McDonald's is a global fast food chain that was founded in 1940 in California by brothers Dick and Mac McDonald. In 1955, Ray Kroc joined the company and established McDonald's Corporation, growing the small restaurant into the largest restaurant chain worldwide. Currently, McDonald's has over 33,000 restaurants serving around 69 million customers daily in 120 countries. While facing competition and health concerns, McDonald's continues to adapt its menu, locations, and operations to remain successful through strategies like global expansion, branding, targeting various customer segments, and innovation.

1. Presented By:
Rafayel Ahmed
Farzana Nazneen
Waliul Islam
MIT-131037
MIT-131016
MIT-131018

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Business Analysis
 History
 Some Interesting Facts
 Mission, Vision
 Competitors
 Financial Facts
 Competitive advantage
 Key success Factors

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History
Raymond Kroc, founder and builder of McDonald's Corporation
was a milkshake machine salesman prior to meeting the two
brothers in 1954
Started in 15th
May,1940 as a
barbeque drive-in
restaurant by two
brothers, Dick and Mac
McDonald, in San
Bernardino, California

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History
 Mr. Ray Kroc took over the rights
from McDonald brothers and
founded The McDonalds
Corporation on 15th April,1955 in
Des Plaines, Illinois.
 By 1958, McDonald’s had sold its
100 millionth hamburger.

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Some Interesting Facts
About McDonalds
 Currently McDonald's serves
around 69 million people
worldwide everyday.
 It currently employs around
4,00,000 employees
worldwide.

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Some Interesting Facts
About McDonalds

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Some Interesting Facts
About McDonalds

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McDonalds-Mission Statement

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Main Rivals
There are many competitors are eating their shares.

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McDonald's – Competitors
 The main things they have to compete with
each other are
1.Minimizing cost
2.Customer satisfaction
3.Healthy ingredients
4.Convenient locations

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Financial Analysis
-
5,000.00
10,000.00
15,000.00
20,000.00
25,000.00
30,000.00
2009-12 2010-12 2011-12 2012-12 2013-12 TTM
Revenue
-
1,000.00
2,000.00
3,000.00
4,000.00
5,000.00
6,000.00
2009-12 2010-12 2011-12 2012-12 2013-12 TTM
Net income
Revenue is presently at 28,106 million in 2013 compares to
22,745 million in 2009.
Net income is at 5,586 million compares to 4,551 in 2009.

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Financial Analysis
Profitability 2009-12 2010-12 2011-12 2012-12 2013-12 TTM
Tax Rate % 29.84 29.34 31.32 32.36 31.92 31.92
Net Margin % 20.01 20.55 20.38 19.82 19.87 19.87
Asset Turnover (Average) 0.78 0.77 0.83 0.81 0.78 0.78
Return on Assets % 15.51 15.9 16.94 15.98 15.51 15.51
Financial Leverage (Average) 2.15 2.19 2.29 2.31 2.29 2.34
Return on Equity % 33.2 34.51 37.92 36.82 35.69 35.69
Return on Invested Capital % 17.5 18.24 19.48 18.33 17.71 17.71
Interest Coverage 14.71 16.53 17.26 16.64 16.72 16.72
Return on Equity is at 35.69% which is a 2.5% increase from 2009
Return on invested capital is at the same level as it was in 2009

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McDonalds-Profitability with the
Retailing Industry

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McDonalds In Competitive
advantage(Cost)
Company Rank
Worldwide
Sales ($M)
Domestic
Units
International
Unit Total
McDonald’s 1 89,941 14,098 19,412 33,510
KFC (Yum
Brands) 3 21,300 4,780 12,621 17,401
Burger King 5 14,975 7,500 5,012 12,512
Pizza Hut (Yum
Brands) 6 12,626 7,600 6,147 13,747
Wendy’s 18 6,004 6,772 3,020 9,792
Panera Bread 33 3,421 1,538 3 1,541
Dunkin’ Donuts
(Dunkin Brands) 18 6,004 6,792 3,020 9,792

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McDonald's – Competitive
advantage(Differentiate)
 Mc Café
Modern, relaxing mood
Free Wifi.
Attract new market segments
Variety of drinks
Satisfy hunger

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McDonald's–Key Success Factor
Customer Range
A key factor in the success of McDonald’s
is its ability to appeal to a wide range of
customers. For example, in June 1976
McDonald’s introduced a breakfast menu
to capture more customers
Nutrition
On the organization’s website,
McDonald’s states that part of its success
is due to its commitment to the well-
being of customers. In 2004, McDonald’s
established a global advisory council to
provide expert guidance on nutrition and
well-being.

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McDonald's–Key Success Factor
Availability
Restaurant locations are so prevalent in
suburban towns and cities that you are
never more then a few minutes away by car
or by foot
Affordability
McDonald’s has weathered economic
downturns because of the affordability of its
menu
.

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Environmental Analysis
 Porters Five Forces analysis
 Micro Environmental analysis
 Internal Environment
 Strength
 weakness
 External Environment
 Opportunities
 Theatres
 Macro Environment Analysis
 PESTEL

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McDonald's –Five Forces

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McDonald's –Five Forces
Threat of Competition HIGH
 Very similar products in the Fast Food industry
 High Competitors Advertising Capabilities
 Location of outlets are close
 EX: KFC, Chick-fil-A, Burger King,Sturbacks.
Threat of New Entrance Moderate
 Easy to enter, low setup cost
 Lack of ability to compete with MCD( cost efficiency,
customer awareness)
Threat of Substitutes Moderate
 Substitutable food
 Irreplaceable image

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McDonald's –Five Forces
Power of Suppliers LOW
 Worlds largest restaurant chain in sales
 High bargaining power over its suppliers(volume)
 Most of them owe MCD for their own existence
 Low power of suppliers—Lower the cost of raw
materials and High competitive price
Power of Buyers LOW
 Less chances of switching, high brand image through
differentiation and uniqueness
 Attractive price
 Buyer don’t have bargaining power(Low volume)

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McDonald's –SWOT Analysis
Internal Analysis
Strength
 Brand name
 Adapts to local markets
 Socially responsible with charities
 Safety and quality food
Weakness
 Management's failure to see
trends that do not fit
 High employee turnovers
 Price competition
 Controlling quality with franchised
operations

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McDonald's –SWOT Analysis
External Analysis
Opportunities
 Upscale restaurant
 Organic foods for the health conscious
 Going green
 Expanding to new parts of the globe
Threats
 Sued for unhealthy food many times
 Health concerns
 Competitors
 Contamination risks
 Geopolitical issues affect

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McDonald's –External Factor
Evaluation matrix( EFE )

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McDonald's –Macro environments
PESTEL Analysis
Political (Mild Threat (-1))
• Government regulations over wage
• Government regulation on labeling/packaging
Economic (Moderate Opportunity (+2))
• Inflation, Recession
• Exchange rate
• U.S. housing market crash/EU financial crisis
Social (Moderate Threat (-2))
• Employment opportunities
• Health conscious trends
• Norms , cultural practice

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McDonald's –Macro environments
PESTEL Analysis
Technological (Significant Opportunity (+5))
• Improvement by advanced technology, Social media outlets for
consumer
• Increasing comfort levels with technology
Environmental (Opportunity (+3))
• Forced not to harm the environment
• Lobbying for use of environmentally friendly material
Legal (Major Threat (-4))
• Advertisement regulations
• Health lawsuits

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Strategically Analysis
 Generic Building Block
 Corporate Level Strategies
 Business Level Strategies
 Functional Level Strategies
 Criticism and Recommendation

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McDonalds-The Generic Building
Blocks of Competitive Advantage

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Corporate Level Strategies (Globalization)
McDonald’s currently operates over 32000 stores
worldwide in 120 countries.

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Corporate Level Strategies (Branding)

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Corporate Level Strategies (Branding)

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Business Level Strategies (Target Market)

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Daam
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Business Level Strategies (Marketing)

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Efficiency, Innovation and Renovation
Efficiency
New Look
Outdoor Kisds
Zone
Functional Level Strategies

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Norms and Cultural Practice
Functional Level Strategies

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Worker, Employees and Cook
Functional Level Strategies

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Criticism and Recommendation
-Ecological damage
-Selling unhealthy food, McDonalds=junk food?
-Contributing to suffering and exploitation of livestock.
-Speculating Business Practice
-Low Risk Mitigation strategies
-New Innovative menus
-Bigger ranged sectors
-More diversification and Acquisition
-Better service and employment (operational improvement)
-Better Corporate level/management level involvement
-More focus on subcontinent.

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