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on 14 January 2013

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Transcript of McDonald's

CEO Yu Ting Peng - began in 1940 when Dick and Mac McDonald opened a restaurant in California
- 1st franchised restaurant opened in 1955 and was owned by Ray Kroc (Laru, 2011)
- grown from family burger stand to global fast-food restaurant, with more than 33,000 locations in 119 countries
- 2.5 million guests visit our restaurants across Canada everyday, serving 47 million customers daily worldwide
- with franchisees, McDonald’s Restaurants of Canada Limited owns and operates more than 1,400 restaurants and employs more than 80,000 Canadians
- approx. 75% of McDonald’s Canadian restaurants are locally owned (McDonald's Canada, 2012) History and Today Overview Corporate and Industry Culture McDonald's:
- poor individual autonomy
- great structure
- supports
- excellent performance-reward (McDonald's a process culture, 2009)

- way of life is built around speed and efficiency
- quality of food has become less important
- reason why fast food is so appealing: it's tasty
- Canada is slowly turning into a fast food nation, but fast food industry has challenges Become customers' favourite place and way to eat and drink! History and Today's Culture
Porter's Model
PEST Analysis
SWOT Analysis About Us Some of our locations: Porter's Model 1. Industry competitors:
- competing with KFC, Burger King, Taco Bells, Pizza Hut,
Wendy's, Harvey's
- McCafé is competing with Tim Hortons which is still the
dominant coffee restaurateur in Canada, Starbucks, Second Cups
- differentiate through design, variety, quality, and speed 2. New entrants:
- since the starting of McDonald's there has been fast food
restaurants also starting, but it is a risky industry to enter
- capital investment requirements
3. Suppliers:
- great deal = long working relationship
- bargaining power is highest when...
- sellers product has few substitutes
- differentiation makes it costly to switch suppliers
4. Customers:
- must compete on price to attract customers
5. Substitutes:
- threat of it is very high in this industry (Industry Analysis, Mayra Garcia) Porter's Model (Con'd) PEST Analysis Political
- same factors that apply to any other fast food chain restaurant apply to us, like workers' right
- federal, provincial, and local government make laws for all businesses
- in Feb. 2005 we agreed to pay $8.5 million to settle a lawsuit over trans fats in its cooking oils (McDonald's Corporation, 2012) Economic
- general state of the economy affects customers
- help build a strong workforce, business partnerships and local economies
-McDonald’s Canada creates more than 200,000 jobs, generating almost $4.5 billion in local annual economic activity
- largest buyer of ground beef in the Canadian restaurant industry with annual purchases of more than 66 million pounds
- overall, McDonald’s Canada creates more than $610 million annually in taxes through the generation of new jobs and additional purchases of goods and services from other Canadian businesses
- we inject approx. $4.2 million into local Canadian economies every day and $130 million in corporate income taxes annually (McDonald's.ca, 2012) PEST Analysis PEST Analysis Social
Societal views and perceptions:
- consumers are becoming more health conscious, which leads them to avoid fast food

The age of the consumer:
- older customers prefer higher service and food quality PEST Analysis Technological
- revolutionize the way restaurants use technology (MacPepple, 2013)
- use technologies for order taking to increase speed of service using computer capabilities
- offers free WiFi services Official Restaurant of Olympic Games SWOT Analysis Strength
- strong branding
- recently renovated
- our growth beyond our traditional industry with new food items and beverages
- extended hours
- renewed focus on our classic menu favorites and breakfast
- serve customers new and different products with the service, speed, and convenience SWOT Analysis Weakness
- obesity with high calories food
- excessive packaging waste
- anti-globalization protests like...
- local residence of Tecoma and surrounding areas are angry about building McDonald's restaurant in Australia
- symbol of economical resources dominance
- exploitative advertisement
- suffering & exploitative of livestock Opportunities
- open up online services for customers
- discounts given on food item may gain more customers
- introduce healthy hamburgers and healthy drinks
- in order to be environment friendly, we could start using packing material which can be recycled or material that does not create pollution (McDonald's, 2012)
- provide optional allergen free foods (SWOT, 2009)
-they could provide more upscale restaurant settings SWOT Analysis Threats
- emerging competition of similar restaurants
- health issue
- for multinational food restaurant, fluctuations in the currency of other countries becomes a problem
- recession in any country would definitely affect our revenue worldwide
- multinational companies that take special care of the culture and traditions of the country
- people having heart problems and obesity accuse us for not providing them with the healthy food
- threat of local food restaurants in different countries (SWOT, 2012) SWOT Analysis - brand recognition
- longer than the vast majority of their competitors
- front running company because they have great advertising and they are consistent
- innovators in their industry by creating revolutionary ideas
- recently came out with a new premium coffee line
- McDonald's is a powerful company that consumers have come to know and trust and they have the power to change as tastes change,
- this keeps their competitive advantage alive (McDonalds Competitive Advantage, Katelyn Choo) Strategic Competitiveness:
Competitive Advantages Strategic Competitiveness:
Challenges 1. Rising food prices
- higher food and energy prices have recently pushed up wholesale and retail food prices -> it could eventually hurt profits of the overall chain
- it makes it difficult for franchises to expand ( Nin-Hai Tseng, 2011)

2. Lack of growth opportunities

3. Healthier food - ranked 5th on Social Responsibility by Fortune magazine
- McHappy Day -> do charity under the umbrella of Ronald McDonald House Charities (RMHC)
- care about health -> there are veggie products like salad in stores and also a veggie store in certain countries like India
- care about balance of work
- follow rules
- value honesty Operating Objectives:
Social Responsibility Operating Objectives:
Goals Short term:
- reduce packaging waste
- serve good food in a friendly and fun environment
- be socially responsible

Long term:
- more healthy alternatives and increase awareness to the public
- increase more public support (Goals and Objectives for McDonald's, 2011)
- provide good returns to our shareholders
1. Franchise Model - only 15% of total number of restaurants are owned by the company, others are all franchise monitored
2. Act like a retailer think like a brand - we focus not only on delivering sales for immediate present but also protecting long term brand reputation
3. A place both for eating and playing - with Happy Meals and playgrounds in some locations suitable for family to go and spend the afternoon there
4. Pricing - often discounts and free coffee
5. Bundling strategies - such as happy meal, combo meal, family meal, happy price menu, etc to increase sales
6. Growth - adding restaurants, max sales and profits at existing restaurants
7. Advertisement and Branding Newsletter: Business Strategies I will continue to further drive our company’s momentum.
Investors have been loving the stock share prices that have risen nearly 30% in the past year and I promise that you will continue to love it. But we would not be where we are today without having the mix of people, ideas, backgrounds and ethnicity that we have in the organization.
I expected myself to drive McDonald’s growth through my continued attention to talent development, customer service and innovation, whether it's identifying diverse employees or developing new products.
Innovation will takes place in all forms whether its human resources development, operating systems development, supply chain efficiency or those things customers see in a restaurant. It is an honor and privilege for me to be here today and announce to be your new leader. I appreciate this opportunity to lead as a CEO of McDonald's® Restaurants of Canada Limited. McDonald's Corporation will be lead by me, a diverse and experienced set of globally-focused CEO and a supporting leaders.

In the future not far, I will be responsible for implementing changes, changes in: green initiatives, reduce factory farming and buy more locally, reducing hormones and chemicals in food, stop marketing unhealthy food to children, encourage more ideas from lower level management, discourage deforestation, and discourage cruelty to animals. Newsletter Fun Advertisement from McDonald's Conclusion Business Brief Leadership Vision Competitive Advantages
Social Responsibility
Goals Newsletter Strategies
What We Learned What we learned - strategic competitiveness (competitive adv.)
- goals are to create above-average returns for investors
- hypercompetition
- organizational culture and industry environment
- analysis of operating objectives (social responsibility)
- attractive industry and its business strategy Some of the benefits of working in McDonald's are, we set you up for life, you’ll learn valuable skills like time management, customer service, and how to work as part of a team. You will be trained for professional skills like handling money, quality control, and equipment maintenance. You'll make new friends, McDonald’s is a fun environment with a friendly team. It’s a great way to meet new people or to work with your existing friends. Plus, there’s always a social event every year. Newsletter:
Employee Benefits The hours are flexible, Many of our restaurants offer work hours that can fit around your commitments, like school, sport or family. We help young employees balance work and studying, our flexible rostering system can accommodate exam periods and other important activities. Plus, if you're a student under 17, you won't be asked to work after 11pm on a school night. Newsletter:
Working Hours Business Brief
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