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company name
Quick Facts
 Started in 1940 as a barbeque drive-in restaurant
by two brothers, Dick and Mac McDonald, in Sa...
company name
Vision & Mission
 To be the best and leading fast
food provider around the world
 Summarized in Q.S.C.V - Q...
company name
Value Chain Analysis
Primary Activities
 Inbound Logistics - Organizing the supply of food and materials to ...
company name
 General Administration - Strategic planning to ensure their competitive
strategy of customer service that s...
company name
Financial Analysis
-
5,000.00
10,000.00
15,000.00
20,000.00
25,000.00
30,000.00
2009-12 2010-12 2011-12 2012-...
company name
Financial Analysis
Key Efficiency Ratios
Efficiency 2009-12 2010-12 2011-12 2012-12 2013-12 TTM
Days Sales Ou...
company name
McDonald's –Five Forces
company name
McDonald's –Five Forces
Threat of Competition HIGH
 Very similar products in the Fast Food industry
 High ...
company name
McDonald's –Five Forces
Power of Suppliers LOW
 Worlds largest restaurant chain in sales
 High bargaining ...
company name
McDonald's –Industry Life Cycle
 Embryonic Stage
 Growth Stage
 Maturity Stage
 Decline Stage
company name
McDonald's –Macro environments
Economic
• Inflation
• Exchange rate
Social
• Employment
Technological
• Impro...
company name
McDonald's – Competitors
 There are many competitors are eating their shares.
 The main things they have to...
company name
McDonald's – Diversification
 Mc Café
Modern, relaxing mood
Free Wifi
Attract new market segments
Variety of...
company name
McDonald's –VRIO Analysis
 Value: McDonald’s hold a high value in accordance to its brand
image and exploita...
company name
McDonald's –Generic Strategies
 Broad Differentiation
 drive through, lobby, restroom, Breakfast menu, Lunc...
company name
McDonald's –SWOT Analysis
Strength
 Brand name
 Adapts to local markets
 Socially responsible with chariti...
company name
McDonald's –SWOT Analysis
Opportunities
 Upscale restaurant
 Organic foods for the health conscious
 Going...
company name
McDonald's – BCG Matrix
company name
McDonald's – Recommendation
 Develop new offerings
 Buy local popular chains such as Haidilao in China
or P...
company name
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THANK YOU.
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McDonald's Company Analysis

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Transcript of "McDonald's Company Analysis"

  1. 1. company name Quick Facts  Started in 1940 as a barbeque drive-in restaurant by two brothers, Dick and Mac McDonald, in San Bernardino, California  Raymond Kroc, founder and builder of McDonald's Corporation was a milkshake machine salesman prior to meeting the two brothers in 1954  By 1958, McDonald’s had sold its 100 millionth hamburger.  McDonald’s restaurants is operated by either a franchisee, an affiliate, or the corporation itself  Revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants.
  2. 2. company name Vision & Mission  To be the best and leading fast food provider around the world  Summarized in Q.S.C.V - Quality, Service, Cleanliness and Value - this is the guiding force behind it’s service to customers.  The value of food products makes every customer smile.  Being the best company for all employees in every community around the world  Deliver services with superior operational systems for each customer in every branch of McDonald’s restaurants  Keep progressing in a favorable direction as a brand, while continuing to develop operational systems through innovation and technology
  3. 3. company name Value Chain Analysis Primary Activities  Inbound Logistics - Organizing the supply of food and materials to restaurants through approved 3rd party logistics operators  Production in huge plants exclusive to control food distribution and packaging systems  Operations- Ensure specific guidelines are followed in food preparation  Computerized order tracking technology that ensures consistency in service and food production  Outbound Logistics - Growing as a part of McDonald’s recycling system integrating in the logistics of distribution centers  Efficient crew who store and distribute goods from the warehouse at the right time  Marketing - Long term objectives are broken down into short term measurable targets which as used as milestone accomplishments  Franchises are given autonomy in marketing mix decisions
  4. 4. company name  General Administration - Strategic planning to ensure their competitive strategy of customer service that sustains their growth and capitalization is met  They conduct surveys and have a hot-line where customers can call to file complaints or offer suggestions about their experience so as to strengthen the company  Technological Development - R&D in field research needs for end user  Quality development in collaboration with good suppliers  Forward integration through franchisees with control over store presentation and menu items  HRM - Consistently provide sufficient training to employees on how to perform work processes and how to treat customers  Each time their product is redesigned, they conduct training sessions for all employees to enhance their development  Procurement - Flexibility to choose the best suppliers in the market who can increase or decrease the amount supplied without being held to a benchmark  Sought partners with expertise on down trade distribution Value Chain Analysis Supporting Activities
  5. 5. company name Financial Analysis - 5,000.00 10,000.00 15,000.00 20,000.00 25,000.00 30,000.00 2009-12 2010-12 2011-12 2012-12 2013-12 TTM Revenue - 1,000.00 2,000.00 3,000.00 4,000.00 5,000.00 6,000.00 2009-12 2010-12 2011-12 2012-12 2013-12 TTM Net income
  6. 6. company name Financial Analysis Key Efficiency Ratios Efficiency 2009-12 2010-12 2011-12 2012-12 2013-12 TTM Days Sales Outstanding 15.98 16.98 16.99 17.94 17.5 17.5 Days Inventory 2.85 2.73 2.54 2.6 2.6 2.6 Payables Period 16.43 19.97 21.31 22.91 23.63 23.63 Cash Conversion Cycle 2.39 -0.26 -1.78 -2.38 -3.53 -3.53 Receivables Turnover 22.84 21.5 21.49 20.34 20.86 20.86 Inventory Turnover 128.18 133.62 143.97 140.47 140.2 140.2 Fixed Assets Turnover 1.09 1.1 1.2 1.16 1.11 1.11 Asset Turnover 0.78 0.77 0.83 0.81 0.78 0.78 Profitability 2009-12 2010-12 2011-12 2012-12 2013-12 TTM Tax Rate % 29.84 29.34 31.32 32.36 31.92 31.92 Net Margin % 20.01 20.55 20.38 19.82 19.87 19.87 Asset Turnover (Average) 0.78 0.77 0.83 0.81 0.78 0.78 Return on Assets % 15.51 15.9 16.94 15.98 15.51 15.51 Financial Leverage (Average) 2.15 2.19 2.29 2.31 2.29 2.34 Return on Equity % 33.2 34.51 37.92 36.82 35.69 35.69 Return on Invested Capital % 17.5 18.24 19.48 18.33 17.71 17.71 Interest Coverage 14.71 16.53 17.26 16.64 16.72 16.72 Copyright 2014 Morningstar, Inc.
  7. 7. company name McDonald's –Five Forces
  8. 8. company name McDonald's –Five Forces Threat of Competition HIGH  Very similar products in the Fast Food industry  High Competitors Advertising Capabilities  Location of outlets are close  EX: KFC, Chick-fil-A Threat of New Entrance Moderate  Easy to enter, low setup cost  Lack of ability to compete with MCD( cost efficiency, customer awareness) Threat of Substitutes Moderate  Substitutable food  Irreplaceable image
  9. 9. company name McDonald's –Five Forces Power of Suppliers LOW  Worlds largest restaurant chain in sales  High bargaining power over its suppliers(volume)  Most of them owe MCD for their own existence  Low power of suppliers—Lower the cost of raw materials and High competitive price Power of Buyers LOW  Less chances of switching, high brand image through differentiation and uniqueness  Attractive price  Buyer don’t have bargaining power(Low volume)
  10. 10. company name McDonald's –Industry Life Cycle  Embryonic Stage  Growth Stage  Maturity Stage  Decline Stage
  11. 11. company name McDonald's –Macro environments Economic • Inflation • Exchange rate Social • Employment Technological • Improvement by advanced technology Environmental • Forced not to harm the environment
  12. 12. company name McDonald's – Competitors  There are many competitors are eating their shares.  The main things they have to compete with each other are 1.Minimizing cost 2.Customer satisfaction 3.Healthy ingredients 4.Convenient locations
  13. 13. company name McDonald's – Diversification  Mc Café Modern, relaxing mood Free Wifi Attract new market segments Variety of drinks Satisfy hunger
  14. 14. company name McDonald's –VRIO Analysis  Value: McDonald’s hold a high value in accordance to its brand image and exploitation of the available resources which had helped it evolved successfully for more than five decades.  Rarity: The utility of the resource may be franchise oriented and spread through its breadth but the main control still remains in the hands of the top 50 management authorities. The franchisee has to follow the company rules strictly to run a franchise of McDonald’s.  Imitability: McDonald’s may not be difficult to imitate in aspect of the product but its functionality is very difficult to achieve.  Organization support: McDonald’s is always ready to exploit new resource and the organization structure is well organized. It provides a good support to its franchise operations.
  15. 15. company name McDonald's –Generic Strategies  Broad Differentiation  drive through, lobby, restroom, Breakfast menu, Lunch menu , and someone who is capable of speaking Spanish  today in over 14,000 restaurants provide free WiFi service for the customers  McDonald’s has successfully used a differentiated market segmentation strategy by targeting the family unit and particularly children with their “Happy Meal” and price  Leading Cost  It offers basic fast-food meals at low prices.  They are able to keep prices low through a division of labor that allows it to hire and train inexperienced employees rather than trained cooks.  It also relies on few managers who typically earn higher wages.
  16. 16. company name McDonald's –SWOT Analysis Strength  Brand name  Adapts to local markets  Socially responsible with charities  Safety and quality food Weakness  Management's failure to see trends that do not fit  High employee turnovers  Price competition  Controlling quality with franchised operations
  17. 17. company name McDonald's –SWOT Analysis Opportunities  Upscale restaurant  Organic foods for the health conscious  Going green  Expanding to new parts of the globe Threats  Sued for unhealthy food many times  Health concerns  Competitors  Contamination risks  Geopolitical issues affect
  18. 18. company name McDonald's – BCG Matrix
  19. 19. company name McDonald's – Recommendation  Develop new offerings  Buy local popular chains such as Haidilao in China or Panera Bread.  Form a JV with companies like Nestle to sell branded and packaged ice cream and exploit the brand name.
  20. 20. company name You wanna a bite! THANK YOU.
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