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mcdonals and dominos


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fast food industry in india

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mcdonals and dominos

  1. 1. <br /> <br />SR. NO.TOPICPAGE NO1INTRODUCTION TO FAST FOOD INDUSTRY32ABOUT MCDONALDS53MCDONALD’S : MISSION VISSION VALUES64MCDONALD’S IN INDIA 75MCDONALD’S BUSINESS MODEL8-96MCDONALD’S SUPPLY CHAIN107 MCDONALD’S SUPPLY CHAIN IN INDIA118MCDONALD’S LOGISTICS STANDARD129MCDONALD’S VALUE CHAIN ANALYSIS13-1410MCDONALD’S CORPORATE SOCIAL RESPONSIBILITY1511MCDONALD’S CORPORATE GOVERNANCE1612ABOUT DOMINOS PIZZA1813 DOMINOS PIZZA: MISSION VISSION VALUES1914EVOLUTION OF DOMINOS PIZZA20-2115 DOMINOS PIZZA OFFERED PRODUCTS2216 DOMINOS OPERATIONS2317 DOMINOS PIZZA SUPPLY CHAIN24-2518 OUTSOURCING OF INGREDIENTS2619DOMINOS PIZZA CORPORATE SOCIAL RESPONSIBILITY27-2820DOMINOS PIZZA CORPORATE GOVERNANCE29<br />With rapidly growing middle class population and changing lifestyle, India is blessed with one of the fastest growing fast food markets of the world. The Indian fast food market is growing at the rate of 30-35% per annum. Almost all big fast food brands of the world have succeeded in making their presence felt in the country and most of them are posting appreciable growth.<br />Consequently, all the popular fast food chains have chalked out massive plans for expanding their business and presence throughout the country. Moreover, foreign fast food chains are aggressively increasing their presence in the country. For instance, Domino’s has planned to open 60-65 outlets every year for the next three years (2010-2012) while Yum Brands Inc is also preparing for massive expansion across the country with plans to open 1000 fast food outlets by 2015.<br />According to “Indian Fast Food Market Analysis”, although the market has witnessed a robust growth in the past couple of years, it remains largely underpenetrated and concentrated into metropolitan cities. However, there is large room for growth in tier-II cities and tier-III cities, which are mostly untapped. Therefore, the future of Indian fast food industry lies in masses that live in tier-II and tier-III cities.<br />The report provides extensive research and objective analysis on the fast expanding Indian fast food market. The report analyzes all the vital industry trends and possible growth areas for future expansion. It also analyzes important driving forces in detail, which will help clients to understand the market better.<br />Moreover, we have also identified the important players operating in the sector and have made a separate chapter which talks about their business expansion plans in detail. Most importantly, the report also features forecast on fast food sales in the country. The forecast is based on the correlation between past market growth and growth in base drivers such as growth in middle class, urbanization, cultural shift and lifestyle changes.<br />2971800-321945-8096251905 <br /> <br />McDonald's a Global PhenomenonFormed in 1954, McDonald's brand is the leading global foodservice retailer with more than 30,000 local restaurants serving nearly 50 million people in more than 120 countries each day. Our rich history began with the founder Ray Kroc's vision and his commitment, transformed in our talented executives, and will keep the shine on McDonald's arches for years to come<br />Quick Facts About McDonald’s<br /><ul><li>McDonald's was started as a drive-in restaurant by two brothers, Richard and Maurice McDonald in California,US in the year 1937.
  2. 2. By mid-1950s, the restaurant's revenues had reached $350,000.
  3. 3. Ray Kroc, distributor for milkshake machines, expressed interest in the business, and he finalized a deal for franchising with the McDonald brothers in 1954.
  4. 4. He established a franchising company, the McDonald System Inc. and appointed franchisees.
  5. 5. In 1961, he bought out the McDonald brothers' share for $2.7 million and changed the name of the company to McDonald's Corporation. In 1965, McDonald's went public…</li></ul> <br />To be the world's best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile."<br />To be the best & leading fast food providers around the globe<br /> <br />Our values summarized in “Q.S.C & V”. Provide good quality, services to customer. Have cleanliness environment when customer enjoys their meal .The value of food product makes every customer is smiling.Our values summarized in “Q.S.C & V”. Provide good quality, services to customer . Have cleanliness environment when customer enjoys their meal .The value of food product makes every customer is smiling.<br /><ul><li>-238125-742954594225182880
  6. 6. 1996 - First restaurant opens in India, at Basant Lok,Vasant Vihar, New Delhi.
  7. 7. McDonald's India is a 50 – 50 JV partnership between McDonald’s Corporation (U.S.A) and two Indian businessman Amit Jatia (Hardcastle Restaurants Private Limited, Mumbai)and Vikram Bakshi (Connaught Plaza Restaurants Private Limited, Delhi).
  8. 8. Two separate operations in Northern & Western India.
  9. 9. Partners and their management teams trained extensively in Indonesia & the U.S.
  10. 10. Approximately 75% of the menu available in McDonald’s in India is Indianized and specifically designed to woo Indian customers.
  11. 11. The McDonald's philosophy of QSC&V is the guiding force behind its service to the customers.</li></ul>-38100068580 <br />866775287655<br />McDonald’s is a global foodservice retailer with more than 32,000 local restaurants in 117 countries, serving more than 58 million customers each day. In simpler terms, we’re a global brand of local restaurants. At the heart of McDonald’s operations is a unique business model comprised of the Company, our suppliers and franchisees (also called owner/operators). Often referred to as a three-legged stool, all three parts of this business model are essential to McDonald’s success around the world.<br /> <br />THE THREE-LEGGED STOOL: MCDONALD’S BUSINESS MODEL<br /> <br />The strength of the alignment between the Company and its employees, franchisees and suppliers has been critical to McDonald’s success. This business model enables McDonald’s to consistently provide customers locally-relevant restaurant experiences and be an integral part of the communities we serve.<br />Franchisees – own and operate the majority of our restaurants<br />Suppliers – provide food and packaging<br />Company employees – support and deliver restaurant operations around the world<br />MCDONALD’S FRANCHISEES - IN PURSUIT OF CONTINUOUS CUSTOMER SATISFACTION<br /> <br />We believe locally-owned and operated restaurants are at the core of our competitive advantage, making McDonald’s not just a global brand but a locally relevant one. Approximately 80% of McDonald’s restaurants worldwide are operated by local business people, including conventional franchisees, joint venture partners (foreign affiliates) and developmental licensees.<br /> <br />Conventional franchisees provide a portion of the capital required by investing in equipment, seating and signage, while the Company owns or holds a long-term lease for the land. Conventional franchisees pay rent and royalties based on a percent of sales to the Company.<br />Joint Venture Partner (foreign affliates) is when McDonald’s jointly invests with a local business partner to own and operate McDonald’s restaurants in a local market. McDonald’s receives a royalty based on a percent of sales.<br />Developmental Licensees (DL) provide the capital for the entire business, including the real estate. The DL pays a royalty based on a percent of sales. McDonald’s retains the right to approve building designs, operating procedures and use of McDonald’s trademarks.<br /> <br />As you might imagine, our supply chain is large and complex. We have numerous direct suppliers – companies that make or deliver final products for our restaurants. We have an even larger number of indirect suppliers – farms and facilities that grow and process the ingredients that get delivered to our direct suppliers.<br />McDonald’s does not actually grow or produce any of the food we sell. So we work closely with our direct suppliers to continuously improve the practices that impact their employees, their communities, the environment, their own suppliers and, of course, our customers. Examples of this type of work include our Social Accountability program and our environmental scorecard.<br /> <br />SUPPLIERS<br />Trikaya Agriculture<br /><ul><li>Supplier of Iceberg Lettuce</li></ul>Vista Processed Foods Pvt. Ltd.<br /><ul><li>Supplier of Chicken and Vegetable range of products (including Fruit Pies)</li></ul>Dynamix Diary<br /><ul><li>Supplier of Cheese</li></ul>Amrit Food<br /><ul><li>Supplier of long life UHT Milk and Milk Products for Frozen Desserts</li></ul>DISTRIBUTORS <br />Radhakrishna Foodland<br />Distribution Centres and cold storages.<br /><ul><li>Completely dedicated distribution and supply chain.
  12. 12. Matching supplier production with deliveries using ERP.
  13. 13. •Quality inspection Program, quality check at 20 different points in supply chain.
  14. 14. •HACCP(Hazard analysis critical control points) food safety standards emphasizing prevention of faults. </li></ul> <br />Distributor Quality Management Process<br />Operations and Customer Relations<br />Quality Control (HACCP/QIP)<br />Cold Chain Standards<br />Hygiene Regulations<br />Product Handling Standards<br />Emergency and contigency plan<br />Risk and Crisis management<br />Continuous unannounced internal and 3rd party audits for DCs result in superior quality scores regularly<br /> <br /> <br /> <br /> <br />Technological DevelopmentHuman Resource ManagementFirm InfrastructureProcurementInbound LogisticsOperationsOutboundLogisticsMarketing & SalesServiceServiceServices provided by the companies enrollment standardsService Technological DevelopmentHuman Resource ManagementFirm InfrastructureProcurementInbound LogisticsOperationsOutboundLogisticsMarketing & SalesServiceProcurementSought partners with expertise on down trade distributionProcurement <br />Technological DevelopmentHuman Resource ManagementFirm InfrastructureProcurementInbound LogisticsOperationsOutboundLogisticsMarketing & SalesServiceHuman Resource ManagementHRM specialists in R&D and expertise in food formulation, education to raise awareness of issues and raise demand. The addressing environmental issues and CRS.HRM Technological DevelopmentHuman Resource ManagementFirm InfrastructureProcurementInbound LogisticsOperationsOutboundLogisticsMarketing & SalesServiceTechnological DevelopmentTechnology and development research in quality assurance, and packing readdressed at lower cost, faster delivery chain system and process control equipments, recycling system.R & D <br />SupportActivitiesTechnological DevelopmentHuman Resource ManagementFirm InfrastructureInbound LogisticsOperationsOutboundLogisticsMarketing & SalesServiceFirm InfrastructureStrong real estate portfolio.International organization more than 50000 employees works in more than 50 countries, INFRASTRUCTURE <br />-409575192405<br /> <br />Corporate social responsibility (CSR) or corporate citizenship entails companies behaving in a socially responsible manner, and dealing with other business parties who do the same. With growing public awareness and demand for socially responsible businesses, it is little wonder that companies of today take corporate social responsibility into account when planning future socially responsible business operations. This case study on McDonald’s social responsibility examines one such example of corporate social responsibility exemplified by McDonald’s.<br />McDonald’s is the world's largest chain of hamburger fast food restaurants. According to the McDonald’s Corporate Social Responsibility website, McDonald’s take on corporate social responsibility or CSR of McDonalds is about taking action, achieving results and always maintaining open lines of communication with its customers and other key stakeholders.<br />Sustainable Supply Chain Strategy<br />McDonald’s works with its suppliers to promote socially responsible practices in its supply chain as part of its supply chain strategy. This is part of its wider Framework for Corporate Social Responsibility. As described on its corporate social responsibility website, it has its own Code of Conduct for Suppliers which describes how McDonald’s expects its suppliers to treat their employees. It has also sought to extend social accountability throughout its supply chain as part of its supply chain strategy. McDonald’s has succeeded in supporting suppliers who are phasing out sow gestation crates in their supply chain. According to its website, currently, more than 50% of all Cargill's contracted hog farms are in new-generation systems that do not use gestation stalls<br />-57150087631<br /> <br />“The basis for our entire business is that we are ethical, truthful and dependable. It takes time to build a reputation. We are not promoters. We are business people with a solid, permanent, constructive ethical program that will be in style years from now even more than it is today.”Ray Kroc, 1958<br />McDonald’s success is built on a foundation of personal and professional integrity. Hundreds of millions of people around the world trust McDonald’s. We earn that trust everyday by serving safe food, respecting our customers and employees and delivering outstanding Quality, Service, Cleanliness and Value (QSC&V). We build on this trust by being ethical, truthful and dependable. In short, what Ray Kroc, founder of McDonald’s Corporation said some 45 years ago was right. <br />McDonald’s Board of Directors is entrusted with and responsible for the oversight of McDonald’s Corporation in an honest, fair, diligent and ethical manner. The Board has long believed that good corporate governance is critical to fulfilling the Company’s obligation to shareholders. We have and will continue to strive to be a leader in this area. This section of McDonald’s website contains detailed information about McDonald’s governance practices. <br />McDonald’s Board believes that good governance is a journey, not a destination. Accordingly, we are committed to reviewing our governance principles at least annually with a view to continuous improvement. One thing that will not change, however, is our commitment to ensuring the integrity of the McDonald’s System in all its dealings with stakeholders.<br />3514725-350520-7620001905<br />-5238751905 <br /> <br />Domino's Pizza, Inc. is an international pizza delivery corporation headquartered in Ann Arbor, Michigan, United States. Founded in 1960, Domino's is the second-largest pizza chain in the United States and has nearly 9,000 corporate and franchised stores in 60 international markets and all 50 U.S. states. Domino's Pizza was sold to Bain Capital in 1998 and went public in 2004. The menu features pizza, pasta, oven-baked sandwiches, wings, boneless chicken, salads, breadsticks, cheese sticks, and a variety of dessert items.<br />Domino’s Pizza is the number one pizza delivery company in the United States and is one of the most recognizable pizza brands in the world. On average, Domino's sells over one million pizzas every day across the globe , and covers ten million miles per week in pizza deliveries . At the end of 2007, there were 8,624 domestic and international locations- the vast majority of them franchised.<br />-34861501905<br />-420214-23378 <br />Sell more pizza, have more fun<br />Number one in pizzaNumber one in people <br /> <br /> <br />Treat people as you’d like to be treated.Produce the best for less.Measure, manage and share what’s important.Think big and grow.Incentivise what you want to change.Set the bar high, train, never stop learning.Promote from within.We are not ordinary, we are exceptional. <br /> <br /> <br />-5238751905 <br /> <br />The Beginning<br />•The Domino's franchise started out as just one tiny store. It was purchased and started by brothers Tom and James Monaghan in 1960. At that time, the restaurant was known, not as "Domino's," but as "Dominick's Pizza" and was located in Ypsilanti, MI. The two brothers only worked as a team until 1961, when James traded his half of the business to his brother for the price of a Volkswagen Beetle. In 1965, the name "Dominick's" was traded for "Domino's." <br />Growth<br />•The second Domino's pizza store was opened in Ypsilanti in 1967, officially starting the Domino's franchise. Since that time, the chain has experienced record-breaking growth: By 1978, 200 Domino's restaurants had been opened, and by 1983, the chain boasted 1,000 openings as well as restaurants in Australia and Canada. By 1985, Domino's was the fastest-growing chain in the United States, with additional locations in England and Japan. <br />Obstacles<br />•As hugely successful as the Domino's pizza franchise has been, the chain's history has been riddled with obstacles and troubles. In 1968, the company's headquarters were destroyed in a fire. In 1975, Domino's entered, and eventually won, a 5-year legal battle over trademark infringement claims posed by Domino Sugar. In 1989, a man named Kenneth Noid created a hostage situation at an Atlanta restaurant, angrily believing that the company's "Avoid the Noid" ad campaign (featuring a pizza-stealing, stop-motion animation character known as "The Noid") to be a personal insult. Luckily, Noid surrendered to police without harming his hostages, though he did force them to make pizza for him. <br />Delivery<br />•From the early days of the company, Domino's has had a delivery-focused business model. This approach helped the business gain a serious leg up during the late 1960s when the store's East Lansing location gained massive popularity with Michigan State University students wanting convenient food options without having to have their own cars. The delivery-heavy model prompted the restaurant's famous "30 minutes or it's free" guarantee. However, this guarantee was rescinded in 1993 as a result of complaints about reckless driving and accidents caused by delivery drivers in a rush to meet the requirements. <br />Today<br />•Nowadays, Domino's pizza continues to grow, with over 8,000 store locations worldwide. The company has continued to develop its business model by featuring many non-pizza menu items and incorporating new customer service options such as online order. Domino's has also been listed in Entrepreneur magazine's list of the top 10 best franchise opportunities. <br />IN INDIA<br />Domino’s pizza opened its first store in India in January 1996, at New Delhi. Today Domino’s pizza India has grown into a country wide network of more than 300 stores with a team of 9000 people. According to India retail report 2009, domino’s is the largest Pizza chain in India.<br />-314325-112395 <br /> <br />Pizzas<br /> Pastas<br /> Breadsticks<br /> Cheese Dips<br /> Beverages<br /> Chocolava Cake<br />-8609589188<br />Indian operations are ranked number one for the past 3 years.<br /> Delivers an average of 1 million pizzas per day.<br />Over the last 2 years, they opened stores in 15 new cities.<br /><ul><li>The company operates in three segments:</li></ul>Domestic stores : <br /><ul><li>Uses its company-owned stores as a testing ground for new products and technologies which may then be passed onto franchisees.
  15. 15. Generates income from company-owned stores in the form of store profits.</li></ul> Domestic supply chain : <br /><ul><li>Vertically integrated supply system automatic delivery of raw materials cuts out a lot of the "back of-store" activities.</li></ul>Helps in keeping down food costs.<br /> International :<br /><ul><li>consists of 3,469 franchised stores outside the United States.
  16. 16. operates six supply chain centers which manufacture dough and distribute food and supplies.</li></ul> International segment accounts for about 41% of Domino's store sales worldwide. <br />-1200151905<br /> <br />Procurement of raw materials<br /><ul><li>Raw materials like wheat, baby corn, tomatoes and spices are got, out of which wheat was bought in from jalandhar and then sent to the commissaries in refrigerated trucks.
  17. 17. 4 commissaries (Regional Centralized Facilities)
  18. 18. Delhi
  19. 19. Bangalore
  20. 20. Kolkata
  21. 21. Mumbai </li></ul>Distribution<br /><ul><li>Pizza dough processed from the wheat is then sent to the retail outlets again in refrigerated trucks.
  22. 22. Logistics requirement for sending frozen foods, at a temperature of ₋18⁰C and of refrigerated trucks in which food is sent at a temperature range of between 1 to 4⁰C.</li></ul>Retail Outlets<br />Regular stores<br />Super stores : High traffic, More counters <br />Express stores : those where people were expected to walk in and order rather than ask for home delivery.<br />-361950144780<br /> <br /> ITEM PLACE Wheat  Jalandhar (Punjab)Cheese  Karnal, HaryanaTomatoes  Bhubaneshwar, OrissaSpice  South IndiaBaby Corn  NepalExotic Vegetables  Sri LankaPepperoni  AustraliaJalapeno  Spain<br />1599565-83820-485775240030<br /> <br />Food Quality <br /> <br />We constantly review the quality of our ingredients and have pioneered pizza innovation within our market. Last year we were pleased to complete the removal of added hydrogenated fats and MSG (Monosodium Glutamate) from all products on the menu in addition to our long-standing policy of not allowing any GMO’s (Genetically Modified Organisms). Our ongoing review of ingredients serves to maintain quality standards whilst also identifying opportunities to improve the nutrient profile of our food.<br />Environment <br /> <br />The new commissary in Milton Keynes is being designed to be certified to BREEAM<br />excellence (Building Research Establishment Environmental Assessment Method). A<br />third of our truck fleet, which deliver food to our stores, are already registered “Euro 5”,<br />currently the highest standard in emissions control. It is anticipated that half the fleet will<br />be Euro 5 by the end of the current year and all trucks will be at this level by 2012. New<br />fuel alternatives, such as biodiesel, are constantly being tested. <br />Currently 80% of our pizza boxes are made with recycled board and are 100% recyclable.<br />Furthermore all invoices and statements are now sent to our franchisees lectronically.<br />Not only is this more efficient but is importantly saving substantial paper and wastage in<br />the process.<br />Charity <br />The phrase ‘Delivering More’ sums up our franchisees’ approach to developing <br />relationships with their local communities. It is these local activities that build loyalty <br />and sustain long term success. In 2007 our stores have made considerable strides in <br />terms of their community relations efforts, driven in particular by our first full year of <br />association with Special Olympics GB and Special Olympics Ireland. Special Olympics <br />is a major provider of sporting opportunities for people with a learning disability and <br />provides equality of opportunity for all our athletes regardless of ability or degree of <br />disability. The Company also organised and funded a number of events aimed at <br />encouraging regional participation in Special Olympics activities and promoted the <br />charity on boxes and menus.<br />People <br />In stores, our franchisees today employ approximately 12,000 team members, a large and <br />diverse group of people including some who require a short-term income and others <br />looking for a long-term career. We rely upon these people to work with a fanatical focus <br />on customer service and food quality without which we will lose the momentum required <br />to fuel our growth. Considerable effort continues to be directed at helping franchisees to keep pace with ever-changing employment legislation and at ensuring that their people benefit from a hard-working environment which is still huge fun and very rewarding. We have bolstered the support provided to the stores with the appointment of a full-time franchisee HR consultant, nationwide seminars, telephone hotlines and web-based resources. Improvements to the scope and volume of training available to franchisees and in-store teams will serve to underline our reputation as a great place to work.<br /> <br />-714375-150495 <br />The corporate governance philosophy of the Company is driven by the interest of stakeholders and business needs of the Company. Therefore, enhancing corporate governance is on our highest priority in order to keep the trust of the shareholders and to fulfill our social responsibilities as a company. <br />Our Corporate Governance Philosophy is based on the following principles - <br />(a)   To ensure transparency, high degree of disclosure and adequate control system.(b)   To ensure that the decision making process is systematic and rational.(c)   To ensure full commitment of the Management to maximize shareholders value.(d)   To ensure that the employees of the Company subscribe to the corporate values and apply them in their conduct. <br />The highlights of our company's Corporate Governance Regime are : <br /><ul><li>At the core of our Corporate Governance practice is our board, which oversees which oversees how the management serves and protects the long-term interests of all our stakeholders. We believe that an active, well-informed and independent Board is necessary to ensure the highest standards of corporate governance. To ensure the independency of the Board, the majority of the Board, four out of seven, are independent Directors.
  23. 23. Constitution of several Committees such as Audit Committee, Remuneration Committee, Compensation Committee, Investors Grievance Committee etc. for more focused attention.
  24. 24. Established Code of Conduct for Directors and Senior Management as also for other employees. The Company has also in place the Code of Conduct for Prevention of Insider Trading as per the SEBI Guidelines.