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Title: Mc Donald's Corporation- 2007

A Case Analysis presented to the faculty of the graduate school, P!

"n partial fulfill#ent for the course $trategic Manage#ent

$u%#itted %y: &oan ( )ortuna

Date of $u%#ission: Dece#%er *, 20+

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"( T"T: Mc Donald's Corporation, )ast food Chain

""( .C!T"/ $!MMA1:

Mc Donald's Play to in 3as initiated in 2004, part of the i#ple#entation 3ere so#e

of the restaurant in atin A#erica and the Cari%%ean 3ere %eing sold to a licensee, oods

$taton, C5 of estC5 "%eroa#ericana, i#ited( Mc Donald's continuous to #aintain its long

ter# goal of achie6ing a6erage annual co#pany sales and re6enue gro3th( The atin A#erican

di6ision 3as recognied as the 8est co#pany to 3or9 for in atin A#erica MCD's atin

A#erican di6estiture is intended to support the co#pany's co##it#ent to reduce the nu#%er of

restaurants its o3n and #ini#ie the 6olatility caused %y the 3ild s3ings in the 6alue of

currencies( this pro%le# #a9e the in6estors , chief financial officer #ore ner6ous( ood $taton

engaged into a 20-year #aster franchise agree#ent to pay #onthly royalties to MCD(

)urther#ore, under the agree#ent the franchisees are o%ligated to co##it to capital ependitures

e6ery year for eisting restaurants( MCD collects royalties 3ithout in6esting capital(

As for the co#petitors, it ranges fro# the s#all pri6ately o3ned eateries to #ultinational

retailers of food products, %ut its 9ey co#petitors include 8urger ;ing, 1u# %rands and endys(

egarding to their financial perfor#ance, MCD %oasted of continued re6enue gro3th, increasecusto#er 6isits and enhanced profita%ility(

5n the contrary, MCD faces legal challenges fro# acti6ist, consu#ers, la%or unions,

#edical and religious groups around the 3orld( egal issues such as underpaying student

e#ployees in China( Another challenge 3hen California #edical doctors' group sued the

co#pany and si other restaurant chains for the presence of carcinogens in the chic9en #enu

ite#s ser6ed( MCD 3as thro3n into the center of contro6ersy 3ith #any issues 3orld3ide(

C5 $9inner %elie6es that Plan to in $trategy 3ill continue to deli6er results for

custo#ers, #e#%ers of the Mc Donalds syste# and shareholder(

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"""( /"P5" Dept(, Accounting

"/( T"M C5

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/""( AA$ 5) C5igh uality products

d Place - $trategically located and )ranchise as

their Channel of Distri%ution

McDonald's continues to %e recognied as a pre#ier

franchising co#pany around the 3orld( More than

E0F of our restaurants 3orld3ide are o3ned and

operated %y our )ranchisees(

e People

$atisfied e#ployeesMc Donald's %elie6ed that people are the #ost

i#portant assets of their %usiness, they pro6ide

re3arding opportunities for their e#ployees

f Physical e6idence

g Process

)ast deli6ery of ser6ice

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( %INANCIA& MANAGEMENT

Mc Donald operating and net inco#es sho3ed

a steady increase(

G( RESEARCH AN' 'E(E&O)MENT

Mc Donalds has etensi6e approach to researchand de6elop#entThis in6ol6es understanding eternal factors such aschanging custo#er needs, #acro trends and the

co#petiti6e landscape( "n addition they ensure

theylearn fro# inside the %usiness %y understanding

3hat de6elop#ents or launches ha6e %een successful

else3here in the 3orld and 3hy( Throughout the

research and de6elop#ent process they partner 3ith

9ey suppliers, engage consu#ers and see9 input fro#

franchisees( This is funda#ental to the McDonald's

%usiness #odel and ensures 3e achie6e the right

%alance across our product and ser6ice offering(

8( .T

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(III. A&TERNATI(E COURSE O% ACTION

ACA * 1+#il- ne pro-#/t0 pro-#/t etension

Ad6antages:

+

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ACA *6 Mr3et -e$elop!ent b" o44ering i-e $riet" o4 !en# tht ill trget ne !r3et

li3e senior /iti7ens n- helth /ons/io#s /ons#!ers

Ad6antages:

+ $ales and profits 3ill gro3(

2 Mini#ie the 6olatility caused %y the 3ild s3ings in the 6alue of local currencies

Disad6antages:

+ "t 3ill reuire intensi6e research of ne3 potential #ar9ets, ne3 product line and consu#er

%eha6ior to3ards the needs of the #ar9ets(

2 Added epenses for #ar9eting tools to pro#ote ne3 product in the ne3 #ar9ets(

4 Conducting a #ar9et research can %e costly

".( DC"$"5< MAT".

C"T"A ACA J + ACA J2 ACA J4

+( Cost euire#ent 2 G 2

2( Ti#e euire#ent 4 4

4( ase of i#ple#entation 2 4 2

( !ncertainty 4 4

G( Co#pleity 4 4 4

*( >igh ris9 conseuence 2 4 2

T5TA +G 22 +G

i9ert $cale:

G- cheapest 2- less epensi6e

- less cheap +- epensi6e

4- #oderate

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.( C5MM

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