McDonald's started in 1940 selling hot dogs and was franchised nationally in 1955. It now operates over 35,000 outlets in 119 countries, serving over 68 million customers daily. McDonald's dominance in the fast food industry is due to its consistency, innovation, emphasis on quality and value. However, it faces risks of health concerns reducing customers and competition offering more customization. Moving forward, McDonald's will need to focus on healthier options while controlling expansion to maintain its leading market position.

1. McDonald’s Case Study
Why is everyone lovin’ it?

2. History
Flow of Presentation
The Company Today Competitors & Revenues Reasons For Success
Risks FacedTackling RisksCase Study QuestionsSummary

3. How It All Began
Started by Richard and Maurice McDonald in
1940 with hotdogs. Yes, that’s right! Not burgers.
Nationally franchised by businessman Ray Croc in 1955
who eventually bought the chain from the McDonald
brothers
The world famous golden arches were incorporated in the
company logo in 1962 and the mascot Ronald McDonald
was introduced in 1967.

5. TIMELINE

6. The Company Today
Operates more than 35,000 outlets in more than 119 countries.
More than 1.9 million employees worldwide
Feeds more than 68 million people worldwide everyday. (in
case you are wondering, that’s more than the population of
UK)
Generated $25.4 billion in revenues in the year 2015.
Also owns assets worth $38 billion worldwide.

7. Competition

8. 0
5
10
15
20
25
30
35
40
McDonalds Burger King Starbucks Dominos Subway KFC
SystemWideSales(billion$)
Miles Ahead Of Competition

9. Reasons For

10. Consistency: Same quality throughout the world both in
terms of products and services
Innovation: Introduction of innovative products and
services to enhance customer experience
Strong emphasis on cleanliness, quality and customer
service.

11. Strong focus on building of brand equity through:
Smart choice of brand elements
&
Holistic marketing activities

12. Brand revitalization through brand extension.
Affordability of products. Attracts masses and
youngsters.
Localized product offerings satisfies local
tastes.

13. Innovative and targeted advertising campaigns and products
Ads and promotions targeted at kids
and teens
Promotes the idea of sharing with
friends
Emphasis on cheapness and affordability

14. Risks Faced By The CompanyRisks Faced By The Company
Rivals are offering more customization
options to lure in customers.
Associated with obesity all over the world.
Health conscious customers shifting to
healthier alternatives. Food safety issues also
exist.
Expanding too fast  Dip in quality

15. Tackling Risks
Introducing healthier items in the menu
Slimming the menu down & focusing on
customization
Controlled expansion will keep focus on
core brand values and undiluted quality
of products and services

16. What are McDonald’s core brand values? Have these changed over the years?
• The core values of the brand have included quality, cleanliness, service and
value.
• Their core values are reflected in their outlets, the pricing of their products
and their employees.
• Although the company lost focus during expansion in the 80s, the company
has learnt from its mistakes.
• Even after so many years, the company does try its best to stick to their core
values which is the center of their business model.

17. McDonald’s did very well during the recession in the late 2000s. With the economy turning
around for the better, should McDonald’s change its strategy? Why or why not?
• The company did exceptionally well in the recession especially when compared to its
peers.
• The reason it did well was because of its cheap offerings which attracted customers in
times of financial troubles.
• The company should definitely stick with their strategy even now because if it has
done well in financially trying times, it is favored to do well when the situation eases.
• Certain changes can be made to the existing strategy after in-depth study of the
current markets.

18. What risks do you feel McDonald’s will face going forward?
• Health conscious consumers might move to brands offering healthier
options.
• Changing tastes and lifestyles pose a big threat. The company will need to
adapt to changes to be able to tackle such problems effectively
• Competition from local fast food chains as they have to focus only on a small
area .
• Training employees rapidly and effectively during expansion drives.

19. Summary
• Started in 1955(franchise), the company has grown to be the world’s largest fast food chain with assets
worth around $38 billion and 1.9 million employees.
• Miles ahead of its competition in terms of sales.
• Has managed to build a very strong brand. The 6th most recognizable brand in the world.
• Continues to expand and grow at am alarming rate.
• Innovative marketing campaign along with good quality and affordability of both services and products
and localization fueling growth.
• Often associated with increased obesity which might lead to customers migrating to healthier alternatives.
• Plagued with food safety issues in many countries.
• Needs to introduce healthier options and control its expansion to maintain lead in the fast food industry.

20. “If I had a brick for every time I’ve repeated the
phrase Quality, Service, Cleanliness and Value, I think I’d
probably be able to bridge the Atlantic Ocean with them.”
—RayKroc

21. DISCLAIMER
These slides are Created by Ayushi nagar,
IIT Bombay, during a marketing internship
(May’17-june’17) under the guidance of Prof.
Sameer Mathur, IIM Lucknow