cold chain distribution system has involved the transfer of
state-of-the-art food processing technology by McDonalds and its international
suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain
From Field to -2⁰C in 90 Minutes
Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be
grown during the winter months but with McDonalds expertise in the area of
agriculture they are now able to grow this crop through the year
Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room
to remove field heat a large cold room and a refrigerated van for transportation where
the temperature and the relative humidity of the crop is maintained between 1ordm C and
4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room
within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling
to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at
the farms itself ensuring no delay between harvesting pre-cooling packaging and
cold storage
Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd
Flavour and Freshness locked in at - 35degC
Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable
range of products is another important player in this cold chain This includes hi-tech
refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C
This is vital to ensure that the frozen food retains it freshness for a long time and the
cold chain is maintained The frozen product is immediately moved to cold storage
rooms
31
Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India
From Farm to Bulk Cooler in less than 90 Minutes
McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for
quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk
coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -
thus maintaining the cold chain
All leading to the Consumer
McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The
DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity
of the products throughout the entire cold chain
Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C
as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state
All these suppliers share McDonalds commitment and dedication to satisfying
customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently
each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental
effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn
more
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
12
Corporate Social Responsibility
Being responsible is at the core of everything that we do at McDonaldstrade It is
a deep-rooted value and a tradition that dates back to our founder Ray Kroc It is also one of our top business priorities
We believe that our continuing success depends on our stakeholders trust in
each and every aspect of our business be it the quality and safety of the food we serve in the way we do our business the way we connect and make the difference in the communities we operate being sensitive to environment and
being sustainable
1 We are committed to doing what is right
2 We are committed to be a good neighbour and partner in the community
3 We are committed to conducting our business ethically and with complete transparency
4 We are committed to treating our entire internal and external stakeholders with respect and dignity
13
McDonaldrsquos International
McDonaldrsquos has over 32000 local restaurants in more than 100 countries
70 percent of our restaurants worldwide are owned and operated by
independent local businessmen and businesswomen
McDonaldrsquos serves nearly 50 million customers each day
McDonaldrsquos first franchised restaurant opened at Des Plaines Illinois in
1955 by the founder Ray Kroc
McDonaldrsquos has its own Hamburger University in Illinois and the first
batch graduated in 1961
12 classes offered at Hamburger University are college accredited
In 1963 McDonaldrsquos sold its one billionth hamburger
McDonaldrsquos is listed on the New York Frankfurt Munich Paris and
Tokyo stock exchanges
McDonaldrsquos aired its first network TV advertisement ldquoMcDonaldrsquos -
Where Quality Starts Fresh Everydayrdquo in 1965
The first McDonaldrsquos Drive-Thru opened in Sierra Vista Arizona in 1975
14
Happy Meals were added to McDonaldrsquos menu in 1979
McDonaldrsquos launched the new worldwide Balanced Active Lifestyles
public awareness campaign in 2005
McDonaldrsquos celebrated its 50th Anniversary on April 15 2005
Business model
McDonalds Corporation earns revenue as an investor in properties
a franchiser of restaurants and an operator of restaurants Approximately 15 of McDonalds restaurants are owned and
operated by McDonalds Corporation directly The remainder are operated by others through a variety of franchise agreements and
joint ventures
The McDonalds Corporations business model is slightly different
from that of most other fast-food chains In addition to ordinary franchise fees and marketing fees which are calculated as
a percentage of sales McDonalds may also collect rent which may also be calculated on the basis of sales
As a condition of many franchise agreements which vary by
contract age country and location the Corporation may own or lease the properties on which McDonalds franchises are located In most if not all cases the franchisee does not own the location of its
restaurants
The United Kingdom and Ireland business model is different than the US in that fewer than 30 of restaurants are franchised with
the majority under the ownership of the company McDonalds trains its franchisees and others at Hamburger Univers ity in Oak
Brook Illino is
In other countries McDonalds restaurants are operated by joint
ventures of McDonalds Corporation and other local entities or governments
15
As a matter of policy McDonalds does not make direct sales of food or materials to franchisees instead organizing the supply of
food and materials to restaurants through approved third party logistics operators
According to Fast Food Nation by Eric Schlosser nearly one in
eight workers in the US have at some time been employed by McDonalds It also states that McDonalds is the largest private
operator of playgrounds in the US as well as the single largest purchaser of beef pork potatoes and apples The selection of
meats McDonalds uses varies with the culture of the host country
MARKETING MIX
The marketing mix of a company consists of the various elements as follows
which form the core of a companyrsquos marketing system and hence helps to
achieve marketing objectives The marketing mix of McDonaldrsquos is as follows-
The McDonald plains its marketing by simple keeping 4Ps in mind
Product
Price
Promotion
Place
Product - McDonaldrsquos places considerable emphasis on developing a menu
which customers want Market research establishes exactly what this is However customersrsquo requirements change over time In order to meet these
changes McDonaldrsquos has introduced new products and phased out old ones and will continue to do so Care is taken not to adversely affect the sales of one choice by introducing a new choice which will cannibalise sales from the
existing one (trade off) McDonaldrsquos knows that items on its menu will vary in popularity Their ability to generate profits will vary at different points in their
cycle In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian
The happy meal for the children is a great seller among others
Price-The customerrsquos perception of value is an important determinant of the price charged Customers draw their own mental picture of what a product is worth A product is more than a physical item it also has psychological
connotations for the customer The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised It is
16
important when deciding on price to be fully aware of the brand and its integrity
In India McDonalds classifies its products into 2 categories namely the branded
affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and
the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price
perceptions
Promotion- The promotions aspect of the marketing mix covers all types of
marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and
in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct
mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that
provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be
supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item
At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart
from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos
Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the
management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities
making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers
17
Other than the main four elements mentioned above there are a few other
elements too in the marketing mix which are as follows-
People -The employees in McDonaldrsquos have a standard uniform and
McDonaldrsquos specially focuses on friendly and prompt service to its customers
from their employees
Process -The food manufacturing process at McDonaldrsquos is completely
transparent ie the whole process is visible to the customers In fact the fast
food joint allows its customers to view and judge the hygienic standards at
McDonaldrsquos by allowing them to enter the area where the process takes place
The customers are invited to check the ingredients used in food
Physical evidence - McDonalds focuses on clean and hygienic interiors of
is outlets and at the same time the interiors are attractive and the fast food joint
maintains a proper decorum at its joints
18
SWOT ANALYSIS
Strengths
McDonaldrsquos holds a very strong brand name worldwide
They have large partnerships with other companies that provide them
with their desired products this increases the goodwill of the company
McDonaldrsquos is one of the most reputed firms who are socially
responsible
Loyal employees amp management amp customer are their biggest strength
19
McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind
while providing food to different countries
Clean environment and play areas for children where they can enjoy their
time
Weakness
The weakness that hits the list of employee turnover rate Every year
many of their employees are fired out of the restaurant
McDonalds mostly advertises products and food items that targets
children
Health conscious people often complain that they do not provide us with
the organic and healthy food This becomes their weakness when they get in the complaints
They also face quality issue at times This affects the business as they are
running the outlet worldwide if one franchise gets affected others also
get a bad name
Opportunities
It can open up online services for their customers so that they can easily
order their desired meals sitting at home
Discounts given on every food item may help them gain more customers
They can go for a joint venture with the retailers they work with
They can introduce healthy hamburgers and healthy drinks for the people who are health conscious
20
In order to be environment friendly they can use packing material which
can be recycled later or material that does not create pollution
Threats
Emerging competition of similar outlets is becoming a problem for McDonalds
Health issue also becomes a problem when it comes to food
As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies
Recession in any country would definitely affect the whole outlet
worldwide
People facing heart problems and obesity accuse McDonalds for not
providing them with the healthy food
They have a threat of local food outlets in different countries
McDonalds is operating in a fully fledged economy where competition is
increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession
McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local
Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government
regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled
Indian businesses to grow by improving their ability to compete in todays international markets
21
Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in
predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first
restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept
has today been adopted by various Indian and International players to deliver quality produce to consumers
For instance Cremica Industries worked with another McDonalds supplier
from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to
McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with
farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water
consumption better seeds amp agricultural management practices which result in greater yields
In some cases these Indian suppliers had the technology - but no market for the
products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk
casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to
restaurants across India
McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations
COMPANYrsquoS FINANCIAL INFORMATION
Company Name McDonalds Corporation
Ticker Symbol MCD
Web Address wwwmcdonaldscom
CEO Mr Donald Thompson
No of Employees 420000
Common Issue Type CS
Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other
22
goods from numerous independent suppliers
Industry Information LEISURE - Restaurants
Price Day Change Bid Ask Open High Low Volume
8718 -002 - - 8743 8743 8676 3658828
Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range
875267 10040 039 527 253 164 35 10222 - 8331
KEY FIGURES (Latest Twelve Months - LTM)
Yesterdays Close 8706 $
PE Ratio - LTM 164
Market Capitalisation 875267 mil
Latest Shares Outstanding 10040 mil
Earnings pS (EPS) 527 $
Dividend pS (DPS) 253 cent
Dividend Yield 35
Dividend Payout Ratio 48
Revenue per Employee 64300 $
Effective Tax Rate 313
Float 10153 mil
Float as of Shares Outstanding 999
Foreign Sales 18478 mil
Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue
910
Research amp Devlopment (RampD) as of Revenue
000
Gross Profit Margin 447
EBITDA Margin 356
Pre-Tax Profit Margin 291
Assets Turnover 08
Return on Assets (ROA) 161
Return on Equity (ROE) 392
Return on Capital Invested (ROCI) 204 Current Ratio 10
Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096
LT DebtTotal Capital 480
Working Capital pS 006 $
Cash pS 217 $
Book-Value pS 1383 $
Balance Sheet (at a glance) in Millions
DIVIDEND INFO
Dividend Declared Date 09202012
Dividend Ex-Date 11282012
Dividend Record Date 12022012
Dividend Pay Date 12162012
Dividend Amount 770
Type of Payment Cash Payment
Dividend Rate 308
Current Dividend Yield 35
5-Y Average Dividend Yield 31
Payout Ratio 480
5-Y Average Payout Ratio 530
Share price performance previous 3 years
Share price performance intraday
23
Tangible Book-Value pS 1110 $
Cash Flow pS 689 $
Free Cash Flow pS 125 $
KEY FIGURES (LTM) Price info PriceBook Ratio 630
PriceTangible Book Ratio 785 PriceCash Flow 126
PriceFree Cash Flow 699
PE as of Industry Group 420
PE as of Sector Segment 770
PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol
1 Week - - - 00 101 54041 66217
4 Weeks 8743 8331 8474 27 101 57129 856929
13 Weeks 9416 8331 9102 -44 98 61288 3554700
26 Weeks 9416 8331 8775 -08 93 59419 7189758
52 Weeks 10222 8331 9803 -112 79 59272 14521666
YTD 10222 8331 - -132 77 59774 13807695
Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)
8661 8631 8825 8931 9174 039 031
GROWTH RATES 5-Year
Growh Rsup2 of 5-Year Growth
3-Year
Growth
Revenue 381 776 666
Income 2017 811 978
Dividend 1536 947 1016
Capital Spending 697 NA 1052
RampD 000 NA 000
Normalized Inc 1158 NA 979
CHANGES YTD vs
Last YTD
Curr Qtr vs
Qtr 1-Yr ago
Annual vs
Last Annual
Revenue 21 -02 122
Earnings -14 -35 113
EPS 10 -14 151
EPS $ 004 -002 069
SOLVENCY RATIOS
SHORT-TERM SOLVENCY RATIOS
(LIQUIDITY)
Net Working Capital Ratio 271
Current Ratio 13
Quick Ratio (Acid Test) 10
Liquidity Ratio (Cash) 067
Receivables Turnover 215
Average Collection Period 17
Working CapitalEquity 62
Working Capital pS 088
Cash-Flow pS 677
Free Cash-Flow pS 209
24
FINANCIAL STRUCTURE RATIOS
Altmans Z-Score Ratio 485
Financial Leverage Ratio (AssetsEquity) 23
Debt Ratio 564
Total DebtEquity (Gearing Ratio) 087
LT DebtEquity 084
LT DebtCapital Invested 569
LT DebtTotal Liabilities 652
Interest Cover 173
InterestCapital Invested 167
25
People hellip McDonaldrsquos 1 Resource in India
26
McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs
around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in
1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with
McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)
The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive
training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course
(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the
Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University
27
The McDonaldrsquos Promise
QUALITY SERVICE CLEANLINESS amp VALUE
When asked to explain McDonalds success founder Ray Kroc used to say We
take the hamburger business more seriously than anyone else
Kroc was a perfectionist From the day he opened his first restaurant he vowed
to give his customers high quality products served quickly --and with a smile
in a clean and pleasant environment and all at a fair price Quality Service
Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds
business
QUALITY
McDonalds India serves only the highest quality products The attention to food
quality started long before the first restaurant opened McDonalds India has
established close relationships with local suppliers who provide McDonalds
with the highest quality freshest ingredients to make its products
All suppliers adhere to Indian government regulations on food health and
hygiene while continuously maintaining McDonalds own recognized standards
McDonalds has established an extensive cold chain distribution system in
India to ensure that the products which arrive at the restaurant from suppliers
all over India are absolutely fresh In the restaurants products and supplies are
used on a first-in first-out basis to ensure freshness All McDonalds products
are prepared using modern state-of-the-art cooking equipment to ensure quality
and safety
SERVICE
McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos
which sets its restaurants apart from others At McDonalds the customer
always comes first Every employee strives to provide 100 percent customer
satisfaction -- for every customer -- every visit This includes friendly and
attentive service accuracy in order taking and anticipation of customers needs
-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun
and youthful spirit we will proudly serve an exceptional McDonaldrsquos
eating experience that makes all people feel special and makes them smile ndash
every customer every timerdquo
28
CLEANLINESS
McDonalds restaurants provide a clean comfortable environment especially
suited for families McDonalds stringent cleaning standards ensure that all
tables seating highchairs and trays are sanitized several times each hour The
attention to cleanliness extends from the lobby to the kitchen to the sidewalk
and immediate areas outside the restaurant
In addition to urging customers to dispose of their litter properly and offering a
number of trash bins (both inside and outside the restaurants) for their
convenience McDonalds Litter Patrols walk around the restaurants several
times each day picking up litter -- even if it isnt from McDonalds
Restaurant managers walk through the dining areas each hour to ensure that it
is clean and well stocked All restaurants provide a variety of comfortable
seating arrangements to accommodate anyone -- from a single individual to a
large family The environment is warm inviting and well lit
VALUE
McDonalds menu is priced at a value that the largest segment of Indian
consumers can afford McDonalds does not sacrifice quality for value -- rather
McDonalds leverages economies of scale to minimize costs while maximizing
value to customers
McDonalds definition of value is broader than most restaurants of its kind -- it
is more than price Value at McDonalds is the sum of the total McDonalds
experience quality food fast friendly service a clean and pleasant
environment and products priced at very affordable prices for the largest
segment of Indian consumers possible That is value at McDonalds
29
McDonaldrsquos Indiahellip Culturally Sensitive
Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much
that is consistent with other McDonaldrsquos restaurants around the world such as
the quality of the food and the attention to service
The dedication to local cultures is not new for McDonaldrsquos For the past 50
years McDonaldrsquos has opened restaurants in more than 120 distinctly different
countries and cultures With guidance from its local partners McDonaldrsquos is
able to adapt- where necessary-its menu and restaurant operations to
complement existing eating-out options McDonaldrsquos local owners understand
what their customers want perhaps more importantly what is acceptable within
local customs and values
There is much too that is very different- such as the first beef-less and pork-
less menu in the world and special product formulations to cater to Indian
culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos
India says ldquoWe know the Indian culture because we were born in it
inherited its richness and respect it greatly It is the respect for this culture
and the sentiments of many of our customersrsquo that we do not serve any
beef and pork items in our restaurantsrdquo
McDonaldrsquos commitment to its Indian customers is evident even in
development of special sauces that use local spices and chillies The
mayonnaise and all other sauces are egg-less
In India vegetarianism is in many cases more than a lifestyle choice Many
people are vegetarians due to religious reasons and in some cases even the
vegetarian product that has come into contact with a non-vegetarian product is
unacceptable Hence McDonaldrsquos India has also changed its operations to
address the special requirements of our vegetarian customers by having
processes that ensure that a physical separation of veg and non-veg products is
maintained right from farm to the customer Vegetable products are prepared
separately using dedicated equipment and utensils Also in India McDonaldrsquos
uses only vegetable oil as a medium for cooking
30
McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash
lsquoto be driven by the leadership of local ownersrsquo This commitment has translated
into enduring benefits to the businesses at the grass root level in the areas of
introduction of new crops new agricultural practices and food processing methods
and procedures
McDonalds unique cold chain on which the QSR major has spent more than six
years setting up in India has brought about a veritable revolution immensely
benefiting the farmers at one end and enabling customers at retail counters get the
highest quality food products absolutely fresh and at great value
Setting up this extensive cold chain distribution system has involved the transfer of
state-of-the-art food processing technology by McDonalds and its international
suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain
From Field to -2⁰C in 90 Minutes
Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be
grown during the winter months but with McDonalds expertise in the area of
agriculture they are now able to grow this crop through the year
Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room
to remove field heat a large cold room and a refrigerated van for transportation where
the temperature and the relative humidity of the crop is maintained between 1ordm C and
4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room
within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling
to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at
the farms itself ensuring no delay between harvesting pre-cooling packaging and
cold storage
Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd
Flavour and Freshness locked in at - 35degC
Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable
range of products is another important player in this cold chain This includes hi-tech
refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C
This is vital to ensure that the frozen food retains it freshness for a long time and the
cold chain is maintained The frozen product is immediately moved to cold storage
rooms
31
Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India
From Farm to Bulk Cooler in less than 90 Minutes
McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for
quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk
coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -
thus maintaining the cold chain
All leading to the Consumer
McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The
DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity
of the products throughout the entire cold chain
Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C
as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state
All these suppliers share McDonalds commitment and dedication to satisfying
customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently
each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental
effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn
more
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
13
McDonaldrsquos International
McDonaldrsquos has over 32000 local restaurants in more than 100 countries
70 percent of our restaurants worldwide are owned and operated by
independent local businessmen and businesswomen
McDonaldrsquos serves nearly 50 million customers each day
McDonaldrsquos first franchised restaurant opened at Des Plaines Illinois in
1955 by the founder Ray Kroc
McDonaldrsquos has its own Hamburger University in Illinois and the first
batch graduated in 1961
12 classes offered at Hamburger University are college accredited
In 1963 McDonaldrsquos sold its one billionth hamburger
McDonaldrsquos is listed on the New York Frankfurt Munich Paris and
Tokyo stock exchanges
McDonaldrsquos aired its first network TV advertisement ldquoMcDonaldrsquos -
Where Quality Starts Fresh Everydayrdquo in 1965
The first McDonaldrsquos Drive-Thru opened in Sierra Vista Arizona in 1975
14
Happy Meals were added to McDonaldrsquos menu in 1979
McDonaldrsquos launched the new worldwide Balanced Active Lifestyles
public awareness campaign in 2005
McDonaldrsquos celebrated its 50th Anniversary on April 15 2005
Business model
McDonalds Corporation earns revenue as an investor in properties
a franchiser of restaurants and an operator of restaurants Approximately 15 of McDonalds restaurants are owned and
operated by McDonalds Corporation directly The remainder are operated by others through a variety of franchise agreements and
joint ventures
The McDonalds Corporations business model is slightly different
from that of most other fast-food chains In addition to ordinary franchise fees and marketing fees which are calculated as
a percentage of sales McDonalds may also collect rent which may also be calculated on the basis of sales
As a condition of many franchise agreements which vary by
contract age country and location the Corporation may own or lease the properties on which McDonalds franchises are located In most if not all cases the franchisee does not own the location of its
restaurants
The United Kingdom and Ireland business model is different than the US in that fewer than 30 of restaurants are franchised with
the majority under the ownership of the company McDonalds trains its franchisees and others at Hamburger Univers ity in Oak
Brook Illino is
In other countries McDonalds restaurants are operated by joint
ventures of McDonalds Corporation and other local entities or governments
15
As a matter of policy McDonalds does not make direct sales of food or materials to franchisees instead organizing the supply of
food and materials to restaurants through approved third party logistics operators
According to Fast Food Nation by Eric Schlosser nearly one in
eight workers in the US have at some time been employed by McDonalds It also states that McDonalds is the largest private
operator of playgrounds in the US as well as the single largest purchaser of beef pork potatoes and apples The selection of
meats McDonalds uses varies with the culture of the host country
MARKETING MIX
The marketing mix of a company consists of the various elements as follows
which form the core of a companyrsquos marketing system and hence helps to
achieve marketing objectives The marketing mix of McDonaldrsquos is as follows-
The McDonald plains its marketing by simple keeping 4Ps in mind
Product
Price
Promotion
Place
Product - McDonaldrsquos places considerable emphasis on developing a menu
which customers want Market research establishes exactly what this is However customersrsquo requirements change over time In order to meet these
changes McDonaldrsquos has introduced new products and phased out old ones and will continue to do so Care is taken not to adversely affect the sales of one choice by introducing a new choice which will cannibalise sales from the
existing one (trade off) McDonaldrsquos knows that items on its menu will vary in popularity Their ability to generate profits will vary at different points in their
cycle In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian
The happy meal for the children is a great seller among others
Price-The customerrsquos perception of value is an important determinant of the price charged Customers draw their own mental picture of what a product is worth A product is more than a physical item it also has psychological
connotations for the customer The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised It is
16
important when deciding on price to be fully aware of the brand and its integrity
In India McDonalds classifies its products into 2 categories namely the branded
affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and
the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price
perceptions
Promotion- The promotions aspect of the marketing mix covers all types of
marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and
in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct
mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that
provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be
supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item
At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart
from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos
Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the
management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities
making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers
17
Other than the main four elements mentioned above there are a few other
elements too in the marketing mix which are as follows-
People -The employees in McDonaldrsquos have a standard uniform and
McDonaldrsquos specially focuses on friendly and prompt service to its customers
from their employees
Process -The food manufacturing process at McDonaldrsquos is completely
transparent ie the whole process is visible to the customers In fact the fast
food joint allows its customers to view and judge the hygienic standards at
McDonaldrsquos by allowing them to enter the area where the process takes place
The customers are invited to check the ingredients used in food
Physical evidence - McDonalds focuses on clean and hygienic interiors of
is outlets and at the same time the interiors are attractive and the fast food joint
maintains a proper decorum at its joints
18
SWOT ANALYSIS
Strengths
McDonaldrsquos holds a very strong brand name worldwide
They have large partnerships with other companies that provide them
with their desired products this increases the goodwill of the company
McDonaldrsquos is one of the most reputed firms who are socially
responsible
Loyal employees amp management amp customer are their biggest strength
19
McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind
while providing food to different countries
Clean environment and play areas for children where they can enjoy their
time
Weakness
The weakness that hits the list of employee turnover rate Every year
many of their employees are fired out of the restaurant
McDonalds mostly advertises products and food items that targets
children
Health conscious people often complain that they do not provide us with
the organic and healthy food This becomes their weakness when they get in the complaints
They also face quality issue at times This affects the business as they are
running the outlet worldwide if one franchise gets affected others also
get a bad name
Opportunities
It can open up online services for their customers so that they can easily
order their desired meals sitting at home
Discounts given on every food item may help them gain more customers
They can go for a joint venture with the retailers they work with
They can introduce healthy hamburgers and healthy drinks for the people who are health conscious
20
In order to be environment friendly they can use packing material which
can be recycled later or material that does not create pollution
Threats
Emerging competition of similar outlets is becoming a problem for McDonalds
Health issue also becomes a problem when it comes to food
As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies
Recession in any country would definitely affect the whole outlet
worldwide
People facing heart problems and obesity accuse McDonalds for not
providing them with the healthy food
They have a threat of local food outlets in different countries
McDonalds is operating in a fully fledged economy where competition is
increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession
McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local
Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government
regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled
Indian businesses to grow by improving their ability to compete in todays international markets
21
Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in
predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first
restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept
has today been adopted by various Indian and International players to deliver quality produce to consumers
For instance Cremica Industries worked with another McDonalds supplier
from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to
McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with
farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water
consumption better seeds amp agricultural management practices which result in greater yields
In some cases these Indian suppliers had the technology - but no market for the
products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk
casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to
restaurants across India
McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations
COMPANYrsquoS FINANCIAL INFORMATION
Company Name McDonalds Corporation
Ticker Symbol MCD
Web Address wwwmcdonaldscom
CEO Mr Donald Thompson
No of Employees 420000
Common Issue Type CS
Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other
22
goods from numerous independent suppliers
Industry Information LEISURE - Restaurants
Price Day Change Bid Ask Open High Low Volume
8718 -002 - - 8743 8743 8676 3658828
Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range
875267 10040 039 527 253 164 35 10222 - 8331
KEY FIGURES (Latest Twelve Months - LTM)
Yesterdays Close 8706 $
PE Ratio - LTM 164
Market Capitalisation 875267 mil
Latest Shares Outstanding 10040 mil
Earnings pS (EPS) 527 $
Dividend pS (DPS) 253 cent
Dividend Yield 35
Dividend Payout Ratio 48
Revenue per Employee 64300 $
Effective Tax Rate 313
Float 10153 mil
Float as of Shares Outstanding 999
Foreign Sales 18478 mil
Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue
910
Research amp Devlopment (RampD) as of Revenue
000
Gross Profit Margin 447
EBITDA Margin 356
Pre-Tax Profit Margin 291
Assets Turnover 08
Return on Assets (ROA) 161
Return on Equity (ROE) 392
Return on Capital Invested (ROCI) 204 Current Ratio 10
Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096
LT DebtTotal Capital 480
Working Capital pS 006 $
Cash pS 217 $
Book-Value pS 1383 $
Balance Sheet (at a glance) in Millions
DIVIDEND INFO
Dividend Declared Date 09202012
Dividend Ex-Date 11282012
Dividend Record Date 12022012
Dividend Pay Date 12162012
Dividend Amount 770
Type of Payment Cash Payment
Dividend Rate 308
Current Dividend Yield 35
5-Y Average Dividend Yield 31
Payout Ratio 480
5-Y Average Payout Ratio 530
Share price performance previous 3 years
Share price performance intraday
23
Tangible Book-Value pS 1110 $
Cash Flow pS 689 $
Free Cash Flow pS 125 $
KEY FIGURES (LTM) Price info PriceBook Ratio 630
PriceTangible Book Ratio 785 PriceCash Flow 126
PriceFree Cash Flow 699
PE as of Industry Group 420
PE as of Sector Segment 770
PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol
1 Week - - - 00 101 54041 66217
4 Weeks 8743 8331 8474 27 101 57129 856929
13 Weeks 9416 8331 9102 -44 98 61288 3554700
26 Weeks 9416 8331 8775 -08 93 59419 7189758
52 Weeks 10222 8331 9803 -112 79 59272 14521666
YTD 10222 8331 - -132 77 59774 13807695
Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)
8661 8631 8825 8931 9174 039 031
GROWTH RATES 5-Year
Growh Rsup2 of 5-Year Growth
3-Year
Growth
Revenue 381 776 666
Income 2017 811 978
Dividend 1536 947 1016
Capital Spending 697 NA 1052
RampD 000 NA 000
Normalized Inc 1158 NA 979
CHANGES YTD vs
Last YTD
Curr Qtr vs
Qtr 1-Yr ago
Annual vs
Last Annual
Revenue 21 -02 122
Earnings -14 -35 113
EPS 10 -14 151
EPS $ 004 -002 069
SOLVENCY RATIOS
SHORT-TERM SOLVENCY RATIOS
(LIQUIDITY)
Net Working Capital Ratio 271
Current Ratio 13
Quick Ratio (Acid Test) 10
Liquidity Ratio (Cash) 067
Receivables Turnover 215
Average Collection Period 17
Working CapitalEquity 62
Working Capital pS 088
Cash-Flow pS 677
Free Cash-Flow pS 209
24
FINANCIAL STRUCTURE RATIOS
Altmans Z-Score Ratio 485
Financial Leverage Ratio (AssetsEquity) 23
Debt Ratio 564
Total DebtEquity (Gearing Ratio) 087
LT DebtEquity 084
LT DebtCapital Invested 569
LT DebtTotal Liabilities 652
Interest Cover 173
InterestCapital Invested 167
25
People hellip McDonaldrsquos 1 Resource in India
26
McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs
around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in
1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with
McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)
The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive
training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course
(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the
Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University
27
The McDonaldrsquos Promise
QUALITY SERVICE CLEANLINESS amp VALUE
When asked to explain McDonalds success founder Ray Kroc used to say We
take the hamburger business more seriously than anyone else
Kroc was a perfectionist From the day he opened his first restaurant he vowed
to give his customers high quality products served quickly --and with a smile
in a clean and pleasant environment and all at a fair price Quality Service
Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds
business
QUALITY
McDonalds India serves only the highest quality products The attention to food
quality started long before the first restaurant opened McDonalds India has
established close relationships with local suppliers who provide McDonalds
with the highest quality freshest ingredients to make its products
All suppliers adhere to Indian government regulations on food health and
hygiene while continuously maintaining McDonalds own recognized standards
McDonalds has established an extensive cold chain distribution system in
India to ensure that the products which arrive at the restaurant from suppliers
all over India are absolutely fresh In the restaurants products and supplies are
used on a first-in first-out basis to ensure freshness All McDonalds products
are prepared using modern state-of-the-art cooking equipment to ensure quality
and safety
SERVICE
McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos
which sets its restaurants apart from others At McDonalds the customer
always comes first Every employee strives to provide 100 percent customer
satisfaction -- for every customer -- every visit This includes friendly and
attentive service accuracy in order taking and anticipation of customers needs
-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun
and youthful spirit we will proudly serve an exceptional McDonaldrsquos
eating experience that makes all people feel special and makes them smile ndash
every customer every timerdquo
28
CLEANLINESS
McDonalds restaurants provide a clean comfortable environment especially
suited for families McDonalds stringent cleaning standards ensure that all
tables seating highchairs and trays are sanitized several times each hour The
attention to cleanliness extends from the lobby to the kitchen to the sidewalk
and immediate areas outside the restaurant
In addition to urging customers to dispose of their litter properly and offering a
number of trash bins (both inside and outside the restaurants) for their
convenience McDonalds Litter Patrols walk around the restaurants several
times each day picking up litter -- even if it isnt from McDonalds
Restaurant managers walk through the dining areas each hour to ensure that it
is clean and well stocked All restaurants provide a variety of comfortable
seating arrangements to accommodate anyone -- from a single individual to a
large family The environment is warm inviting and well lit
VALUE
McDonalds menu is priced at a value that the largest segment of Indian
consumers can afford McDonalds does not sacrifice quality for value -- rather
McDonalds leverages economies of scale to minimize costs while maximizing
value to customers
McDonalds definition of value is broader than most restaurants of its kind -- it
is more than price Value at McDonalds is the sum of the total McDonalds
experience quality food fast friendly service a clean and pleasant
environment and products priced at very affordable prices for the largest
segment of Indian consumers possible That is value at McDonalds
29
McDonaldrsquos Indiahellip Culturally Sensitive
Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much
that is consistent with other McDonaldrsquos restaurants around the world such as
the quality of the food and the attention to service
The dedication to local cultures is not new for McDonaldrsquos For the past 50
years McDonaldrsquos has opened restaurants in more than 120 distinctly different
countries and cultures With guidance from its local partners McDonaldrsquos is
able to adapt- where necessary-its menu and restaurant operations to
complement existing eating-out options McDonaldrsquos local owners understand
what their customers want perhaps more importantly what is acceptable within
local customs and values
There is much too that is very different- such as the first beef-less and pork-
less menu in the world and special product formulations to cater to Indian
culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos
India says ldquoWe know the Indian culture because we were born in it
inherited its richness and respect it greatly It is the respect for this culture
and the sentiments of many of our customersrsquo that we do not serve any
beef and pork items in our restaurantsrdquo
McDonaldrsquos commitment to its Indian customers is evident even in
development of special sauces that use local spices and chillies The
mayonnaise and all other sauces are egg-less
In India vegetarianism is in many cases more than a lifestyle choice Many
people are vegetarians due to religious reasons and in some cases even the
vegetarian product that has come into contact with a non-vegetarian product is
unacceptable Hence McDonaldrsquos India has also changed its operations to
address the special requirements of our vegetarian customers by having
processes that ensure that a physical separation of veg and non-veg products is
maintained right from farm to the customer Vegetable products are prepared
separately using dedicated equipment and utensils Also in India McDonaldrsquos
uses only vegetable oil as a medium for cooking
30
McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash
lsquoto be driven by the leadership of local ownersrsquo This commitment has translated
into enduring benefits to the businesses at the grass root level in the areas of
introduction of new crops new agricultural practices and food processing methods
and procedures
McDonalds unique cold chain on which the QSR major has spent more than six
years setting up in India has brought about a veritable revolution immensely
benefiting the farmers at one end and enabling customers at retail counters get the
highest quality food products absolutely fresh and at great value
Setting up this extensive cold chain distribution system has involved the transfer of
state-of-the-art food processing technology by McDonalds and its international
suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain
From Field to -2⁰C in 90 Minutes
Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be
grown during the winter months but with McDonalds expertise in the area of
agriculture they are now able to grow this crop through the year
Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room
to remove field heat a large cold room and a refrigerated van for transportation where
the temperature and the relative humidity of the crop is maintained between 1ordm C and
4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room
within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling
to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at
the farms itself ensuring no delay between harvesting pre-cooling packaging and
cold storage
Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd
Flavour and Freshness locked in at - 35degC
Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable
range of products is another important player in this cold chain This includes hi-tech
refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C
This is vital to ensure that the frozen food retains it freshness for a long time and the
cold chain is maintained The frozen product is immediately moved to cold storage
rooms
31
Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India
From Farm to Bulk Cooler in less than 90 Minutes
McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for
quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk
coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -
thus maintaining the cold chain
All leading to the Consumer
McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The
DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity
of the products throughout the entire cold chain
Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C
as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state
All these suppliers share McDonalds commitment and dedication to satisfying
customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently
each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental
effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn
more
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
14
Happy Meals were added to McDonaldrsquos menu in 1979
McDonaldrsquos launched the new worldwide Balanced Active Lifestyles
public awareness campaign in 2005
McDonaldrsquos celebrated its 50th Anniversary on April 15 2005
Business model
McDonalds Corporation earns revenue as an investor in properties
a franchiser of restaurants and an operator of restaurants Approximately 15 of McDonalds restaurants are owned and
operated by McDonalds Corporation directly The remainder are operated by others through a variety of franchise agreements and
joint ventures
The McDonalds Corporations business model is slightly different
from that of most other fast-food chains In addition to ordinary franchise fees and marketing fees which are calculated as
a percentage of sales McDonalds may also collect rent which may also be calculated on the basis of sales
As a condition of many franchise agreements which vary by
contract age country and location the Corporation may own or lease the properties on which McDonalds franchises are located In most if not all cases the franchisee does not own the location of its
restaurants
The United Kingdom and Ireland business model is different than the US in that fewer than 30 of restaurants are franchised with
the majority under the ownership of the company McDonalds trains its franchisees and others at Hamburger Univers ity in Oak
Brook Illino is
In other countries McDonalds restaurants are operated by joint
ventures of McDonalds Corporation and other local entities or governments
15
As a matter of policy McDonalds does not make direct sales of food or materials to franchisees instead organizing the supply of
food and materials to restaurants through approved third party logistics operators
According to Fast Food Nation by Eric Schlosser nearly one in
eight workers in the US have at some time been employed by McDonalds It also states that McDonalds is the largest private
operator of playgrounds in the US as well as the single largest purchaser of beef pork potatoes and apples The selection of
meats McDonalds uses varies with the culture of the host country
MARKETING MIX
The marketing mix of a company consists of the various elements as follows
which form the core of a companyrsquos marketing system and hence helps to
achieve marketing objectives The marketing mix of McDonaldrsquos is as follows-
The McDonald plains its marketing by simple keeping 4Ps in mind
Product
Price
Promotion
Place
Product - McDonaldrsquos places considerable emphasis on developing a menu
which customers want Market research establishes exactly what this is However customersrsquo requirements change over time In order to meet these
changes McDonaldrsquos has introduced new products and phased out old ones and will continue to do so Care is taken not to adversely affect the sales of one choice by introducing a new choice which will cannibalise sales from the
existing one (trade off) McDonaldrsquos knows that items on its menu will vary in popularity Their ability to generate profits will vary at different points in their
cycle In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian
The happy meal for the children is a great seller among others
Price-The customerrsquos perception of value is an important determinant of the price charged Customers draw their own mental picture of what a product is worth A product is more than a physical item it also has psychological
connotations for the customer The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised It is
16
important when deciding on price to be fully aware of the brand and its integrity
In India McDonalds classifies its products into 2 categories namely the branded
affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and
the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price
perceptions
Promotion- The promotions aspect of the marketing mix covers all types of
marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and
in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct
mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that
provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be
supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item
At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart
from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos
Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the
management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities
making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers
17
Other than the main four elements mentioned above there are a few other
elements too in the marketing mix which are as follows-
People -The employees in McDonaldrsquos have a standard uniform and
McDonaldrsquos specially focuses on friendly and prompt service to its customers
from their employees
Process -The food manufacturing process at McDonaldrsquos is completely
transparent ie the whole process is visible to the customers In fact the fast
food joint allows its customers to view and judge the hygienic standards at
McDonaldrsquos by allowing them to enter the area where the process takes place
The customers are invited to check the ingredients used in food
Physical evidence - McDonalds focuses on clean and hygienic interiors of
is outlets and at the same time the interiors are attractive and the fast food joint
maintains a proper decorum at its joints
18
SWOT ANALYSIS
Strengths
McDonaldrsquos holds a very strong brand name worldwide
They have large partnerships with other companies that provide them
with their desired products this increases the goodwill of the company
McDonaldrsquos is one of the most reputed firms who are socially
responsible
Loyal employees amp management amp customer are their biggest strength
19
McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind
while providing food to different countries
Clean environment and play areas for children where they can enjoy their
time
Weakness
The weakness that hits the list of employee turnover rate Every year
many of their employees are fired out of the restaurant
McDonalds mostly advertises products and food items that targets
children
Health conscious people often complain that they do not provide us with
the organic and healthy food This becomes their weakness when they get in the complaints
They also face quality issue at times This affects the business as they are
running the outlet worldwide if one franchise gets affected others also
get a bad name
Opportunities
It can open up online services for their customers so that they can easily
order their desired meals sitting at home
Discounts given on every food item may help them gain more customers
They can go for a joint venture with the retailers they work with
They can introduce healthy hamburgers and healthy drinks for the people who are health conscious
20
In order to be environment friendly they can use packing material which
can be recycled later or material that does not create pollution
Threats
Emerging competition of similar outlets is becoming a problem for McDonalds
Health issue also becomes a problem when it comes to food
As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies
Recession in any country would definitely affect the whole outlet
worldwide
People facing heart problems and obesity accuse McDonalds for not
providing them with the healthy food
They have a threat of local food outlets in different countries
McDonalds is operating in a fully fledged economy where competition is
increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession
McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local
Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government
regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled
Indian businesses to grow by improving their ability to compete in todays international markets
21
Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in
predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first
restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept
has today been adopted by various Indian and International players to deliver quality produce to consumers
For instance Cremica Industries worked with another McDonalds supplier
from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to
McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with
farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water
consumption better seeds amp agricultural management practices which result in greater yields
In some cases these Indian suppliers had the technology - but no market for the
products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk
casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to
restaurants across India
McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations
COMPANYrsquoS FINANCIAL INFORMATION
Company Name McDonalds Corporation
Ticker Symbol MCD
Web Address wwwmcdonaldscom
CEO Mr Donald Thompson
No of Employees 420000
Common Issue Type CS
Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other
22
goods from numerous independent suppliers
Industry Information LEISURE - Restaurants
Price Day Change Bid Ask Open High Low Volume
8718 -002 - - 8743 8743 8676 3658828
Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range
875267 10040 039 527 253 164 35 10222 - 8331
KEY FIGURES (Latest Twelve Months - LTM)
Yesterdays Close 8706 $
PE Ratio - LTM 164
Market Capitalisation 875267 mil
Latest Shares Outstanding 10040 mil
Earnings pS (EPS) 527 $
Dividend pS (DPS) 253 cent
Dividend Yield 35
Dividend Payout Ratio 48
Revenue per Employee 64300 $
Effective Tax Rate 313
Float 10153 mil
Float as of Shares Outstanding 999
Foreign Sales 18478 mil
Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue
910
Research amp Devlopment (RampD) as of Revenue
000
Gross Profit Margin 447
EBITDA Margin 356
Pre-Tax Profit Margin 291
Assets Turnover 08
Return on Assets (ROA) 161
Return on Equity (ROE) 392
Return on Capital Invested (ROCI) 204 Current Ratio 10
Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096
LT DebtTotal Capital 480
Working Capital pS 006 $
Cash pS 217 $
Book-Value pS 1383 $
Balance Sheet (at a glance) in Millions
DIVIDEND INFO
Dividend Declared Date 09202012
Dividend Ex-Date 11282012
Dividend Record Date 12022012
Dividend Pay Date 12162012
Dividend Amount 770
Type of Payment Cash Payment
Dividend Rate 308
Current Dividend Yield 35
5-Y Average Dividend Yield 31
Payout Ratio 480
5-Y Average Payout Ratio 530
Share price performance previous 3 years
Share price performance intraday
23
Tangible Book-Value pS 1110 $
Cash Flow pS 689 $
Free Cash Flow pS 125 $
KEY FIGURES (LTM) Price info PriceBook Ratio 630
PriceTangible Book Ratio 785 PriceCash Flow 126
PriceFree Cash Flow 699
PE as of Industry Group 420
PE as of Sector Segment 770
PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol
1 Week - - - 00 101 54041 66217
4 Weeks 8743 8331 8474 27 101 57129 856929
13 Weeks 9416 8331 9102 -44 98 61288 3554700
26 Weeks 9416 8331 8775 -08 93 59419 7189758
52 Weeks 10222 8331 9803 -112 79 59272 14521666
YTD 10222 8331 - -132 77 59774 13807695
Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)
8661 8631 8825 8931 9174 039 031
GROWTH RATES 5-Year
Growh Rsup2 of 5-Year Growth
3-Year
Growth
Revenue 381 776 666
Income 2017 811 978
Dividend 1536 947 1016
Capital Spending 697 NA 1052
RampD 000 NA 000
Normalized Inc 1158 NA 979
CHANGES YTD vs
Last YTD
Curr Qtr vs
Qtr 1-Yr ago
Annual vs
Last Annual
Revenue 21 -02 122
Earnings -14 -35 113
EPS 10 -14 151
EPS $ 004 -002 069
SOLVENCY RATIOS
SHORT-TERM SOLVENCY RATIOS
(LIQUIDITY)
Net Working Capital Ratio 271
Current Ratio 13
Quick Ratio (Acid Test) 10
Liquidity Ratio (Cash) 067
Receivables Turnover 215
Average Collection Period 17
Working CapitalEquity 62
Working Capital pS 088
Cash-Flow pS 677
Free Cash-Flow pS 209
24
FINANCIAL STRUCTURE RATIOS
Altmans Z-Score Ratio 485
Financial Leverage Ratio (AssetsEquity) 23
Debt Ratio 564
Total DebtEquity (Gearing Ratio) 087
LT DebtEquity 084
LT DebtCapital Invested 569
LT DebtTotal Liabilities 652
Interest Cover 173
InterestCapital Invested 167
25
People hellip McDonaldrsquos 1 Resource in India
26
McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs
around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in
1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with
McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)
The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive
training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course
(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the
Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University
27
The McDonaldrsquos Promise
QUALITY SERVICE CLEANLINESS amp VALUE
When asked to explain McDonalds success founder Ray Kroc used to say We
take the hamburger business more seriously than anyone else
Kroc was a perfectionist From the day he opened his first restaurant he vowed
to give his customers high quality products served quickly --and with a smile
in a clean and pleasant environment and all at a fair price Quality Service
Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds
business
QUALITY
McDonalds India serves only the highest quality products The attention to food
quality started long before the first restaurant opened McDonalds India has
established close relationships with local suppliers who provide McDonalds
with the highest quality freshest ingredients to make its products
All suppliers adhere to Indian government regulations on food health and
hygiene while continuously maintaining McDonalds own recognized standards
McDonalds has established an extensive cold chain distribution system in
India to ensure that the products which arrive at the restaurant from suppliers
all over India are absolutely fresh In the restaurants products and supplies are
used on a first-in first-out basis to ensure freshness All McDonalds products
are prepared using modern state-of-the-art cooking equipment to ensure quality
and safety
SERVICE
McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos
which sets its restaurants apart from others At McDonalds the customer
always comes first Every employee strives to provide 100 percent customer
satisfaction -- for every customer -- every visit This includes friendly and
attentive service accuracy in order taking and anticipation of customers needs
-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun
and youthful spirit we will proudly serve an exceptional McDonaldrsquos
eating experience that makes all people feel special and makes them smile ndash
every customer every timerdquo
28
CLEANLINESS
McDonalds restaurants provide a clean comfortable environment especially
suited for families McDonalds stringent cleaning standards ensure that all
tables seating highchairs and trays are sanitized several times each hour The
attention to cleanliness extends from the lobby to the kitchen to the sidewalk
and immediate areas outside the restaurant
In addition to urging customers to dispose of their litter properly and offering a
number of trash bins (both inside and outside the restaurants) for their
convenience McDonalds Litter Patrols walk around the restaurants several
times each day picking up litter -- even if it isnt from McDonalds
Restaurant managers walk through the dining areas each hour to ensure that it
is clean and well stocked All restaurants provide a variety of comfortable
seating arrangements to accommodate anyone -- from a single individual to a
large family The environment is warm inviting and well lit
VALUE
McDonalds menu is priced at a value that the largest segment of Indian
consumers can afford McDonalds does not sacrifice quality for value -- rather
McDonalds leverages economies of scale to minimize costs while maximizing
value to customers
McDonalds definition of value is broader than most restaurants of its kind -- it
is more than price Value at McDonalds is the sum of the total McDonalds
experience quality food fast friendly service a clean and pleasant
environment and products priced at very affordable prices for the largest
segment of Indian consumers possible That is value at McDonalds
29
McDonaldrsquos Indiahellip Culturally Sensitive
Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much
that is consistent with other McDonaldrsquos restaurants around the world such as
the quality of the food and the attention to service
The dedication to local cultures is not new for McDonaldrsquos For the past 50
years McDonaldrsquos has opened restaurants in more than 120 distinctly different
countries and cultures With guidance from its local partners McDonaldrsquos is
able to adapt- where necessary-its menu and restaurant operations to
complement existing eating-out options McDonaldrsquos local owners understand
what their customers want perhaps more importantly what is acceptable within
local customs and values
There is much too that is very different- such as the first beef-less and pork-
less menu in the world and special product formulations to cater to Indian
culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos
India says ldquoWe know the Indian culture because we were born in it
inherited its richness and respect it greatly It is the respect for this culture
and the sentiments of many of our customersrsquo that we do not serve any
beef and pork items in our restaurantsrdquo
McDonaldrsquos commitment to its Indian customers is evident even in
development of special sauces that use local spices and chillies The
mayonnaise and all other sauces are egg-less
In India vegetarianism is in many cases more than a lifestyle choice Many
people are vegetarians due to religious reasons and in some cases even the
vegetarian product that has come into contact with a non-vegetarian product is
unacceptable Hence McDonaldrsquos India has also changed its operations to
address the special requirements of our vegetarian customers by having
processes that ensure that a physical separation of veg and non-veg products is
maintained right from farm to the customer Vegetable products are prepared
separately using dedicated equipment and utensils Also in India McDonaldrsquos
uses only vegetable oil as a medium for cooking
30
McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash
lsquoto be driven by the leadership of local ownersrsquo This commitment has translated
into enduring benefits to the businesses at the grass root level in the areas of
introduction of new crops new agricultural practices and food processing methods
and procedures
McDonalds unique cold chain on which the QSR major has spent more than six
years setting up in India has brought about a veritable revolution immensely
benefiting the farmers at one end and enabling customers at retail counters get the
highest quality food products absolutely fresh and at great value
Setting up this extensive cold chain distribution system has involved the transfer of
state-of-the-art food processing technology by McDonalds and its international
suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain
From Field to -2⁰C in 90 Minutes
Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be
grown during the winter months but with McDonalds expertise in the area of
agriculture they are now able to grow this crop through the year
Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room
to remove field heat a large cold room and a refrigerated van for transportation where
the temperature and the relative humidity of the crop is maintained between 1ordm C and
4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room
within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling
to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at
the farms itself ensuring no delay between harvesting pre-cooling packaging and
cold storage
Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd
Flavour and Freshness locked in at - 35degC
Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable
range of products is another important player in this cold chain This includes hi-tech
refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C
This is vital to ensure that the frozen food retains it freshness for a long time and the
cold chain is maintained The frozen product is immediately moved to cold storage
rooms
31
Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India
From Farm to Bulk Cooler in less than 90 Minutes
McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for
quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk
coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -
thus maintaining the cold chain
All leading to the Consumer
McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The
DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity
of the products throughout the entire cold chain
Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C
as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state
All these suppliers share McDonalds commitment and dedication to satisfying
customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently
each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental
effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn
more
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
15
As a matter of policy McDonalds does not make direct sales of food or materials to franchisees instead organizing the supply of
food and materials to restaurants through approved third party logistics operators
According to Fast Food Nation by Eric Schlosser nearly one in
eight workers in the US have at some time been employed by McDonalds It also states that McDonalds is the largest private
operator of playgrounds in the US as well as the single largest purchaser of beef pork potatoes and apples The selection of
meats McDonalds uses varies with the culture of the host country
MARKETING MIX
The marketing mix of a company consists of the various elements as follows
which form the core of a companyrsquos marketing system and hence helps to
achieve marketing objectives The marketing mix of McDonaldrsquos is as follows-
The McDonald plains its marketing by simple keeping 4Ps in mind
Product
Price
Promotion
Place
Product - McDonaldrsquos places considerable emphasis on developing a menu
which customers want Market research establishes exactly what this is However customersrsquo requirements change over time In order to meet these
changes McDonaldrsquos has introduced new products and phased out old ones and will continue to do so Care is taken not to adversely affect the sales of one choice by introducing a new choice which will cannibalise sales from the
existing one (trade off) McDonaldrsquos knows that items on its menu will vary in popularity Their ability to generate profits will vary at different points in their
cycle In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian
The happy meal for the children is a great seller among others
Price-The customerrsquos perception of value is an important determinant of the price charged Customers draw their own mental picture of what a product is worth A product is more than a physical item it also has psychological
connotations for the customer The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised It is
16
important when deciding on price to be fully aware of the brand and its integrity
In India McDonalds classifies its products into 2 categories namely the branded
affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and
the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price
perceptions
Promotion- The promotions aspect of the marketing mix covers all types of
marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and
in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct
mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that
provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be
supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item
At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart
from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos
Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the
management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities
making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers
17
Other than the main four elements mentioned above there are a few other
elements too in the marketing mix which are as follows-
People -The employees in McDonaldrsquos have a standard uniform and
McDonaldrsquos specially focuses on friendly and prompt service to its customers
from their employees
Process -The food manufacturing process at McDonaldrsquos is completely
transparent ie the whole process is visible to the customers In fact the fast
food joint allows its customers to view and judge the hygienic standards at
McDonaldrsquos by allowing them to enter the area where the process takes place
The customers are invited to check the ingredients used in food
Physical evidence - McDonalds focuses on clean and hygienic interiors of
is outlets and at the same time the interiors are attractive and the fast food joint
maintains a proper decorum at its joints
18
SWOT ANALYSIS
Strengths
McDonaldrsquos holds a very strong brand name worldwide
They have large partnerships with other companies that provide them
with their desired products this increases the goodwill of the company
McDonaldrsquos is one of the most reputed firms who are socially
responsible
Loyal employees amp management amp customer are their biggest strength
19
McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind
while providing food to different countries
Clean environment and play areas for children where they can enjoy their
time
Weakness
The weakness that hits the list of employee turnover rate Every year
many of their employees are fired out of the restaurant
McDonalds mostly advertises products and food items that targets
children
Health conscious people often complain that they do not provide us with
the organic and healthy food This becomes their weakness when they get in the complaints
They also face quality issue at times This affects the business as they are
running the outlet worldwide if one franchise gets affected others also
get a bad name
Opportunities
It can open up online services for their customers so that they can easily
order their desired meals sitting at home
Discounts given on every food item may help them gain more customers
They can go for a joint venture with the retailers they work with
They can introduce healthy hamburgers and healthy drinks for the people who are health conscious
20
In order to be environment friendly they can use packing material which
can be recycled later or material that does not create pollution
Threats
Emerging competition of similar outlets is becoming a problem for McDonalds
Health issue also becomes a problem when it comes to food
As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies
Recession in any country would definitely affect the whole outlet
worldwide
People facing heart problems and obesity accuse McDonalds for not
providing them with the healthy food
They have a threat of local food outlets in different countries
McDonalds is operating in a fully fledged economy where competition is
increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession
McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local
Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government
regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled
Indian businesses to grow by improving their ability to compete in todays international markets
21
Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in
predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first
restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept
has today been adopted by various Indian and International players to deliver quality produce to consumers
For instance Cremica Industries worked with another McDonalds supplier
from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to
McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with
farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water
consumption better seeds amp agricultural management practices which result in greater yields
In some cases these Indian suppliers had the technology - but no market for the
products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk
casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to
restaurants across India
McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations
COMPANYrsquoS FINANCIAL INFORMATION
Company Name McDonalds Corporation
Ticker Symbol MCD
Web Address wwwmcdonaldscom
CEO Mr Donald Thompson
No of Employees 420000
Common Issue Type CS
Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other
22
goods from numerous independent suppliers
Industry Information LEISURE - Restaurants
Price Day Change Bid Ask Open High Low Volume
8718 -002 - - 8743 8743 8676 3658828
Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range
875267 10040 039 527 253 164 35 10222 - 8331
KEY FIGURES (Latest Twelve Months - LTM)
Yesterdays Close 8706 $
PE Ratio - LTM 164
Market Capitalisation 875267 mil
Latest Shares Outstanding 10040 mil
Earnings pS (EPS) 527 $
Dividend pS (DPS) 253 cent
Dividend Yield 35
Dividend Payout Ratio 48
Revenue per Employee 64300 $
Effective Tax Rate 313
Float 10153 mil
Float as of Shares Outstanding 999
Foreign Sales 18478 mil
Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue
910
Research amp Devlopment (RampD) as of Revenue
000
Gross Profit Margin 447
EBITDA Margin 356
Pre-Tax Profit Margin 291
Assets Turnover 08
Return on Assets (ROA) 161
Return on Equity (ROE) 392
Return on Capital Invested (ROCI) 204 Current Ratio 10
Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096
LT DebtTotal Capital 480
Working Capital pS 006 $
Cash pS 217 $
Book-Value pS 1383 $
Balance Sheet (at a glance) in Millions
DIVIDEND INFO
Dividend Declared Date 09202012
Dividend Ex-Date 11282012
Dividend Record Date 12022012
Dividend Pay Date 12162012
Dividend Amount 770
Type of Payment Cash Payment
Dividend Rate 308
Current Dividend Yield 35
5-Y Average Dividend Yield 31
Payout Ratio 480
5-Y Average Payout Ratio 530
Share price performance previous 3 years
Share price performance intraday
23
Tangible Book-Value pS 1110 $
Cash Flow pS 689 $
Free Cash Flow pS 125 $
KEY FIGURES (LTM) Price info PriceBook Ratio 630
PriceTangible Book Ratio 785 PriceCash Flow 126
PriceFree Cash Flow 699
PE as of Industry Group 420
PE as of Sector Segment 770
PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol
1 Week - - - 00 101 54041 66217
4 Weeks 8743 8331 8474 27 101 57129 856929
13 Weeks 9416 8331 9102 -44 98 61288 3554700
26 Weeks 9416 8331 8775 -08 93 59419 7189758
52 Weeks 10222 8331 9803 -112 79 59272 14521666
YTD 10222 8331 - -132 77 59774 13807695
Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)
8661 8631 8825 8931 9174 039 031
GROWTH RATES 5-Year
Growh Rsup2 of 5-Year Growth
3-Year
Growth
Revenue 381 776 666
Income 2017 811 978
Dividend 1536 947 1016
Capital Spending 697 NA 1052
RampD 000 NA 000
Normalized Inc 1158 NA 979
CHANGES YTD vs
Last YTD
Curr Qtr vs
Qtr 1-Yr ago
Annual vs
Last Annual
Revenue 21 -02 122
Earnings -14 -35 113
EPS 10 -14 151
EPS $ 004 -002 069
SOLVENCY RATIOS
SHORT-TERM SOLVENCY RATIOS
(LIQUIDITY)
Net Working Capital Ratio 271
Current Ratio 13
Quick Ratio (Acid Test) 10
Liquidity Ratio (Cash) 067
Receivables Turnover 215
Average Collection Period 17
Working CapitalEquity 62
Working Capital pS 088
Cash-Flow pS 677
Free Cash-Flow pS 209
24
FINANCIAL STRUCTURE RATIOS
Altmans Z-Score Ratio 485
Financial Leverage Ratio (AssetsEquity) 23
Debt Ratio 564
Total DebtEquity (Gearing Ratio) 087
LT DebtEquity 084
LT DebtCapital Invested 569
LT DebtTotal Liabilities 652
Interest Cover 173
InterestCapital Invested 167
25
People hellip McDonaldrsquos 1 Resource in India
26
McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs
around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in
1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with
McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)
The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive
training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course
(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the
Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University
27
The McDonaldrsquos Promise
QUALITY SERVICE CLEANLINESS amp VALUE
When asked to explain McDonalds success founder Ray Kroc used to say We
take the hamburger business more seriously than anyone else
Kroc was a perfectionist From the day he opened his first restaurant he vowed
to give his customers high quality products served quickly --and with a smile
in a clean and pleasant environment and all at a fair price Quality Service
Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds
business
QUALITY
McDonalds India serves only the highest quality products The attention to food
quality started long before the first restaurant opened McDonalds India has
established close relationships with local suppliers who provide McDonalds
with the highest quality freshest ingredients to make its products
All suppliers adhere to Indian government regulations on food health and
hygiene while continuously maintaining McDonalds own recognized standards
McDonalds has established an extensive cold chain distribution system in
India to ensure that the products which arrive at the restaurant from suppliers
all over India are absolutely fresh In the restaurants products and supplies are
used on a first-in first-out basis to ensure freshness All McDonalds products
are prepared using modern state-of-the-art cooking equipment to ensure quality
and safety
SERVICE
McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos
which sets its restaurants apart from others At McDonalds the customer
always comes first Every employee strives to provide 100 percent customer
satisfaction -- for every customer -- every visit This includes friendly and
attentive service accuracy in order taking and anticipation of customers needs
-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun
and youthful spirit we will proudly serve an exceptional McDonaldrsquos
eating experience that makes all people feel special and makes them smile ndash
every customer every timerdquo
28
CLEANLINESS
McDonalds restaurants provide a clean comfortable environment especially
suited for families McDonalds stringent cleaning standards ensure that all
tables seating highchairs and trays are sanitized several times each hour The
attention to cleanliness extends from the lobby to the kitchen to the sidewalk
and immediate areas outside the restaurant
In addition to urging customers to dispose of their litter properly and offering a
number of trash bins (both inside and outside the restaurants) for their
convenience McDonalds Litter Patrols walk around the restaurants several
times each day picking up litter -- even if it isnt from McDonalds
Restaurant managers walk through the dining areas each hour to ensure that it
is clean and well stocked All restaurants provide a variety of comfortable
seating arrangements to accommodate anyone -- from a single individual to a
large family The environment is warm inviting and well lit
VALUE
McDonalds menu is priced at a value that the largest segment of Indian
consumers can afford McDonalds does not sacrifice quality for value -- rather
McDonalds leverages economies of scale to minimize costs while maximizing
value to customers
McDonalds definition of value is broader than most restaurants of its kind -- it
is more than price Value at McDonalds is the sum of the total McDonalds
experience quality food fast friendly service a clean and pleasant
environment and products priced at very affordable prices for the largest
segment of Indian consumers possible That is value at McDonalds
29
McDonaldrsquos Indiahellip Culturally Sensitive
Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much
that is consistent with other McDonaldrsquos restaurants around the world such as
the quality of the food and the attention to service
The dedication to local cultures is not new for McDonaldrsquos For the past 50
years McDonaldrsquos has opened restaurants in more than 120 distinctly different
countries and cultures With guidance from its local partners McDonaldrsquos is
able to adapt- where necessary-its menu and restaurant operations to
complement existing eating-out options McDonaldrsquos local owners understand
what their customers want perhaps more importantly what is acceptable within
local customs and values
There is much too that is very different- such as the first beef-less and pork-
less menu in the world and special product formulations to cater to Indian
culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos
India says ldquoWe know the Indian culture because we were born in it
inherited its richness and respect it greatly It is the respect for this culture
and the sentiments of many of our customersrsquo that we do not serve any
beef and pork items in our restaurantsrdquo
McDonaldrsquos commitment to its Indian customers is evident even in
development of special sauces that use local spices and chillies The
mayonnaise and all other sauces are egg-less
In India vegetarianism is in many cases more than a lifestyle choice Many
people are vegetarians due to religious reasons and in some cases even the
vegetarian product that has come into contact with a non-vegetarian product is
unacceptable Hence McDonaldrsquos India has also changed its operations to
address the special requirements of our vegetarian customers by having
processes that ensure that a physical separation of veg and non-veg products is
maintained right from farm to the customer Vegetable products are prepared
separately using dedicated equipment and utensils Also in India McDonaldrsquos
uses only vegetable oil as a medium for cooking
30
McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash
lsquoto be driven by the leadership of local ownersrsquo This commitment has translated
into enduring benefits to the businesses at the grass root level in the areas of
introduction of new crops new agricultural practices and food processing methods
and procedures
McDonalds unique cold chain on which the QSR major has spent more than six
years setting up in India has brought about a veritable revolution immensely
benefiting the farmers at one end and enabling customers at retail counters get the
highest quality food products absolutely fresh and at great value
Setting up this extensive cold chain distribution system has involved the transfer of
state-of-the-art food processing technology by McDonalds and its international
suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain
From Field to -2⁰C in 90 Minutes
Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be
grown during the winter months but with McDonalds expertise in the area of
agriculture they are now able to grow this crop through the year
Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room
to remove field heat a large cold room and a refrigerated van for transportation where
the temperature and the relative humidity of the crop is maintained between 1ordm C and
4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room
within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling
to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at
the farms itself ensuring no delay between harvesting pre-cooling packaging and
cold storage
Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd
Flavour and Freshness locked in at - 35degC
Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable
range of products is another important player in this cold chain This includes hi-tech
refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C
This is vital to ensure that the frozen food retains it freshness for a long time and the
cold chain is maintained The frozen product is immediately moved to cold storage
rooms
31
Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India
From Farm to Bulk Cooler in less than 90 Minutes
McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for
quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk
coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -
thus maintaining the cold chain
All leading to the Consumer
McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The
DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity
of the products throughout the entire cold chain
Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C
as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state
All these suppliers share McDonalds commitment and dedication to satisfying
customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently
each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental
effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn
more
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
16
important when deciding on price to be fully aware of the brand and its integrity
In India McDonalds classifies its products into 2 categories namely the branded
affordability (BA) and branded core value products (BCV) The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and
the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30 This has been done to satisfy consumers which different price
perceptions
Promotion- The promotions aspect of the marketing mix covers all types of
marketing communications One of the methods employed is advertising Advertising is conducted on TV radio in cinema online using poster sites and
in the press for example in newspapers and magazines Other promotional methods include sales promotions point of sale display merchandising direct
mail loyalty schemes door drops etc The skill in marketing communications is to develop a campaign which uses several of these methods in a way that
provides the most effective results For example TV advertising makes people aware of a food item and press advertising provides more detail This may be
supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item
At McDonalds the prime focus is on targeting children In happy meals too which are targeted at children small toys are given along with the meal Apart
from this various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos
Place - Place as an element of the marketing mix is not just about the physical location or distribution points for products It encompasses the
management of a range of processes involved in bringing products to the end consumer McDonaldrsquos outlets are very evenly spread throughout the cities
making them very accessible Drive in and drive through options make McDonaldrsquos products further convenient to the consumers
17
Other than the main four elements mentioned above there are a few other
elements too in the marketing mix which are as follows-
People -The employees in McDonaldrsquos have a standard uniform and
McDonaldrsquos specially focuses on friendly and prompt service to its customers
from their employees
Process -The food manufacturing process at McDonaldrsquos is completely
transparent ie the whole process is visible to the customers In fact the fast
food joint allows its customers to view and judge the hygienic standards at
McDonaldrsquos by allowing them to enter the area where the process takes place
The customers are invited to check the ingredients used in food
Physical evidence - McDonalds focuses on clean and hygienic interiors of
is outlets and at the same time the interiors are attractive and the fast food joint
maintains a proper decorum at its joints
18
SWOT ANALYSIS
Strengths
McDonaldrsquos holds a very strong brand name worldwide
They have large partnerships with other companies that provide them
with their desired products this increases the goodwill of the company
McDonaldrsquos is one of the most reputed firms who are socially
responsible
Loyal employees amp management amp customer are their biggest strength
19
McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind
while providing food to different countries
Clean environment and play areas for children where they can enjoy their
time
Weakness
The weakness that hits the list of employee turnover rate Every year
many of their employees are fired out of the restaurant
McDonalds mostly advertises products and food items that targets
children
Health conscious people often complain that they do not provide us with
the organic and healthy food This becomes their weakness when they get in the complaints
They also face quality issue at times This affects the business as they are
running the outlet worldwide if one franchise gets affected others also
get a bad name
Opportunities
It can open up online services for their customers so that they can easily
order their desired meals sitting at home
Discounts given on every food item may help them gain more customers
They can go for a joint venture with the retailers they work with
They can introduce healthy hamburgers and healthy drinks for the people who are health conscious
20
In order to be environment friendly they can use packing material which
can be recycled later or material that does not create pollution
Threats
Emerging competition of similar outlets is becoming a problem for McDonalds
Health issue also becomes a problem when it comes to food
As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies
Recession in any country would definitely affect the whole outlet
worldwide
People facing heart problems and obesity accuse McDonalds for not
providing them with the healthy food
They have a threat of local food outlets in different countries
McDonalds is operating in a fully fledged economy where competition is
increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession
McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local
Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government
regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled
Indian businesses to grow by improving their ability to compete in todays international markets
21
Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in
predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first
restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept
has today been adopted by various Indian and International players to deliver quality produce to consumers
For instance Cremica Industries worked with another McDonalds supplier
from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to
McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with
farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water
consumption better seeds amp agricultural management practices which result in greater yields
In some cases these Indian suppliers had the technology - but no market for the
products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk
casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to
restaurants across India
McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations
COMPANYrsquoS FINANCIAL INFORMATION
Company Name McDonalds Corporation
Ticker Symbol MCD
Web Address wwwmcdonaldscom
CEO Mr Donald Thompson
No of Employees 420000
Common Issue Type CS
Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other
22
goods from numerous independent suppliers
Industry Information LEISURE - Restaurants
Price Day Change Bid Ask Open High Low Volume
8718 -002 - - 8743 8743 8676 3658828
Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range
875267 10040 039 527 253 164 35 10222 - 8331
KEY FIGURES (Latest Twelve Months - LTM)
Yesterdays Close 8706 $
PE Ratio - LTM 164
Market Capitalisation 875267 mil
Latest Shares Outstanding 10040 mil
Earnings pS (EPS) 527 $
Dividend pS (DPS) 253 cent
Dividend Yield 35
Dividend Payout Ratio 48
Revenue per Employee 64300 $
Effective Tax Rate 313
Float 10153 mil
Float as of Shares Outstanding 999
Foreign Sales 18478 mil
Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue
910
Research amp Devlopment (RampD) as of Revenue
000
Gross Profit Margin 447
EBITDA Margin 356
Pre-Tax Profit Margin 291
Assets Turnover 08
Return on Assets (ROA) 161
Return on Equity (ROE) 392
Return on Capital Invested (ROCI) 204 Current Ratio 10
Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096
LT DebtTotal Capital 480
Working Capital pS 006 $
Cash pS 217 $
Book-Value pS 1383 $
Balance Sheet (at a glance) in Millions
DIVIDEND INFO
Dividend Declared Date 09202012
Dividend Ex-Date 11282012
Dividend Record Date 12022012
Dividend Pay Date 12162012
Dividend Amount 770
Type of Payment Cash Payment
Dividend Rate 308
Current Dividend Yield 35
5-Y Average Dividend Yield 31
Payout Ratio 480
5-Y Average Payout Ratio 530
Share price performance previous 3 years
Share price performance intraday
23
Tangible Book-Value pS 1110 $
Cash Flow pS 689 $
Free Cash Flow pS 125 $
KEY FIGURES (LTM) Price info PriceBook Ratio 630
PriceTangible Book Ratio 785 PriceCash Flow 126
PriceFree Cash Flow 699
PE as of Industry Group 420
PE as of Sector Segment 770
PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol
1 Week - - - 00 101 54041 66217
4 Weeks 8743 8331 8474 27 101 57129 856929
13 Weeks 9416 8331 9102 -44 98 61288 3554700
26 Weeks 9416 8331 8775 -08 93 59419 7189758
52 Weeks 10222 8331 9803 -112 79 59272 14521666
YTD 10222 8331 - -132 77 59774 13807695
Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)
8661 8631 8825 8931 9174 039 031
GROWTH RATES 5-Year
Growh Rsup2 of 5-Year Growth
3-Year
Growth
Revenue 381 776 666
Income 2017 811 978
Dividend 1536 947 1016
Capital Spending 697 NA 1052
RampD 000 NA 000
Normalized Inc 1158 NA 979
CHANGES YTD vs
Last YTD
Curr Qtr vs
Qtr 1-Yr ago
Annual vs
Last Annual
Revenue 21 -02 122
Earnings -14 -35 113
EPS 10 -14 151
EPS $ 004 -002 069
SOLVENCY RATIOS
SHORT-TERM SOLVENCY RATIOS
(LIQUIDITY)
Net Working Capital Ratio 271
Current Ratio 13
Quick Ratio (Acid Test) 10
Liquidity Ratio (Cash) 067
Receivables Turnover 215
Average Collection Period 17
Working CapitalEquity 62
Working Capital pS 088
Cash-Flow pS 677
Free Cash-Flow pS 209
24
FINANCIAL STRUCTURE RATIOS
Altmans Z-Score Ratio 485
Financial Leverage Ratio (AssetsEquity) 23
Debt Ratio 564
Total DebtEquity (Gearing Ratio) 087
LT DebtEquity 084
LT DebtCapital Invested 569
LT DebtTotal Liabilities 652
Interest Cover 173
InterestCapital Invested 167
25
People hellip McDonaldrsquos 1 Resource in India
26
McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs
around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in
1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with
McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)
The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive
training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course
(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the
Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University
27
The McDonaldrsquos Promise
QUALITY SERVICE CLEANLINESS amp VALUE
When asked to explain McDonalds success founder Ray Kroc used to say We
take the hamburger business more seriously than anyone else
Kroc was a perfectionist From the day he opened his first restaurant he vowed
to give his customers high quality products served quickly --and with a smile
in a clean and pleasant environment and all at a fair price Quality Service
Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds
business
QUALITY
McDonalds India serves only the highest quality products The attention to food
quality started long before the first restaurant opened McDonalds India has
established close relationships with local suppliers who provide McDonalds
with the highest quality freshest ingredients to make its products
All suppliers adhere to Indian government regulations on food health and
hygiene while continuously maintaining McDonalds own recognized standards
McDonalds has established an extensive cold chain distribution system in
India to ensure that the products which arrive at the restaurant from suppliers
all over India are absolutely fresh In the restaurants products and supplies are
used on a first-in first-out basis to ensure freshness All McDonalds products
are prepared using modern state-of-the-art cooking equipment to ensure quality
and safety
SERVICE
McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos
which sets its restaurants apart from others At McDonalds the customer
always comes first Every employee strives to provide 100 percent customer
satisfaction -- for every customer -- every visit This includes friendly and
attentive service accuracy in order taking and anticipation of customers needs
-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun
and youthful spirit we will proudly serve an exceptional McDonaldrsquos
eating experience that makes all people feel special and makes them smile ndash
every customer every timerdquo
28
CLEANLINESS
McDonalds restaurants provide a clean comfortable environment especially
suited for families McDonalds stringent cleaning standards ensure that all
tables seating highchairs and trays are sanitized several times each hour The
attention to cleanliness extends from the lobby to the kitchen to the sidewalk
and immediate areas outside the restaurant
In addition to urging customers to dispose of their litter properly and offering a
number of trash bins (both inside and outside the restaurants) for their
convenience McDonalds Litter Patrols walk around the restaurants several
times each day picking up litter -- even if it isnt from McDonalds
Restaurant managers walk through the dining areas each hour to ensure that it
is clean and well stocked All restaurants provide a variety of comfortable
seating arrangements to accommodate anyone -- from a single individual to a
large family The environment is warm inviting and well lit
VALUE
McDonalds menu is priced at a value that the largest segment of Indian
consumers can afford McDonalds does not sacrifice quality for value -- rather
McDonalds leverages economies of scale to minimize costs while maximizing
value to customers
McDonalds definition of value is broader than most restaurants of its kind -- it
is more than price Value at McDonalds is the sum of the total McDonalds
experience quality food fast friendly service a clean and pleasant
environment and products priced at very affordable prices for the largest
segment of Indian consumers possible That is value at McDonalds
29
McDonaldrsquos Indiahellip Culturally Sensitive
Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much
that is consistent with other McDonaldrsquos restaurants around the world such as
the quality of the food and the attention to service
The dedication to local cultures is not new for McDonaldrsquos For the past 50
years McDonaldrsquos has opened restaurants in more than 120 distinctly different
countries and cultures With guidance from its local partners McDonaldrsquos is
able to adapt- where necessary-its menu and restaurant operations to
complement existing eating-out options McDonaldrsquos local owners understand
what their customers want perhaps more importantly what is acceptable within
local customs and values
There is much too that is very different- such as the first beef-less and pork-
less menu in the world and special product formulations to cater to Indian
culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos
India says ldquoWe know the Indian culture because we were born in it
inherited its richness and respect it greatly It is the respect for this culture
and the sentiments of many of our customersrsquo that we do not serve any
beef and pork items in our restaurantsrdquo
McDonaldrsquos commitment to its Indian customers is evident even in
development of special sauces that use local spices and chillies The
mayonnaise and all other sauces are egg-less
In India vegetarianism is in many cases more than a lifestyle choice Many
people are vegetarians due to religious reasons and in some cases even the
vegetarian product that has come into contact with a non-vegetarian product is
unacceptable Hence McDonaldrsquos India has also changed its operations to
address the special requirements of our vegetarian customers by having
processes that ensure that a physical separation of veg and non-veg products is
maintained right from farm to the customer Vegetable products are prepared
separately using dedicated equipment and utensils Also in India McDonaldrsquos
uses only vegetable oil as a medium for cooking
30
McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash
lsquoto be driven by the leadership of local ownersrsquo This commitment has translated
into enduring benefits to the businesses at the grass root level in the areas of
introduction of new crops new agricultural practices and food processing methods
and procedures
McDonalds unique cold chain on which the QSR major has spent more than six
years setting up in India has brought about a veritable revolution immensely
benefiting the farmers at one end and enabling customers at retail counters get the
highest quality food products absolutely fresh and at great value
Setting up this extensive cold chain distribution system has involved the transfer of
state-of-the-art food processing technology by McDonalds and its international
suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain
From Field to -2⁰C in 90 Minutes
Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be
grown during the winter months but with McDonalds expertise in the area of
agriculture they are now able to grow this crop through the year
Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room
to remove field heat a large cold room and a refrigerated van for transportation where
the temperature and the relative humidity of the crop is maintained between 1ordm C and
4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room
within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling
to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at
the farms itself ensuring no delay between harvesting pre-cooling packaging and
cold storage
Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd
Flavour and Freshness locked in at - 35degC
Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable
range of products is another important player in this cold chain This includes hi-tech
refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C
This is vital to ensure that the frozen food retains it freshness for a long time and the
cold chain is maintained The frozen product is immediately moved to cold storage
rooms
31
Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India
From Farm to Bulk Cooler in less than 90 Minutes
McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for
quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk
coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -
thus maintaining the cold chain
All leading to the Consumer
McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The
DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity
of the products throughout the entire cold chain
Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C
as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state
All these suppliers share McDonalds commitment and dedication to satisfying
customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently
each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental
effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn
more
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
17
Other than the main four elements mentioned above there are a few other
elements too in the marketing mix which are as follows-
People -The employees in McDonaldrsquos have a standard uniform and
McDonaldrsquos specially focuses on friendly and prompt service to its customers
from their employees
Process -The food manufacturing process at McDonaldrsquos is completely
transparent ie the whole process is visible to the customers In fact the fast
food joint allows its customers to view and judge the hygienic standards at
McDonaldrsquos by allowing them to enter the area where the process takes place
The customers are invited to check the ingredients used in food
Physical evidence - McDonalds focuses on clean and hygienic interiors of
is outlets and at the same time the interiors are attractive and the fast food joint
maintains a proper decorum at its joints
18
SWOT ANALYSIS
Strengths
McDonaldrsquos holds a very strong brand name worldwide
They have large partnerships with other companies that provide them
with their desired products this increases the goodwill of the company
McDonaldrsquos is one of the most reputed firms who are socially
responsible
Loyal employees amp management amp customer are their biggest strength
19
McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind
while providing food to different countries
Clean environment and play areas for children where they can enjoy their
time
Weakness
The weakness that hits the list of employee turnover rate Every year
many of their employees are fired out of the restaurant
McDonalds mostly advertises products and food items that targets
children
Health conscious people often complain that they do not provide us with
the organic and healthy food This becomes their weakness when they get in the complaints
They also face quality issue at times This affects the business as they are
running the outlet worldwide if one franchise gets affected others also
get a bad name
Opportunities
It can open up online services for their customers so that they can easily
order their desired meals sitting at home
Discounts given on every food item may help them gain more customers
They can go for a joint venture with the retailers they work with
They can introduce healthy hamburgers and healthy drinks for the people who are health conscious
20
In order to be environment friendly they can use packing material which
can be recycled later or material that does not create pollution
Threats
Emerging competition of similar outlets is becoming a problem for McDonalds
Health issue also becomes a problem when it comes to food
As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies
Recession in any country would definitely affect the whole outlet
worldwide
People facing heart problems and obesity accuse McDonalds for not
providing them with the healthy food
They have a threat of local food outlets in different countries
McDonalds is operating in a fully fledged economy where competition is
increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession
McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local
Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government
regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled
Indian businesses to grow by improving their ability to compete in todays international markets
21
Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in
predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first
restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept
has today been adopted by various Indian and International players to deliver quality produce to consumers
For instance Cremica Industries worked with another McDonalds supplier
from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to
McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with
farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water
consumption better seeds amp agricultural management practices which result in greater yields
In some cases these Indian suppliers had the technology - but no market for the
products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk
casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to
restaurants across India
McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations
COMPANYrsquoS FINANCIAL INFORMATION
Company Name McDonalds Corporation
Ticker Symbol MCD
Web Address wwwmcdonaldscom
CEO Mr Donald Thompson
No of Employees 420000
Common Issue Type CS
Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other
22
goods from numerous independent suppliers
Industry Information LEISURE - Restaurants
Price Day Change Bid Ask Open High Low Volume
8718 -002 - - 8743 8743 8676 3658828
Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range
875267 10040 039 527 253 164 35 10222 - 8331
KEY FIGURES (Latest Twelve Months - LTM)
Yesterdays Close 8706 $
PE Ratio - LTM 164
Market Capitalisation 875267 mil
Latest Shares Outstanding 10040 mil
Earnings pS (EPS) 527 $
Dividend pS (DPS) 253 cent
Dividend Yield 35
Dividend Payout Ratio 48
Revenue per Employee 64300 $
Effective Tax Rate 313
Float 10153 mil
Float as of Shares Outstanding 999
Foreign Sales 18478 mil
Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue
910
Research amp Devlopment (RampD) as of Revenue
000
Gross Profit Margin 447
EBITDA Margin 356
Pre-Tax Profit Margin 291
Assets Turnover 08
Return on Assets (ROA) 161
Return on Equity (ROE) 392
Return on Capital Invested (ROCI) 204 Current Ratio 10
Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096
LT DebtTotal Capital 480
Working Capital pS 006 $
Cash pS 217 $
Book-Value pS 1383 $
Balance Sheet (at a glance) in Millions
DIVIDEND INFO
Dividend Declared Date 09202012
Dividend Ex-Date 11282012
Dividend Record Date 12022012
Dividend Pay Date 12162012
Dividend Amount 770
Type of Payment Cash Payment
Dividend Rate 308
Current Dividend Yield 35
5-Y Average Dividend Yield 31
Payout Ratio 480
5-Y Average Payout Ratio 530
Share price performance previous 3 years
Share price performance intraday
23
Tangible Book-Value pS 1110 $
Cash Flow pS 689 $
Free Cash Flow pS 125 $
KEY FIGURES (LTM) Price info PriceBook Ratio 630
PriceTangible Book Ratio 785 PriceCash Flow 126
PriceFree Cash Flow 699
PE as of Industry Group 420
PE as of Sector Segment 770
PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol
1 Week - - - 00 101 54041 66217
4 Weeks 8743 8331 8474 27 101 57129 856929
13 Weeks 9416 8331 9102 -44 98 61288 3554700
26 Weeks 9416 8331 8775 -08 93 59419 7189758
52 Weeks 10222 8331 9803 -112 79 59272 14521666
YTD 10222 8331 - -132 77 59774 13807695
Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)
8661 8631 8825 8931 9174 039 031
GROWTH RATES 5-Year
Growh Rsup2 of 5-Year Growth
3-Year
Growth
Revenue 381 776 666
Income 2017 811 978
Dividend 1536 947 1016
Capital Spending 697 NA 1052
RampD 000 NA 000
Normalized Inc 1158 NA 979
CHANGES YTD vs
Last YTD
Curr Qtr vs
Qtr 1-Yr ago
Annual vs
Last Annual
Revenue 21 -02 122
Earnings -14 -35 113
EPS 10 -14 151
EPS $ 004 -002 069
SOLVENCY RATIOS
SHORT-TERM SOLVENCY RATIOS
(LIQUIDITY)
Net Working Capital Ratio 271
Current Ratio 13
Quick Ratio (Acid Test) 10
Liquidity Ratio (Cash) 067
Receivables Turnover 215
Average Collection Period 17
Working CapitalEquity 62
Working Capital pS 088
Cash-Flow pS 677
Free Cash-Flow pS 209
24
FINANCIAL STRUCTURE RATIOS
Altmans Z-Score Ratio 485
Financial Leverage Ratio (AssetsEquity) 23
Debt Ratio 564
Total DebtEquity (Gearing Ratio) 087
LT DebtEquity 084
LT DebtCapital Invested 569
LT DebtTotal Liabilities 652
Interest Cover 173
InterestCapital Invested 167
25
People hellip McDonaldrsquos 1 Resource in India
26
McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs
around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in
1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with
McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)
The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive
training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course
(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the
Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University
27
The McDonaldrsquos Promise
QUALITY SERVICE CLEANLINESS amp VALUE
When asked to explain McDonalds success founder Ray Kroc used to say We
take the hamburger business more seriously than anyone else
Kroc was a perfectionist From the day he opened his first restaurant he vowed
to give his customers high quality products served quickly --and with a smile
in a clean and pleasant environment and all at a fair price Quality Service
Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds
business
QUALITY
McDonalds India serves only the highest quality products The attention to food
quality started long before the first restaurant opened McDonalds India has
established close relationships with local suppliers who provide McDonalds
with the highest quality freshest ingredients to make its products
All suppliers adhere to Indian government regulations on food health and
hygiene while continuously maintaining McDonalds own recognized standards
McDonalds has established an extensive cold chain distribution system in
India to ensure that the products which arrive at the restaurant from suppliers
all over India are absolutely fresh In the restaurants products and supplies are
used on a first-in first-out basis to ensure freshness All McDonalds products
are prepared using modern state-of-the-art cooking equipment to ensure quality
and safety
SERVICE
McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos
which sets its restaurants apart from others At McDonalds the customer
always comes first Every employee strives to provide 100 percent customer
satisfaction -- for every customer -- every visit This includes friendly and
attentive service accuracy in order taking and anticipation of customers needs
-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun
and youthful spirit we will proudly serve an exceptional McDonaldrsquos
eating experience that makes all people feel special and makes them smile ndash
every customer every timerdquo
28
CLEANLINESS
McDonalds restaurants provide a clean comfortable environment especially
suited for families McDonalds stringent cleaning standards ensure that all
tables seating highchairs and trays are sanitized several times each hour The
attention to cleanliness extends from the lobby to the kitchen to the sidewalk
and immediate areas outside the restaurant
In addition to urging customers to dispose of their litter properly and offering a
number of trash bins (both inside and outside the restaurants) for their
convenience McDonalds Litter Patrols walk around the restaurants several
times each day picking up litter -- even if it isnt from McDonalds
Restaurant managers walk through the dining areas each hour to ensure that it
is clean and well stocked All restaurants provide a variety of comfortable
seating arrangements to accommodate anyone -- from a single individual to a
large family The environment is warm inviting and well lit
VALUE
McDonalds menu is priced at a value that the largest segment of Indian
consumers can afford McDonalds does not sacrifice quality for value -- rather
McDonalds leverages economies of scale to minimize costs while maximizing
value to customers
McDonalds definition of value is broader than most restaurants of its kind -- it
is more than price Value at McDonalds is the sum of the total McDonalds
experience quality food fast friendly service a clean and pleasant
environment and products priced at very affordable prices for the largest
segment of Indian consumers possible That is value at McDonalds
29
McDonaldrsquos Indiahellip Culturally Sensitive
Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much
that is consistent with other McDonaldrsquos restaurants around the world such as
the quality of the food and the attention to service
The dedication to local cultures is not new for McDonaldrsquos For the past 50
years McDonaldrsquos has opened restaurants in more than 120 distinctly different
countries and cultures With guidance from its local partners McDonaldrsquos is
able to adapt- where necessary-its menu and restaurant operations to
complement existing eating-out options McDonaldrsquos local owners understand
what their customers want perhaps more importantly what is acceptable within
local customs and values
There is much too that is very different- such as the first beef-less and pork-
less menu in the world and special product formulations to cater to Indian
culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos
India says ldquoWe know the Indian culture because we were born in it
inherited its richness and respect it greatly It is the respect for this culture
and the sentiments of many of our customersrsquo that we do not serve any
beef and pork items in our restaurantsrdquo
McDonaldrsquos commitment to its Indian customers is evident even in
development of special sauces that use local spices and chillies The
mayonnaise and all other sauces are egg-less
In India vegetarianism is in many cases more than a lifestyle choice Many
people are vegetarians due to religious reasons and in some cases even the
vegetarian product that has come into contact with a non-vegetarian product is
unacceptable Hence McDonaldrsquos India has also changed its operations to
address the special requirements of our vegetarian customers by having
processes that ensure that a physical separation of veg and non-veg products is
maintained right from farm to the customer Vegetable products are prepared
separately using dedicated equipment and utensils Also in India McDonaldrsquos
uses only vegetable oil as a medium for cooking
30
McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash
lsquoto be driven by the leadership of local ownersrsquo This commitment has translated
into enduring benefits to the businesses at the grass root level in the areas of
introduction of new crops new agricultural practices and food processing methods
and procedures
McDonalds unique cold chain on which the QSR major has spent more than six
years setting up in India has brought about a veritable revolution immensely
benefiting the farmers at one end and enabling customers at retail counters get the
highest quality food products absolutely fresh and at great value
Setting up this extensive cold chain distribution system has involved the transfer of
state-of-the-art food processing technology by McDonalds and its international
suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain
From Field to -2⁰C in 90 Minutes
Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be
grown during the winter months but with McDonalds expertise in the area of
agriculture they are now able to grow this crop through the year
Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room
to remove field heat a large cold room and a refrigerated van for transportation where
the temperature and the relative humidity of the crop is maintained between 1ordm C and
4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room
within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling
to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at
the farms itself ensuring no delay between harvesting pre-cooling packaging and
cold storage
Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd
Flavour and Freshness locked in at - 35degC
Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable
range of products is another important player in this cold chain This includes hi-tech
refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C
This is vital to ensure that the frozen food retains it freshness for a long time and the
cold chain is maintained The frozen product is immediately moved to cold storage
rooms
31
Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India
From Farm to Bulk Cooler in less than 90 Minutes
McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for
quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk
coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -
thus maintaining the cold chain
All leading to the Consumer
McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The
DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity
of the products throughout the entire cold chain
Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C
as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state
All these suppliers share McDonalds commitment and dedication to satisfying
customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently
each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental
effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn
more
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
18
SWOT ANALYSIS
Strengths
McDonaldrsquos holds a very strong brand name worldwide
They have large partnerships with other companies that provide them
with their desired products this increases the goodwill of the company
McDonaldrsquos is one of the most reputed firms who are socially
responsible
Loyal employees amp management amp customer are their biggest strength
19
McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind
while providing food to different countries
Clean environment and play areas for children where they can enjoy their
time
Weakness
The weakness that hits the list of employee turnover rate Every year
many of their employees are fired out of the restaurant
McDonalds mostly advertises products and food items that targets
children
Health conscious people often complain that they do not provide us with
the organic and healthy food This becomes their weakness when they get in the complaints
They also face quality issue at times This affects the business as they are
running the outlet worldwide if one franchise gets affected others also
get a bad name
Opportunities
It can open up online services for their customers so that they can easily
order their desired meals sitting at home
Discounts given on every food item may help them gain more customers
They can go for a joint venture with the retailers they work with
They can introduce healthy hamburgers and healthy drinks for the people who are health conscious
20
In order to be environment friendly they can use packing material which
can be recycled later or material that does not create pollution
Threats
Emerging competition of similar outlets is becoming a problem for McDonalds
Health issue also becomes a problem when it comes to food
As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies
Recession in any country would definitely affect the whole outlet
worldwide
People facing heart problems and obesity accuse McDonalds for not
providing them with the healthy food
They have a threat of local food outlets in different countries
McDonalds is operating in a fully fledged economy where competition is
increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession
McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local
Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government
regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled
Indian businesses to grow by improving their ability to compete in todays international markets
21
Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in
predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first
restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept
has today been adopted by various Indian and International players to deliver quality produce to consumers
For instance Cremica Industries worked with another McDonalds supplier
from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to
McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with
farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water
consumption better seeds amp agricultural management practices which result in greater yields
In some cases these Indian suppliers had the technology - but no market for the
products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk
casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to
restaurants across India
McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations
COMPANYrsquoS FINANCIAL INFORMATION
Company Name McDonalds Corporation
Ticker Symbol MCD
Web Address wwwmcdonaldscom
CEO Mr Donald Thompson
No of Employees 420000
Common Issue Type CS
Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other
22
goods from numerous independent suppliers
Industry Information LEISURE - Restaurants
Price Day Change Bid Ask Open High Low Volume
8718 -002 - - 8743 8743 8676 3658828
Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range
875267 10040 039 527 253 164 35 10222 - 8331
KEY FIGURES (Latest Twelve Months - LTM)
Yesterdays Close 8706 $
PE Ratio - LTM 164
Market Capitalisation 875267 mil
Latest Shares Outstanding 10040 mil
Earnings pS (EPS) 527 $
Dividend pS (DPS) 253 cent
Dividend Yield 35
Dividend Payout Ratio 48
Revenue per Employee 64300 $
Effective Tax Rate 313
Float 10153 mil
Float as of Shares Outstanding 999
Foreign Sales 18478 mil
Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue
910
Research amp Devlopment (RampD) as of Revenue
000
Gross Profit Margin 447
EBITDA Margin 356
Pre-Tax Profit Margin 291
Assets Turnover 08
Return on Assets (ROA) 161
Return on Equity (ROE) 392
Return on Capital Invested (ROCI) 204 Current Ratio 10
Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096
LT DebtTotal Capital 480
Working Capital pS 006 $
Cash pS 217 $
Book-Value pS 1383 $
Balance Sheet (at a glance) in Millions
DIVIDEND INFO
Dividend Declared Date 09202012
Dividend Ex-Date 11282012
Dividend Record Date 12022012
Dividend Pay Date 12162012
Dividend Amount 770
Type of Payment Cash Payment
Dividend Rate 308
Current Dividend Yield 35
5-Y Average Dividend Yield 31
Payout Ratio 480
5-Y Average Payout Ratio 530
Share price performance previous 3 years
Share price performance intraday
23
Tangible Book-Value pS 1110 $
Cash Flow pS 689 $
Free Cash Flow pS 125 $
KEY FIGURES (LTM) Price info PriceBook Ratio 630
PriceTangible Book Ratio 785 PriceCash Flow 126
PriceFree Cash Flow 699
PE as of Industry Group 420
PE as of Sector Segment 770
PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol
1 Week - - - 00 101 54041 66217
4 Weeks 8743 8331 8474 27 101 57129 856929
13 Weeks 9416 8331 9102 -44 98 61288 3554700
26 Weeks 9416 8331 8775 -08 93 59419 7189758
52 Weeks 10222 8331 9803 -112 79 59272 14521666
YTD 10222 8331 - -132 77 59774 13807695
Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)
8661 8631 8825 8931 9174 039 031
GROWTH RATES 5-Year
Growh Rsup2 of 5-Year Growth
3-Year
Growth
Revenue 381 776 666
Income 2017 811 978
Dividend 1536 947 1016
Capital Spending 697 NA 1052
RampD 000 NA 000
Normalized Inc 1158 NA 979
CHANGES YTD vs
Last YTD
Curr Qtr vs
Qtr 1-Yr ago
Annual vs
Last Annual
Revenue 21 -02 122
Earnings -14 -35 113
EPS 10 -14 151
EPS $ 004 -002 069
SOLVENCY RATIOS
SHORT-TERM SOLVENCY RATIOS
(LIQUIDITY)
Net Working Capital Ratio 271
Current Ratio 13
Quick Ratio (Acid Test) 10
Liquidity Ratio (Cash) 067
Receivables Turnover 215
Average Collection Period 17
Working CapitalEquity 62
Working Capital pS 088
Cash-Flow pS 677
Free Cash-Flow pS 209
24
FINANCIAL STRUCTURE RATIOS
Altmans Z-Score Ratio 485
Financial Leverage Ratio (AssetsEquity) 23
Debt Ratio 564
Total DebtEquity (Gearing Ratio) 087
LT DebtEquity 084
LT DebtCapital Invested 569
LT DebtTotal Liabilities 652
Interest Cover 173
InterestCapital Invested 167
25
People hellip McDonaldrsquos 1 Resource in India
26
McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs
around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in
1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with
McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)
The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive
training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course
(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the
Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University
27
The McDonaldrsquos Promise
QUALITY SERVICE CLEANLINESS amp VALUE
When asked to explain McDonalds success founder Ray Kroc used to say We
take the hamburger business more seriously than anyone else
Kroc was a perfectionist From the day he opened his first restaurant he vowed
to give his customers high quality products served quickly --and with a smile
in a clean and pleasant environment and all at a fair price Quality Service
Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds
business
QUALITY
McDonalds India serves only the highest quality products The attention to food
quality started long before the first restaurant opened McDonalds India has
established close relationships with local suppliers who provide McDonalds
with the highest quality freshest ingredients to make its products
All suppliers adhere to Indian government regulations on food health and
hygiene while continuously maintaining McDonalds own recognized standards
McDonalds has established an extensive cold chain distribution system in
India to ensure that the products which arrive at the restaurant from suppliers
all over India are absolutely fresh In the restaurants products and supplies are
used on a first-in first-out basis to ensure freshness All McDonalds products
are prepared using modern state-of-the-art cooking equipment to ensure quality
and safety
SERVICE
McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos
which sets its restaurants apart from others At McDonalds the customer
always comes first Every employee strives to provide 100 percent customer
satisfaction -- for every customer -- every visit This includes friendly and
attentive service accuracy in order taking and anticipation of customers needs
-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun
and youthful spirit we will proudly serve an exceptional McDonaldrsquos
eating experience that makes all people feel special and makes them smile ndash
every customer every timerdquo
28
CLEANLINESS
McDonalds restaurants provide a clean comfortable environment especially
suited for families McDonalds stringent cleaning standards ensure that all
tables seating highchairs and trays are sanitized several times each hour The
attention to cleanliness extends from the lobby to the kitchen to the sidewalk
and immediate areas outside the restaurant
In addition to urging customers to dispose of their litter properly and offering a
number of trash bins (both inside and outside the restaurants) for their
convenience McDonalds Litter Patrols walk around the restaurants several
times each day picking up litter -- even if it isnt from McDonalds
Restaurant managers walk through the dining areas each hour to ensure that it
is clean and well stocked All restaurants provide a variety of comfortable
seating arrangements to accommodate anyone -- from a single individual to a
large family The environment is warm inviting and well lit
VALUE
McDonalds menu is priced at a value that the largest segment of Indian
consumers can afford McDonalds does not sacrifice quality for value -- rather
McDonalds leverages economies of scale to minimize costs while maximizing
value to customers
McDonalds definition of value is broader than most restaurants of its kind -- it
is more than price Value at McDonalds is the sum of the total McDonalds
experience quality food fast friendly service a clean and pleasant
environment and products priced at very affordable prices for the largest
segment of Indian consumers possible That is value at McDonalds
29
McDonaldrsquos Indiahellip Culturally Sensitive
Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much
that is consistent with other McDonaldrsquos restaurants around the world such as
the quality of the food and the attention to service
The dedication to local cultures is not new for McDonaldrsquos For the past 50
years McDonaldrsquos has opened restaurants in more than 120 distinctly different
countries and cultures With guidance from its local partners McDonaldrsquos is
able to adapt- where necessary-its menu and restaurant operations to
complement existing eating-out options McDonaldrsquos local owners understand
what their customers want perhaps more importantly what is acceptable within
local customs and values
There is much too that is very different- such as the first beef-less and pork-
less menu in the world and special product formulations to cater to Indian
culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos
India says ldquoWe know the Indian culture because we were born in it
inherited its richness and respect it greatly It is the respect for this culture
and the sentiments of many of our customersrsquo that we do not serve any
beef and pork items in our restaurantsrdquo
McDonaldrsquos commitment to its Indian customers is evident even in
development of special sauces that use local spices and chillies The
mayonnaise and all other sauces are egg-less
In India vegetarianism is in many cases more than a lifestyle choice Many
people are vegetarians due to religious reasons and in some cases even the
vegetarian product that has come into contact with a non-vegetarian product is
unacceptable Hence McDonaldrsquos India has also changed its operations to
address the special requirements of our vegetarian customers by having
processes that ensure that a physical separation of veg and non-veg products is
maintained right from farm to the customer Vegetable products are prepared
separately using dedicated equipment and utensils Also in India McDonaldrsquos
uses only vegetable oil as a medium for cooking
30
McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash
lsquoto be driven by the leadership of local ownersrsquo This commitment has translated
into enduring benefits to the businesses at the grass root level in the areas of
introduction of new crops new agricultural practices and food processing methods
and procedures
McDonalds unique cold chain on which the QSR major has spent more than six
years setting up in India has brought about a veritable revolution immensely
benefiting the farmers at one end and enabling customers at retail counters get the
highest quality food products absolutely fresh and at great value
Setting up this extensive cold chain distribution system has involved the transfer of
state-of-the-art food processing technology by McDonalds and its international
suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain
From Field to -2⁰C in 90 Minutes
Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be
grown during the winter months but with McDonalds expertise in the area of
agriculture they are now able to grow this crop through the year
Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room
to remove field heat a large cold room and a refrigerated van for transportation where
the temperature and the relative humidity of the crop is maintained between 1ordm C and
4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room
within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling
to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at
the farms itself ensuring no delay between harvesting pre-cooling packaging and
cold storage
Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd
Flavour and Freshness locked in at - 35degC
Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable
range of products is another important player in this cold chain This includes hi-tech
refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C
This is vital to ensure that the frozen food retains it freshness for a long time and the
cold chain is maintained The frozen product is immediately moved to cold storage
rooms
31
Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India
From Farm to Bulk Cooler in less than 90 Minutes
McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for
quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk
coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -
thus maintaining the cold chain
All leading to the Consumer
McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The
DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity
of the products throughout the entire cold chain
Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C
as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state
All these suppliers share McDonalds commitment and dedication to satisfying
customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently
each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental
effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn
more
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
19
McDonaldrsquos makes sure that cultural amp regional barriers are kept in mind
while providing food to different countries
Clean environment and play areas for children where they can enjoy their
time
Weakness
The weakness that hits the list of employee turnover rate Every year
many of their employees are fired out of the restaurant
McDonalds mostly advertises products and food items that targets
children
Health conscious people often complain that they do not provide us with
the organic and healthy food This becomes their weakness when they get in the complaints
They also face quality issue at times This affects the business as they are
running the outlet worldwide if one franchise gets affected others also
get a bad name
Opportunities
It can open up online services for their customers so that they can easily
order their desired meals sitting at home
Discounts given on every food item may help them gain more customers
They can go for a joint venture with the retailers they work with
They can introduce healthy hamburgers and healthy drinks for the people who are health conscious
20
In order to be environment friendly they can use packing material which
can be recycled later or material that does not create pollution
Threats
Emerging competition of similar outlets is becoming a problem for McDonalds
Health issue also becomes a problem when it comes to food
As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies
Recession in any country would definitely affect the whole outlet
worldwide
People facing heart problems and obesity accuse McDonalds for not
providing them with the healthy food
They have a threat of local food outlets in different countries
McDonalds is operating in a fully fledged economy where competition is
increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession
McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local
Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government
regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled
Indian businesses to grow by improving their ability to compete in todays international markets
21
Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in
predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first
restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept
has today been adopted by various Indian and International players to deliver quality produce to consumers
For instance Cremica Industries worked with another McDonalds supplier
from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to
McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with
farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water
consumption better seeds amp agricultural management practices which result in greater yields
In some cases these Indian suppliers had the technology - but no market for the
products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk
casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to
restaurants across India
McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations
COMPANYrsquoS FINANCIAL INFORMATION
Company Name McDonalds Corporation
Ticker Symbol MCD
Web Address wwwmcdonaldscom
CEO Mr Donald Thompson
No of Employees 420000
Common Issue Type CS
Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other
22
goods from numerous independent suppliers
Industry Information LEISURE - Restaurants
Price Day Change Bid Ask Open High Low Volume
8718 -002 - - 8743 8743 8676 3658828
Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range
875267 10040 039 527 253 164 35 10222 - 8331
KEY FIGURES (Latest Twelve Months - LTM)
Yesterdays Close 8706 $
PE Ratio - LTM 164
Market Capitalisation 875267 mil
Latest Shares Outstanding 10040 mil
Earnings pS (EPS) 527 $
Dividend pS (DPS) 253 cent
Dividend Yield 35
Dividend Payout Ratio 48
Revenue per Employee 64300 $
Effective Tax Rate 313
Float 10153 mil
Float as of Shares Outstanding 999
Foreign Sales 18478 mil
Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue
910
Research amp Devlopment (RampD) as of Revenue
000
Gross Profit Margin 447
EBITDA Margin 356
Pre-Tax Profit Margin 291
Assets Turnover 08
Return on Assets (ROA) 161
Return on Equity (ROE) 392
Return on Capital Invested (ROCI) 204 Current Ratio 10
Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096
LT DebtTotal Capital 480
Working Capital pS 006 $
Cash pS 217 $
Book-Value pS 1383 $
Balance Sheet (at a glance) in Millions
DIVIDEND INFO
Dividend Declared Date 09202012
Dividend Ex-Date 11282012
Dividend Record Date 12022012
Dividend Pay Date 12162012
Dividend Amount 770
Type of Payment Cash Payment
Dividend Rate 308
Current Dividend Yield 35
5-Y Average Dividend Yield 31
Payout Ratio 480
5-Y Average Payout Ratio 530
Share price performance previous 3 years
Share price performance intraday
23
Tangible Book-Value pS 1110 $
Cash Flow pS 689 $
Free Cash Flow pS 125 $
KEY FIGURES (LTM) Price info PriceBook Ratio 630
PriceTangible Book Ratio 785 PriceCash Flow 126
PriceFree Cash Flow 699
PE as of Industry Group 420
PE as of Sector Segment 770
PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol
1 Week - - - 00 101 54041 66217
4 Weeks 8743 8331 8474 27 101 57129 856929
13 Weeks 9416 8331 9102 -44 98 61288 3554700
26 Weeks 9416 8331 8775 -08 93 59419 7189758
52 Weeks 10222 8331 9803 -112 79 59272 14521666
YTD 10222 8331 - -132 77 59774 13807695
Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)
8661 8631 8825 8931 9174 039 031
GROWTH RATES 5-Year
Growh Rsup2 of 5-Year Growth
3-Year
Growth
Revenue 381 776 666
Income 2017 811 978
Dividend 1536 947 1016
Capital Spending 697 NA 1052
RampD 000 NA 000
Normalized Inc 1158 NA 979
CHANGES YTD vs
Last YTD
Curr Qtr vs
Qtr 1-Yr ago
Annual vs
Last Annual
Revenue 21 -02 122
Earnings -14 -35 113
EPS 10 -14 151
EPS $ 004 -002 069
SOLVENCY RATIOS
SHORT-TERM SOLVENCY RATIOS
(LIQUIDITY)
Net Working Capital Ratio 271
Current Ratio 13
Quick Ratio (Acid Test) 10
Liquidity Ratio (Cash) 067
Receivables Turnover 215
Average Collection Period 17
Working CapitalEquity 62
Working Capital pS 088
Cash-Flow pS 677
Free Cash-Flow pS 209
24
FINANCIAL STRUCTURE RATIOS
Altmans Z-Score Ratio 485
Financial Leverage Ratio (AssetsEquity) 23
Debt Ratio 564
Total DebtEquity (Gearing Ratio) 087
LT DebtEquity 084
LT DebtCapital Invested 569
LT DebtTotal Liabilities 652
Interest Cover 173
InterestCapital Invested 167
25
People hellip McDonaldrsquos 1 Resource in India
26
McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs
around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in
1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with
McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)
The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive
training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course
(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the
Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University
27
The McDonaldrsquos Promise
QUALITY SERVICE CLEANLINESS amp VALUE
When asked to explain McDonalds success founder Ray Kroc used to say We
take the hamburger business more seriously than anyone else
Kroc was a perfectionist From the day he opened his first restaurant he vowed
to give his customers high quality products served quickly --and with a smile
in a clean and pleasant environment and all at a fair price Quality Service
Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds
business
QUALITY
McDonalds India serves only the highest quality products The attention to food
quality started long before the first restaurant opened McDonalds India has
established close relationships with local suppliers who provide McDonalds
with the highest quality freshest ingredients to make its products
All suppliers adhere to Indian government regulations on food health and
hygiene while continuously maintaining McDonalds own recognized standards
McDonalds has established an extensive cold chain distribution system in
India to ensure that the products which arrive at the restaurant from suppliers
all over India are absolutely fresh In the restaurants products and supplies are
used on a first-in first-out basis to ensure freshness All McDonalds products
are prepared using modern state-of-the-art cooking equipment to ensure quality
and safety
SERVICE
McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos
which sets its restaurants apart from others At McDonalds the customer
always comes first Every employee strives to provide 100 percent customer
satisfaction -- for every customer -- every visit This includes friendly and
attentive service accuracy in order taking and anticipation of customers needs
-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun
and youthful spirit we will proudly serve an exceptional McDonaldrsquos
eating experience that makes all people feel special and makes them smile ndash
every customer every timerdquo
28
CLEANLINESS
McDonalds restaurants provide a clean comfortable environment especially
suited for families McDonalds stringent cleaning standards ensure that all
tables seating highchairs and trays are sanitized several times each hour The
attention to cleanliness extends from the lobby to the kitchen to the sidewalk
and immediate areas outside the restaurant
In addition to urging customers to dispose of their litter properly and offering a
number of trash bins (both inside and outside the restaurants) for their
convenience McDonalds Litter Patrols walk around the restaurants several
times each day picking up litter -- even if it isnt from McDonalds
Restaurant managers walk through the dining areas each hour to ensure that it
is clean and well stocked All restaurants provide a variety of comfortable
seating arrangements to accommodate anyone -- from a single individual to a
large family The environment is warm inviting and well lit
VALUE
McDonalds menu is priced at a value that the largest segment of Indian
consumers can afford McDonalds does not sacrifice quality for value -- rather
McDonalds leverages economies of scale to minimize costs while maximizing
value to customers
McDonalds definition of value is broader than most restaurants of its kind -- it
is more than price Value at McDonalds is the sum of the total McDonalds
experience quality food fast friendly service a clean and pleasant
environment and products priced at very affordable prices for the largest
segment of Indian consumers possible That is value at McDonalds
29
McDonaldrsquos Indiahellip Culturally Sensitive
Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much
that is consistent with other McDonaldrsquos restaurants around the world such as
the quality of the food and the attention to service
The dedication to local cultures is not new for McDonaldrsquos For the past 50
years McDonaldrsquos has opened restaurants in more than 120 distinctly different
countries and cultures With guidance from its local partners McDonaldrsquos is
able to adapt- where necessary-its menu and restaurant operations to
complement existing eating-out options McDonaldrsquos local owners understand
what their customers want perhaps more importantly what is acceptable within
local customs and values
There is much too that is very different- such as the first beef-less and pork-
less menu in the world and special product formulations to cater to Indian
culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos
India says ldquoWe know the Indian culture because we were born in it
inherited its richness and respect it greatly It is the respect for this culture
and the sentiments of many of our customersrsquo that we do not serve any
beef and pork items in our restaurantsrdquo
McDonaldrsquos commitment to its Indian customers is evident even in
development of special sauces that use local spices and chillies The
mayonnaise and all other sauces are egg-less
In India vegetarianism is in many cases more than a lifestyle choice Many
people are vegetarians due to religious reasons and in some cases even the
vegetarian product that has come into contact with a non-vegetarian product is
unacceptable Hence McDonaldrsquos India has also changed its operations to
address the special requirements of our vegetarian customers by having
processes that ensure that a physical separation of veg and non-veg products is
maintained right from farm to the customer Vegetable products are prepared
separately using dedicated equipment and utensils Also in India McDonaldrsquos
uses only vegetable oil as a medium for cooking
30
McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash
lsquoto be driven by the leadership of local ownersrsquo This commitment has translated
into enduring benefits to the businesses at the grass root level in the areas of
introduction of new crops new agricultural practices and food processing methods
and procedures
McDonalds unique cold chain on which the QSR major has spent more than six
years setting up in India has brought about a veritable revolution immensely
benefiting the farmers at one end and enabling customers at retail counters get the
highest quality food products absolutely fresh and at great value
Setting up this extensive cold chain distribution system has involved the transfer of
state-of-the-art food processing technology by McDonalds and its international
suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain
From Field to -2⁰C in 90 Minutes
Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be
grown during the winter months but with McDonalds expertise in the area of
agriculture they are now able to grow this crop through the year
Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room
to remove field heat a large cold room and a refrigerated van for transportation where
the temperature and the relative humidity of the crop is maintained between 1ordm C and
4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room
within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling
to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at
the farms itself ensuring no delay between harvesting pre-cooling packaging and
cold storage
Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd
Flavour and Freshness locked in at - 35degC
Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable
range of products is another important player in this cold chain This includes hi-tech
refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C
This is vital to ensure that the frozen food retains it freshness for a long time and the
cold chain is maintained The frozen product is immediately moved to cold storage
rooms
31
Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India
From Farm to Bulk Cooler in less than 90 Minutes
McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for
quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk
coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -
thus maintaining the cold chain
All leading to the Consumer
McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The
DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity
of the products throughout the entire cold chain
Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C
as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state
All these suppliers share McDonalds commitment and dedication to satisfying
customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently
each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental
effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn
more
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
20
In order to be environment friendly they can use packing material which
can be recycled later or material that does not create pollution
Threats
Emerging competition of similar outlets is becoming a problem for McDonalds
Health issue also becomes a problem when it comes to food
As it is a multinational food outlet fluctuations in the currency of other countries becomes a problem for such companies
Recession in any country would definitely affect the whole outlet
worldwide
People facing heart problems and obesity accuse McDonalds for not
providing them with the healthy food
They have a threat of local food outlets in different countries
McDonalds is operating in a fully fledged economy where competition is
increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession
McDonaldrsquos Role in the Indian Economic Growth In 1990 six years before the opening of the first McDonalds restaurant in India McDonaldrsquos and its international supplier partners worked together with local
Indian companies to develop products that meet McDonalds vigorous quality standards These standards also strictly adhere to Indian Government
regulations on food health and hygiene Part of this development has involved the transfer of state-of-the-art food processing technology which has enabled
Indian businesses to grow by improving their ability to compete in todays international markets
21
Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in
predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first
restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept
has today been adopted by various Indian and International players to deliver quality produce to consumers
For instance Cremica Industries worked with another McDonalds supplier
from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to
McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with
farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water
consumption better seeds amp agricultural management practices which result in greater yields
In some cases these Indian suppliers had the technology - but no market for the
products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk
casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to
restaurants across India
McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations
COMPANYrsquoS FINANCIAL INFORMATION
Company Name McDonalds Corporation
Ticker Symbol MCD
Web Address wwwmcdonaldscom
CEO Mr Donald Thompson
No of Employees 420000
Common Issue Type CS
Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other
22
goods from numerous independent suppliers
Industry Information LEISURE - Restaurants
Price Day Change Bid Ask Open High Low Volume
8718 -002 - - 8743 8743 8676 3658828
Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range
875267 10040 039 527 253 164 35 10222 - 8331
KEY FIGURES (Latest Twelve Months - LTM)
Yesterdays Close 8706 $
PE Ratio - LTM 164
Market Capitalisation 875267 mil
Latest Shares Outstanding 10040 mil
Earnings pS (EPS) 527 $
Dividend pS (DPS) 253 cent
Dividend Yield 35
Dividend Payout Ratio 48
Revenue per Employee 64300 $
Effective Tax Rate 313
Float 10153 mil
Float as of Shares Outstanding 999
Foreign Sales 18478 mil
Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue
910
Research amp Devlopment (RampD) as of Revenue
000
Gross Profit Margin 447
EBITDA Margin 356
Pre-Tax Profit Margin 291
Assets Turnover 08
Return on Assets (ROA) 161
Return on Equity (ROE) 392
Return on Capital Invested (ROCI) 204 Current Ratio 10
Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096
LT DebtTotal Capital 480
Working Capital pS 006 $
Cash pS 217 $
Book-Value pS 1383 $
Balance Sheet (at a glance) in Millions
DIVIDEND INFO
Dividend Declared Date 09202012
Dividend Ex-Date 11282012
Dividend Record Date 12022012
Dividend Pay Date 12162012
Dividend Amount 770
Type of Payment Cash Payment
Dividend Rate 308
Current Dividend Yield 35
5-Y Average Dividend Yield 31
Payout Ratio 480
5-Y Average Payout Ratio 530
Share price performance previous 3 years
Share price performance intraday
23
Tangible Book-Value pS 1110 $
Cash Flow pS 689 $
Free Cash Flow pS 125 $
KEY FIGURES (LTM) Price info PriceBook Ratio 630
PriceTangible Book Ratio 785 PriceCash Flow 126
PriceFree Cash Flow 699
PE as of Industry Group 420
PE as of Sector Segment 770
PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol
1 Week - - - 00 101 54041 66217
4 Weeks 8743 8331 8474 27 101 57129 856929
13 Weeks 9416 8331 9102 -44 98 61288 3554700
26 Weeks 9416 8331 8775 -08 93 59419 7189758
52 Weeks 10222 8331 9803 -112 79 59272 14521666
YTD 10222 8331 - -132 77 59774 13807695
Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)
8661 8631 8825 8931 9174 039 031
GROWTH RATES 5-Year
Growh Rsup2 of 5-Year Growth
3-Year
Growth
Revenue 381 776 666
Income 2017 811 978
Dividend 1536 947 1016
Capital Spending 697 NA 1052
RampD 000 NA 000
Normalized Inc 1158 NA 979
CHANGES YTD vs
Last YTD
Curr Qtr vs
Qtr 1-Yr ago
Annual vs
Last Annual
Revenue 21 -02 122
Earnings -14 -35 113
EPS 10 -14 151
EPS $ 004 -002 069
SOLVENCY RATIOS
SHORT-TERM SOLVENCY RATIOS
(LIQUIDITY)
Net Working Capital Ratio 271
Current Ratio 13
Quick Ratio (Acid Test) 10
Liquidity Ratio (Cash) 067
Receivables Turnover 215
Average Collection Period 17
Working CapitalEquity 62
Working Capital pS 088
Cash-Flow pS 677
Free Cash-Flow pS 209
24
FINANCIAL STRUCTURE RATIOS
Altmans Z-Score Ratio 485
Financial Leverage Ratio (AssetsEquity) 23
Debt Ratio 564
Total DebtEquity (Gearing Ratio) 087
LT DebtEquity 084
LT DebtCapital Invested 569
LT DebtTotal Liabilities 652
Interest Cover 173
InterestCapital Invested 167
25
People hellip McDonaldrsquos 1 Resource in India
26
McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs
around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in
1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with
McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)
The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive
training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course
(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the
Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University
27
The McDonaldrsquos Promise
QUALITY SERVICE CLEANLINESS amp VALUE
When asked to explain McDonalds success founder Ray Kroc used to say We
take the hamburger business more seriously than anyone else
Kroc was a perfectionist From the day he opened his first restaurant he vowed
to give his customers high quality products served quickly --and with a smile
in a clean and pleasant environment and all at a fair price Quality Service
Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds
business
QUALITY
McDonalds India serves only the highest quality products The attention to food
quality started long before the first restaurant opened McDonalds India has
established close relationships with local suppliers who provide McDonalds
with the highest quality freshest ingredients to make its products
All suppliers adhere to Indian government regulations on food health and
hygiene while continuously maintaining McDonalds own recognized standards
McDonalds has established an extensive cold chain distribution system in
India to ensure that the products which arrive at the restaurant from suppliers
all over India are absolutely fresh In the restaurants products and supplies are
used on a first-in first-out basis to ensure freshness All McDonalds products
are prepared using modern state-of-the-art cooking equipment to ensure quality
and safety
SERVICE
McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos
which sets its restaurants apart from others At McDonalds the customer
always comes first Every employee strives to provide 100 percent customer
satisfaction -- for every customer -- every visit This includes friendly and
attentive service accuracy in order taking and anticipation of customers needs
-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun
and youthful spirit we will proudly serve an exceptional McDonaldrsquos
eating experience that makes all people feel special and makes them smile ndash
every customer every timerdquo
28
CLEANLINESS
McDonalds restaurants provide a clean comfortable environment especially
suited for families McDonalds stringent cleaning standards ensure that all
tables seating highchairs and trays are sanitized several times each hour The
attention to cleanliness extends from the lobby to the kitchen to the sidewalk
and immediate areas outside the restaurant
In addition to urging customers to dispose of their litter properly and offering a
number of trash bins (both inside and outside the restaurants) for their
convenience McDonalds Litter Patrols walk around the restaurants several
times each day picking up litter -- even if it isnt from McDonalds
Restaurant managers walk through the dining areas each hour to ensure that it
is clean and well stocked All restaurants provide a variety of comfortable
seating arrangements to accommodate anyone -- from a single individual to a
large family The environment is warm inviting and well lit
VALUE
McDonalds menu is priced at a value that the largest segment of Indian
consumers can afford McDonalds does not sacrifice quality for value -- rather
McDonalds leverages economies of scale to minimize costs while maximizing
value to customers
McDonalds definition of value is broader than most restaurants of its kind -- it
is more than price Value at McDonalds is the sum of the total McDonalds
experience quality food fast friendly service a clean and pleasant
environment and products priced at very affordable prices for the largest
segment of Indian consumers possible That is value at McDonalds
29
McDonaldrsquos Indiahellip Culturally Sensitive
Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much
that is consistent with other McDonaldrsquos restaurants around the world such as
the quality of the food and the attention to service
The dedication to local cultures is not new for McDonaldrsquos For the past 50
years McDonaldrsquos has opened restaurants in more than 120 distinctly different
countries and cultures With guidance from its local partners McDonaldrsquos is
able to adapt- where necessary-its menu and restaurant operations to
complement existing eating-out options McDonaldrsquos local owners understand
what their customers want perhaps more importantly what is acceptable within
local customs and values
There is much too that is very different- such as the first beef-less and pork-
less menu in the world and special product formulations to cater to Indian
culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos
India says ldquoWe know the Indian culture because we were born in it
inherited its richness and respect it greatly It is the respect for this culture
and the sentiments of many of our customersrsquo that we do not serve any
beef and pork items in our restaurantsrdquo
McDonaldrsquos commitment to its Indian customers is evident even in
development of special sauces that use local spices and chillies The
mayonnaise and all other sauces are egg-less
In India vegetarianism is in many cases more than a lifestyle choice Many
people are vegetarians due to religious reasons and in some cases even the
vegetarian product that has come into contact with a non-vegetarian product is
unacceptable Hence McDonaldrsquos India has also changed its operations to
address the special requirements of our vegetarian customers by having
processes that ensure that a physical separation of veg and non-veg products is
maintained right from farm to the customer Vegetable products are prepared
separately using dedicated equipment and utensils Also in India McDonaldrsquos
uses only vegetable oil as a medium for cooking
30
McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash
lsquoto be driven by the leadership of local ownersrsquo This commitment has translated
into enduring benefits to the businesses at the grass root level in the areas of
introduction of new crops new agricultural practices and food processing methods
and procedures
McDonalds unique cold chain on which the QSR major has spent more than six
years setting up in India has brought about a veritable revolution immensely
benefiting the farmers at one end and enabling customers at retail counters get the
highest quality food products absolutely fresh and at great value
Setting up this extensive cold chain distribution system has involved the transfer of
state-of-the-art food processing technology by McDonalds and its international
suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain
From Field to -2⁰C in 90 Minutes
Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be
grown during the winter months but with McDonalds expertise in the area of
agriculture they are now able to grow this crop through the year
Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room
to remove field heat a large cold room and a refrigerated van for transportation where
the temperature and the relative humidity of the crop is maintained between 1ordm C and
4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room
within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling
to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at
the farms itself ensuring no delay between harvesting pre-cooling packaging and
cold storage
Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd
Flavour and Freshness locked in at - 35degC
Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable
range of products is another important player in this cold chain This includes hi-tech
refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C
This is vital to ensure that the frozen food retains it freshness for a long time and the
cold chain is maintained The frozen product is immediately moved to cold storage
rooms
31
Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India
From Farm to Bulk Cooler in less than 90 Minutes
McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for
quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk
coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -
thus maintaining the cold chain
All leading to the Consumer
McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The
DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity
of the products throughout the entire cold chain
Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C
as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state
All these suppliers share McDonalds commitment and dedication to satisfying
customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently
each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental
effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn
more
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
21
Prior to McDonaldrsquos arrival in India the concept of a Cold Chain for the distribution of food and dairy products from the farm to the end supplier in
predetermined and stringently enforced climactic and hygienic conditions was at a very nascent stage of development For five years prior to opening the first
restaurant McDonaldrsquos pioneered the effort to develop this aforementioned Cold Chain so that trademarked high standards would be assured This concept
has today been adopted by various Indian and International players to deliver quality produce to consumers
For instance Cremica Industries worked with another McDonalds supplier
from Europe to develop technology and expertise which allowed Cremica to expand its business from baking to also providing breading and batters to
McDonalds India and other companies Another benefit is expertise in the areas of agriculture which allowed McDonaldrsquos and its suppliers to work with
farmers in Ooty Pune Dehradun and other regions to cultivate high quality Iceberg lettuce This includes sharing advanced agricultural technology and expertise like utilization of drip irrigation systems which reduce overall water
consumption better seeds amp agricultural management practices which result in greater yields
In some cases these Indian suppliers had the technology - but no market for the
products they produced For example Dynamix Dairies - through its relationship with McDonalds - was introduced to a large customer of milk
casein and other milk derivatives McDonalds local supply networks through Radhakrishna Foodland to get products from the various suppliers to
restaurants across India
McDonaldrsquos North India alone contributes Rs307crore (USD 776 million)annum approximately as sales tax to different State Governments where we have our operations
COMPANYrsquoS FINANCIAL INFORMATION
Company Name McDonalds Corporation
Ticker Symbol MCD
Web Address wwwmcdonaldscom
CEO Mr Donald Thompson
No of Employees 420000
Common Issue Type CS
Business Description McDonalds Corporation franchises and operates McDonalds restaurants in the food service industry The Company and its franchisees purchase food packaging equipment and other
22
goods from numerous independent suppliers
Industry Information LEISURE - Restaurants
Price Day Change Bid Ask Open High Low Volume
8718 -002 - - 8743 8743 8676 3658828
Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range
875267 10040 039 527 253 164 35 10222 - 8331
KEY FIGURES (Latest Twelve Months - LTM)
Yesterdays Close 8706 $
PE Ratio - LTM 164
Market Capitalisation 875267 mil
Latest Shares Outstanding 10040 mil
Earnings pS (EPS) 527 $
Dividend pS (DPS) 253 cent
Dividend Yield 35
Dividend Payout Ratio 48
Revenue per Employee 64300 $
Effective Tax Rate 313
Float 10153 mil
Float as of Shares Outstanding 999
Foreign Sales 18478 mil
Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue
910
Research amp Devlopment (RampD) as of Revenue
000
Gross Profit Margin 447
EBITDA Margin 356
Pre-Tax Profit Margin 291
Assets Turnover 08
Return on Assets (ROA) 161
Return on Equity (ROE) 392
Return on Capital Invested (ROCI) 204 Current Ratio 10
Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096
LT DebtTotal Capital 480
Working Capital pS 006 $
Cash pS 217 $
Book-Value pS 1383 $
Balance Sheet (at a glance) in Millions
DIVIDEND INFO
Dividend Declared Date 09202012
Dividend Ex-Date 11282012
Dividend Record Date 12022012
Dividend Pay Date 12162012
Dividend Amount 770
Type of Payment Cash Payment
Dividend Rate 308
Current Dividend Yield 35
5-Y Average Dividend Yield 31
Payout Ratio 480
5-Y Average Payout Ratio 530
Share price performance previous 3 years
Share price performance intraday
23
Tangible Book-Value pS 1110 $
Cash Flow pS 689 $
Free Cash Flow pS 125 $
KEY FIGURES (LTM) Price info PriceBook Ratio 630
PriceTangible Book Ratio 785 PriceCash Flow 126
PriceFree Cash Flow 699
PE as of Industry Group 420
PE as of Sector Segment 770
PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol
1 Week - - - 00 101 54041 66217
4 Weeks 8743 8331 8474 27 101 57129 856929
13 Weeks 9416 8331 9102 -44 98 61288 3554700
26 Weeks 9416 8331 8775 -08 93 59419 7189758
52 Weeks 10222 8331 9803 -112 79 59272 14521666
YTD 10222 8331 - -132 77 59774 13807695
Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)
8661 8631 8825 8931 9174 039 031
GROWTH RATES 5-Year
Growh Rsup2 of 5-Year Growth
3-Year
Growth
Revenue 381 776 666
Income 2017 811 978
Dividend 1536 947 1016
Capital Spending 697 NA 1052
RampD 000 NA 000
Normalized Inc 1158 NA 979
CHANGES YTD vs
Last YTD
Curr Qtr vs
Qtr 1-Yr ago
Annual vs
Last Annual
Revenue 21 -02 122
Earnings -14 -35 113
EPS 10 -14 151
EPS $ 004 -002 069
SOLVENCY RATIOS
SHORT-TERM SOLVENCY RATIOS
(LIQUIDITY)
Net Working Capital Ratio 271
Current Ratio 13
Quick Ratio (Acid Test) 10
Liquidity Ratio (Cash) 067
Receivables Turnover 215
Average Collection Period 17
Working CapitalEquity 62
Working Capital pS 088
Cash-Flow pS 677
Free Cash-Flow pS 209
24
FINANCIAL STRUCTURE RATIOS
Altmans Z-Score Ratio 485
Financial Leverage Ratio (AssetsEquity) 23
Debt Ratio 564
Total DebtEquity (Gearing Ratio) 087
LT DebtEquity 084
LT DebtCapital Invested 569
LT DebtTotal Liabilities 652
Interest Cover 173
InterestCapital Invested 167
25
People hellip McDonaldrsquos 1 Resource in India
26
McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs
around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in
1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with
McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)
The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive
training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course
(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the
Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University
27
The McDonaldrsquos Promise
QUALITY SERVICE CLEANLINESS amp VALUE
When asked to explain McDonalds success founder Ray Kroc used to say We
take the hamburger business more seriously than anyone else
Kroc was a perfectionist From the day he opened his first restaurant he vowed
to give his customers high quality products served quickly --and with a smile
in a clean and pleasant environment and all at a fair price Quality Service
Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds
business
QUALITY
McDonalds India serves only the highest quality products The attention to food
quality started long before the first restaurant opened McDonalds India has
established close relationships with local suppliers who provide McDonalds
with the highest quality freshest ingredients to make its products
All suppliers adhere to Indian government regulations on food health and
hygiene while continuously maintaining McDonalds own recognized standards
McDonalds has established an extensive cold chain distribution system in
India to ensure that the products which arrive at the restaurant from suppliers
all over India are absolutely fresh In the restaurants products and supplies are
used on a first-in first-out basis to ensure freshness All McDonalds products
are prepared using modern state-of-the-art cooking equipment to ensure quality
and safety
SERVICE
McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos
which sets its restaurants apart from others At McDonalds the customer
always comes first Every employee strives to provide 100 percent customer
satisfaction -- for every customer -- every visit This includes friendly and
attentive service accuracy in order taking and anticipation of customers needs
-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun
and youthful spirit we will proudly serve an exceptional McDonaldrsquos
eating experience that makes all people feel special and makes them smile ndash
every customer every timerdquo
28
CLEANLINESS
McDonalds restaurants provide a clean comfortable environment especially
suited for families McDonalds stringent cleaning standards ensure that all
tables seating highchairs and trays are sanitized several times each hour The
attention to cleanliness extends from the lobby to the kitchen to the sidewalk
and immediate areas outside the restaurant
In addition to urging customers to dispose of their litter properly and offering a
number of trash bins (both inside and outside the restaurants) for their
convenience McDonalds Litter Patrols walk around the restaurants several
times each day picking up litter -- even if it isnt from McDonalds
Restaurant managers walk through the dining areas each hour to ensure that it
is clean and well stocked All restaurants provide a variety of comfortable
seating arrangements to accommodate anyone -- from a single individual to a
large family The environment is warm inviting and well lit
VALUE
McDonalds menu is priced at a value that the largest segment of Indian
consumers can afford McDonalds does not sacrifice quality for value -- rather
McDonalds leverages economies of scale to minimize costs while maximizing
value to customers
McDonalds definition of value is broader than most restaurants of its kind -- it
is more than price Value at McDonalds is the sum of the total McDonalds
experience quality food fast friendly service a clean and pleasant
environment and products priced at very affordable prices for the largest
segment of Indian consumers possible That is value at McDonalds
29
McDonaldrsquos Indiahellip Culturally Sensitive
Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much
that is consistent with other McDonaldrsquos restaurants around the world such as
the quality of the food and the attention to service
The dedication to local cultures is not new for McDonaldrsquos For the past 50
years McDonaldrsquos has opened restaurants in more than 120 distinctly different
countries and cultures With guidance from its local partners McDonaldrsquos is
able to adapt- where necessary-its menu and restaurant operations to
complement existing eating-out options McDonaldrsquos local owners understand
what their customers want perhaps more importantly what is acceptable within
local customs and values
There is much too that is very different- such as the first beef-less and pork-
less menu in the world and special product formulations to cater to Indian
culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos
India says ldquoWe know the Indian culture because we were born in it
inherited its richness and respect it greatly It is the respect for this culture
and the sentiments of many of our customersrsquo that we do not serve any
beef and pork items in our restaurantsrdquo
McDonaldrsquos commitment to its Indian customers is evident even in
development of special sauces that use local spices and chillies The
mayonnaise and all other sauces are egg-less
In India vegetarianism is in many cases more than a lifestyle choice Many
people are vegetarians due to religious reasons and in some cases even the
vegetarian product that has come into contact with a non-vegetarian product is
unacceptable Hence McDonaldrsquos India has also changed its operations to
address the special requirements of our vegetarian customers by having
processes that ensure that a physical separation of veg and non-veg products is
maintained right from farm to the customer Vegetable products are prepared
separately using dedicated equipment and utensils Also in India McDonaldrsquos
uses only vegetable oil as a medium for cooking
30
McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash
lsquoto be driven by the leadership of local ownersrsquo This commitment has translated
into enduring benefits to the businesses at the grass root level in the areas of
introduction of new crops new agricultural practices and food processing methods
and procedures
McDonalds unique cold chain on which the QSR major has spent more than six
years setting up in India has brought about a veritable revolution immensely
benefiting the farmers at one end and enabling customers at retail counters get the
highest quality food products absolutely fresh and at great value
Setting up this extensive cold chain distribution system has involved the transfer of
state-of-the-art food processing technology by McDonalds and its international
suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain
From Field to -2⁰C in 90 Minutes
Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be
grown during the winter months but with McDonalds expertise in the area of
agriculture they are now able to grow this crop through the year
Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room
to remove field heat a large cold room and a refrigerated van for transportation where
the temperature and the relative humidity of the crop is maintained between 1ordm C and
4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room
within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling
to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at
the farms itself ensuring no delay between harvesting pre-cooling packaging and
cold storage
Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd
Flavour and Freshness locked in at - 35degC
Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable
range of products is another important player in this cold chain This includes hi-tech
refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C
This is vital to ensure that the frozen food retains it freshness for a long time and the
cold chain is maintained The frozen product is immediately moved to cold storage
rooms
31
Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India
From Farm to Bulk Cooler in less than 90 Minutes
McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for
quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk
coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -
thus maintaining the cold chain
All leading to the Consumer
McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The
DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity
of the products throughout the entire cold chain
Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C
as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state
All these suppliers share McDonalds commitment and dedication to satisfying
customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently
each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental
effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn
more
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
22
goods from numerous independent suppliers
Industry Information LEISURE - Restaurants
Price Day Change Bid Ask Open High Low Volume
8718 -002 - - 8743 8743 8676 3658828
Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS PE Yield 52-Wks-Range
875267 10040 039 527 253 164 35 10222 - 8331
KEY FIGURES (Latest Twelve Months - LTM)
Yesterdays Close 8706 $
PE Ratio - LTM 164
Market Capitalisation 875267 mil
Latest Shares Outstanding 10040 mil
Earnings pS (EPS) 527 $
Dividend pS (DPS) 253 cent
Dividend Yield 35
Dividend Payout Ratio 48
Revenue per Employee 64300 $
Effective Tax Rate 313
Float 10153 mil
Float as of Shares Outstanding 999
Foreign Sales 18478 mil
Domestic Sales 8528 mil Selling General amp Admtive (SGampA) as of Revenue
910
Research amp Devlopment (RampD) as of Revenue
000
Gross Profit Margin 447
EBITDA Margin 356
Pre-Tax Profit Margin 291
Assets Turnover 08
Return on Assets (ROA) 161
Return on Equity (ROE) 392
Return on Capital Invested (ROCI) 204 Current Ratio 10
Leverage Ratio (AssetsEquity) 24 Interest Cover 166 Total DebtEquity (Gearing Ratio) 096
LT DebtTotal Capital 480
Working Capital pS 006 $
Cash pS 217 $
Book-Value pS 1383 $
Balance Sheet (at a glance) in Millions
DIVIDEND INFO
Dividend Declared Date 09202012
Dividend Ex-Date 11282012
Dividend Record Date 12022012
Dividend Pay Date 12162012
Dividend Amount 770
Type of Payment Cash Payment
Dividend Rate 308
Current Dividend Yield 35
5-Y Average Dividend Yield 31
Payout Ratio 480
5-Y Average Payout Ratio 530
Share price performance previous 3 years
Share price performance intraday
23
Tangible Book-Value pS 1110 $
Cash Flow pS 689 $
Free Cash Flow pS 125 $
KEY FIGURES (LTM) Price info PriceBook Ratio 630
PriceTangible Book Ratio 785 PriceCash Flow 126
PriceFree Cash Flow 699
PE as of Industry Group 420
PE as of Sector Segment 770
PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol
1 Week - - - 00 101 54041 66217
4 Weeks 8743 8331 8474 27 101 57129 856929
13 Weeks 9416 8331 9102 -44 98 61288 3554700
26 Weeks 9416 8331 8775 -08 93 59419 7189758
52 Weeks 10222 8331 9803 -112 79 59272 14521666
YTD 10222 8331 - -132 77 59774 13807695
Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)
8661 8631 8825 8931 9174 039 031
GROWTH RATES 5-Year
Growh Rsup2 of 5-Year Growth
3-Year
Growth
Revenue 381 776 666
Income 2017 811 978
Dividend 1536 947 1016
Capital Spending 697 NA 1052
RampD 000 NA 000
Normalized Inc 1158 NA 979
CHANGES YTD vs
Last YTD
Curr Qtr vs
Qtr 1-Yr ago
Annual vs
Last Annual
Revenue 21 -02 122
Earnings -14 -35 113
EPS 10 -14 151
EPS $ 004 -002 069
SOLVENCY RATIOS
SHORT-TERM SOLVENCY RATIOS
(LIQUIDITY)
Net Working Capital Ratio 271
Current Ratio 13
Quick Ratio (Acid Test) 10
Liquidity Ratio (Cash) 067
Receivables Turnover 215
Average Collection Period 17
Working CapitalEquity 62
Working Capital pS 088
Cash-Flow pS 677
Free Cash-Flow pS 209
24
FINANCIAL STRUCTURE RATIOS
Altmans Z-Score Ratio 485
Financial Leverage Ratio (AssetsEquity) 23
Debt Ratio 564
Total DebtEquity (Gearing Ratio) 087
LT DebtEquity 084
LT DebtCapital Invested 569
LT DebtTotal Liabilities 652
Interest Cover 173
InterestCapital Invested 167
25
People hellip McDonaldrsquos 1 Resource in India
26
McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs
around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in
1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with
McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)
The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive
training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course
(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the
Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University
27
The McDonaldrsquos Promise
QUALITY SERVICE CLEANLINESS amp VALUE
When asked to explain McDonalds success founder Ray Kroc used to say We
take the hamburger business more seriously than anyone else
Kroc was a perfectionist From the day he opened his first restaurant he vowed
to give his customers high quality products served quickly --and with a smile
in a clean and pleasant environment and all at a fair price Quality Service
Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds
business
QUALITY
McDonalds India serves only the highest quality products The attention to food
quality started long before the first restaurant opened McDonalds India has
established close relationships with local suppliers who provide McDonalds
with the highest quality freshest ingredients to make its products
All suppliers adhere to Indian government regulations on food health and
hygiene while continuously maintaining McDonalds own recognized standards
McDonalds has established an extensive cold chain distribution system in
India to ensure that the products which arrive at the restaurant from suppliers
all over India are absolutely fresh In the restaurants products and supplies are
used on a first-in first-out basis to ensure freshness All McDonalds products
are prepared using modern state-of-the-art cooking equipment to ensure quality
and safety
SERVICE
McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos
which sets its restaurants apart from others At McDonalds the customer
always comes first Every employee strives to provide 100 percent customer
satisfaction -- for every customer -- every visit This includes friendly and
attentive service accuracy in order taking and anticipation of customers needs
-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun
and youthful spirit we will proudly serve an exceptional McDonaldrsquos
eating experience that makes all people feel special and makes them smile ndash
every customer every timerdquo
28
CLEANLINESS
McDonalds restaurants provide a clean comfortable environment especially
suited for families McDonalds stringent cleaning standards ensure that all
tables seating highchairs and trays are sanitized several times each hour The
attention to cleanliness extends from the lobby to the kitchen to the sidewalk
and immediate areas outside the restaurant
In addition to urging customers to dispose of their litter properly and offering a
number of trash bins (both inside and outside the restaurants) for their
convenience McDonalds Litter Patrols walk around the restaurants several
times each day picking up litter -- even if it isnt from McDonalds
Restaurant managers walk through the dining areas each hour to ensure that it
is clean and well stocked All restaurants provide a variety of comfortable
seating arrangements to accommodate anyone -- from a single individual to a
large family The environment is warm inviting and well lit
VALUE
McDonalds menu is priced at a value that the largest segment of Indian
consumers can afford McDonalds does not sacrifice quality for value -- rather
McDonalds leverages economies of scale to minimize costs while maximizing
value to customers
McDonalds definition of value is broader than most restaurants of its kind -- it
is more than price Value at McDonalds is the sum of the total McDonalds
experience quality food fast friendly service a clean and pleasant
environment and products priced at very affordable prices for the largest
segment of Indian consumers possible That is value at McDonalds
29
McDonaldrsquos Indiahellip Culturally Sensitive
Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much
that is consistent with other McDonaldrsquos restaurants around the world such as
the quality of the food and the attention to service
The dedication to local cultures is not new for McDonaldrsquos For the past 50
years McDonaldrsquos has opened restaurants in more than 120 distinctly different
countries and cultures With guidance from its local partners McDonaldrsquos is
able to adapt- where necessary-its menu and restaurant operations to
complement existing eating-out options McDonaldrsquos local owners understand
what their customers want perhaps more importantly what is acceptable within
local customs and values
There is much too that is very different- such as the first beef-less and pork-
less menu in the world and special product formulations to cater to Indian
culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos
India says ldquoWe know the Indian culture because we were born in it
inherited its richness and respect it greatly It is the respect for this culture
and the sentiments of many of our customersrsquo that we do not serve any
beef and pork items in our restaurantsrdquo
McDonaldrsquos commitment to its Indian customers is evident even in
development of special sauces that use local spices and chillies The
mayonnaise and all other sauces are egg-less
In India vegetarianism is in many cases more than a lifestyle choice Many
people are vegetarians due to religious reasons and in some cases even the
vegetarian product that has come into contact with a non-vegetarian product is
unacceptable Hence McDonaldrsquos India has also changed its operations to
address the special requirements of our vegetarian customers by having
processes that ensure that a physical separation of veg and non-veg products is
maintained right from farm to the customer Vegetable products are prepared
separately using dedicated equipment and utensils Also in India McDonaldrsquos
uses only vegetable oil as a medium for cooking
30
McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash
lsquoto be driven by the leadership of local ownersrsquo This commitment has translated
into enduring benefits to the businesses at the grass root level in the areas of
introduction of new crops new agricultural practices and food processing methods
and procedures
McDonalds unique cold chain on which the QSR major has spent more than six
years setting up in India has brought about a veritable revolution immensely
benefiting the farmers at one end and enabling customers at retail counters get the
highest quality food products absolutely fresh and at great value
Setting up this extensive cold chain distribution system has involved the transfer of
state-of-the-art food processing technology by McDonalds and its international
suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain
From Field to -2⁰C in 90 Minutes
Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be
grown during the winter months but with McDonalds expertise in the area of
agriculture they are now able to grow this crop through the year
Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room
to remove field heat a large cold room and a refrigerated van for transportation where
the temperature and the relative humidity of the crop is maintained between 1ordm C and
4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room
within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling
to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at
the farms itself ensuring no delay between harvesting pre-cooling packaging and
cold storage
Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd
Flavour and Freshness locked in at - 35degC
Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable
range of products is another important player in this cold chain This includes hi-tech
refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C
This is vital to ensure that the frozen food retains it freshness for a long time and the
cold chain is maintained The frozen product is immediately moved to cold storage
rooms
31
Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India
From Farm to Bulk Cooler in less than 90 Minutes
McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for
quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk
coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -
thus maintaining the cold chain
All leading to the Consumer
McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The
DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity
of the products throughout the entire cold chain
Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C
as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state
All these suppliers share McDonalds commitment and dedication to satisfying
customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently
each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental
effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn
more
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
23
Tangible Book-Value pS 1110 $
Cash Flow pS 689 $
Free Cash Flow pS 125 $
KEY FIGURES (LTM) Price info PriceBook Ratio 630
PriceTangible Book Ratio 785 PriceCash Flow 126
PriceFree Cash Flow 699
PE as of Industry Group 420
PE as of Sector Segment 770
PRICEVOLUME High Low Close Price Chg Price Chg vs Mkt Avg Daily Vol Total Vol
1 Week - - - 00 101 54041 66217
4 Weeks 8743 8331 8474 27 101 57129 856929
13 Weeks 9416 8331 9102 -44 98 61288 3554700
26 Weeks 9416 8331 8775 -08 93 59419 7189758
52 Weeks 10222 8331 9803 -112 79 59272 14521666
YTD 10222 8331 - -132 77 59774 13807695
Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth)
8661 8631 8825 8931 9174 039 031
GROWTH RATES 5-Year
Growh Rsup2 of 5-Year Growth
3-Year
Growth
Revenue 381 776 666
Income 2017 811 978
Dividend 1536 947 1016
Capital Spending 697 NA 1052
RampD 000 NA 000
Normalized Inc 1158 NA 979
CHANGES YTD vs
Last YTD
Curr Qtr vs
Qtr 1-Yr ago
Annual vs
Last Annual
Revenue 21 -02 122
Earnings -14 -35 113
EPS 10 -14 151
EPS $ 004 -002 069
SOLVENCY RATIOS
SHORT-TERM SOLVENCY RATIOS
(LIQUIDITY)
Net Working Capital Ratio 271
Current Ratio 13
Quick Ratio (Acid Test) 10
Liquidity Ratio (Cash) 067
Receivables Turnover 215
Average Collection Period 17
Working CapitalEquity 62
Working Capital pS 088
Cash-Flow pS 677
Free Cash-Flow pS 209
24
FINANCIAL STRUCTURE RATIOS
Altmans Z-Score Ratio 485
Financial Leverage Ratio (AssetsEquity) 23
Debt Ratio 564
Total DebtEquity (Gearing Ratio) 087
LT DebtEquity 084
LT DebtCapital Invested 569
LT DebtTotal Liabilities 652
Interest Cover 173
InterestCapital Invested 167
25
People hellip McDonaldrsquos 1 Resource in India
26
McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs
around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in
1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with
McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)
The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive
training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course
(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the
Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University
27
The McDonaldrsquos Promise
QUALITY SERVICE CLEANLINESS amp VALUE
When asked to explain McDonalds success founder Ray Kroc used to say We
take the hamburger business more seriously than anyone else
Kroc was a perfectionist From the day he opened his first restaurant he vowed
to give his customers high quality products served quickly --and with a smile
in a clean and pleasant environment and all at a fair price Quality Service
Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds
business
QUALITY
McDonalds India serves only the highest quality products The attention to food
quality started long before the first restaurant opened McDonalds India has
established close relationships with local suppliers who provide McDonalds
with the highest quality freshest ingredients to make its products
All suppliers adhere to Indian government regulations on food health and
hygiene while continuously maintaining McDonalds own recognized standards
McDonalds has established an extensive cold chain distribution system in
India to ensure that the products which arrive at the restaurant from suppliers
all over India are absolutely fresh In the restaurants products and supplies are
used on a first-in first-out basis to ensure freshness All McDonalds products
are prepared using modern state-of-the-art cooking equipment to ensure quality
and safety
SERVICE
McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos
which sets its restaurants apart from others At McDonalds the customer
always comes first Every employee strives to provide 100 percent customer
satisfaction -- for every customer -- every visit This includes friendly and
attentive service accuracy in order taking and anticipation of customers needs
-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun
and youthful spirit we will proudly serve an exceptional McDonaldrsquos
eating experience that makes all people feel special and makes them smile ndash
every customer every timerdquo
28
CLEANLINESS
McDonalds restaurants provide a clean comfortable environment especially
suited for families McDonalds stringent cleaning standards ensure that all
tables seating highchairs and trays are sanitized several times each hour The
attention to cleanliness extends from the lobby to the kitchen to the sidewalk
and immediate areas outside the restaurant
In addition to urging customers to dispose of their litter properly and offering a
number of trash bins (both inside and outside the restaurants) for their
convenience McDonalds Litter Patrols walk around the restaurants several
times each day picking up litter -- even if it isnt from McDonalds
Restaurant managers walk through the dining areas each hour to ensure that it
is clean and well stocked All restaurants provide a variety of comfortable
seating arrangements to accommodate anyone -- from a single individual to a
large family The environment is warm inviting and well lit
VALUE
McDonalds menu is priced at a value that the largest segment of Indian
consumers can afford McDonalds does not sacrifice quality for value -- rather
McDonalds leverages economies of scale to minimize costs while maximizing
value to customers
McDonalds definition of value is broader than most restaurants of its kind -- it
is more than price Value at McDonalds is the sum of the total McDonalds
experience quality food fast friendly service a clean and pleasant
environment and products priced at very affordable prices for the largest
segment of Indian consumers possible That is value at McDonalds
29
McDonaldrsquos Indiahellip Culturally Sensitive
Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much
that is consistent with other McDonaldrsquos restaurants around the world such as
the quality of the food and the attention to service
The dedication to local cultures is not new for McDonaldrsquos For the past 50
years McDonaldrsquos has opened restaurants in more than 120 distinctly different
countries and cultures With guidance from its local partners McDonaldrsquos is
able to adapt- where necessary-its menu and restaurant operations to
complement existing eating-out options McDonaldrsquos local owners understand
what their customers want perhaps more importantly what is acceptable within
local customs and values
There is much too that is very different- such as the first beef-less and pork-
less menu in the world and special product formulations to cater to Indian
culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos
India says ldquoWe know the Indian culture because we were born in it
inherited its richness and respect it greatly It is the respect for this culture
and the sentiments of many of our customersrsquo that we do not serve any
beef and pork items in our restaurantsrdquo
McDonaldrsquos commitment to its Indian customers is evident even in
development of special sauces that use local spices and chillies The
mayonnaise and all other sauces are egg-less
In India vegetarianism is in many cases more than a lifestyle choice Many
people are vegetarians due to religious reasons and in some cases even the
vegetarian product that has come into contact with a non-vegetarian product is
unacceptable Hence McDonaldrsquos India has also changed its operations to
address the special requirements of our vegetarian customers by having
processes that ensure that a physical separation of veg and non-veg products is
maintained right from farm to the customer Vegetable products are prepared
separately using dedicated equipment and utensils Also in India McDonaldrsquos
uses only vegetable oil as a medium for cooking
30
McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash
lsquoto be driven by the leadership of local ownersrsquo This commitment has translated
into enduring benefits to the businesses at the grass root level in the areas of
introduction of new crops new agricultural practices and food processing methods
and procedures
McDonalds unique cold chain on which the QSR major has spent more than six
years setting up in India has brought about a veritable revolution immensely
benefiting the farmers at one end and enabling customers at retail counters get the
highest quality food products absolutely fresh and at great value
Setting up this extensive cold chain distribution system has involved the transfer of
state-of-the-art food processing technology by McDonalds and its international
suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain
From Field to -2⁰C in 90 Minutes
Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be
grown during the winter months but with McDonalds expertise in the area of
agriculture they are now able to grow this crop through the year
Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room
to remove field heat a large cold room and a refrigerated van for transportation where
the temperature and the relative humidity of the crop is maintained between 1ordm C and
4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room
within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling
to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at
the farms itself ensuring no delay between harvesting pre-cooling packaging and
cold storage
Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd
Flavour and Freshness locked in at - 35degC
Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable
range of products is another important player in this cold chain This includes hi-tech
refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C
This is vital to ensure that the frozen food retains it freshness for a long time and the
cold chain is maintained The frozen product is immediately moved to cold storage
rooms
31
Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India
From Farm to Bulk Cooler in less than 90 Minutes
McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for
quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk
coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -
thus maintaining the cold chain
All leading to the Consumer
McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The
DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity
of the products throughout the entire cold chain
Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C
as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state
All these suppliers share McDonalds commitment and dedication to satisfying
customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently
each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental
effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn
more
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
24
FINANCIAL STRUCTURE RATIOS
Altmans Z-Score Ratio 485
Financial Leverage Ratio (AssetsEquity) 23
Debt Ratio 564
Total DebtEquity (Gearing Ratio) 087
LT DebtEquity 084
LT DebtCapital Invested 569
LT DebtTotal Liabilities 652
Interest Cover 173
InterestCapital Invested 167
25
People hellip McDonaldrsquos 1 Resource in India
26
McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs
around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in
1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with
McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)
The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive
training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course
(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the
Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University
27
The McDonaldrsquos Promise
QUALITY SERVICE CLEANLINESS amp VALUE
When asked to explain McDonalds success founder Ray Kroc used to say We
take the hamburger business more seriously than anyone else
Kroc was a perfectionist From the day he opened his first restaurant he vowed
to give his customers high quality products served quickly --and with a smile
in a clean and pleasant environment and all at a fair price Quality Service
Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds
business
QUALITY
McDonalds India serves only the highest quality products The attention to food
quality started long before the first restaurant opened McDonalds India has
established close relationships with local suppliers who provide McDonalds
with the highest quality freshest ingredients to make its products
All suppliers adhere to Indian government regulations on food health and
hygiene while continuously maintaining McDonalds own recognized standards
McDonalds has established an extensive cold chain distribution system in
India to ensure that the products which arrive at the restaurant from suppliers
all over India are absolutely fresh In the restaurants products and supplies are
used on a first-in first-out basis to ensure freshness All McDonalds products
are prepared using modern state-of-the-art cooking equipment to ensure quality
and safety
SERVICE
McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos
which sets its restaurants apart from others At McDonalds the customer
always comes first Every employee strives to provide 100 percent customer
satisfaction -- for every customer -- every visit This includes friendly and
attentive service accuracy in order taking and anticipation of customers needs
-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun
and youthful spirit we will proudly serve an exceptional McDonaldrsquos
eating experience that makes all people feel special and makes them smile ndash
every customer every timerdquo
28
CLEANLINESS
McDonalds restaurants provide a clean comfortable environment especially
suited for families McDonalds stringent cleaning standards ensure that all
tables seating highchairs and trays are sanitized several times each hour The
attention to cleanliness extends from the lobby to the kitchen to the sidewalk
and immediate areas outside the restaurant
In addition to urging customers to dispose of their litter properly and offering a
number of trash bins (both inside and outside the restaurants) for their
convenience McDonalds Litter Patrols walk around the restaurants several
times each day picking up litter -- even if it isnt from McDonalds
Restaurant managers walk through the dining areas each hour to ensure that it
is clean and well stocked All restaurants provide a variety of comfortable
seating arrangements to accommodate anyone -- from a single individual to a
large family The environment is warm inviting and well lit
VALUE
McDonalds menu is priced at a value that the largest segment of Indian
consumers can afford McDonalds does not sacrifice quality for value -- rather
McDonalds leverages economies of scale to minimize costs while maximizing
value to customers
McDonalds definition of value is broader than most restaurants of its kind -- it
is more than price Value at McDonalds is the sum of the total McDonalds
experience quality food fast friendly service a clean and pleasant
environment and products priced at very affordable prices for the largest
segment of Indian consumers possible That is value at McDonalds
29
McDonaldrsquos Indiahellip Culturally Sensitive
Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much
that is consistent with other McDonaldrsquos restaurants around the world such as
the quality of the food and the attention to service
The dedication to local cultures is not new for McDonaldrsquos For the past 50
years McDonaldrsquos has opened restaurants in more than 120 distinctly different
countries and cultures With guidance from its local partners McDonaldrsquos is
able to adapt- where necessary-its menu and restaurant operations to
complement existing eating-out options McDonaldrsquos local owners understand
what their customers want perhaps more importantly what is acceptable within
local customs and values
There is much too that is very different- such as the first beef-less and pork-
less menu in the world and special product formulations to cater to Indian
culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos
India says ldquoWe know the Indian culture because we were born in it
inherited its richness and respect it greatly It is the respect for this culture
and the sentiments of many of our customersrsquo that we do not serve any
beef and pork items in our restaurantsrdquo
McDonaldrsquos commitment to its Indian customers is evident even in
development of special sauces that use local spices and chillies The
mayonnaise and all other sauces are egg-less
In India vegetarianism is in many cases more than a lifestyle choice Many
people are vegetarians due to religious reasons and in some cases even the
vegetarian product that has come into contact with a non-vegetarian product is
unacceptable Hence McDonaldrsquos India has also changed its operations to
address the special requirements of our vegetarian customers by having
processes that ensure that a physical separation of veg and non-veg products is
maintained right from farm to the customer Vegetable products are prepared
separately using dedicated equipment and utensils Also in India McDonaldrsquos
uses only vegetable oil as a medium for cooking
30
McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash
lsquoto be driven by the leadership of local ownersrsquo This commitment has translated
into enduring benefits to the businesses at the grass root level in the areas of
introduction of new crops new agricultural practices and food processing methods
and procedures
McDonalds unique cold chain on which the QSR major has spent more than six
years setting up in India has brought about a veritable revolution immensely
benefiting the farmers at one end and enabling customers at retail counters get the
highest quality food products absolutely fresh and at great value
Setting up this extensive cold chain distribution system has involved the transfer of
state-of-the-art food processing technology by McDonalds and its international
suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain
From Field to -2⁰C in 90 Minutes
Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be
grown during the winter months but with McDonalds expertise in the area of
agriculture they are now able to grow this crop through the year
Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room
to remove field heat a large cold room and a refrigerated van for transportation where
the temperature and the relative humidity of the crop is maintained between 1ordm C and
4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room
within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling
to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at
the farms itself ensuring no delay between harvesting pre-cooling packaging and
cold storage
Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd
Flavour and Freshness locked in at - 35degC
Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable
range of products is another important player in this cold chain This includes hi-tech
refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C
This is vital to ensure that the frozen food retains it freshness for a long time and the
cold chain is maintained The frozen product is immediately moved to cold storage
rooms
31
Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India
From Farm to Bulk Cooler in less than 90 Minutes
McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for
quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk
coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -
thus maintaining the cold chain
All leading to the Consumer
McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The
DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity
of the products throughout the entire cold chain
Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C
as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state
All these suppliers share McDonalds commitment and dedication to satisfying
customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently
each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental
effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn
more
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
25
People hellip McDonaldrsquos 1 Resource in India
26
McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs
around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in
1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with
McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)
The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive
training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course
(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the
Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University
27
The McDonaldrsquos Promise
QUALITY SERVICE CLEANLINESS amp VALUE
When asked to explain McDonalds success founder Ray Kroc used to say We
take the hamburger business more seriously than anyone else
Kroc was a perfectionist From the day he opened his first restaurant he vowed
to give his customers high quality products served quickly --and with a smile
in a clean and pleasant environment and all at a fair price Quality Service
Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds
business
QUALITY
McDonalds India serves only the highest quality products The attention to food
quality started long before the first restaurant opened McDonalds India has
established close relationships with local suppliers who provide McDonalds
with the highest quality freshest ingredients to make its products
All suppliers adhere to Indian government regulations on food health and
hygiene while continuously maintaining McDonalds own recognized standards
McDonalds has established an extensive cold chain distribution system in
India to ensure that the products which arrive at the restaurant from suppliers
all over India are absolutely fresh In the restaurants products and supplies are
used on a first-in first-out basis to ensure freshness All McDonalds products
are prepared using modern state-of-the-art cooking equipment to ensure quality
and safety
SERVICE
McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos
which sets its restaurants apart from others At McDonalds the customer
always comes first Every employee strives to provide 100 percent customer
satisfaction -- for every customer -- every visit This includes friendly and
attentive service accuracy in order taking and anticipation of customers needs
-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun
and youthful spirit we will proudly serve an exceptional McDonaldrsquos
eating experience that makes all people feel special and makes them smile ndash
every customer every timerdquo
28
CLEANLINESS
McDonalds restaurants provide a clean comfortable environment especially
suited for families McDonalds stringent cleaning standards ensure that all
tables seating highchairs and trays are sanitized several times each hour The
attention to cleanliness extends from the lobby to the kitchen to the sidewalk
and immediate areas outside the restaurant
In addition to urging customers to dispose of their litter properly and offering a
number of trash bins (both inside and outside the restaurants) for their
convenience McDonalds Litter Patrols walk around the restaurants several
times each day picking up litter -- even if it isnt from McDonalds
Restaurant managers walk through the dining areas each hour to ensure that it
is clean and well stocked All restaurants provide a variety of comfortable
seating arrangements to accommodate anyone -- from a single individual to a
large family The environment is warm inviting and well lit
VALUE
McDonalds menu is priced at a value that the largest segment of Indian
consumers can afford McDonalds does not sacrifice quality for value -- rather
McDonalds leverages economies of scale to minimize costs while maximizing
value to customers
McDonalds definition of value is broader than most restaurants of its kind -- it
is more than price Value at McDonalds is the sum of the total McDonalds
experience quality food fast friendly service a clean and pleasant
environment and products priced at very affordable prices for the largest
segment of Indian consumers possible That is value at McDonalds
29
McDonaldrsquos Indiahellip Culturally Sensitive
Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much
that is consistent with other McDonaldrsquos restaurants around the world such as
the quality of the food and the attention to service
The dedication to local cultures is not new for McDonaldrsquos For the past 50
years McDonaldrsquos has opened restaurants in more than 120 distinctly different
countries and cultures With guidance from its local partners McDonaldrsquos is
able to adapt- where necessary-its menu and restaurant operations to
complement existing eating-out options McDonaldrsquos local owners understand
what their customers want perhaps more importantly what is acceptable within
local customs and values
There is much too that is very different- such as the first beef-less and pork-
less menu in the world and special product formulations to cater to Indian
culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos
India says ldquoWe know the Indian culture because we were born in it
inherited its richness and respect it greatly It is the respect for this culture
and the sentiments of many of our customersrsquo that we do not serve any
beef and pork items in our restaurantsrdquo
McDonaldrsquos commitment to its Indian customers is evident even in
development of special sauces that use local spices and chillies The
mayonnaise and all other sauces are egg-less
In India vegetarianism is in many cases more than a lifestyle choice Many
people are vegetarians due to religious reasons and in some cases even the
vegetarian product that has come into contact with a non-vegetarian product is
unacceptable Hence McDonaldrsquos India has also changed its operations to
address the special requirements of our vegetarian customers by having
processes that ensure that a physical separation of veg and non-veg products is
maintained right from farm to the customer Vegetable products are prepared
separately using dedicated equipment and utensils Also in India McDonaldrsquos
uses only vegetable oil as a medium for cooking
30
McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash
lsquoto be driven by the leadership of local ownersrsquo This commitment has translated
into enduring benefits to the businesses at the grass root level in the areas of
introduction of new crops new agricultural practices and food processing methods
and procedures
McDonalds unique cold chain on which the QSR major has spent more than six
years setting up in India has brought about a veritable revolution immensely
benefiting the farmers at one end and enabling customers at retail counters get the
highest quality food products absolutely fresh and at great value
Setting up this extensive cold chain distribution system has involved the transfer of
state-of-the-art food processing technology by McDonalds and its international
suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain
From Field to -2⁰C in 90 Minutes
Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be
grown during the winter months but with McDonalds expertise in the area of
agriculture they are now able to grow this crop through the year
Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room
to remove field heat a large cold room and a refrigerated van for transportation where
the temperature and the relative humidity of the crop is maintained between 1ordm C and
4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room
within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling
to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at
the farms itself ensuring no delay between harvesting pre-cooling packaging and
cold storage
Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd
Flavour and Freshness locked in at - 35degC
Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable
range of products is another important player in this cold chain This includes hi-tech
refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C
This is vital to ensure that the frozen food retains it freshness for a long time and the
cold chain is maintained The frozen product is immediately moved to cold storage
rooms
31
Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India
From Farm to Bulk Cooler in less than 90 Minutes
McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for
quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk
coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -
thus maintaining the cold chain
All leading to the Consumer
McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The
DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity
of the products throughout the entire cold chain
Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C
as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state
All these suppliers share McDonalds commitment and dedication to satisfying
customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently
each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental
effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn
more
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
26
McDonalds India is an employer of opportunity providing quality employment and long-term careers to the Indian people A McDonalds restaurant employs
around 50 people on an average performing 25 different job responsibilities - from the counter crew to the restaurant manager Starting with 50 employees in
1996 McDonaldrsquos world-class training inputs to its employees can today be seen in close to 10000+ employees currently employed directly with
McDonalds restaurants across India Additional indirect employment contributes to over 2000 people (Suppliers service agents etc)
The training centers at Delhi amp Mumbai provide world-class training to every employee It is ensured that each employee who has undergone an extensive
training program is judged at the end of every course involving assessment at regular intervals Some of the courses are the Basic Shift Management Course
(BSM) Advance Shift Management Course (ASM) Effective Management Practices Course (EMP) and candidates who were till now attending the
Restaurant Leadership Practices Course (RLP) in Australia can now do the same here in India with the support of McDonalds Hamburger University
27
The McDonaldrsquos Promise
QUALITY SERVICE CLEANLINESS amp VALUE
When asked to explain McDonalds success founder Ray Kroc used to say We
take the hamburger business more seriously than anyone else
Kroc was a perfectionist From the day he opened his first restaurant he vowed
to give his customers high quality products served quickly --and with a smile
in a clean and pleasant environment and all at a fair price Quality Service
Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds
business
QUALITY
McDonalds India serves only the highest quality products The attention to food
quality started long before the first restaurant opened McDonalds India has
established close relationships with local suppliers who provide McDonalds
with the highest quality freshest ingredients to make its products
All suppliers adhere to Indian government regulations on food health and
hygiene while continuously maintaining McDonalds own recognized standards
McDonalds has established an extensive cold chain distribution system in
India to ensure that the products which arrive at the restaurant from suppliers
all over India are absolutely fresh In the restaurants products and supplies are
used on a first-in first-out basis to ensure freshness All McDonalds products
are prepared using modern state-of-the-art cooking equipment to ensure quality
and safety
SERVICE
McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos
which sets its restaurants apart from others At McDonalds the customer
always comes first Every employee strives to provide 100 percent customer
satisfaction -- for every customer -- every visit This includes friendly and
attentive service accuracy in order taking and anticipation of customers needs
-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun
and youthful spirit we will proudly serve an exceptional McDonaldrsquos
eating experience that makes all people feel special and makes them smile ndash
every customer every timerdquo
28
CLEANLINESS
McDonalds restaurants provide a clean comfortable environment especially
suited for families McDonalds stringent cleaning standards ensure that all
tables seating highchairs and trays are sanitized several times each hour The
attention to cleanliness extends from the lobby to the kitchen to the sidewalk
and immediate areas outside the restaurant
In addition to urging customers to dispose of their litter properly and offering a
number of trash bins (both inside and outside the restaurants) for their
convenience McDonalds Litter Patrols walk around the restaurants several
times each day picking up litter -- even if it isnt from McDonalds
Restaurant managers walk through the dining areas each hour to ensure that it
is clean and well stocked All restaurants provide a variety of comfortable
seating arrangements to accommodate anyone -- from a single individual to a
large family The environment is warm inviting and well lit
VALUE
McDonalds menu is priced at a value that the largest segment of Indian
consumers can afford McDonalds does not sacrifice quality for value -- rather
McDonalds leverages economies of scale to minimize costs while maximizing
value to customers
McDonalds definition of value is broader than most restaurants of its kind -- it
is more than price Value at McDonalds is the sum of the total McDonalds
experience quality food fast friendly service a clean and pleasant
environment and products priced at very affordable prices for the largest
segment of Indian consumers possible That is value at McDonalds
29
McDonaldrsquos Indiahellip Culturally Sensitive
Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much
that is consistent with other McDonaldrsquos restaurants around the world such as
the quality of the food and the attention to service
The dedication to local cultures is not new for McDonaldrsquos For the past 50
years McDonaldrsquos has opened restaurants in more than 120 distinctly different
countries and cultures With guidance from its local partners McDonaldrsquos is
able to adapt- where necessary-its menu and restaurant operations to
complement existing eating-out options McDonaldrsquos local owners understand
what their customers want perhaps more importantly what is acceptable within
local customs and values
There is much too that is very different- such as the first beef-less and pork-
less menu in the world and special product formulations to cater to Indian
culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos
India says ldquoWe know the Indian culture because we were born in it
inherited its richness and respect it greatly It is the respect for this culture
and the sentiments of many of our customersrsquo that we do not serve any
beef and pork items in our restaurantsrdquo
McDonaldrsquos commitment to its Indian customers is evident even in
development of special sauces that use local spices and chillies The
mayonnaise and all other sauces are egg-less
In India vegetarianism is in many cases more than a lifestyle choice Many
people are vegetarians due to religious reasons and in some cases even the
vegetarian product that has come into contact with a non-vegetarian product is
unacceptable Hence McDonaldrsquos India has also changed its operations to
address the special requirements of our vegetarian customers by having
processes that ensure that a physical separation of veg and non-veg products is
maintained right from farm to the customer Vegetable products are prepared
separately using dedicated equipment and utensils Also in India McDonaldrsquos
uses only vegetable oil as a medium for cooking
30
McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash
lsquoto be driven by the leadership of local ownersrsquo This commitment has translated
into enduring benefits to the businesses at the grass root level in the areas of
introduction of new crops new agricultural practices and food processing methods
and procedures
McDonalds unique cold chain on which the QSR major has spent more than six
years setting up in India has brought about a veritable revolution immensely
benefiting the farmers at one end and enabling customers at retail counters get the
highest quality food products absolutely fresh and at great value
Setting up this extensive cold chain distribution system has involved the transfer of
state-of-the-art food processing technology by McDonalds and its international
suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain
From Field to -2⁰C in 90 Minutes
Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be
grown during the winter months but with McDonalds expertise in the area of
agriculture they are now able to grow this crop through the year
Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room
to remove field heat a large cold room and a refrigerated van for transportation where
the temperature and the relative humidity of the crop is maintained between 1ordm C and
4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room
within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling
to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at
the farms itself ensuring no delay between harvesting pre-cooling packaging and
cold storage
Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd
Flavour and Freshness locked in at - 35degC
Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable
range of products is another important player in this cold chain This includes hi-tech
refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C
This is vital to ensure that the frozen food retains it freshness for a long time and the
cold chain is maintained The frozen product is immediately moved to cold storage
rooms
31
Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India
From Farm to Bulk Cooler in less than 90 Minutes
McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for
quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk
coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -
thus maintaining the cold chain
All leading to the Consumer
McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The
DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity
of the products throughout the entire cold chain
Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C
as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state
All these suppliers share McDonalds commitment and dedication to satisfying
customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently
each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental
effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn
more
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
27
The McDonaldrsquos Promise
QUALITY SERVICE CLEANLINESS amp VALUE
When asked to explain McDonalds success founder Ray Kroc used to say We
take the hamburger business more seriously than anyone else
Kroc was a perfectionist From the day he opened his first restaurant he vowed
to give his customers high quality products served quickly --and with a smile
in a clean and pleasant environment and all at a fair price Quality Service
Cleanliness and Value (QSCampV) became the philosophy that drove McDonalds
business
QUALITY
McDonalds India serves only the highest quality products The attention to food
quality started long before the first restaurant opened McDonalds India has
established close relationships with local suppliers who provide McDonalds
with the highest quality freshest ingredients to make its products
All suppliers adhere to Indian government regulations on food health and
hygiene while continuously maintaining McDonalds own recognized standards
McDonalds has established an extensive cold chain distribution system in
India to ensure that the products which arrive at the restaurant from suppliers
all over India are absolutely fresh In the restaurants products and supplies are
used on a first-in first-out basis to ensure freshness All McDonalds products
are prepared using modern state-of-the-art cooking equipment to ensure quality
and safety
SERVICE
McDonalds India provides fast friendly service -- the hallmark of McDonaldrsquos
which sets its restaurants apart from others At McDonalds the customer
always comes first Every employee strives to provide 100 percent customer
satisfaction -- for every customer -- every visit This includes friendly and
attentive service accuracy in order taking and anticipation of customers needs
-- such as napkins or straws The McDonaldrsquos promise is ldquoWith a sense of fun
and youthful spirit we will proudly serve an exceptional McDonaldrsquos
eating experience that makes all people feel special and makes them smile ndash
every customer every timerdquo
28
CLEANLINESS
McDonalds restaurants provide a clean comfortable environment especially
suited for families McDonalds stringent cleaning standards ensure that all
tables seating highchairs and trays are sanitized several times each hour The
attention to cleanliness extends from the lobby to the kitchen to the sidewalk
and immediate areas outside the restaurant
In addition to urging customers to dispose of their litter properly and offering a
number of trash bins (both inside and outside the restaurants) for their
convenience McDonalds Litter Patrols walk around the restaurants several
times each day picking up litter -- even if it isnt from McDonalds
Restaurant managers walk through the dining areas each hour to ensure that it
is clean and well stocked All restaurants provide a variety of comfortable
seating arrangements to accommodate anyone -- from a single individual to a
large family The environment is warm inviting and well lit
VALUE
McDonalds menu is priced at a value that the largest segment of Indian
consumers can afford McDonalds does not sacrifice quality for value -- rather
McDonalds leverages economies of scale to minimize costs while maximizing
value to customers
McDonalds definition of value is broader than most restaurants of its kind -- it
is more than price Value at McDonalds is the sum of the total McDonalds
experience quality food fast friendly service a clean and pleasant
environment and products priced at very affordable prices for the largest
segment of Indian consumers possible That is value at McDonalds
29
McDonaldrsquos Indiahellip Culturally Sensitive
Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much
that is consistent with other McDonaldrsquos restaurants around the world such as
the quality of the food and the attention to service
The dedication to local cultures is not new for McDonaldrsquos For the past 50
years McDonaldrsquos has opened restaurants in more than 120 distinctly different
countries and cultures With guidance from its local partners McDonaldrsquos is
able to adapt- where necessary-its menu and restaurant operations to
complement existing eating-out options McDonaldrsquos local owners understand
what their customers want perhaps more importantly what is acceptable within
local customs and values
There is much too that is very different- such as the first beef-less and pork-
less menu in the world and special product formulations to cater to Indian
culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos
India says ldquoWe know the Indian culture because we were born in it
inherited its richness and respect it greatly It is the respect for this culture
and the sentiments of many of our customersrsquo that we do not serve any
beef and pork items in our restaurantsrdquo
McDonaldrsquos commitment to its Indian customers is evident even in
development of special sauces that use local spices and chillies The
mayonnaise and all other sauces are egg-less
In India vegetarianism is in many cases more than a lifestyle choice Many
people are vegetarians due to religious reasons and in some cases even the
vegetarian product that has come into contact with a non-vegetarian product is
unacceptable Hence McDonaldrsquos India has also changed its operations to
address the special requirements of our vegetarian customers by having
processes that ensure that a physical separation of veg and non-veg products is
maintained right from farm to the customer Vegetable products are prepared
separately using dedicated equipment and utensils Also in India McDonaldrsquos
uses only vegetable oil as a medium for cooking
30
McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash
lsquoto be driven by the leadership of local ownersrsquo This commitment has translated
into enduring benefits to the businesses at the grass root level in the areas of
introduction of new crops new agricultural practices and food processing methods
and procedures
McDonalds unique cold chain on which the QSR major has spent more than six
years setting up in India has brought about a veritable revolution immensely
benefiting the farmers at one end and enabling customers at retail counters get the
highest quality food products absolutely fresh and at great value
Setting up this extensive cold chain distribution system has involved the transfer of
state-of-the-art food processing technology by McDonalds and its international
suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain
From Field to -2⁰C in 90 Minutes
Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be
grown during the winter months but with McDonalds expertise in the area of
agriculture they are now able to grow this crop through the year
Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room
to remove field heat a large cold room and a refrigerated van for transportation where
the temperature and the relative humidity of the crop is maintained between 1ordm C and
4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room
within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling
to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at
the farms itself ensuring no delay between harvesting pre-cooling packaging and
cold storage
Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd
Flavour and Freshness locked in at - 35degC
Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable
range of products is another important player in this cold chain This includes hi-tech
refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C
This is vital to ensure that the frozen food retains it freshness for a long time and the
cold chain is maintained The frozen product is immediately moved to cold storage
rooms
31
Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India
From Farm to Bulk Cooler in less than 90 Minutes
McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for
quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk
coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -
thus maintaining the cold chain
All leading to the Consumer
McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The
DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity
of the products throughout the entire cold chain
Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C
as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state
All these suppliers share McDonalds commitment and dedication to satisfying
customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently
each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental
effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn
more
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
28
CLEANLINESS
McDonalds restaurants provide a clean comfortable environment especially
suited for families McDonalds stringent cleaning standards ensure that all
tables seating highchairs and trays are sanitized several times each hour The
attention to cleanliness extends from the lobby to the kitchen to the sidewalk
and immediate areas outside the restaurant
In addition to urging customers to dispose of their litter properly and offering a
number of trash bins (both inside and outside the restaurants) for their
convenience McDonalds Litter Patrols walk around the restaurants several
times each day picking up litter -- even if it isnt from McDonalds
Restaurant managers walk through the dining areas each hour to ensure that it
is clean and well stocked All restaurants provide a variety of comfortable
seating arrangements to accommodate anyone -- from a single individual to a
large family The environment is warm inviting and well lit
VALUE
McDonalds menu is priced at a value that the largest segment of Indian
consumers can afford McDonalds does not sacrifice quality for value -- rather
McDonalds leverages economies of scale to minimize costs while maximizing
value to customers
McDonalds definition of value is broader than most restaurants of its kind -- it
is more than price Value at McDonalds is the sum of the total McDonalds
experience quality food fast friendly service a clean and pleasant
environment and products priced at very affordable prices for the largest
segment of Indian consumers possible That is value at McDonalds
29
McDonaldrsquos Indiahellip Culturally Sensitive
Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much
that is consistent with other McDonaldrsquos restaurants around the world such as
the quality of the food and the attention to service
The dedication to local cultures is not new for McDonaldrsquos For the past 50
years McDonaldrsquos has opened restaurants in more than 120 distinctly different
countries and cultures With guidance from its local partners McDonaldrsquos is
able to adapt- where necessary-its menu and restaurant operations to
complement existing eating-out options McDonaldrsquos local owners understand
what their customers want perhaps more importantly what is acceptable within
local customs and values
There is much too that is very different- such as the first beef-less and pork-
less menu in the world and special product formulations to cater to Indian
culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos
India says ldquoWe know the Indian culture because we were born in it
inherited its richness and respect it greatly It is the respect for this culture
and the sentiments of many of our customersrsquo that we do not serve any
beef and pork items in our restaurantsrdquo
McDonaldrsquos commitment to its Indian customers is evident even in
development of special sauces that use local spices and chillies The
mayonnaise and all other sauces are egg-less
In India vegetarianism is in many cases more than a lifestyle choice Many
people are vegetarians due to religious reasons and in some cases even the
vegetarian product that has come into contact with a non-vegetarian product is
unacceptable Hence McDonaldrsquos India has also changed its operations to
address the special requirements of our vegetarian customers by having
processes that ensure that a physical separation of veg and non-veg products is
maintained right from farm to the customer Vegetable products are prepared
separately using dedicated equipment and utensils Also in India McDonaldrsquos
uses only vegetable oil as a medium for cooking
30
McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash
lsquoto be driven by the leadership of local ownersrsquo This commitment has translated
into enduring benefits to the businesses at the grass root level in the areas of
introduction of new crops new agricultural practices and food processing methods
and procedures
McDonalds unique cold chain on which the QSR major has spent more than six
years setting up in India has brought about a veritable revolution immensely
benefiting the farmers at one end and enabling customers at retail counters get the
highest quality food products absolutely fresh and at great value
Setting up this extensive cold chain distribution system has involved the transfer of
state-of-the-art food processing technology by McDonalds and its international
suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain
From Field to -2⁰C in 90 Minutes
Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be
grown during the winter months but with McDonalds expertise in the area of
agriculture they are now able to grow this crop through the year
Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room
to remove field heat a large cold room and a refrigerated van for transportation where
the temperature and the relative humidity of the crop is maintained between 1ordm C and
4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room
within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling
to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at
the farms itself ensuring no delay between harvesting pre-cooling packaging and
cold storage
Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd
Flavour and Freshness locked in at - 35degC
Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable
range of products is another important player in this cold chain This includes hi-tech
refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C
This is vital to ensure that the frozen food retains it freshness for a long time and the
cold chain is maintained The frozen product is immediately moved to cold storage
rooms
31
Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India
From Farm to Bulk Cooler in less than 90 Minutes
McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for
quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk
coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -
thus maintaining the cold chain
All leading to the Consumer
McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The
DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity
of the products throughout the entire cold chain
Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C
as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state
All these suppliers share McDonalds commitment and dedication to satisfying
customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently
each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental
effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn
more
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
29
McDonaldrsquos Indiahellip Culturally Sensitive
Indianisation of Menu With the opening of the first McDonaldrsquos restaurants in India- there is much
that is consistent with other McDonaldrsquos restaurants around the world such as
the quality of the food and the attention to service
The dedication to local cultures is not new for McDonaldrsquos For the past 50
years McDonaldrsquos has opened restaurants in more than 120 distinctly different
countries and cultures With guidance from its local partners McDonaldrsquos is
able to adapt- where necessary-its menu and restaurant operations to
complement existing eating-out options McDonaldrsquos local owners understand
what their customers want perhaps more importantly what is acceptable within
local customs and values
There is much too that is very different- such as the first beef-less and pork-
less menu in the world and special product formulations to cater to Indian
culture and palate Vikram Bakshi the joint venture partner for McDonaldrsquos
India says ldquoWe know the Indian culture because we were born in it
inherited its richness and respect it greatly It is the respect for this culture
and the sentiments of many of our customersrsquo that we do not serve any
beef and pork items in our restaurantsrdquo
McDonaldrsquos commitment to its Indian customers is evident even in
development of special sauces that use local spices and chillies The
mayonnaise and all other sauces are egg-less
In India vegetarianism is in many cases more than a lifestyle choice Many
people are vegetarians due to religious reasons and in some cases even the
vegetarian product that has come into contact with a non-vegetarian product is
unacceptable Hence McDonaldrsquos India has also changed its operations to
address the special requirements of our vegetarian customers by having
processes that ensure that a physical separation of veg and non-veg products is
maintained right from farm to the customer Vegetable products are prepared
separately using dedicated equipment and utensils Also in India McDonaldrsquos
uses only vegetable oil as a medium for cooking
30
McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash
lsquoto be driven by the leadership of local ownersrsquo This commitment has translated
into enduring benefits to the businesses at the grass root level in the areas of
introduction of new crops new agricultural practices and food processing methods
and procedures
McDonalds unique cold chain on which the QSR major has spent more than six
years setting up in India has brought about a veritable revolution immensely
benefiting the farmers at one end and enabling customers at retail counters get the
highest quality food products absolutely fresh and at great value
Setting up this extensive cold chain distribution system has involved the transfer of
state-of-the-art food processing technology by McDonalds and its international
suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain
From Field to -2⁰C in 90 Minutes
Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be
grown during the winter months but with McDonalds expertise in the area of
agriculture they are now able to grow this crop through the year
Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room
to remove field heat a large cold room and a refrigerated van for transportation where
the temperature and the relative humidity of the crop is maintained between 1ordm C and
4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room
within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling
to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at
the farms itself ensuring no delay between harvesting pre-cooling packaging and
cold storage
Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd
Flavour and Freshness locked in at - 35degC
Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable
range of products is another important player in this cold chain This includes hi-tech
refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C
This is vital to ensure that the frozen food retains it freshness for a long time and the
cold chain is maintained The frozen product is immediately moved to cold storage
rooms
31
Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India
From Farm to Bulk Cooler in less than 90 Minutes
McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for
quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk
coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -
thus maintaining the cold chain
All leading to the Consumer
McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The
DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity
of the products throughout the entire cold chain
Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C
as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state
All these suppliers share McDonalds commitment and dedication to satisfying
customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently
each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental
effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn
more
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
30
McDonaldrsquos Cold Chain in India McDonalds India is characterized by a unique sense of dedication and commitment ndash
lsquoto be driven by the leadership of local ownersrsquo This commitment has translated
into enduring benefits to the businesses at the grass root level in the areas of
introduction of new crops new agricultural practices and food processing methods
and procedures
McDonalds unique cold chain on which the QSR major has spent more than six
years setting up in India has brought about a veritable revolution immensely
benefiting the farmers at one end and enabling customers at retail counters get the
highest quality food products absolutely fresh and at great value
Setting up this extensive cold chain distribution system has involved the transfer of
state-of-the-art food processing technology by McDonalds and its international
suppliers to pioneering Indian enterprises which are today an integral part of the McDonaldrsquos cold chain
From Field to -2⁰C in 90 Minutes
Trikaya Agriculture a major supplier of iceberg lettuce to McDonalds India is one such enterprise that is an intrinsic part of the cold chain Initially lettuce could only be
grown during the winter months but with McDonalds expertise in the area of
agriculture they are now able to grow this crop through the year
Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room
to remove field heat a large cold room and a refrigerated van for transportation where
the temperature and the relative humidity of the crop is maintained between 1ordm C and
4ordm C and 95 per cent respectively Vegetables are moved into the pre-cooling room
within half an hour of harvesting The pre-cooling room ensures rapid vacuum cooling
to 2ordm C within 90 minutes The pack house pre-cooling and cold room are located at
the farms itself ensuring no delay between harvesting pre-cooling packaging and
cold storage
Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from our partners Vista Processed Foods Pvt Ltd
Flavour and Freshness locked in at - 35degC
Vista Processed Foods Pvt Ltd McDonalds suppliers for the chicken and vegetable
range of products is another important player in this cold chain This includes hi-tech
refrigeration plants for manufacture of frozen food at temperatures as low as - 35deg C
This is vital to ensure that the frozen food retains it freshness for a long time and the
cold chain is maintained The frozen product is immediately moved to cold storage
rooms
31
Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India
From Farm to Bulk Cooler in less than 90 Minutes
McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for
quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk
coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -
thus maintaining the cold chain
All leading to the Consumer
McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The
DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity
of the products throughout the entire cold chain
Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C
as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state
All these suppliers share McDonalds commitment and dedication to satisfying
customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently
each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental
effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn
more
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
31
Our Backbone Cold Chain amp Suppliers McDonaldrsquos Cold Chain In India
From Farm to Bulk Cooler in less than 90 Minutes
McDonalds suppliers of cheese Dynamix Dairy too recognizing the need for
quality milk to make quality cheese has set up a dedicated quality program for milk procurement They have made significant investments in setting up bulk
coolers at all milk collection centres in the Baramati area where they are based On receipt the milk is immediately stored in the bulk coolers at the collection centres to prevent growth of bacteria in the milk and preserve its freshness -
thus maintaining the cold chain
All leading to the Consumer
McDonalds local supply networks through Radhakrishna Foodland which operates distribution centres (DCs) for McDonalds restaurants across India The
DCs have focused all their resources to meet McDonalds expectation of Cold Clean and On-Time Delivery and plays a vital role in maintaining the integrity
of the products throughout the entire cold chain
Ranging from liquid products coming from Punjab to lettuce from Pune the DC receives items from different parts of the country These items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements The company has both cold and dry storage facilities with capability to store products up to -22ordm C
as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state
All these suppliers share McDonalds commitment and dedication to satisfying
customers by supplying them the highest quality products They are working cohesively to ensure that the final product reaches the customer consistently
each time and every time At their level every care is taken to guard against any interruptions in the cold chain which can break the link and have a detrimental
effect on the quality of the product And more products reaching the market fresher and quicker not only benefit the economy but also help the farmer earn
more
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
32
QUESTIONNAIRE
1 How often do you visit fast food restaurants
Everyday Alternate days Weekends Once in a
month Once every three months
2 Which of the following fast food chain do you visit the most
Subway McDonaldrsquos KFC Pizza Hut
Burger King
3 Are you satisfied with the services provided by them
Yes Sometimes Not at all satisfied
4 How often do you eat at McDonaldrsquos
Everyday Alternate days Weekends Once in a
month Once every three months
5 Which among the following is your favourite product at McDonaldrsquos
Big Mac Burger Mac Veggie Big Mac Chicken Burger
Maharaja Mac Mac Fileto Fish
6 Is the product line of McDonaldrsquos adequate
Yes No Havenrsquot Thought About That
7 What time of the day do you prefer to eat at McDonaldrsquos
Morning Noon Evening Night
8 What is the main problem you faced at McDonaldrsquos
Long queues Wrong orders Hygienic problems
Other problems No problems
9 What are the unique selling prepositions of McDonaldrsquos
Product variety Hygiene Ambience Quick service
Location Other
10 Do you think McDonaldrsquos will be triumphant over all its competitors
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
33
Yes Maybe Havenrsquot Thought About That Never Thank You
SURVEY RESPONSE ANALYSIS
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
34
THE TOP FIVE REASONS WHY MCDONALDrsquoS IS SO
POPULAR
Frequency of visits made to fast food
centers
Everyday
Alternate
days
Weekends
Once in a
month
Fast food chain visited the most
Subway
MacDonalds
KFC
Pizza Hut
Burger King
Favourite product at Macdonaldrsquos
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
Time of the day prefered to eat at
Macdonaldrsquos
Morning
Noon
Evening
Night
Main problem faced at McDonaldrsquos
Long queues
Wrong orders
Hygienic
problems
Other
problems
No problems
The unique selling prepositions of MacDonaldrsquos
Product
variety
Hygiene
Ambience
Quick service
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
35
1 The System This is the first thing that makes McDonalds so successful by
having an effective and efficient system in place which exploits the minimum wage labour availab le in the form of young teenagers
who are just looking to make some cash or pick up fundamental job skills
2 Convenience
The second reason why McDonalds is so popular is because its everywhere There a McDonalds at every corner of the map at
every major shopping centre district highway freeway every place which attracts even remotely more than 10 people will have
a McDonalds restaurant not too far from them McDonalds is having the best Real Estate locations around the world which makes
it so popular around the globe 3 Likability and Familiarity
The Golden Arches the Big M Ronald McDonald happiness and fun all these are the associations with McDonaldrsquos which makes it
so familiar by being so familiar to all age groups and to everybody
4 The Menu McDonalds has one of the most diverse menus targeting all ages
from little kids to old pensioners and everyone else in between Theres Big Macs for the big kids and junior burgers for the little
The menus versatility is accentuated when they introduced the healthy tick concept which target those people who wants to
watch what they eat (even though it doesnt make sense to go to a fast food restaurant to eat healthy)
5 Consistency The last reason is McDonalds is so successful because of its
consistency The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide
worldwide So everybody knows what theyre getting into before they come to McDonalds and by being so consistent it has a solid
reputation to uphold
Findings
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
36
At McDonalds the corporate culture and management system are strictly
imposed detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards
The organizational development focused upon generating revenues from
the existing operations
They give different trainings to their employees managers to work in
more productive way and to achieve the goals of the organisation
The domestic growth has slowed as a result of market saturation but McDonaldrsquos global foodservice business delivered good results and was
possible only due to expansion and positive comparable sales
McDonalds develop a deep connection between McDonaldrsquos and the
local communities in which it operates
McDonalds believes that the success of the restaurants and the company is achieved through the people it employs
The company aims to recruit the best people to retain them by offering
ongoing training relevant to their position and to promote them when they
are ready
CONCLUSION
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
37
What started as a simple food stand on Huntington drive California in 1937 through the ages have become a billion Dollar corporation and the worldrsquos
second largest fast-food chain When analysed one would understand that McDonaldrsquos had a stable growth in the past years
The credits of building it into one of worldrsquos largest fast food operation can be
given to Ray Kroc who took over McDonaldrsquos from its establishers modernised and expanded it to suit the contemporary trend Today McDonaldrsquos has a net
worth of $1515 billion
Through this project report and market survey we saw the how McDonaldrsquos was
formed its history and the present position We also its list of various products offered and the corporate profile
Through the marketing mix we saw how they make use of their product price
place promotion mixes SWOT analysis showed us the strengths and weakness of McDonaldrsquos as well as the opportunities and threats they have got
The consolidated financial statement showed us the financial position of the corporation as of 2011 The questionnaire survey provided us with a clear
picture of the needs want and expectations of the consumers of the fast food market in general and McDonaldrsquos in particular The respondents also rated the
services provided by the corporation At last we also saw the top five reasons that make McDonaldrsquos so popular
I gladly hope that this project has met its aim
Let me conclude by quoting this quote by Ray Kroc
Perfection is very difficult to achieve and perfection was what I wanted in McDonalds Everything else was secondary for me
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~
38
BIBLIOGRAPHY
wwwgooglecom
wwwwikiped iaorg
wwwmacdonaldscom
wwwmarketing91com
wwwaboutmacdonaldscom
~~~~~~~~~~~~