The document is a proposal from The Lighthouse Group consulting firm to McDonald's Corporation to address declining sales and customer traffic among Millennials. It recommends developing an interactive "McChoice Menu" that allows customization of sandwiches with all-natural ingredients using touchscreen kiosks or a smartphone app. This would target health-conscious male students aged 18-24. The proposal includes an analysis of McDonald's financial performance and the challenges of appealing to Millennials. It predicts the McChoice Menu will improve perceptions of McDonald's and increase customer satisfaction and revenue among the target demographic.
This document analyzes the economic impact of Instacart on the U.S. grocery industry both before and during the COVID-19 pandemic through a series of statistical models. Some of the key findings include:
1) Before the pandemic, Instacart was responsible for creating approximately 116,000 jobs and increasing grocery revenue by $2.9 billion in the U.S.
2) During the pandemic, Instacart created an additional 70,000 jobs and increased grocery revenue by $3.5 billion.
3) Instacart accounted for 92% of the net job growth in the grocery industry associated with COVID-19.
Stiff competition, evolving consumer preferences and a challenging organic growth environment are driving many food retailers to consider strategic alternatives, including M&A, in order to optimize capital allocation and growth opportunities.
The document is a market report on the global coffee market from 2021-2028 published by Cognitive Market Research. It provides an overview of the key players, types of coffee, applications, regional markets, and historical and forecast revenue figures. It also discusses factors influencing the market such as consumer needs, economic changes, and manufacturing costs. The report forecasts continued growth in the global coffee market from 2020-2027 driven by emerging regions.
Restaurant Monthly Update - January 2017Duff & Phelps
December marked the ninth month out of the past ten with declining sales for the restaurant industry. Both same-store sales and traffic growth deteriorated from November’s results, officially marking 2016 as the worst year of industry performance since 2009. Despite challenges in the sector, private equity investors with significant dry powder and strong, relatively inexpensive credit, will likely continue to fuel investment in innovative and rapidly expanding restaurant concepts.
The convenience store industry had another year of strong sales and profit growth in 2018. However, the document notes that in-store sales grew only 1.6% which is a paltry increase, and foodservice sales growth continued to slow. While motor fuel sales increased 10.7% due to higher prices, the number of gallons sold was flat. Profits were up but this was largely due to robust fuel prices and margins, as underlying issues like a decrease in customer trips and rising operating expenses threaten the industry's health. In-store categories like cigarettes and prepared foods saw their market share decline slightly as well.
- Hansen Natural Corporation will host an investor meeting on December 15, 2011 to discuss the company's business and operations.
- At the meeting, the company will present slides providing an overview of its financial results, the energy drink category dynamics, and Hansen's performance within the category.
- The presentation will include details on Hansen's 19 consecutive years of sales growth, solid financial results for the third quarter of 2011, and the size and growth of the energy drink market overall.
- Kellogg Company is a leading global manufacturer of cereal and convenience foods. Its largest customer is Walmart, accounting for 20% of sales.
- The company has a diversified debt portfolio including bonds, commercial paper, and bank loans. It has adequate liquidity to cover upcoming debt obligations.
- Kellogg acquired Pringles in 2012, expanding its international snacks business. Key strategies include growth in emerging markets and executing category growth plans.
Personal Care and Beauty Products Industry Insights - April 2015Duff & Phelps
The Personal Care and Beauty Products sector has seen strategic acquisitions driven by desires to strengthen market position, expand product portfolios, and broaden and deepen distribution channels. Robust M&A activity is forecasted to continue through 2015. For more detail on personal care and beauty products trends, public market performance and deal activity.
This document analyzes the economic impact of Instacart on the U.S. grocery industry both before and during the COVID-19 pandemic through a series of statistical models. Some of the key findings include:
1) Before the pandemic, Instacart was responsible for creating approximately 116,000 jobs and increasing grocery revenue by $2.9 billion in the U.S.
2) During the pandemic, Instacart created an additional 70,000 jobs and increased grocery revenue by $3.5 billion.
3) Instacart accounted for 92% of the net job growth in the grocery industry associated with COVID-19.
Stiff competition, evolving consumer preferences and a challenging organic growth environment are driving many food retailers to consider strategic alternatives, including M&A, in order to optimize capital allocation and growth opportunities.
The document is a market report on the global coffee market from 2021-2028 published by Cognitive Market Research. It provides an overview of the key players, types of coffee, applications, regional markets, and historical and forecast revenue figures. It also discusses factors influencing the market such as consumer needs, economic changes, and manufacturing costs. The report forecasts continued growth in the global coffee market from 2020-2027 driven by emerging regions.
Restaurant Monthly Update - January 2017Duff & Phelps
December marked the ninth month out of the past ten with declining sales for the restaurant industry. Both same-store sales and traffic growth deteriorated from November’s results, officially marking 2016 as the worst year of industry performance since 2009. Despite challenges in the sector, private equity investors with significant dry powder and strong, relatively inexpensive credit, will likely continue to fuel investment in innovative and rapidly expanding restaurant concepts.
The convenience store industry had another year of strong sales and profit growth in 2018. However, the document notes that in-store sales grew only 1.6% which is a paltry increase, and foodservice sales growth continued to slow. While motor fuel sales increased 10.7% due to higher prices, the number of gallons sold was flat. Profits were up but this was largely due to robust fuel prices and margins, as underlying issues like a decrease in customer trips and rising operating expenses threaten the industry's health. In-store categories like cigarettes and prepared foods saw their market share decline slightly as well.
- Hansen Natural Corporation will host an investor meeting on December 15, 2011 to discuss the company's business and operations.
- At the meeting, the company will present slides providing an overview of its financial results, the energy drink category dynamics, and Hansen's performance within the category.
- The presentation will include details on Hansen's 19 consecutive years of sales growth, solid financial results for the third quarter of 2011, and the size and growth of the energy drink market overall.
- Kellogg Company is a leading global manufacturer of cereal and convenience foods. Its largest customer is Walmart, accounting for 20% of sales.
- The company has a diversified debt portfolio including bonds, commercial paper, and bank loans. It has adequate liquidity to cover upcoming debt obligations.
- Kellogg acquired Pringles in 2012, expanding its international snacks business. Key strategies include growth in emerging markets and executing category growth plans.
Personal Care and Beauty Products Industry Insights - April 2015Duff & Phelps
The Personal Care and Beauty Products sector has seen strategic acquisitions driven by desires to strengthen market position, expand product portfolios, and broaden and deepen distribution channels. Robust M&A activity is forecasted to continue through 2015. For more detail on personal care and beauty products trends, public market performance and deal activity.
Industrial Distribution Industry Insights - January 2015 Duff & Phelps
The Industrial Distribution market continues to be driven by improving end markets and favorable industry dynamics. Industry consolidation is expected to drive ongoing M&A activity. For more detail on market indices, public market performance and deal activity, read the report.
In this edition of the European Chemicals Update, we highlight the global food additives market and include a special interview with Hezi Israel, Executive Vice President of Business Development and Strategy at Israel Chemicals Ltd.
Restaurant Monthly Update - November 2016Duff & Phelps
Despite the challenging year for the industry amidst the downturn in same-store sales and traffic, restaurant investments continue to flourish, especially for emerging entrants in the fast-casual category who are favored more by the Millennial consumer. Restaurants still remain an attractive investment within the consumer space, as traditional retail has been heavily impacted by the growth of e-commerce.
Profitable addictions- Sin stocks mainSonia Khalsa
The document analyzes the profitable alcohol industry in Canada. It discusses factors that may contribute to the industry's forecasted growth between 2013-2018, such as changes to provincial policies allowing alcohol sales in grocery stores. However, it also notes risks like predicted decreases in per capita alcohol consumption due to growing health concerns. The industry is dominated by Anheuser-Busch InBev, which reported revenue growth and profit increases in Q1 despite higher costs of sales, demonstrating the success of its "Focus Brands" strategy of prioritizing brands popular in each market.
PepsiCo Inc. is analyzed in this document. It provides a business description of PepsiCo and its segments. An economic analysis discusses improving US GDP growth and a low interest rate environment. The beverage and snack industries are overviewed, noting changing consumer tastes towards healthier options. PepsiCo has opportunities in emerging markets and product innovation. Financial analyses include valuation models estimating PepsiCo's fair price at $109.90, implying 9.5% upside. Strengths include brand recognition and diversification, while weaknesses are consumer tastes shifting away from sugary drinks.
- The Company (Celsius) is significantly outpacing category growth in the convenience channel, growing 44% YoY compared to the category growth of 4%.
- Though Celsius has only 15% of total sales volume (ACV), it is ranked as the 11th top brand with over 200 brands in the category.
- Celsius saw record quarterly revenue in Q3 2020 of $80 million, up 80% year-over-year, marking its 7th consecutive quarter of growth in North America.
The document provides an overview of The Coca-Cola Company's 2020 outlook. It discusses non-GAAP financial measures and the inability to reconcile certain projected 2020 metrics to GAAP due to uncertainties. It also notes forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from expectations.
This is an example of an investment memo for a consumer products company, Kraft Heinz. This does not constitute investment advice and is an outdated valuation. This should only serve educational purposes.
Starbucks Valuation Report - V3 (Complete) Kevin Schultz
This document provides a valuation report for Starbucks Corporation (SBUX). The report values SBUX using two methods: a discounted cash flow (DCF) analysis and a relative valuation analysis.
The DCF analysis values SBUX at an enterprise value of $90.98 billion. This value is reached by forecasting SBUX's free cash flows for 10 years based on historical ratios, applying a terminal growth rate, and discounting the cash flows using a weighted average cost of capital of 6.45%.
The relative valuation values SBUX at an enterprise value of $62.1 billion. This is derived by selecting comparable companies, calculating valuation multiples based on those companies, and applying the multiples
General Mills held its annual CAGNY conference to discuss new growth opportunities. Ken Powell, Chairman and CEO, kicked off the conference by highlighting the company's long history of growth since 1866 and its transition to becoming a global food company by 1995. Jeff Harmening then provided an update on the U.S. Retail segment, noting challenges in the first half of fiscal year 2015 but expectations for renewed sales and profit growth in the second half through actions like focusing on key businesses like cereal, yogurt, and snacks. Chris O'Leary followed with details on the company's strategies for continued international growth.
East African Breweries Limited Initiation Coverage Report - March 2016Stephanie Kimani
EABL is a leading alcoholic beverage company in East and Central Africa. It operates in Kenya, Uganda, Tanzania, and South Sudan. The report provides an initiation coverage report on EABL, with a target price and recommendation to sell. Key points include continued growth expected in the Kenyan market, disruptions facing markets like South Sudan, Uganda and Tanzania, and a focus on premiumization and shifting consumer tastes towards spirits. The global alcohol industry is growing, fueled by emerging markets in places like Africa.
This document provides a safe harbor statement noting that certain statements made could constitute forward-looking statements regarding expectations of future operating results and events. It cautions that actual results could differ materially from expectations due to various risks and uncertainties. It also outlines Monster Beverage Corporation's commitment to employee health and safety during the COVID-19 pandemic, including closing offices, providing necessary equipment for remote work, enhanced safety protocols, and increased employee communication and support programs. Finally, it provides data on the company's and category's financial performance in the total US market for the 13 weeks ending December 26, 2020.
Restaurant Monthly Update December - 2016Duff & Phelps
October marked the seventh month out of the past eight with declining sales for the restaurant industry. While both same-store sales and traffic growth showed modest improvements from September, the results continue to raise concerns for the industry. Despite challenges in the sector, a number of emerging concepts across the restaurant industry have received additional rounds of funding from institutional and strategic investors.
Coca Cola Investor Day 2017 - James Qunicey - CEONeil Kimberley
- James Quincey is the President and Chief Executive Officer of The Coca-Cola Company.
- The presentation includes non-GAAP financial measures and forward-looking statements that are subject to risks and uncertainties.
- The presentation discusses strategies to accelerate growth of the Company's leading consumer-centric brand portfolio, drive revenue growth, strengthen the system's value-creation advantage by digitizing the system, and unlock the power of employees.
Starbucks is recommended as a buy with a target price of $63.25 per share. The recommendation is based on Starbucks' strong financial position and dividend growth, optimistic outlook in the China-Asia Pacific region, and sensitivity analysis. Starbucks enjoys stable revenue growth in the short term and substantial growth in the mid-term. It has a strong financial flexibility to respond to challenges. Risks include market risk, economic risk, and operational risk.
Wal Mart Store Financial ResultsFebruary 03/07/08finance1
Wal-Mart reported an 8.9% increase in total net sales for the four-week period ending February 29, 2008 compared to the same period the previous year. Comparable store sales increased 2.6% in the US and international sales increased 19.8%. Strength was seen in grocery, health and wellness, and entertainment categories in the US. The company estimates comparable store sales in the US to be flat to up 2% for the upcoming five-week period.
Neil Kimberley Bevnet Dec 2013 PresentationNeil Kimberley
The document discusses projections for growth in the US beverage market over the next five years. It notes that while carbonated soft drinks have declined as a percentage of sales, total beverage sales have grown steadily over the past decade and are projected to continue moderate growth of around 1.4% annually through 2018. Non-carbonated beverages have been the driver of overall category growth and are expected to continue outpacing carbonated drinks. The document outlines five key opportunities for beverage companies to capitalize on this trend, including expanding retail space and promotions for non-CSDs, evolving consumer preferences, opportunities in value price segments, changing product forms and sales channels, and potential impacts from changes in sweetener formulation.
GNC presented at the William Blair Growth Stock Conference on June 14, 2011. The presentation provided an overview of GNC's business segments including retail, franchise, and manufacturing/wholesale. It highlighted GNC's leading market position in health and wellness retailing in the US and globally. The presentation also discussed positive macro trends driving industry growth, such as increasing focus on health and wellness, and how GNC is well-positioned to capitalize on these trends through its premium branded products and knowledgeable customer service.
This is a project presentation for Managerial Accounting course. In the form of a corporate financial conference, we aim to convey the company background and financial predictions to investors to persuade them into continue investing in Starbucks.
Corporate level strategies - strategic management - Manu Melwin Joymanumelwin
Market penetration involves trying to gain additional share of a firm’s existing markets using existing products. Often firms will rely on advertising to attract new customers with existing markets.
Strategic Management - Module 2 – MG University - Manu Melwin Joymanumelwin
Market penetration involves trying to gain additional share of a firm’s existing markets using existing products. Often firms will rely on advertising to attract new customers with existing markets.
Industrial Distribution Industry Insights - January 2015 Duff & Phelps
The Industrial Distribution market continues to be driven by improving end markets and favorable industry dynamics. Industry consolidation is expected to drive ongoing M&A activity. For more detail on market indices, public market performance and deal activity, read the report.
In this edition of the European Chemicals Update, we highlight the global food additives market and include a special interview with Hezi Israel, Executive Vice President of Business Development and Strategy at Israel Chemicals Ltd.
Restaurant Monthly Update - November 2016Duff & Phelps
Despite the challenging year for the industry amidst the downturn in same-store sales and traffic, restaurant investments continue to flourish, especially for emerging entrants in the fast-casual category who are favored more by the Millennial consumer. Restaurants still remain an attractive investment within the consumer space, as traditional retail has been heavily impacted by the growth of e-commerce.
Profitable addictions- Sin stocks mainSonia Khalsa
The document analyzes the profitable alcohol industry in Canada. It discusses factors that may contribute to the industry's forecasted growth between 2013-2018, such as changes to provincial policies allowing alcohol sales in grocery stores. However, it also notes risks like predicted decreases in per capita alcohol consumption due to growing health concerns. The industry is dominated by Anheuser-Busch InBev, which reported revenue growth and profit increases in Q1 despite higher costs of sales, demonstrating the success of its "Focus Brands" strategy of prioritizing brands popular in each market.
PepsiCo Inc. is analyzed in this document. It provides a business description of PepsiCo and its segments. An economic analysis discusses improving US GDP growth and a low interest rate environment. The beverage and snack industries are overviewed, noting changing consumer tastes towards healthier options. PepsiCo has opportunities in emerging markets and product innovation. Financial analyses include valuation models estimating PepsiCo's fair price at $109.90, implying 9.5% upside. Strengths include brand recognition and diversification, while weaknesses are consumer tastes shifting away from sugary drinks.
- The Company (Celsius) is significantly outpacing category growth in the convenience channel, growing 44% YoY compared to the category growth of 4%.
- Though Celsius has only 15% of total sales volume (ACV), it is ranked as the 11th top brand with over 200 brands in the category.
- Celsius saw record quarterly revenue in Q3 2020 of $80 million, up 80% year-over-year, marking its 7th consecutive quarter of growth in North America.
The document provides an overview of The Coca-Cola Company's 2020 outlook. It discusses non-GAAP financial measures and the inability to reconcile certain projected 2020 metrics to GAAP due to uncertainties. It also notes forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from expectations.
This is an example of an investment memo for a consumer products company, Kraft Heinz. This does not constitute investment advice and is an outdated valuation. This should only serve educational purposes.
Starbucks Valuation Report - V3 (Complete) Kevin Schultz
This document provides a valuation report for Starbucks Corporation (SBUX). The report values SBUX using two methods: a discounted cash flow (DCF) analysis and a relative valuation analysis.
The DCF analysis values SBUX at an enterprise value of $90.98 billion. This value is reached by forecasting SBUX's free cash flows for 10 years based on historical ratios, applying a terminal growth rate, and discounting the cash flows using a weighted average cost of capital of 6.45%.
The relative valuation values SBUX at an enterprise value of $62.1 billion. This is derived by selecting comparable companies, calculating valuation multiples based on those companies, and applying the multiples
General Mills held its annual CAGNY conference to discuss new growth opportunities. Ken Powell, Chairman and CEO, kicked off the conference by highlighting the company's long history of growth since 1866 and its transition to becoming a global food company by 1995. Jeff Harmening then provided an update on the U.S. Retail segment, noting challenges in the first half of fiscal year 2015 but expectations for renewed sales and profit growth in the second half through actions like focusing on key businesses like cereal, yogurt, and snacks. Chris O'Leary followed with details on the company's strategies for continued international growth.
East African Breweries Limited Initiation Coverage Report - March 2016Stephanie Kimani
EABL is a leading alcoholic beverage company in East and Central Africa. It operates in Kenya, Uganda, Tanzania, and South Sudan. The report provides an initiation coverage report on EABL, with a target price and recommendation to sell. Key points include continued growth expected in the Kenyan market, disruptions facing markets like South Sudan, Uganda and Tanzania, and a focus on premiumization and shifting consumer tastes towards spirits. The global alcohol industry is growing, fueled by emerging markets in places like Africa.
This document provides a safe harbor statement noting that certain statements made could constitute forward-looking statements regarding expectations of future operating results and events. It cautions that actual results could differ materially from expectations due to various risks and uncertainties. It also outlines Monster Beverage Corporation's commitment to employee health and safety during the COVID-19 pandemic, including closing offices, providing necessary equipment for remote work, enhanced safety protocols, and increased employee communication and support programs. Finally, it provides data on the company's and category's financial performance in the total US market for the 13 weeks ending December 26, 2020.
Restaurant Monthly Update December - 2016Duff & Phelps
October marked the seventh month out of the past eight with declining sales for the restaurant industry. While both same-store sales and traffic growth showed modest improvements from September, the results continue to raise concerns for the industry. Despite challenges in the sector, a number of emerging concepts across the restaurant industry have received additional rounds of funding from institutional and strategic investors.
Coca Cola Investor Day 2017 - James Qunicey - CEONeil Kimberley
- James Quincey is the President and Chief Executive Officer of The Coca-Cola Company.
- The presentation includes non-GAAP financial measures and forward-looking statements that are subject to risks and uncertainties.
- The presentation discusses strategies to accelerate growth of the Company's leading consumer-centric brand portfolio, drive revenue growth, strengthen the system's value-creation advantage by digitizing the system, and unlock the power of employees.
Starbucks is recommended as a buy with a target price of $63.25 per share. The recommendation is based on Starbucks' strong financial position and dividend growth, optimistic outlook in the China-Asia Pacific region, and sensitivity analysis. Starbucks enjoys stable revenue growth in the short term and substantial growth in the mid-term. It has a strong financial flexibility to respond to challenges. Risks include market risk, economic risk, and operational risk.
Wal Mart Store Financial ResultsFebruary 03/07/08finance1
Wal-Mart reported an 8.9% increase in total net sales for the four-week period ending February 29, 2008 compared to the same period the previous year. Comparable store sales increased 2.6% in the US and international sales increased 19.8%. Strength was seen in grocery, health and wellness, and entertainment categories in the US. The company estimates comparable store sales in the US to be flat to up 2% for the upcoming five-week period.
Neil Kimberley Bevnet Dec 2013 PresentationNeil Kimberley
The document discusses projections for growth in the US beverage market over the next five years. It notes that while carbonated soft drinks have declined as a percentage of sales, total beverage sales have grown steadily over the past decade and are projected to continue moderate growth of around 1.4% annually through 2018. Non-carbonated beverages have been the driver of overall category growth and are expected to continue outpacing carbonated drinks. The document outlines five key opportunities for beverage companies to capitalize on this trend, including expanding retail space and promotions for non-CSDs, evolving consumer preferences, opportunities in value price segments, changing product forms and sales channels, and potential impacts from changes in sweetener formulation.
GNC presented at the William Blair Growth Stock Conference on June 14, 2011. The presentation provided an overview of GNC's business segments including retail, franchise, and manufacturing/wholesale. It highlighted GNC's leading market position in health and wellness retailing in the US and globally. The presentation also discussed positive macro trends driving industry growth, such as increasing focus on health and wellness, and how GNC is well-positioned to capitalize on these trends through its premium branded products and knowledgeable customer service.
This is a project presentation for Managerial Accounting course. In the form of a corporate financial conference, we aim to convey the company background and financial predictions to investors to persuade them into continue investing in Starbucks.
Corporate level strategies - strategic management - Manu Melwin Joymanumelwin
Market penetration involves trying to gain additional share of a firm’s existing markets using existing products. Often firms will rely on advertising to attract new customers with existing markets.
Strategic Management - Module 2 – MG University - Manu Melwin Joymanumelwin
Market penetration involves trying to gain additional share of a firm’s existing markets using existing products. Often firms will rely on advertising to attract new customers with existing markets.
The document discusses Subway's marketing strategies and business model. It notes that Subway has been ranked the number one franchise opportunity for the last 20 years. Some of Subway's key strengths are its brand awareness worldwide, high quality fresh ingredients, efficient ordering process, and adaptable store locations. Subway uses the advertising slogan "Eat Fresh" and colors like dark green and yellow in its logo to represent freshness, health, and purity. The company focuses on younger demographic groups interested in nutrition. Subway franchises its business model and does not operate restaurants directly, instead contracting with local franchisees and development agents.
This document discusses franchising. It defines franchising as an ongoing relationship where a franchisor provides a licensed privilege to a franchisee to do business and offers assistance in exchange for monetary compensation. It describes the main types of franchises as commercial, industrial, distribution, and service franchises. It identifies the key parties in a franchise as the franchisor, who grants the franchise, and the franchisee, who is granted the right to market the franchisor's goods or services. The document outlines some of the main advantages and disadvantages of franchising for franchisees and franchisors.
Presentation for International Marketing class
Discussing Franchising on the examples of McDonals and Subway in US and Poland
Created by:
Aleksey Narko
Natalia Swierczek
A presentation on world's number 1 fast food chain "SUBWAY". Here we have covered all the aspects of Total Quality Management including dimensions of quality, problems and rewards. Hope you will find it helpful.
This document provides a business case analysis of McDonald's recent struggles and proposed solutions. It summarizes McDonald's goals, mission, and vision as becoming the favorite place to eat. However, McDonald's has been losing market share and saw declining sales and revenues in recent years. One major reason identified is that McDonald's menu is seen as unhealthy junk food that contributes to obesity. The document evaluates three proposed solutions and recommends redesigning McDonald's menu to offer healthier food options using a weighted matrix analysis and cost benefit analysis. An implementation plan is outlined that would pilot healthier options in the Pacific Northwest over 12 months to gauge customer and public perception.
Pestelpestel analysis mc donaldspolitical factorsincreasing interssuser562afc1
The document analyzes McDonald's using various strategic frameworks. A PESTEL analysis identifies political, economic, social, technological, environmental and legal factors impacting McDonald's. A Five Forces analysis finds bargaining power of consumers and competition among rivals are strong forces. Financial ratios show McDonald's had a 2% revenue increase in 2019 with a current ratio of 0.98 and return on assets of 12.68%.
Competitive business environment, it is no longer sufficient to merely satisfy customers. To remain or become quality leaders, consumer foodservice companies have to implement advanced models of service leadership and management of a service to get and retain customers.
FS, MCDFinancial Statements, McDonalds ($millions)As of Dec 31, 20.docxbudbarber38650
FS, MCDFinancial Statements, McDonalds ($millions)As of Dec 31, 2012:INCOME STATEMENT20132012Total Revenues$28,106$27,567Restaurant expenses17,20316,75120142013201220112010Gross profit$10,903$10,816SG & A expenses2,3862,455Sales1816918875186031829316233Impairment charges(credits)08Net Income47585586546555034946Other operating (income)expense(247)(252)EBIT$8,764$8,605Interest expense$522$517Other (income)expense$38$9Before-tax earnings$8,204$8,079Taxes2,6182,614Net income$5,586$5,465EPS$5.60$5.41BALANCE SHEET, as of Dec 3120132012ASSETSCash & equivalents$2,798$2,336Accounts & notes receivable1,3201,375Inventory124122Prepaid expenses8081,089Current assets$5,050$4,922Gross Prop & Equip40,35538,491Less Accum Depreciation(14,608)(13,814)Net Prop & Equip$25,747$24,677Goodwill2,8732,804Other Assets2,9562,983Total assets$36,626$35,387LIABILITIES AND EQUITIESAccounts payable$1,086$1,142Accrued payroll and other liabilities1,2641,375Other current liabilities820886Current liabilities$3,170$3,403Long-term debt$14,130$13,633Deferred taxes1,6481,531Other liabilities1,6691,526Total liabilities$20,617$20,093Common stock1717Additional paid-in capital5,9945,779Retained earnings41,75139,278Treasury stock and other(31,752)(29,780)Total equity$16,009$15,294Total liabilities & Equity$36,626$35,387Common shares out9981,010Common stock price*:20132012Jan 3, 2013, Jan 3, 2012$86.32$91.22Dec 30, 2013, Dec 31, 2012$95.44$84.02Average$90.88$87.62* Adjusted close, per Yahoo FinanceBook value per share$16.04$15.14
Going from 0 to 100 percent payout would have two possible effects. First, it might affect the price of the stock causing a change in the formula value of the warrant; however, it is not at all clear that the stock price would change, let alone what the change would be. Second, and more important here, the increase in the payout ratio drastically lowers the expected growth rate. This reduces the chance of the stock going up in the future. This lowers the expected value of the warrant, hence the premium and the price of the warrant.
FS, WENFinancial Statements, The Wendy's Company ($thousands)INCOME STATEMENT20132012Total revenues$2,487,410$2,505,242Cost of sales1,839,7401,881,248Gross profit$647,670$623,994SG & A expenses293,792287,808Depreciation182,359146,976Impairment & other expenses36,37766,463EBIT$135,142$122,747Interest expense69,01298,604Other (income)expense6,48937,268Before-tax earnings$59,641($13,125)Taxes and other (income)expense14,154(20,208)Net income$45,487$7,083EPS$0.096694$0.015057BALANCE SHEET20132012ASSETSCash & equivalents$580,152$453,361Accounts & notes receivable62,88561,164Inventory10,22613,805Prepaid expenses & other81,75924,231Deferred Taxes120,20691,489Advertising funds restricted assets67,18365,777Current assets$922,411$709,827Gross Prop & EquipLess Accum DepreciationNet Prop & Equip$1,165,487$1,250,338Goodwill842,544876,201Other intangibles1,305,7801,301,537Other Assets126,818165,296Total assets$4,363,040$4,303,199LIABILITIES AND EQU.
[Document title]ContentsCurrent State of Dunkin Donuts.docxdanielfoster65629
[Document title]
Contents
Current State of Dunkin Donuts 2
The same products, yet so much more 2
Introduction 2
Challenges 3
Strengths 3
Rising industry 4
Future of Dunkin’ Donuts 5
Tables 6
References 7
Current State of Dunkin Donuts
Dunkin Donuts is best known for its variety of delicious donuts and coffee, but over the years they expanded their product lines to include many different breakfast items and specialty coffee drinks. Over the past five years, the company developed a solid reputation for their coffee, and has managed to gain a loyal customer fan base. The company has been in operation since 1948, currently has approximately 6,500 outlets, and a goal to go to 15,000 outlets by the year 2020. The five main goals of Dunkin’ Donuts are as follows: (1) Grow relevant brands; (2) Expand globally; (3) Enhance the guest experience; (4) Continue their sustainability plan; and (5) Intensify domestic and international markets. The same products, yet so much more
Mission statement:“Dunkin’ Donuts will strive to be the dominant retailer of high quality donuts, bakery products and beverages in each metropolitan market in which we choose to compete “ (DD IP Holder LLC, 2015).
Krispy Kreme is a company in the industry that offers high quality doughnuts, and packaged sweets, among various kinds of beverages. Introduction
The restaurant services industry has high levels of complexity and stiff competition, therefore, a potential acquisition of Krispy Kreme by Dunkin Donuts is identified. These two companies have great levels of potential, but face stiff competition from the other leading competitors previously mentioned. It would cost both Dunkin Donuts and Krispy Kreme a lot to expand to the levels of some of the competitors. The acquisition will most likely improve the companies’ performance and reduce the competition, thereby giving the two companies an opportunity to achieve their organizational objectives. Challenges
There are some factors that could affect the growth and profitability for the restaurant services industry. The three most prominent risks are healthcare costs, mandatory wage hikes, and taxes. The new healthcare law, Affordable Care Act, has put significant pressure on the restaurant industry because a vast majority of the franchisees are small businesses. This is because these businesses tend to be labor intensive with a high number of young, part-time employees and are not typically associated with healthcare costs. However, the healthcare law will require these businesses to offer health care to employees which will drive up the healthcare costs. A second factor that affects the growth and profitability of the restaurant services industry is the mandatory wage hike. This recent federal proposal calls to raise the minimum wage from $7.25 to $10.10 over roughly two years. This is an increase in labor expenses of 40%, which will drive up operating expenses and will affect the ability of companies to have cash ava.
Yo2Go is a new yogurt parfait shop opening in London, Ontario. It will offer customizable yogurt parfaits made with a variety of yogurt and topping options. The document outlines Yo2Go's venture description, goals, market analysis, marketing plan, operations, finances, and growth opportunities. Yo2Go aims to enter the growing frozen yogurt market with a health-focused approach. Its marketing plan includes partnerships with local gyms and a stamp card loyalty program. Financial projections estimate yearly profits could reach $118,000 within three years, allowing Yo2Go to expand.
Using traditional planning tool is of significant value, and is the basic requirement in this case. Like geographical mapping, corporate mapping is also an essential document. Hence, incomplete, providing partial information ignoring the constantly changing factors like weather etc. Here, simulation is an effective strategy to get detailed meteorological information .
Team L Marketing Plan Final Final Draft (1)Sarah Lux
This document provides a marketing plan for McDonald's to launch a home delivery service. It includes a company description of McDonald's history and strategic focus. A situation analysis examines strengths, weaknesses, opportunities, threats and competitors in the industry. The marketing program outlines the product, pricing, placement and promotion strategies. Financial projections over 5 years and an implementation plan with rollout schedule are also included. The overall goal is to expand McDonald's convenience by delivering food to customers and competing with pizza delivery businesses.
McDonalds is a global leader in the fast food industry with over 68 million customers globally. It has seen impressive financial growth since starting as a small barbecue restaurant in the 1940s. Today it has annual revenues of over $27 billion. McDonalds focuses on uniform menus customized to local preferences and has a vision of being customers' favorite place to eat. It uses forecasting and budgeting techniques to adapt to changing market conditions and customer demands. McDonalds also implements management accounting systems like ERP and activity-based costing to monitor performance and control costs across its global operations.
The GCC food retail sector is fragmented with many small, local retailers. However, the sector is gradually consolidating with international and domestic retailers competing for market share. Large hypermarkets are expected to dominate the future landscape, with further consolidation seen as imminent. The top retailers currently hold 13% of the market in Saudi Arabia and 36% in the UAE. Regional players have engaged in M&A activity to maintain market share against international competitors. Family businesses in the fragmented GCC market face challenges from global players and may need to collaborate or restructure to remain competitive.
- General Mills' net sales increased 5% to $17.6 billion in fiscal 2020, with organic net sales growth of 4%. Operating profit increased 17% to $3 billion.
- The COVID-19 pandemic significantly increased demand for at-home food consumption while decreasing away-from-home food demand. General Mills adapted quickly by prioritizing production of popular products and accelerating their e-commerce business.
- General Mills contributed $10 million in donations to address hunger and ensure food access during the pandemic. They also implemented enhanced safety measures across facilities.
- For fiscal 2021, General Mills' priorities are competing effectively to gain market share, driving efficiency to fuel brand investment, and reducing leverage to increase
Matteo Giudici submitted his class portfolio project analyzing three investments - McDonald's Corporation, The Coca-Cola Company, and the Vanguard Wellesley Income Fund. The portfolio reflects Giudici's conservative investment philosophy as a new, risk-averse investor. He invested $10,000 in each company. McDonald's is a dominant fast food chain that provides steady growth. Coca-Cola is a leader in beverages with a good reputation. The fund provides bonds and stocks for reduced risk. Giudici analyzed each company's financials and projected continued growth above his required 8.03% return. He aims to avoid risk and obtain a constant long-term return through this balanced, research-driven portfolio.
Running head EXTERNAL ENVIRONMENTAL SCAN .docxcowinhelen
Running head: EXTERNAL ENVIRONMENTAL SCAN
1
EXTERNAL ENVIRONMENTAL SCAN
2
External environmental scan of McDonald’s
Student’s name
Course number
Instructor’s name
Date
External environmental scan of McDonald’s
Introduction
McDonald's Corporation is the world biggest chain of fast food eating place and franchises system in the globally. The organization was found or established in 1940 east of Pasadena, California by two brothers Richard and Maurice McDonald. Presently the organization has 35,000 braches across the world in 125 countries with an estimated daily customer of 69 million. In the year 2013 the organization recorded an operating income of approximately US$ 9 billion which is a clear indication of the success since the establishment in 1940. Due tot hat fact that its the biggest food chain across the globe its gets affected by all the external factors such as political situation in the countries, economical circumstance, local competition, buyer behavior, legal rules and regulation across the nations and societal factors.
The organization faces two major external factors including the substitution of new products that are healthier as compared to fast food and the entrant of new competitors in the market. This essay does the study of these external aspects that are affecting or can affect the McDonald in a constructive or unconstructive manner. The paper also comprises five force examination of fast food analysis to cover all features of external factors impacting this commerce.
Porter's Five Forces Analysis
Porter's five force analysis is a type of structure that is utilized by the organization to determine the competition levels in the market and provided vital information that will be used to developed strategies that leads to competitive advantages (Burks, 2015). This analysis provide the evaluation or information that can be used by new entrant or existing organization as the negative and positive market current and future conditions are exploited. Higher competition levels are presented in the industry of fast food.
Threat of New entrant - At the present time there is no much competition due to new entrant in the market that can have the significant effects to McDonald as they have already established brand name in the market. Due to that fact that McDonald has invested more on their employees and the products hence providing acceptable standards in the market there has been a barrier blocking some of the new small entrant to the market. Creating a good image and provision of better services to the client is one of the main aspects to consider in the food industry to win the customer loyalty.
The existing major competitors of McDonald are Burger King and KFC. However individuals are having high preference to McDonald products as they are high quality and within the affordable prices. So at this time for M ...
Gap analysis of Mc donalds with respect to fast food industryShashi Kumar
Gap analysis of Mc donalds with respect to fast food industry.
Gap analysis helps to identify the gap between the customers expectation and managment perception.
it help company under stand gaps internal and external
1) Millennials spend more on eating out than previous generations due to convenience and higher incomes. They prefer quick service restaurants that provide fast, affordable meals.
2) McDonald's is a highly successful global fast food chain that has used strategies like customizing menus for local tastes, franchising, reducing operational costs, and extensive advertising to maintain its dominant market position worldwide.
3) By implementing technologies like kiosks and automation, McDonald's has increased efficiency while reducing costs and workforce, further boosting its profits.
The dispute between McDonald's India and its franchisee CPRL hampered McDonald's operations in northern and eastern India. McDonald's alleged CPRL violated their franchise agreement through financial irregularities and mismanagement. As a result of the dispute, McDonald's India incurred losses of 3.05 billion rupees and its brand image suffered. The emergence of new competitors like Domino's, KFC, and Subway made it difficult for McDonald's to gain market share.
Dirk Van de Put, CEO of Mondelēz International, presented at CAGNY 2019. He outlined the company's strategy to drive accelerated growth by adopting a more consumer-centric approach, focusing on operational excellence, and building a winning culture. Van de Put projected 3%+ organic net revenue growth, high single-digit adjusted EPS growth at constant currency, dividend growth above adjusted EPS growth, and over $3 billion in annual free cash flow as part of an attractive long-term financial outlook. He also highlighted strategic initiatives around global and local brands, new marketing approaches, agile innovation, expanding channels and key markets, and partnerships and M&A to support continued growth.
In 2009, Business Leaders for Michigan (BLM)
released the Michigan Turnaround Plan, a plan
on how to make Michigan a Top Ten state for
job, economic and personal income growth.
The Plan was updated in 2012 to identify the
six most distinctive assets Michigan had which
could be leveraged to accelerate growth.
These assets include the state’s engineering
prowess, geographic location, and world-class
higher education institutions, among others.
The 2013 New Michigan Report is the first in
an annual series in which Michigan’s progress
in leveraging its assets into economic growth
will be tracked. Michigan’s performance on
various metrics will be charted over time, and
compared to the results achieved in other
high-performing states.
This document provides background information and financial analysis of McDonald's Corporation. It begins with an overview of McDonald's history and recent developments, including its expansion globally and goals to improve sustainability. The document then analyzes McDonald's profitability and stability ratios for 2013-2014. Most ratios showed McDonald's ability to control expenses and liabilities improved over this period, though its ability to manage financial expenses worsened. Overall, the document presents key details on McDonald's operations and evaluates its financial performance through common accounting ratios.
This document provides background information and financial analysis of McDonald's Corporation. It begins with an overview of McDonald's history from its founding in 1940 to becoming the world's largest fast food chain. Recent developments including McDonald's 2020 sustainability goals are then discussed. The document then analyzes McDonald's profitability and stability ratios for 2013-2014, finding that most ratios declined or worsened over this period except selling expenses and working capital. Interpretations of the ratio analysis are provided.
Similar to IP_RUG_McDoanld's_Final_Written_Report (20)
1. 1
The McChoice Menu Experience:
Addressing the Millennial Generation and McDonald’s Corporation
McDonald’s Corporation
Consultation By:
The Lighthouse Group, LLC.
12/04/14
Lighthouse Team:
Madison Capo
Ryan Geary
Kyle Kruse
Vasily Semenikhin
Shenlei Yi
Maura Zipf
2. 2
Dear Mr. Donald Thompson,
It is with great pleasure that we, The Lighthouse Group, LLC, address you today. We have been
commissioned as consultants for McDonald’s Corporation (Referred to as “MCD”). Based on
extensive analysis of market and company internal data, we have detected that the firm is not
reaching its potential in appealing to and capturing the millennial generation (ages 18-34) in the
United States specifically. Millennials seek and value freshness, variety, customization and an
experience, according to Forbes and the New York Times. While MCD has made attempts to
appeal to this demographic with the Premium McWraps, the firm should now focus its attention
to the blossoming generation. By 2020, Millennials will become the nation’s largest buying group,
reported Forbes. Yet, according to the NPD Group, hamburger chains have seen a substantial
decline in millennial traffic in the past 8 years. Likewise, the percentage of 19 to 21 year olds who
visited MCD monthly has fallen since 2011 according to Technomic Inc. Overall, the decline in
foot traffic and revenue from this pivotal demographic is an alarming harbinger for the future of
MCD and must be addressed with haste.
In response to this looming challenge, we have devised a multi-faceted solution that will ensure
MCD an improved perception among health conscious millennials and continued success in an
ever-changing quick-service industry. The McChoice Menu Experience is an interactive ordering
system that features a step-by-step sandwich customization process with all natural ingredients.
The Menu can be experienced in-store with a touchscreen kiosks or mobile platform with a
McChoice smartphone application platform. Both allow MCD customers to personalize
sandwiches with a main protein selection, bun selection, choice of cheese, addition of sauces
toppings, and additional protein additions. The McChoice Menu tracks price and calorie count at
every step of ordering. The new menu will be targeted to male students, ages 18-24, who lead a
3. 3
physically and mentally active lifestyle. Our target customer is concerned with his image, involved
in many forms of social media, a sports fan. The supply chain must be altered to secure the new
ingredients. MCD will partner with United Natural Foods Incorporated (UNFI) to achieve the
ingredient quality that Millennials seek. We will launch the new McChoice Menu Experience in
the following U.S. major cities: Boston, Chicago, Dallas, Los Angeles, New York City,
Philadelphia, Seattle, and Washington, D.C..
Based on our research, the McChoice Menu Experience will positively impact revenue and
improve MCD perception. The McChoice Menu vastly improves the consumer perception of MCD
products, specifically the questions pertaining to ingredient quality. Likewise, it will increase
customer satisfaction among users, especially the target market. With MCD’s current widespread
and complicated menu, customers have options but not personalization. The McChoice Menu will
allow customers to create food in their own unique image. Building the sandwiches will grant
patrons the experience they crave. Meanwhile, the calorie and price tracking systems will ensure
that the customer is in control of his or her meal. With proper implantation of our six-step timeline,
the McChoice Menu Experience will not only have immediate returns but long continued success
at MCD across the country.
With utmost respect and warm regards,
The Lighthouse Group, LLC
4. 4
Table of Contents
I. Firm Overview……………………………….……………...………..……….…….…….5
II. Ratio Analysis………………………...…………………...………………….………….8
III. Identified Business Challenge……….………………....…….………….………...…...13
IV. Market Analysis……………….……………….………….………....………………...15
V. Proposed Response ....………………………....…….……..…………………………...19
VI. Conclusion……………………………………………….…..………………………...24
VII. References…………..………………………...………………..……….………….....26
VIII. Appendix…………………………………...……………...…………………………28
5. 5
I. FIRM OVERVIEW
MCD offers a variety of food and beverage products to its customers in the global restaurant
industry. The primary sources of revenue for MCD Corp. are sales from Company operated
restaurants and conventional and licensed franchises. According to Hoover’s Company Profile
Database, MCD generates 67% of revenue from Company-operated restaurants with 33% of
revenue stemming from franchise revenues.
Conventional franchises provide a portion of initial investments in the equipment, signs, seating,
and décor of a restaurant. MCD retains property rights to both the land and building. Conventional
franchises contribute to corporate revenue through payments of franchising term fees, rent, and
royalties based on a percentage of sales.
Conversely, licensed franchises contribute all necessary initial investments without any
contributions from MCD. As a result, licensed franchises pay only initial fees in addition to
royalties as a percent of sales.
As stated on the Company website, over 80% of MCD restaurants worldwide are franchised
locations with 57% conventional and 24% licensed. According to Hoover’s Company Profile
Database, MCD has 28,619 franchised and 6,738 Company operated locations, totaling over
35,000 total locations in over 100 countries worldwide as of year-end 2013.
6. 6
See Figure 1 in the Appendix for year end 2013 10-K Company and franchise revenue data as
well as the 2014 10-Q revenue status. See Figure 2 for regional revenue and storefront data.
According to Statista: The Statistics Portal, the fast food industry generated $191.03 billion dollars
in revenue in 2013, a modest .5% increase from 2012. MCD accounted for $28.1 billion of the
2013 industry revenue, or 14.7% market share.
MCD requires a variety of inputs from the agricultural industry to create its menu offerings. The
supply chain begins with farms located throughout the world. MCD has committed to consistency
in its global integration strategy, ensuring standardized products at each location throughout the
world. As mentioned on the Company website, the primary supplier relationships in North
America are with Gaviña Gourmet Coffee, Lopez Foods, Keystone Foods, and 100 Circle Farms.
Each MCD restaurant receives supply shipments from independent distribution centers. MCD
largest distributor is the Martin-Brower Company, LLC. According to a University of San
Francisco publication, the Martin-Brower Company supplies over 15,000 MCD locations in North
America. Each distribution center serves anywhere from 250 to 700 MCD restaurants.
As clearly stated in the year end 2013 10-K, MCD offers food and beverage menu products to
every consumer in the worldwide market. It does not have any restrictions on its market segment.
However, 2012 advertising data collected by Statista demonstrates MCD focus on appealing to
children ages 2-11.
See Figure 5 in Appendix for data of MCD advertising to children 2-11.
7. 7
MCD faces various challenges each year as it must adapt to changing industry and economic
landscapes. The recent adverse economic conditions caused sluggish informal eating out (IEO)
statistics for MCD in 2013. As reported in the year end 2013 10-K, MCD is experiencing
comparable guest count declines on average of 2.3% across it three main regions. In addition,
rising input pricing pressure and minimum wage standards are two other economic forces that will
challenge MCD ability to maintain profit margins in the coming years.
See Figure 4 in Appendix for a 2013 regional performance breakdown.
8. 8
II. RATIO ANALYSIS
Lighthouse Consulting has been commissioned to review your firm’s financial status. After
analyzing various financial statements and data we have discovered opportunities for your
management team to consider. Serving as a fast food industry benchmark, we have included
figures from a rival, Wendy’s Company.
Presented below are key financial indicators gathered through our analysis. Companies are referred
to using their NYSE stock ticker.
MCD’s Gross Sales Revenue totaled $28.1 billion in 2013, up 2.0% YOY, which outperformed
WEN. Gross Sales Revenue for WEN declined 0.71% YOY (from $2.51 to $2.48 billion).
MCD experienced a 2.0% increase in Sales Revenue YOY which was outpaced by a 2.3% rise in
COGS. This contributed to a decline in the Gross Margin Ratio of 0.2% YOY, dropping from
44.3% to 44.1%. SG&A expenses decreased 2.8% YOY, which contributed to a rise in EBIT, or
Operating Income, of 1.1% YOY. Thus, although the Gross Margin Ratio declined, the loss was
made up in the decrease in SG&A Expense YOY, resulting in an EBIT Margin Ratio of 30.3%,
which was the same as 2012. An increase in Interest Expense of 0.9% YOY coupled with a slight
rise in Tax Expense, 0.2%, resulted in a Net Income rise of 2.2% YOY ($5.46 billion to $5.58).
Accordingly, the Profit Margin Ratio increased 0.1%.
Conversely, WEN experienced a 0.7% decline in Sales Revenue YOY. However, COGS declined
2.9% YOY, resulting in an increase in the Gross Profit Margin of 1.7% YOY. SG&A Expense for
WEN increased 2.1% YOY. The decline in COGS outweighed the decrease in Sales Revenue and
9. 9
increase in SG&A Expense to yield an impressive rise in EBIT of 18.0% YOY. Therefore, the
EBIT Margin Ratio for WEN in 2013 increased 1.4% YOY. A decrease in Interest Expense of
30.0% YOY and a rise in Tax Expense of 167.3% YOY resulted in an astounding rise in Net
Income in 2013 of 540.8% ($7.1 million to $45.5).
Bottom Line comparison between MCD and WEN reveals the rise in WEN Net Income of 540.8%
YOY trumping the slight 0.1% increase in MCD Net Income. This is a testament to the rising
popularity and market penetration of WEN as compared to the market share leader MCD.
Although MCD saw growth in Gross Sales Revenues while WEN experienced loss, WEN realized
a massive gain in Net Income compared to MCD. This can be a result of COGS, which is the
largest expense for each firm and decreased for WEN while rising for MCD.
Concerning efficiency matters, MCD’s Asset Turnover has been stagnant for some time, 0.8 each
of the past five years. Similarly, MCD’s Day Sales in Inventory has been quite unchanging as well,
improving only 0.1 since 2009 (2.9 from 3.0). WEN’s Asset Turnover remained the same as 2012
and has declined 0.1 since 2009 (0.6 from 0.7). However WEN’s 2013 Day Sales in Inventory
ratio is the lowest over the comparable period. WEN’s DSI has been steadily declining since 2009,
progressing from 3.1 in 2009 to 2.0 in 2013, a 1.1 improvement.
In Marketing Effectiveness however, MCD outshines WEN in Return on Assets (15.3% versus
1.0%), Return on Equity (34.9% versus 2.4%), and Return on Invested Capital (5.3% versus 3.5%)
in 2013, despite MCD worsening its position in all three categories YOY while WEN improved.
MCD’s Interest Bearing Debt rose 3.6% totaling $14.1 billion for FYE 2013, up from $13.6 billion
in 2012. However, the 3.6% rise was the lowest increase in Interest Bearing Debt over the
10. 10
comparable period. WEN’s Interest Bearing Debts have slightly increased YOY by 0.4%, up to
$1.464 billion compared to $1.458 billion in 2012. Even though Interest Bearing Debt has
increased, MCD’s Debt-to-Cap ratio has slightly decreased YOY from 47.1% to 46.9%, partially
due to the rise of 4.7% in Owner's Equity. WEN’s Debt-to-Cap has increased from 42.3% to 43.1%
YOY as the result of a 2.8% decrease in Owner’s Equity. As a result of EBIT increases YOY
outpacing Interest Expense YOY changes, both firms experienced Interest Coverage ratio
increases in 2013, demonstrating that debts hold no significant threat. Quantitatively, MCD’s
Interest Coverage ratio grew from 15.7% to 15.8%, while WEN’s grew from 1.9% to 3.2%. MCD’s
Effective Interest rate is 6% whereas WEN’s experienced a rise of 3.6% YOY, both being
attractive for capital loans, however banks will make a larger return loaning to MCD.
Both firms have increased their Market Caps in 2013. MCD’s Market Cap increased to $96.1
billion from to $88.4 billion in 2012. Likewise, WEN’s Market Cap increased YOY to $3.4 billion
from $1.8 billion.
Prices of stock increased YOY 10% for MCD and 85% for WEN. MCD remains a steady
investment, however, WEN investors have made a major return this past year.
MCD’s liquidity is healthy and stable, showing slight improvement. Operating Cash Flow
increased 2.2% for MCD. Meanwhile, WEN's increased Operating Cash Flow significantly in
2013 by 73.2% YOY.
MCD budgeted Capex of $2.8 billion, or 7.4%, has declined $3 billion in, or 11.7% in 2012.
MCD Share Repurchases have declined 32.0% YOY ($2.6 billion to $1.7). At the same time,
Dividend payments have increased steadily over the comparable period totaling $3.1 billion in
11. 11
2013. In absolute amounts, the total payment for Share Repurchases and Dividends from 2009 to
2013 was $23.5 billion. WEN did not repurchase any shares in 2012 but spent $69.3 million on
Share Repurchases in 2013. WEN has also been steadily increasing Dividend payments nearly
doubling its total YOY. Together, Shares Repurchases and Dividends for WEN yields $671
million.
Compared to Total Capex, which totals $12.7 billion since 2009, MCD’s has chosen to return cash
to investors ($23.5 billion) rather than expand operations. Conversely, WEN has favored
reinvestment as opposed to return to shareholders, spending $818.5 million on Capex versus $671
million on Share Repurchases and Dividends since 2009.
MCD’s Payout ratio has averaged 50.8% over the last five years, meaning on average MCD pays
dividends around 50% of its yearly Net Income. WEN’s Payout ratio has averaged 187.8% over
the same period, as the result of much lower Net income figures compared to MCD.
The global economic conditions is outside management’s projections. MCD is experiencing
stagnant sales versus WEN’s explosive growth YOY. Although MCD is the larger firm and
beginning to experience the effects of a saturated market, WEN is experiencing more robust
margin growth, possibly because of greater opportunities for market penetration.
12. 12
Based on common size vertical analysis of each company’s income statement, MCD had a Net
Income ratio of 19.9% to WEN’s 1.8%. This means that Net Income as a percent of Net Sales was
19.9%, while WEN’s Net Income was only 1.8% of Sales Revenues. COGS for WEN was at a
five year low as a percentage of Sales Revenues (73.4%) along with a five year low in Interest
Expenses of 2.8%. Together these items contributed to a five year high in Net Income for WEN of
1.8%.
Based on common size vertical analysis of each company’s balance sheet, the most astonishing
discrepancies existed in Net PP&E and Total Intangible Assets. 70.3% of MCDs Total Assets was
from Net PP&E, which was well above WEN’s figure of 26.7%. Conversely, WEN’s Total
Intangible Assets accounted for almost half of its Total Assets, 49.2%, while MCD’s was only
7.8%. Cash was at five year for WEN, accounting for 13.7% of Total Assets. Similarly, MCD was
also experiencing its highest Cash as a percentage of Total Assets over the past five years (7.6%).
This may help explain MCD’s generous return of $4.9 billion back to shareholders in 2013.
In conclusion, market saturation is a threat to MCD future growth. Accordingly, MCD must
develop strategies outside market development and penetration to be successful. Lighthouse
Consulting suggests creating greater customer value and by reinvigorating relationships with
former customers.
13. 13
III. IDENTIFIED BUSINESS CHALLENGE
The challenges that MCD is currently facing include appealing to the U.S. millennial demographic,
pressure on profitability margins, and market saturation. There is also a challenge where there is
increasing consumer demand for customization and a preference towards healthiness. MCD faces
constant questioning amongst consumers about the production and appearance of menu offerings.
Documentaries such as Super Size Me by Morgan Spurlock exasperated concerns about the
treatment of livestock that MCD uses in production. In turn, MCD must constantly market their
USDA approved ingredients. Millennials especially are favoring the fast casual restaurant
experience that offers greater customization, variety, and taste. As a result, MCD future
profitability is in jeopardy. A July 2014 Consumerreports.org survey ranked MCD as the worst
fast food burger, citing ingredient taste and cleanliness as two areas of highest concern.
Another challenge can be seen through the analysis of 2013 financial statements which show that
MCD experiencing comparable guest count declines on average of 2.3% across it three main
regions. With over 35,000 restaurants in over 100 countries worldwide as reported on the 2013 10-
K Filing, it is reasonable to believe that MCD is approaching market saturation. According to
Statista: The Statistics Portal, revenues for the fast food industry in 2013 were $191.03 billion with
MCD accounting for $28.1 billion, or 14.7%.
The challenge that Lighthouse Consulting has chosen to address is appealing to the US millennial
demographic’s (ages 18-34) desire for customization and preference for healthiness. It is
imperative that MCD appeals to the millennial demographic because the millennial demographic
is expected to overtake ‘Baby Boomers’ as the nation’s largest consumer buying group by 2020,
as reported on Forbes.com. According to the United States Census Bureau, there are over 73
14. 14
million Americans between 18 and 34 years old. A somewhat overlooked characteristic of the
millennial demographic is their potential to influence other generations. 21% of millennials are
married, as reported from Pew Research Center, and the percentage is assumed to increase as the
younger portion of the demographic enters their mid to late twenties. As a result, it is expected that
the millennial parents will have a profound influence on the value system of their children who
will make up the echo millennial demographic.
Successful marketing to millennials will require a different approach that previous campaigns. The
NPD Group (formerly the National Purchase Diary), hamburger chains have experienced a 16%
decline in millennial customer traffic since 2007. The percentage of 19 to 21 year old people who
visited MCD monthly has fallen 12.9% since 2011 according to Technomic Inc., a food industry
facts insight consulting firm. During the same period, fast-casual restaurants experienced a 2.3%
increase.
According to recent reports in Advertising Age and Forbes, millennials seek fresh products,
variety, and customization. MCD can create value for this demographic by personalizing its
customer experience. Presently, MCD is appealing to millennials with new menu items and new
restaurant decor. The most successful menu addition has been the McWrap. According to
Advertising Age, 22% of the millennial demographic chose MCD because of the McWrap,
otherwise they would have visited Subway.
15. 15
IV. MARKET ANALYSIS
Taking a panoramic view of the fast food industry that MCD pertains to, we discover that
“worldwide sales revenues for the fast food industry in 2013 were $191.03 billion and are expected
to grow 2.1% in 2014 to $195.05 billion and 2.2% in 2015 to $199.34 billion”(Statista: The
statistics portal). MCD earned $28.1 billion in sales revenue during 2013, accounting for a fast
food industry market share of 14.7%. Compared to Subway, which finished second in sales
revenues in the fast food industry in 2013 with a total of $18.1 billion that accounts for 9.5% of
the market share, MCD has the absolute advantage in terms of market occupancy. Another
competitor Yum! Brands, which is the parent company of KFC, Pizza Hut, and Taco Bell,
experienced sales revenues of $13.1 billion, or 6.9% market share. Chick-fil-A and Chipotle
Mexican Grill round off the top five with 2.7% and 1.7% market share respectively. Above all,
MCD has the absolute numeric as well as percentage advantage in terms of the market share in
fast food industry. See Figure 5 for market share data.
As clearly stated in the year end 2013 10-K, MCD offers food and beverage menu products to
every consumer in the worldwide market. It does not have any restrictions on its market segment.
The Company’s business is not dependent upon either a single customer or small group of
customers. Current market segments for MCD appear to include the following:
● Children: Boys and girls between the ages 4 and 11 focused on a fun experience
and good tasting food.
● Teenagers: Segment Profile: 12 through 19 year old boys and girls sensitive to
social pressures and interested in perceptions.
● Tradesmen: Segment Profile: A tradesman 18 years or older needing a quick meal
in between service jobs.
● Parents/Guardians: Segment Profile: A parental figure looking to treat their
dependents with a tasty and nutritional meal.
16. 16
● Travelers: Segment Profile: People en route to a location interested in a
convenient meal.
● Retirees: Segment Profile: Brand loyal individuals 65+ years old seeking value.
The segment that Lighthouse Group is choosing to target is the front half of the millennial
demographic, specifically males individuals 18-24 years old. According to the United States
Census Bureau, 10 percent of the population in the United States is between the ages 18-24, which
is roughly 31 million people. Thus, about 16 million males are within this market segment.
Lighthouse Group believes that MCD is currently not creating superior value for this segment
when compared to competitors. The new market segment Lighthouse Group advises MCD to target
is described below:
● Students: A perception conscious male student between the ages 18 and 24
interested in sharing a meal with his friends and maintaining a healthy diet.
A description of the target segment is also presented below:
Robert is a 20 year old male student at University of California at Los Angeles. He comes from a
middle class family. As a single male, Robert loves to go out and hang out with his friends. He
pursues an active lifestyle in every aspect of his life. For instance, he is an avid tweeter and
fanatical NFL fan. Being part of the millennial demographic, Robert favors trendy restaurants with
particular consciousness about food ingredients. His abundant dining experience makes him a
burger connoisseur who has been tired of standardized menus and desires for some customizations.
MCD currently positions itself as a provider of high quality food and superior service in a clean,
welcoming environment, at a great value. The introduction of the McCafé was designed to expand
MCD position to compete with the atmospheres of Starbucks, Dunkin Donuts, and Panera Bread.
However, in order to compete in today’s marketplace MCD must focus more on customer
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experiences and the “coolness” elements of its brand perception. Lighthouse Group is planning to
adjust the position of MCD to include greater customization for consumers who want meals
tailored to their specific needs. Rolling out a “Build Your Own Entrée” kiosk interface will create
greater value for customers and make a meal at MCD an experience once again.
The position map presented in Figure 6 displays MCD current position among its competitors in
the fast food industry as well as the direction it seeks to move towards. For right now, we consider
that MCD is high on legacy and convenience but lack of coolness and experience which are two
factors that attract our target market (age 18-24 male millennials) the most. When viewing MCD,
we noticed that one company’s market share does not necessary have the correlation with its profit
margin. It’s all about how effective the chosen target markets are and how effectively the company
serves them. Therefore, Lighthouse group advises that MCD needs to move towards the experience
and coolness direction gradually considering its current big market occupancy. Through adopting
the solution that our group suggests, MCD would walk out of the pure quick service zone and
incorporate an enjoyable dining experience.
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Product Mix- “4 P’s”
Product- The menu categories that MCD offers are burgers, chicken, fish, salads, wraps, breakfast,
snacks/sides, McCafé, beverages, desserts & shakes. Each menu item is packaged with the famous
“Golden Arches” logo and MCD brand name. The offerings are designed for efficiency and
standardized production procedures mitigate variances in quality.
Price- MCD prides itself on consumer value. However, this low prices of MCD can adversely
affects its perception to consumer who may correlate price to quality. Most meals are under $6
dollars, which includes a sandwich, fries, and a drink.
Place- According to Hoover’s Company Profile database, MCD has over 35,000 locations in over
100 countries worldwide.
Promotion- In 2013, advertising costs for MCD totaled $808.4 million, a 2.7% YOY increase from
2012. Primary promotional outlets include television, radio, and printed material. MCD is major
sponsor of the Olympic Games in 2012, which increased the scope of its campaigns to include all
participating nations. It also recruits celebrity endorsements most recently LeBron James, NBA
player for the Cleveland Cavaliers.
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V. PROPOSED RESPONSE
1. Dinner Box
In order to appeal to millennials, our first proposed response was revamping MCD current Bundle
Boxes, specifically the Dinner Box. By changing the Dinner Box, the target segment attracted
would be guardians and parents of children between the ages of 25 and 34, the upper range
millennials. In certain cities, the current Dinner Box combo includes two Big Macs, two regular
cheeseburgers, 10-piece Chicken McNuggets and four small fries for $9.99. The first alteration
made to the “Dinner Box,” would be to make them customizable for each customer and offering
healthier options, appealing to millennials’ desire for variety. The second alteration would be
expanding the boxes to more restaurants. Currently, the boxes are offered at 6,500 restaurants, but
the proposal would increase the availability. The response would increase family traffic through
restaurants as well as create value for every family, making MCD a family restaurant like in
decades past. The response was not chosen because the expected revenue impact was too small,
and it would be easily imitable by competitors.
2. Share-to-Win Plan
The second proposed response, we named the “Share-to-Win” alternative. The target segment
chosen was student employees ranging from 18 to 34. Through creating a Share-to-Win program,
MCD would be appealing to millennials desire to see businesses contribute to social change. Share-
to-Win, would have been a program to increase employee motivation to deliver a positive
experience to customers, reduce high employee turnover, and financially help student employees
attend college. According the 2013 MCD 10-K, total return to shareholders totaled $4.9 billion
dollars. The response would redirect some of these funds to current employees looking to attend
college, needing financial help. An employee would apply for a MCD scholarship, becoming part
20. 20
of the program. The student would have to work through their time in college. In addition to giving
funds, MCD would also create internships for these students toward the end of their college career,
so they could begin learning about the corporate side of McDonalds, or learn about running a
franchise. The response would create happier employees, providing a better customer experience.
Also, the response would decrease employee turnover. The response was not chosen because it
may upset shareholders by decreasing their total annual return, and it could cause complications
logistically with university coordination.
3. McChoice Menu Experience
Our recommended response is the “McChoice Menu Experience.” The target segment attracted
would be a 18 to 24 year old, perception conscious male student, interested in sharing meals with
friends and maintaining a healthy diet. According to the United States Census Bureau, the target
segment has approximately 16 million in the U.S. The McChoice Menu Experience, has two
factors, a new menu consisting of natural ingredients supplied by United Natural Foods
Incorporated (UNFI), and the ability to Build-Your-Own-Entrée (B.Y.O.E). Customers can build
their own sandwiches by using a new touch screen interactive kiosk in restaurants or using a mobile
application in which they choose what they want and then they can pick up their orders. See Figure
7 for a choice layout. The kiosks will be a standalone addition to current checkout station. The
McChoice menu will take the place of current premium menu items, not including the wraps, as
well as featured burgers such as the “Jalapeño Double.”
Potential problems with the proposed response would be the complication of the new supply chain,
and some customer dissatisfaction. The McChoice Menu experience will complicate the supply
chain due to the addition of UNFI to MCD current supplier list. Also, the discontinuation of some
21. 21
current offerings could hurt supplier purchases. The experience could potentially slow down the
dining experience, however with the majority of the menu unaltered, MCD will still have quick,
fast options for customers who are on the go. The price of the new sandwiches could potentially
be a turn off for customers, however with higher perceived product quality, individuals will be
willing to pay more.
Benefits of the proposed response are increased appeal to the millennial desire for customization
and health, as well as reduced menu size and confusion. The McChoice Menu will better the
consumer perception of MCD products, specifically the questions pertaining to ingredient quality.
Millennial’s desire for customization will be met with a new “coolness” factor. The new menu
experience allows customers to customize their sandwich both in restaurant and from home for a
quick pick up. The experience also allows customers to control the price of the sandwich and the
nutrition content as well as calorie count. Due to the fact our target segment is very health
conscious, the calorie tracking feature will be attractive. The menu readability and
understandability will be improved through taking away extraneous unpopular sandwiches. The
new experience will leave the creative process to the customers while still leaving the classic
products.
Competitors will probably take a “wait-and-see” approach in reaction to the new menu experience.
Other restaurant chains will want to see the reaction of consumers to the price change as well as
the new ingredients. After waiting to see reactions, some restaurants may create new promotions,
improve their ingredients, add more variety to their menus, remove add-on prices, or market to
salad fanatics or traditionalists. Slow reactions by competitors will allow MCD to increase its
market share while creating a more efficient cost structure.
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MCD has already renovated over 60% of their restaurants and franchises. Along with the new
experience, our target segment will want to sit down and enjoy their meal with friends. We expect
that MCD will become a constantly busy restaurant, with every table full, but turning over quickly.
When one walks in the restaurant, they will notice it is packed with males from our target segment,
wearing their college hoodies, and with backpacks leaning against the chairs. Almost everyone
will have their phones out checking and posting to Social Media sites. The most noticeable aspect
of this new experience, is seeing the diversity and size of others’ sandwiches. All sandwiches are
different but the same in the fact they are stuffed with different ingredients. There will be at least
two standalone kiosk systems that have the function of either scanning the receipt number if one
ordered on the mobile app, or “Build-Your-Own-Entrée.”
The marketing and advertising campaign proposed is a Social Media and television campaign.
Social media advertising on Twitter, Facebook, Instagram and Snapchat provide high potential for
interaction between consumers as well as between the consumer and McDonalds. Television
advertising include, specifically a commercial during the 2015 Super Bowl and repeated
advertisements during NCAA March Madness, has high national exposure and will reach a large
portion of our target.
We are proposing to launch the McChoice Menu Experience in 750 locations in eight cities across
the country. We chose the cities of Boston, Chicago, Dallas, Los Angeles, New York City,
Philadelphia, Seattle and Washington D.C. based on their proximity to UNFI distribution centers.
Our implementation plan begins at the end of December 2014 and spans the next 18 months.
Between December and March 2015, McDonalds will reach agreements with the restaurants and
UNFI, purchase and develop the new equipment, test the experience with real consumers and run
23. 23
the Super Bowl and March Madness Advertisements. In April and May, there will be training
sessions held for MCD restaurant employees. The sessions will be held once a month at one
location in each of the launching cities. Employees will be trained in both using the interface and
mobile application, as well as creating the new customizable sandwiches. Beginning in June 2015,
MCD will begin rolling out and unveiling the experience to the launching locations. After a
successful 12 months, MCD will be ready to begin expanding to new cities in June 2016. See
Figure 8 for an in depth break down of the timeline.
We have estimated costs in six areas: Ingredients, product testing, interface equipment, training,
marketing, and maintenance. Ingredients will have the highest cost of roughly $27.7 million.
Product testing is expected to be $2.5 million. Interface equipment will be $5.8 million, including
the cost of each kiosk running $1,470 each. Training for the first year will cost $960,000 with each
training session costing $1,000. The proposed marketing campaign will cost $2.4 million. We will
use 9.3% of our current advertising and marketing budget and redirect current advertising.
Maintenance for each year is expected to be $500,000. The total amount of costs will be around
$39.8 million. However, we expect to have nearly $50 million in additional revenues, so we expect
MCD to not only break even, but also have improved profit during the first year. See Figure 9-11
for detailed cost analysis workbook data.
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VI. CONCLUSION
McDonald’s Corporation is an international leader and benchmark in the fast-food and quick-
service industries. The firm’s menu offerings are numerous and the firm follows a strict global
integration strategy. Overall, we feel that MCD incredible size and lack of new potential markets
may lead to brand maturity and market saturation.
Brand maturity and decline are not yet manifested in our ratio analysis of MCD but the firm is
facing heavy competition. The firm has seen steady increases in Total Gross Sales Revenue (2%)
and Net Income (2.2%) with minor increases in SG&A and Interest Expense. However,
Wendy’s—a leading competitor—saw an astounding and alarming 540.8% increase in Net Income
from 2012 to 2013. This cannot be ignored. Furthermore, Wendy’s stock prices increased 85%
YOY compared to MCD 10%. Ultimately, the growth and expansion of competitive firms present
numerous challenges for MCD Corporation.
MCD is currently facing a mounting and critical challenge in appealing to the millennial
generation. This demographic desires an experience. They want customization, healthy options,
and interaction. MCD and the fast-food industry are experiencing declines in millennial customer
traffic over the past 5 years. In order to capture and maintain this demographic, considerable
changes must be made by MCD. Among our devised responses, we propose the McChoice Menu
Experience. It is an interactive ordering experience both through an in-store kiosk and mobile
application platform. With McChoice, customers build every aspect of their perfect sandwich. We
believe that the McChoice Menu will appeal to millennials desire for customization and ingredient
quality while reducing MCD current menu’s size and confusion.
25. 25
The target market for our proposed solution is male students, aged 18-24. In order to appeal to
these mentally and physically active consumers, we will advertise the McChoice Menu line in
major sporting events and on social media platforms. This will allow MCD to newly position itself
as healthy, cool and trendy. We believe major competitors such as KFC of YUM! Brands,
Wendy’s, and Chipotle Mexican Grill will not react immediately to our changes. They may adjust
their own menus or create promotions based on success of the McChoice Menu. However, we feel
that our strategic marketing mix and proposed advertising approach will ensure long and continued
achievement in the fast-food and quick-service industries.
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Berfield, Susan. “Why the McWrap Is So Important to MCD.” Bloomberg Businessweek. 03 July.
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Berr, Jonathan. "5 Reasons MCD Has Indigestion." CBSNews. CBS Interactive, 12 Aug. 2014. Web.
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Fast Food Industry. www.statista.com. Statista: The Statistics Portal, 2014. Web. Sept.-Oct. 2014.
Ivankoe, John, Amod Gautam, and Jason W. Price. Investext (Thomson One). Rep. Thomson Reuters,
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Jargon, Julie. "MCD Says Its Restaurants Got Too Complicated." The Wall Street Journal. Dow Jones
& Company, 23 Jan. 2014. Web. 07 Nov. 2014.
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Julie, and Lindsay Howden. “Age and Sex Composition: 2010.” United States Census Bureau. May.
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Kowitt, Beth. "Fallen Arches: Can MCD Get Its Mojo back?" Fortune. Time Inc., 12 Nov. 2014. Web.
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VIII. APPENDIX
Figure 1 (in millions)
Revenue Year End 2013 ($) Six Months End June 30, 2014 ($)
Company operated-sales 18,875 9,276
Franchise revenues 9,231 4,606
Total Revenue $ 28,106 $ 13,882
Source: MCD Corporation SEC Filings Annual Report 2013 pg.9 and 2014 Qtr. 2 10-Q pg.4
Figure 2
Source: Statista: The Statistics Portal
29. 29
Figure 3
Source: Statista: The Statistics Portal
Figure 4 (comparable values)
Region 2013 Guest Counts (%) 2013 Sales (%)
US -1.6 -0.2
Europe -1.5 0
APMEA (Asia Pacific Middle East
and Africa)
-3.8 -1.9
Source: MCD Corporation SEC Filing Annual Report 2013 pg.11