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Saumya Sharma

on 17 October 2012

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Transcript of McDonalds

Strategic Management Amrit Food (Supplier of long life UHT Milk and Milk Products for Frozen Desserts) Selective Specialization Process People Vista Processed Foods Pvt. Ltd. (Supplier of Chicken and Vegetable range of products including Fruit Pies)
A joint venture with OSI Industries Inc., USA, McDonald's India Pvt. Ltd. and Vista Processed Foods Pvt. Ltd., produces a range of frozen chicken and vegetable foods

Radhakrishna Foodland (Distribution Centres for Delhi and Mumbai)
McDonald's local supply networks through Radhakrishna Foodland, which operates distribution centres (DCs) for McDonald's restaurants in Mumbai and Delhi McD’s Strategies International growth

Forward integration
Distribution through franchisees

Backward integration
Local sourcing,cold chain,suppliers Value Chain Analysis McDonald’s indulge a particular variety of consumers with definite types of personalities. It has also been noted that the company have given the markets such as the United Kingdom and India, an option with regards to their dining needs.

 In the case of McDonald’s they establish a good system in determining the needs of the market. The company uses concepts of consumer behaviour product personality and purchasing decisions to its advantage which is clearly evident in case of India as the company was quick in removing their Pork and Mutton products from India’s menu.

It is said to have a major influence on the understanding of the prospective performance of the organisation in a particular market. Social Factors According to BCG Matrix McDonald’s is a star. The reason for this is its high market growth and high market share in the Indian market.

On the other hand KFC and Pizza Hut are the cash cows because of their low growth rate and high market share.

During past some years KFC and Pizza Hut have lost their market growth because of the fact that they lost their standard war to their competitor i-e McDonald’s.

Another direct competitor of McDonald’s is Subway. According to BCG Matrix it is a dog.

Some of the reasons that are responsible for its low market share and low market growth are the less expansion strategies being followed by the company and the focus on all the major cities, rather they are only focused on the target segments of major cities. Mission
McDonald's brand mission is to be our customers' favorite place and way to eat. Our worldwide operations are aligned around a global strategy called the Plan to Win, which center on an exceptional customer experience – People, Products, Place, Price and Promotion. We are committed to continuously improving our operations and enhancing our customers' experience.

McDonald's is driven by the philosophy of Quality, Service, and Cleanliness & Value for Money i.e. to provide customers high quality products, served quickly with a Smile in a clean and pleasant environment at an affordable price. Celebrating over 15 years of leadership in food service retailing in India, McDonald's India now has a network of over 250 restaurants across the country serving more than 6.5lakh customers daily in India.

By 2014, HRPL plans to double the number of restaurants it currently has. HRPL is expanding its reach by expanding the portfolio and access points with formats like from kiosks, drive thrus, web-delivery and petrol pumps in addition to the restaurants.

SOFT SERVES AND MCSHAKES ARE EGGLESS Established in California during 1940s by two brothers, named Richard and Maurice McDonald.

The brothers used assembly line procedures in their kitchen for mass production.

Prices were kept low. Speed, service and cleanliness became the critical success factors of the business.

By mid-1950s, the restaurant's revenues had reached $350,000.

The brothers’ success, in 1955, Entrepreneur Ray Kroc bought the right to franchise the McDonald’s System, and Renamed the McDonald's Corporation in 1960.

Kroc focused his marketing effort on the family meal and children, spending heavily on television advertising which promoted the smiling clown face of its child-friendly brand mascot, Ronald McDonald. Questions are guaranteed in life, answers are not! The research about McDonald’s company has led to the following success factors:

Environment oriented
Willingness to innovate
One dollar menu
Following healthy food trends Key Success Factors Physical Environment Price which caters to Indian Customers

It has various value pricing and bundling strategies such as Happy Meal, Combo Meal, Family Meal, etc to increase overall sales volume

The famous campaign, “Aaj ke zamane me baap k zamane k daam” Price Variety in products ranging from burgers to desserts to beverages to softie
McDonalds continuously innovates its product Product Marketing Strategies GE-McKinsey 9 Cell Matrix 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 world wide

These multinational companies take special care of the culture and traditions of the country they plan to start the business

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. Threats Oppotunities 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
In order to be environment friendly, they can use packing material which can be recycled later or material that does not create pollution
As McDonalds is a socially responsible firm, they can provide more benefits to the people around
It won’t be a bad idea if they introduce food items specially for breakfast Weakness The weakness that hits the list is the 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. You will notice that bill boards always display the advertisements of Happy Meal and any other deal that is ordered for the kids mainly
Health conscious people seldom 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 Strengths McDonalds holds a very strong brand name worldwide
They have large partnerships with other companies that provides them with their desired products, this increases the goodwill of the company
Socially responsible firms earn a good name in the market due to their projects they do to help people, McDonalds is one the most reputed firms who are socially responsible
It is said that McDonalds was the first food outlet to provide its customers with nutritional facts
Loyal employees and management and customers is their biggest strength
McDonalds makes sure that cultural and 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 SWOT Analysis Suppliers Dynamix Dairy Industries (Supplier of Cheese)
Dynamix has brought immense benefits to farmers in Baramati, Maharashtra by setting up a network of milk collection centres equipped with bulk coolers

Trikaya Agriculture (Supplier of Iceberg Lettuce)
Initially lettuce could only be grown during the winter months but with McDonald's expertise in the area of agriculture, Trikaya Farms in Talegaon, Maharashtra, is now able to grow this crop all the year round Supply Chain Management (Cold Chain) McDonald's unique 'cold chain has brought about a veritable revolution, immensely benefiting the farmers enabling customers at retail counters to get the highest quality food products

McDonald's, through its unique cold chain, has been able to, both cut down on its operational wastage, as well as maintain the freshness and nutritional value of raw and processed food products. The reputation of McDonald’s is apparently a huge matter. Seen on the website of the company, it seems that they have acquired strides to take in hand the key social censures that they have been berating them in the past decades.

The company has provided their customers the relevant data that they need with reference to the nutritional substances of their products. This is to attend to the arguments of obesity charged against the products of the company. Legal Factors The social responsibilities of McDonald’s on the country are influential to the operations of the company. These involve accusations of environmental damage.

Among the reasons why they are charged with such claims is the employ of non-biodegradable substances for their drinks glasses and Styrofoam coffers for the meals. Environmental Factors The company’s key tool for marketing is by means of Online Facebook and Google ads, Collaboration with websites like Snapdeal and Timesdeal to promote sales in India, television advertisements, banners and hoardings.

 They employ animated depictions of their characters like Grimace, Ronald and Hamburglar. Other advertising operations employ popular celebrities to promote their products.

The integration of technology in the operations of McDonalds tends to add value to their products. Technological Factors Organizations in the fast food industry are not excused from any disputes and troubles.

Branches and franchises of McDonald’s experience that the customers consequently are faced with a stalemate of going over their individual budgets whether or not they should use up more on these foreign fast food chains like McDonalds. Hence, these chains may have to put up with the issues of the effects of the economic environment. 

Ideally before penetrating the market, the company must carry out a well conducted market research, especially in the movements in the economic environment which McDonalds had done before entering the Indian market due to which the company has been able to bear the frequency of the shifts in the inflation rate as well as the fluctuations in the exchange rates which affects the operations of any company. Economic Factors The international operations of McDonald’s are highly influenced by the individual country’s policies enforced by each government.

Specific markets focus on different areas of concern such as that of health, worker protection, and environment. All these elements are seen in the government control of the licensing of the restaurants in the respective states of the country.

For instance, there is an impending legal dispute in the McDonald’s franchise in India where certain infringement of rights and violation of religious laws pertaining to the contents of the food. The existence of meat in their menus in India is apparently offensive to the Hindu religion in the said market.  Political Factors PESTEL Analysis BCG Matrix Porter’s Five Forces Model Analysis of industry
(five forces framework) In India, McDonald's has two Indian entrepreneurs:

Amit Jatia, Vice Chairman, HardcastleRestaurants Pvt. Ltd, which has been awarded a Development Licensee status by McDonald's Corporation, U.S.A, spearheads McDonald's operations in West & South India.

While McDonald's restaurants in North & East India is managed by Vikram Bakshi's Connaught Plaza Restaurants Private Limited, which is still a Joint Venture with McDonald's Corporation. McDonald's India Profile Where We Are? What We Sell? World’s largest foodservice retailing chain.
Known for its burgers and fries.
It has more than 33,000 restaurants in 118 countries serving more than 67 million customers each day
Offers a standard menu at all locations, though some locations may have some variation based on geographic variations in taste preference.
A majority of the restaurants are operated by franchisees.
McDonald’s owns the land used for each of the franchises, then builds and secures a long-term lease for the restaurant site.
Franchisees then provide a portion of capital by investing in the equipment, signs, seating and décor of their restaurant business. Who We Are? Demographic Segmentation

All levels of family income are accepted
People of all age groups can enjoy he fast food at McDonalds
Those who go for an outing frequently
They take it as a status symbol Needs

Spending time
Eat Fast Food
Low Spending
Enjoyment for Kids
Store Location Nearby
Free Home Delivery
Nutritious & Tasty Food Market Segmentation Promotion Any near by store can be located
Most stores have an in-house capability of making more than 50 people sit at a time
Having a store near to your residence is a must for the copmany Place Direct Competitors KFC
Pizza Hut McDonald’s V/S Competitors PODs
Cheaper Price
Ease of Access
Seating Arrangement Brand Positioning Above the Line PromotionIncludes Boards, hoardings, etcBanners visible on Buses
Below the Line PromotionIncludes fliers, pamphlets, etcPromotion via special offers, etc.
Variety in products ranging from burgers to desserts to beverages to softie
McDonalds continuously innovates its product Product Each store headed by a Restaurant Manager
Delivery Crew Members
Gives employees large role in decisions
Customer Always comes first
Fast Friendly Service
Philosophy of quality, service cleanliness, and value is the guiding force behind its service
Head Body Body Body Body Body Body Body Body Body Body Body Body Food Manufacturing transparent to customers
Training to the licensees
Invented the most efficient cooking equipment
New methods of food packaging and distribution
McDonald’s in India followed the same tradition
The physical
appearance affects
not only the
impression outsiders
have of a business
but also the way that business functions
Staff Members
Location & Appearances
Building Maintenance
Visible cues
There may be no synergy among the segments, but each promises to be a money maker
This multi-segment strategy has the advantage of diversifying the firm’s risk
Not introducing all the products in a single market is nothing but strategic fit McDonalds in India didn’t introduce Beef in their menu.


Prerna Singh
Saumya Sharma
Surabhi Gupta
Vikram Bhandari
Gunjan Batra
Apar chopra
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