McDonalds

1
McDonalds

• Isabel Soboszek
• Meghan Dilawari
• Matt Salisbury
• Farhan Latif
• Tammy Huynh

2
Company Background

• The first McDonalds was built in 1940.
• Ray Kroc was the first franchisee appointed by
  the original McDonald brothers, Dick and Mac.
• He opened his first restaurant in Des Plaines,
  Illinois.
• The company motto became Quality, Service,
  Cleanliness and Value (Q.S.C. V)

3
History of the company

• infancy stage
• growth stage
• maturity stage

4
Significant challenges faced in the companys
history

• 250,000 donation from McDonalds becamesubject
  for investigation during Watergate scandal
• Law suits faced

5
Current status of McDonalds

• Sales and revenues share of market
• Current company locations
• Number of employees
• Customers
• Competitors
• Companys use of IT and IS

6

Current Status Of Company

• McDonald's is the world's 1 fast-food company by
  sales
• Serving burgers and fries, it operates more than
  30,000 flagship restaurants
• It serves in more than 119 countries on six
  continents
• On a day-to-day basis, more than 47 million
  customers world-wide are served
• Employs more than 1.5 million people
• The Boston Market and Chipotle Mexican Grill
  fast-casual chains are also owned by McDonald's
• The most recent promotion was the Monopoly Best
  Chance Game 2004 which lasted from October 12 to
  November 15

7
Competitors

• A competitor for McDonalds can be anywhere from
  an upscale restaurant to a measly hot dog stand
  at a football game.
• McDonalds major competitors
• Burger King ,Subway, Yum, Wendys,In Out, Taco
  Bell, Sonic
• Jack in the Box, Carls Jr, Togos, Quiznos, KFC,
  Popeyes, Pizza Hut, Round Table Pizza, Dominos,
  Wenerschnitzel
• Of those, Burger King, Subway, and Yum are listed
  as the top three competitors McDonalds
  Corporation Fact sheet

8
Suppliers

• McDonalds believes the only way to serve a wide,
  diverse group of customers is through a wide,
  diverse group of suppliers. Therefore, McDonalds
  greatly relies on its suppliers.
• McDonald's suppliers in the U.S. operate over 40
  distribution centers, strategically located to be
  accessible to more than 12,000 restaurants in the
  country. They provide a diverse range of products
  and services for our restaurants. It is crucial
  that the suppliers reflect the diversity of our
  customers around the world.

9
Companys Financial/ Profitability Past
Performance

• McDonald's Corporation (NYSE MCD)
• McDonald's Plaza, Oak Brook, IL 60523 (Map)
• Phone [phone] Fax [phone]
• Key Numbers
• Company Type Public
• Fiscal Year-End December
• 2003 Sales 17,140.5M
• 1-Year Sales Growth 11.3
• 2003 Net Income 1,471.4M
• 1-Year Net Income Growth 64.7
• 2003 Employees 418,000
• Executives
• Chairman Andrew J. McKenna, Sr. 
• President, CEO, Director Charles H. (Charlie)
  Bell 
• SEVP CFO Matthew H. (Matt) Paul

10
Porters Five Competitive Forces (1)

• Rivalry within industry
• Burger King, Wendys, In Out etc.
• Brands - Big Mac, Filet o Fish, Ronald McDonald
  House
• Innovation - McGriddle, celebrity endorsements,
  monopoly
• Online presence - company info, links to charity
  works
• Threat of new entrants
• McDonalds has market dominance (over 30,000
  restaurants world-wide)
• constant growth -Franchising
• Threat of substitutes
• Any other food industry high-class restaurants
  to hot dog stands
• Healthier alternatives (Newmans Own), unique
  products

11
Porters Five Competitive Forces (2)

• Bargaining power of buyers
• Pay attention to customer demands and trends
• Offer specialty products for certain segments
• First mover- removal of super size option,
  salads, cooking oil
• Bargaining power of suppliers
• McDonalds relies on strong supplier and
  distributor relationships
• Help suppliers lower costs
• Develop new supplier base to reflect customer
  diversity
• Suppliers include Coca-Cola, Heinz, Newmans Own

12
Companys Competitive Strategy

• Differentiation strategy - Gold Standard
• Signature Favorites - Big Mac and McNuggets
• Cost Leadership Strategy - Items are very
  competitively priced

13
Strengths Weaknesses

• Strengths
• Company can offer a meal with low prices
• Ronald McDonald Charity Program
• Weaknesses
• Low Market Share in Chicken Products

14
Challenges/Opportunities

• Challenges From CompetitorsThe company has to
  compete with other restaurant and food industry
  since there are so many selections and choices to
  choose from.
• UnionThe company regard union as third parties
  and they refuse the legitimacy of a union as an
  expression of the interests of the employees that
  theyre dealing with.

15
IT/IS Systems

• The company uses IT and IS in a number of ways.
  In fact, without the technology, McDonalds would
  not be able to operate as it does today.
• From taking orders to completing the orders,
  everything involves a computer. A network system
  is used to take an order which is then sent to
  the back through the system in order for the food
  to be cooked.
• The following are a few systems used by
  McDonalds
• POS (Point of sale) allows orders to be placed,
  check the amount of inventory on hand, see the
  number of transactions that have occurred in the
  last few days or even years, see the labor
  percentage, total cost of waste, check the drive
  thru time TTL.
• KVS (Kitchen valiance system) allows the orders
  taken up front and in the drive thru to be
  displayed and transferred to the monitors in the
  grill area.

16
Conclusion

• Thank you for your time.
• Does anyone have any questions?