McDonalds: Entreprenuership and franchising
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McDonalds: Entreprenuership and franchising

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Presentation made for Marketing management case presentation to Mr. Najeeb Agrawalla

Presentation made for Marketing management case presentation to Mr. Najeeb Agrawalla

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McDonalds: Entreprenuership and franchising McDonalds: Entreprenuership and franchising Presentation Transcript

  • entrepreneur ship and franchising
  • presenters Syed Wasiq Hassan Ghufran Waseem Salman ZiaSummaya Mehar Iqbal Madiha Shahid Saad Ullah Khan Arsalan Ullah Qureshi
  • 1940 McDonald brothers open the first McDonald’s and names Speedee as their company image Ray Kroc, a multimixer1954 salesman becomes the franchising agent Ray Kroc buys out the McDonalds brothers for $2.7 million 19’61 creation of ‘McDonald’s Center of Training Excellence’ “Hamburger University”
  • McDonalds goes public first TV Ad airs 1965 Big Mac invented opens in Canada and Puerto Rico 1967‘71 ‘79 Egg Happy McMuffin Meals invented introduced
  • more than34,000 1.8 millionrestaurants worldwide employees 119 81% countries of restaurants are franchised 69 million people served dailyglobal overview of McDonalds
  • Revenues by company operated restaurants $18.29 billion (2011) Franchised sales $67.65 billion (2011)Margin of company operated restaurants = $0.83 billionMargin of franchised restaurants = $1.9 billion 2012 2007 Company operated restaurants 6,598 6,906 Franchised restaurants 27,882 24,471 % of franchised Restaurants 81% 78%
  • McDonaldspresence in Pakistan
  • Pakistani Parallel UFONE – Tum He To Ho!!! Subsidiary Brand PTCL PTML UFONEstarted it’s operation in January 2001Ufone became the part of Etisalat in 2006second largest cellular company in Pakistanfranchises = 359service centers = 17one stop shops = 09
  • Pakistani parallel (contd.)• Both McDonalds and Ufone are the example of Brand franchising• Both mainly depend upon there franchising instead of company owned outlets.• Both serve the customer directly. B to C• Mainly franchises exist in the developed areas and both have opportunity in rural part• Both companies have used extensive marketing as there main tool for growth maximization
  • Q1 What do you understand by the term economies of scale?How will economies of scale affect McDonald’s?
  • economics anyone?
  • Long run average costeconomiesofscale the advantages that result from being large which lead to reductions in average costs
  • uniform menu offerings can bemass produced, loweringproduction costs;the companys bargaining powerwith its suppliers lowers its inputcosts and boosts margins;the companys large advertisingbudget gives McDonalds asignificant competitive advantageover its competitors.
  • uniform menu offerings can bemass produced, loweringproduction costs;the companys bargaining powerwith its suppliers lowers its inputcosts and boosts margins;the companys large advertisingbudget gives McDonalds asignificant competitive advantageover its competitors.
  • uniform menu offerings can bemass produced, loweringproduction costs;the companys bargaining powerwith its suppliers lowers its inputcosts and boosts margins;the companys large advertisingbudget gives McDonalds asignificant competitive advantageover its competitors
  • how will economies of scale affect McDonalds? (contd.)franchisor perspectivethe more restaurants are there, thelower the cost of production andhence the more profit margins willbe there. franchisee perspective due to division of labor efficiency will improve same operations for the large volume will lower the per unit cost of output
  • Q2 You have been hired as advisor on the Pakistani market by McDonald’s. Based on your observations of the Pakistani market, prepare three instructions you would issue to the franchisee on behalf ofMcDonalds, and explain why you think they are important.
  • Lets eat out! Look for the Golden Arches! The closest thing tohome McDonalds is your kind of place You deserve a break todayEnjoy the best food at McDonalds We do it all for you You, McDonalds mission is to beyoure ourone Nobody can do it like McDonalds can You deserve the customers favouritea break today Nobody makes–great taste of McDonald‘s Its Mac place and way to eat withTonight McDonalds is your place to be Good time, great taste inspired people who delightTheres nothing quite like a McDonald‘s You Deserve A Break each customer with unmatchedToday Food, folks and fun McDonalds Today What you wantis quality, service, cleanliness magic? Have you had your what you get Do you believe in and value every timebreak today? My McDonald‘s Did somebody say McDonalds?We love to see you smile Put A Smile On Smile Im lovin itIts what I eat and what I do Its what I eat and what Ido...Im lovin it What were made of your day like McDonaldscan We cook it all for you at McDonalds McDonalds and you
  • Lets eat out! Look for the Golden Arches! The closest thing tohome McDonalds is your kind of place You deserve a break todayEnjoy the best food at McDonalds We do it all for you You,youre the one Nobody can do it like McDonalds can You deservea+ local elements in productstaste of McDonald‘s Its Mac break today Nobody makes greatTonight McDonalds is your place to be Good time, great taste + trainingTheres nothing quite like a McDonald‘s You Deserve A BreakToday Food, folks and fun McDonalds Today What you want + quality checksis what you get Do you believe in magic? Have you had yourbreak today? My McDonald‘s Did somebody say McDonalds?We love to see you smile Put A Smile On Smile Im lovin itIts what I eat and what I do Its what I eat and what Ido...Im lovin it What were made of your day like McDonaldscan We cook it all for you at McDonalds McDonalds and you
  • Q3Why do you think that over 70 per cent of new businesses fail but90 per cent of franchises succeed?
  • ARE YOU WATCHING CLOSELY?
  • franchising success failure success new businesses
  • new businesses fail… start from scratch incomplete market research high investment at stake high managerial skills high risk involved
  • Q4Discuss the advantages and disadvantages of being a franchisee.
  •  being there own boss selling the brand intensive initial training + continuous support marketing by franchisor itself managerial talent get a head start shared liability
  •  legal regulations  investment  profit sharing  you must play by the rules  nothing is ever free  not independent  limited duration for agreement-
  • Q5Evaluate why a business might choose a corporate objective of growthmaximization over profit maximization?