Created by: Sarsenbayeva Asiya
Toregeldi Aijan
Auezova Anel’
McDonald’sMcDonald’s Corporation, known as McD, started it
business from 1940.McD primarily sells hamburgers, cheese burgers,
chicken products, and french fries. More recently, it has begun to offer salads, wraps, and fruit.
McD is the world's largest chain of fast-food restaurants with more than 31,000 local restaurants serving more than 58 million people in 118 countries each day.
Low price, speed, service and cleanliness became the critical success factor of the bussiness.
McDonald’sDespite the diverse environments, most outlets
were operated using the same reward systems, the same hierarchical management structure, and the same routine for serving food.
McD centralized the design of its service concept, restaurant layout, the selection of franchisees and other personnel, and the design and content of training of restaurant managers and staff.
Such strategy, structure, and uniformity have made McDonald’s the brand name that defined American fast food.
COMPETITORYum!
the world's largest fast food restaurant company in terms of system units
Fortune 500 coorparations, that operates or licenses Taco Bell, KFC, Pizza Hut, and A&W restuarant
Subway The third largest fast food operator
globally after Yum! Brands and McDonalds
The Success of the McDonald's Franchise
The success of McDonald's is the business equivalent of the American Dream. Started by a pair of brothers, Dick and Mac McDonald, in Southern California, McDonald's has grown to a network of well over 30,000 locations in more than 100 countries.
Three of the characteristics which stand out when speaking about the success of McDonald's: consistency, innovation and resiliency.
Consistency“Quality, Service, Cleanliness and Value” was McDonald's motto.
These efforts towards process repetition and efficiency not only set the basis for McDonald's success from the standpoint of customers' expectations, but also help McDonald's stay on top in a culture where producing at a quick pace is commonly expected.
InnovationAt first, the characteristics of consistency and innovation seem to
contradict one another. But in fact, they work together to allow for McDonald's continued growth. It's a delicate balance. Innovation stemming from responsiveness to customers and franchisees has played a big role in McDonald's fending off stagnation over the years.
Resiliency Though the trajectory for McDonald's has been primarily
upward throughout its existence, the company has had to weather several challenges and controversies.
Many of the challenges McDonald's has faced over the years are related to health concerns, particularly related to children. In response to these concerns, McDonald's formed the Global Advisory Council (GAC) in 2004.
“What's Wrong with McDonald's?” the group alleged that the food that McDonald's served was bad for people's health and that actions used to produce their food products and packaging contributes to the destruction of rainforests, among other things. In response, McDonald's formally established a Global Environmental Commitment in 1990
McD MISSION
“McD mission is to be the world’s best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurants smile.”
7P OF McDMcDonald’s overall strategic
plan is called Plan to Win: created better McDonald’s experiences through the execution of multiple initiatives surrounding the seven factors of exceptional customer experiences – product, price, place, promotion, people, physical evidence, process.
PRODUCTHamburgersVarious types of chicken sandwichesFrench friesSoft drinksBreakfast itemsDessertSaladsVegetarian itemsWraps
PRICE McDonald’s has a unique pricing strategy
that falls solely on their many product lines.The most notable and recent example of
this is McDonald’s “Dollar Menu”.
PLACENumber of locations more than 31,000
worldwide.Type of restaurant :counter servicedrive-through servicegas stationsconvenience storesshopping mallMcStop
PROMOTIONHappy meals
McDonald’s used to give children a choice between toys, milk, fruit, or vegetables as part of their Happy Meals.
Slogan “I’m Lovin’ it”
PEOPLEStars as their performanceGives employee larger role in decisionPhilosophy of quality, service, cleanliness,
and value is the guiding force behind its service
Fast friendly service
PHYSICAL EVIDENCECleanessSpeedQualityTransparency
PROCESSFood manufacturing transparent to the
customersTraining to the licensesInvented the most efficient cooking
equipmentNew method of food packaging and
distribution
FALLEN OF McDIn 2002, McDonald’s posted its first loss.
Earnings were $893.5 million, down 45 per cent from $1.64 billion in 2001. McDonald's share of fast-food sales in the U.S. has slipped almost two percentage points, to 16.2%.
The drop has come even as the company has increased its number of restaurants by 50%, and the Total revenue from 2001 to 2002 just increased for 3.6%.
Table : McDonald’s Revenue (dollars in millions)
2000 2001 2002
Total Revenue 14,243 14,870 15,406
Operating Income
3,330 2,697 2,113
Net Income 1,977 1,637 893
Source: McDonald’s financial report 2004
Net Income (2001-2002)= (893-1,637)/1,637= 45.5%Total Revenue (2001 -2002) = (15,406-14,870)/14,870 = 3.6%
What went wrong?The most fundamental problem the is the quality of its food. While the company focused on building more stores, consumers have decided they want better food and more variety.
HEALTH ISSUEObesity• According to the Massachusetts Medical Society
Committee on Nutrition, fast food is especially high in fat content, and studies have found associations between fast food intake and increased body mass index (BMI) and weight gain.
Food poisoning• Manure gets mixed with meat, contaminating it with
salmonella and Escherichia coli 0157:H7. E. coli 0157:H7 is one of the worst forms of food poisoning. Usually spread through undercooked hamburgers .
ENVIRONMENTAL ISSUEThe biggest environmental nightmare for
McDonald’s :WastePackagingGlobal warming
Obesity and Well being issueThere is increasing concern about obesity
rates and related risks to well-being, and a holistic approach by McDonald
High-Quality Choices - Continue to develop high quality menu offerings that provide customers with a range of choices that meet their needs and preferences and that fit in a balanced diet.
Consumer-Friendly Nutrition Information - Enable consumers to make the right decisions - continuing to provide even easier access to nutrition information
Communicate Responsibly - Continue to refine marketing and communication practices, particularly to children
High-Quality Choices
Examples of nutrition information on the packaging.
Communicate Responsibly particularly to the children
Enviromental issueMcD efforts on minimizing environmental
impact of restaurants business
Energy efficiency – Find further ways to increase energy efficiency in restaurants to save money and reduce our environmental impact.
In 2007 and 2008, McDonald’s was ranked second among food service companies by Climate Counts, designating the company in the organization’s “Starting” category, as a “better choice for the climate conscious consumer.”
McDonald’s restaurant managers are equipped with a variety of energy management tools, including restaurant energy surveys and audits, and in selected restaurants, Energy Management Systems (EMS).
In 2007, McDonald’s USA was named an Energy Star Partner of the Year by the U.S. Environmental Protection Agency.
Sustainable Packaging & Waste Management – Continue exploring ways to reduce environmental impacts of consumer packaging and waste in restaurant operations.
Green Restaurant Design – Enhance our current strict building standards to incorporate further opportunities for efficiency and innovation in the design and construction of our restaurants.
McDonald’s FranceBeaugrenelle restaurantin Paris with an array ofsustainability enhancementsand environmentallythemeddecor.
Re-branding: the McDonald’s strategy
McDonald’s ValueWe place the customer experience at the
core of all we doWe are committed to our peopleWe believe in the McDonald’s SystemWe operate our business ethicallyWe give back to our communitiesWe grow our business profitablyWe strive continually to improve
We place the customer experience at the core of all we doAllowing franchisees to launch extensive
experiments in food and décor, launching “I’m lovin’ it” marketing theme
Providing the customers with high quality food and superior service, in a clean, welcoming environment, at a great value.
McDonald’s serves as the Official Restaurant of the Olympic Games
McDonald’s ChampionKids programs
More than 930 restaurants, McDonald’s China will support the kind blood donors with a free orange juice and hamburger to replenish their nutrients, upon their presentation of a blood donation certificate (Sichuan region earthquake relief efforts)
CONCLUSIONNowadays fast food are recognized as
an unhealthy foodHowever: their income keep on growing,
because: they offer: speed, cleanliness, and delicious food.
McDonalds do their repositioning from unhealthy to healthy fast food.