IndustryFounder(s)HeadquartersNumber of LocationsProductsRevenueEmployeesRestaurantRichard & Maurice McDonaldOak Brook, Illinois U.S.33,000+ world wideFast food(hamburgers, chicken, French fries, Soft drinks,coffee, milkshakes, salads, Desserts, breakfast)US$ 24.075 billion (2010)400,000 (January, 2010)ABOUT THE COMPANY
WHO WE ARE … McDonald’s operations have steadily grown in the U.S., Europe, the MiddleEast, Asia-Pacific, Africa, Canada, and Latin America. Currently 1.7 million people in 119 countries work for McDonald’s.serve 64mn customers each day around the world. More than 80% of McDonalds 33,000 restaurants worldwide are independentlyowned and operated. In the midst of global economic concerns, McDonald’s has maintained a firmgrasp on the industry because the core strategy remains unchanged – McDonaldcontinue to invest in people and Brand. For more than 50 years, McDonald has provided quality food, valued jobs, andmeaningful charitable support to the communities they serve. MCD’s thenumber-one foodservice retailer in the world.
MCD are committed to providing the highest quality food and superiorservice, at a great value, in a clean and welcoming environment. That’s why MCD work with their employees, franchisees, and suppliersto serve a balanced array of food choices and provide the nutritioninformation needed for customers to make sound decisions. At the restaurant level, MCD focused on energy conservation, sustainablepackaging, and waste management. MCD is dedicated to innovation and improving their operations in orderto build an even more sustainable, environmentally friendly, andprofitable business. MCD will continue to re optimize their menu, modernize the customerexperience, and broaden accessibility to their brand, so that consumerswill always enjoy the maximum MCD’s experienceWHAT MCDONALD’S DOOffering Quality Food, Healthy Choices
MISSIONMcDonalds brand mission is to be our customers favorite place and wayto eat. Our worldwide operations are aligned around a global strategycalled the Plan to Win, which center on an exceptional customerexperience – People, Products, Place, Price and Promotion. We arecommitted to continuously improving our operations and enhancing ourcustomers experience.
VALUESWe place the customer experience at the core of all we do: Our customers are thereason for our existence. We demonstrate our appreciation by providing them with highquality food and superior service in a clean, welcoming environment, at a great value.Our goal is quality, service, cleanliness and value (QSC&V) for each and everycustomer, each and every time.We are committed to our people: We provide opportunity, nurture talent, developleaders and reward achievement. We believe that a team of well-trained individuals withdiverse backgrounds and experiences, working together in an environment that fostersrespect and drives high levels of engagement, is essential to our continued success.We believe in the McDonald’s System: McDonald’s business model, depicted by our“three-legged stool” of owner/operators, suppliers, and company employees, is ourfoundation, and balancing the interests of all three groups is key.
CONTINUE…We operate our business ethically: Sound ethics is good business. At McDonald’s, we holdourselves and conduct our business to high standards of fairness, honesty, and integrity. Weare individually accountable and collectively responsible.We give back to our communities: We take seriously the responsibilities that come withbeing a leader. We help our customers build better communities, support Ronald McDonaldHouse Charities, and leverage our size, scope and resources to help make the world a betterplace.We grow our business profitably: McDonald’s is a publicly traded company. As such, wework to provide sustained profitable growth for our shareholders. This requires a continuousfocus on our customers and the health of our system.We strive continually to improve: We are a learning organization that aims to anticipateand respond to changing customer, employee and system needs through constant evolutionand innovation.
McDonalds enter in to Global MarketMcDonald’s chooses contractual and equity entry modes because the level of control, andthe relationship between franchise and franchisee in this case has the most positiveoutcome.Easily assessing foreign markets with minimum level of investment and high profitexpectations is what McDonald’s entry mode choices stand for.McDonald’s introduces it’s unique concept to international markets, and it becomes a win-win cooperation. First of all, McDonald’s affect business standards in foreign countries.It increases standards of service in foreign countries by introducing machinery, clean andneat restaurants, quality products. Franchisees, in return, propose their innovations.So, McDonald’s benefits from international operations by having access to new know-how’sMcDonald’s is flexible to foreign culture food habits and manipulates with its menuaccordingly. Nevertheless, McDonald’s is presented as original American franchise, thoughhaving different “faces” and approaches overseas
WHY PEOPLE CHOOSE MCDONALD’S..?Meeting the needs of key audiencesCustomers are not all the same. Market research identifiesdifferent types of customers.A parent with twochildrenVisits McDonald’s to give thechildren a treatChildren Want to visit McDonald’s as it is afun place to eat.A business customer Visits McDonald’s during the day as service is quick, thefood tastes great and can be eaten in the car withoutaffecting a busy work scheduleTeenagers Are attracted by the Saver Menu which is affordable, andthe internet access available in restaurants. Theseexamples represent just a few of McDonald’s possible
Being the best means providing outstanding quality, service, cleanliness, andvalue, so that make every customer in every restaurant smile. To achievethis, McDonald’s focus on three worldwide strategies:(1) Be the Best Employer(2) Deliver Operational Excellence(3) Achieve Enduring Profitable Growth To be the worlds best quick service restaurant experience.VISION
MCDONALDS SWOTStrengths(Internal)Weaknesses(Internal)Opportunities(External)Threats(External)E.g. the brand,and detailedmarketresearchto createthe rightmarketing mix.McDonald’shas beenaround for along time.(thereforeimportantto keepinnovating).E.g. increasingnumbers ofcustomerslooking forfood that isserved in aquick andfriendly wayNewcompetitors.Changingcustomerlifestyles.
CorporateobjectiveExamplesMarketingstrategyexamplesHow do goods&services qualifyand win orders inthemarketplace?(competitive priorities)Operation strategyOperatingDesign choiceE.g.:Infrastructure e.g.:ProfitablegrowthAddworldwide1300McDonald’srestaurantsand 150 newpartnerBrandrestaurantsusingcompanyownedfranchisedstoresCompetitivepriorities tie thecorporate andmarketingstrategies to theoperationalstrategy•Flow shopprocess design• Standardizedstore design• equipmentdesign• order-takingdesign• Capacity &facility,size, location,and clusters•Hiring process &criteria• First job training• Recognition andrewards•manager traineeProgram• Coaching andcounseling• Teamwork• e-mail capabilities
CorporateobjectiveExamplesMarketingstrategyexamplesInfrastructure e.g.:OperatingDesign choiceE.g.:Operating Designchoice E.g.:• global value chaincoordination• suppliers• resourcesscheduling• inventory placementand control•Distribution centersstandardizedoperationalAnd job proceduresIdeal storelocation, besttraining andemployeewellbeingprograms.Operationalexcellence1.low price2.quick service(delivery speed)3.high servicequality•Operating plansand controlsystem• shift -management• supplier relationand negotiation• equipment• maintenance• online networkcapability• distributioncentersOperation strategyHow do goods& servicesqualify and winorders in themarket place?(competitivePriorities)
CorporateobjectiveExamplesMarketingstrategyexamplesInfrastructure e.g.:Operating Designchoice E.g.:LeverageStrengthThroughInnovationandtechnologyDevelop newfood items,storeAnd foodmixTie demandAnalysis toDiverseworkforce•Store equipmentTechnology•Value chaininformationsystem to tiestores, distributioncenters, and supplierstogether•New foodproducts• Quality control• laboratory testing• organizationalstructure• Compensation• systems4.High foodqualityHow do goods& servicesqualify and winorders in themarket place?(competitivepriorities )Operation strategy
CorporateobjectiveExamplesMarketingstrategyexamplesInfrastructure e.g.:Operating Designchoice E.g.:DiversityLong-standingCommit-ment toA diverseworkforce• Training and• franchising• Processperformance• Career paths• Learning andinnovationsystems• Hamburgeruniversity5.DemandflexibilitySocialRespon-sibilityBeing aGoodneighborAnd partnerWith thelocalcommunity• Trade-offanalysis• Recyclingprocess• Package redesign,shipping,warehousing• Support services• RonaldMcDonald’shouse• Mobile health• centers• Youth camps6.Brand imageHow do goods& servicesqualify and winorders in themarket place?(competitivepriorities )Operation strategy
STATEMENT OF MCDONALD’S OPERATIONSSTRATEGY“To provide unmatched consistency in operations in support of high productquality. This must be accomplished with adequate speed, low cost, andprocess innovation to accommodate changes in consumer tastes.”
MCDONALD’S OPERATION STRATEGYDimensions StrategyCapacity• Growth as needed through additional stores - but capacity addedcarefully• Well-utilized - franchisees well-being depends on it being usedheavilyFacilitiesDistributed facilities, each facility being very similar to the next, allfocused around the same menu - although the uniformity isbeginning to changeProcessTechnologyHigh degree of process understanding, emphasis on "fool-proof"processesA leader in the technology of fast-food delivery
VerticalIntegrationPartnership arrangementLong-term relationship with suppliers to promoteinnovation and quality improvementWorkforceFranchisees: well-trained, carefully selected, entrepreneursOperators: high-turnover, cheapOrganizationGuidelines provided by corporation, but franchisees push to locallyoptimizeControlSystemsCentralized buyingBulk contracts"Push" system for basic supplies, "pull" system day-to-day in therestaurants
Contribution to competitive advantage –Systemic strategy creates unmatched consistency in operationsthat has been difficult to imitateEvaluation of the operations strategy:Internal and external consistency –Looking at the operations strategy along the sevendimensions, they all support the operations mission and thebusiness strategy.
Focused on the 3Es:Ethics, Environment, and Economics•Ethics - We envision purchasing from suppliers that follow practices that ensure thehealth and safety of their employees and the welfare and humane treatment of animals inour supply chain.•Environment - We envision influencing the sourcing of our materials and ensuring thedesign of our products, their manufacture, distribution and use to minimize life-cycleimpacts on the environment.•Economics - We envision delivering affordable food, engaging in equitable tradepractices, limiting the spread of agricultural diseases, and positively impacting thecommunities where our suppliers operate.
INDIRECT SUPPLIERSPrimary processingPlants & productionPlantsOperate facilities such asGrain mills and abattoirsFarms & RanchesRaise cattle: grow lettuceWheat & other ingredients.DIRECT SUPPLIERSDISTRIBUTION CENTERSCoordinate purchasing and distribution to restaurants.FINANCIAL PROCESSING FACILITIESProduce finished products like meat patties, buns & beverages.