MARKETING STRATEGIES

ADOPTED BY MCDONALD’S
Minor project
BBA – 4
Enroll. No: A30806420013

MARCH 16, 2022

BY: SHUBHAM NAKRANI
Mentor: Ms. DISHA SHAH
 DECLARATION

I here declare that this Minor project is my very own authentic work and this is
the end result of my very own project. This Minor Project studies turned into
conducted to meet the requirement of BBA associated with AMITY GLOBAL
BUSINESS SCHOOL.

By: SHUBHAM NAKRANI

ACKNOWNLEDGEMENT
I am simply grateful to miss Disha Shah (Project Mentor), beneath whose guidance I have
successfully completed this venture and time spent along with her were a super learning
revel in. I think her steady encouragement, warm responses and for filling every hole with
precious ideas has made this undertaking a success. She made it possible for me to put all my
theoretical expertise to work out on the topic:

“Marketing strategies OF McDonald’s”.

A titanic project of this nature calls for highbrow nourishment, expert assist and
encouragement from many human beings. I am distinctly grateful to they all for his or her
help and encouragement. I desire to well-known my extremely good debt to they all whose
thoughts and contribution encouraged me to complete the venture work.

By: - SHUBHAM NAKRANI

TABLE AND CONTENTS

NEEDED

1. TITLE PAGE
2. DECLARATION

3. ACKNOWLEDGEMENT

4. INTRODUCTION

5. COMPANY PROFILE

6. HISTORY OF MCDONALD’S

7. MISSION VISION AND VALUES

8. MCDONALD’S GLOBAL MARKETPLACE ACCESS MODES

9. SWOT ANALYSIS

10 PORTER'S FIVE FORCES

.
11 PESTEL ANALYSIS
.
12 INTERNATIONAL MARKETING
.
13 COMPETITIVE ADVANTAGES AND PROBLEMS
.
14 CORPORATE OVERVIEW
.
CONCLUSION

ANNEXURE

INTRODUCTION
McDonalds business enterprise is the sector’s number 1 rapid meals chain, Richard and
Maurice McDonald commenced this business with a restaurant in San Bernardino California
in 1940. Now a days McDonalds serving extra then 56 million customers every day.

There are greater than 30,000 eating places operated through McDonalds global wherein
greater than 80% are operated as franchise and much less than 20% are owned via company.

McDonald’s predominant selling products are hamburgers, cheeseburgers, double

cheeseburgers, huge Mac burgers, quarter pond burgers, tasty burgers, flit-offish burgers,
salad and culmination.

McDonald's first menu gadgets have been hot dogs, now not hamburgers.

Organization profile

McDonalds is the phrases biggest fast meals employer, serving more than 57 million humans
in 119 international locations day by day with greater than 31,000 eating places world huge
in which 6,899 are owned through organization and 20,499 are operated as franchise and
three,960 are operated by affiliates.

McDonalds using extra then 1.5 million humans global, best in UK organization owned
restaurant hired 43,492 in 2004 wherein hourly paid employers are 2,292. 2,291 restaurant
management and workplace group of workers almost 500. And almost 25,000 people hired
in franchises.

1 IN 8 American people has been employed with the aid of McDonald's.

In 2003 McDonalds owned donates pizza, McDonalds owned a majority of stake in chipotle
Mexican grill till October 2006, in 2007 McDonalds sold Boston marketplace to sun capital
partners.

Andrew j. McKenna is the chairman of McDonalds organization considering that April 2004,
Aprille Harrell Perrine president blur go and blue defend of Florida, Jim Dalton vice
president Dalton employer, Ryan Schwartz treasurer Zurich insurances, Inc. Bill van Zante
secretary McDonalds.

“The agency sales come from the rent, royalties and fees paid by franchises, McDonald sales
grew 27% over 3 years ending in 2007 22.8 billion and 9% boom in working earnings to a
3.9 billion”.
 HISTORY OF MCDONALDS

‘I’m Loving it’ a tagline known to every segment of the market, allow its kids, children or
aged humans. McDonalds is a global foodservice enterprise, which commenced its
operations inside the 1940’s. The idea of McDonalds became brought via brother Dick and
Maurice McDonald, via opening a ‘hamburger stall’ in San Bernardino, California. They
introduced a concept of selling their meals cheaper than competition by using saving on the
auto shops and persuading customers instead to visit a counter to order their meals. This
concept helped in quicker turnaround of the customers. This innovation proved successful
and famous most of the clients. McDonalds have become pioneer of their industry by using
adopting the ‘Florist’ approach to the manufacturing of warm food. They centred on burger
cooking as a production line instead of a kitchen mission.

The group of workers of McDonalds turned into devoted to at least one assignment at a time.
when Mr. Ray Kroc came across McDonalds brother’s burger, he had by no means seen so
many people served so quickly than those on the McDonald’s store. He was quite inspired by
way of the speed of provider that they used in catering their customers. Kroc cautioned that
the McDonalds brothers to open greater outlets in their stall, however they refused as they
have been quite busy with their very own store and had been not in a role to open any shop
in addition. Kroc volunteered to run a brand new outlet himself, by using paying them
royalty for the usage of their concept of commercial enterprise. The McDonald’s brother
agreed for the equal and a brand new McDonalds retail outlet was opened, which turned into
a franchisee by way of nature.

Kroc become someone with aggressive and threat taking mind-set. He found out that small
things have been often valued greater by way of clients than a number of other matters. He
brought a concept of Cleanliness in his shop. He termed cleanliness not handiest a image of
hygiene but it additionally confirmed its customers that the business cared about info. He
started developing his commercial enterprise and started giving franchisee to different
humans. With the help of Ted Turner, Kroc vision that the important thing success of
McDonald’s expansion rests on imparting franchises.

The foremost home increase of McDonald’s in united states of America commenced in

1960’s, as there was a demand of reasonably-priced takeaway food. thru the franchisee
concept, McDonald’s made a flow toward worldwide achievement.

Nowadays the agency operates in extra than 117 countries worldwide, serving more than 50
million customers consistent with day. The corporation’s shops are either owned through the
agency or by franchisees. The employer focuses on handing over excessive first-class and
value to its customers through its services, product variety and consistent high-quality test of
its merchandise.
 VISION MISSION AND VALUE OF MCDONALDS

McDonald’s Vision

"To be the high-quality brief carrier restaurant experience". Being the best manner offering
brilliant excellent, carrier, cleanliness, and cost, in order that we make each patron in each
eating place smile.

McDonald’s Mission

McDonald's logo assignment is to be our customers' favoured region and manner to devour
and drink. Our worldwide operations are aligned around a global approach known as the
Plan to Win, which middle on an exceptional consumer enjoy – people, merchandise, area,
price and promoting. We're devoted to constantly improving our operations and enhancing
our customers' revel in.

McDonald’s Values

 We vicinity the customer enjoys on the centre of all we do:

Our customers are the reason for our lifestyles. We demonstrate our appreciation by way of
offering them with high-quality meals and superior provider in a clean, welcoming
environment, at a fantastic fee. Our purpose is first-rate, carrier, cleanliness and cost
(QSC&V) for each and every consumer, every and every time.

 We are committed to our human beings:

We provide opportunity, nurture expertise, develop leaders and reward achievement. We

consider that a team of nicely-educated individuals with numerous backgrounds and reports,
working together in some surroundings that fosters recognize and drives high degrees of
engagement, is vital to our persisted fulfilment.

 We accept as true with inside the McDonald’s gadget:

McDonald’s business model, depicted by way of our “three-legged stool” of

proprietor/operators, suppliers, and enterprise employees, is our foundation, and balancing
the hobbies of all 3 companies is key.

 We function our commercial enterprise ethically:

Sound ethics is right business. At McDonald’s, we hold ourselves and behaviour our
business to excessive requirements of equity, honesty, and integrity. we are in my view
accountable and together accountable.

 We deliver again to our groups:

We take significantly the obligations that include being a frontrunner. We help our
customers build higher communities, help Ronal McDonald house Charities, and leverage
our length, scope and assets to help make the arena a better region.

 We develop our business profitably:

McDonald’s is a publicly traded enterprise. As such, we paintings to offer sustained
worthwhile boom for our shareholders. This calls for a non-stop focus on our clients and the
fitness of our device.

 We try continually to improve:

we're a studying organization that goals to assume and respond to converting client, worker
and device wishes through steady evolution and innovation.

MCDONALD’S GLOBAL MARKETPLACE

ACCESS MODES

McDonald’s was born in San Bernardino, California in 1940. The international commercial
enterprise started as a fast meals eating place by way of brothers Maurice and Richard
McDonald. From being a restaurant the proprietors turned the commercial enterprise right
into a hamburger outlet before exploring the franchise commercial enterprise. They began
the use of the emblem named Golden Arches in 1953. After joining the corporation in 1955,
Ray Kroc bought the McDonald’s chain. Its new headquarters is positioned in Chicago,
Illinois. And all of this forms the premise for the McDonald’s global approach.

In terms of revenue, McDonald’s is considered as the largest eating place chain within the
international. As of 2017, it has 37,241 rapid meals eating places around the sector. at the
same time as its major menu offerings encompass hamburgers and fries, the short food chain
serves different objects, along with milkshakes, soft drinks, cakes, breakfast fare,
merchandise made with bird and wraps.
Client tastes exchange and the organization spoke back to the changes through providing
healthful food. To counteract the perceived healthiness of their essential menu offerings,
McDonald’s additionally serves culmination, smoothies, fish items and salads.

Like other rapid food eating places, McDonald’s as an international commercial enterprise
additionally faced a few hard times. nonetheless, the organization turned into capable of
withstand the drawbacks, making it one of the most a success speedy food franchises within
the international. It’s exciting to understand how McDonald’s maintains its achievement.

In 1940, McDonald’s operated handiest one QSR but nowadays has eating places at 33,000
places in 119 countries. McDonald’s utilizes a ramification of worldwide marketplace entry
modes for fast growth: sole ventures, franchising, master franchising and joint ventures.

15% of McDonald’s branded eating places are operated as sole ventures. This entails a
tremendous capital dedication but allows the highest degree of manipulate.

Most restaurants are operated as franchises, permitting speedy enlargement without

excessive capital necessities. Franchising has additionally allowed McDonald’s to gain from
neighbourhood understanding, tested through the menu variations with the aid of you. but,
McDonald’s keeps control over important components such as the deliver chain, marketing
blend and personnel education.

How McDonald’s Adapts to exceptional Cultures

The key elements for McDonald’s rapid food restaurants fulfilment in exceptional countries
are variation as well as innovation. The company comes up with a ramification of services
and products catering to the wishes of a client market this is widely numerous, basing their
offerings on consumer demographics, neighbourhood and financial factors, for example:

McDonald’s offered speedy and menu to cater to girls becoming a member of the hard work
force and the growing teenage population inside the 1960s.

Joined the fashion of going worldwide within the 1970s and the Nineteen Eighties via
bringing the “American way of existence” to several countries around the sector via adapting
to the social setting of every USA they entered through franchising to nearby marketers.

Improved the organization's company photograph via introducing the “rapid and handy”
strategy through adjusting the product listing based on the developments in the food
industry. McDonald’s renovated their restaurants to advantage a united, up to date
surroundings with an herbal eating appearance and feel. The idea they added turned into
supported by offering herbal and healthier elements via the addition of greens (such as carrot
sticks), fruits and salads.
The employer’s innovation continues via additional products, including healthful beverages
and espresso of excessive pleasant, competing at once with neighbourhood cafés and
coffeehouse chain, Starbucks.

What's the secret to The McDonald’s global approach achievement?

McDonald’s is an instance of an agency that received extraordinary benefits from

globalization. Of route, it is largely due to the twin advertising plan of the company:

1. Standardization method

Everywhere the enterprise operates, it gives same meals merchandise along with McFlurry,
McNuggets, McChicken, glad Meal or Filet-O-Fish. The plan offers the organization with a
sturdy photo. The strategy is a money and time saver for McDonald’s because it helped build
economies of scale.

2. Edition method

The strategy can be compared to localization. With this method, McDonald’s adapts to the
needs of the customers as required by means of the cultures of precise international
locations.

Version works thoroughly for McDonald’s. The strategy permits the quick meals chain to
have a much broader attain worldwide. The method does require better conversation and
production fees.

aside from the prevailing techniques, the company’s advertising blend is also bendy, if you
want to tailor it to the local market requirements in phrases of location of distribution,
promotions plan and pricing.

How McDonald’s Fares and Adapts in Other Countries?

As a global business brand, McDonald’s strategies likewise employ other strategic marketing
tactics such as segmentation and experimentation/product testing. Comparing the strategies
for the American market and the Japanese market for example, you will see a big difference.

In the United States. McDonald’s spends the biggest slice of their budget. The company does
many new product trials and innovation in its home country, where it has the biggest
audience. The company’s advertising is typically skewed to children in the United States,
where McDonald’s produces about 250 ads annually.
In Japan. The company’s ad campaigns are widely different. The Japanese ads are focused
on adults as well as children, with some features that are unique to the locale’s culture.

McDonald’s is able to adapt its menu and business plans to each culture. It shows that it
respects the differences between cultures and adheres to the country’s policy when they
develop additional items for their menu.

The company does product tests and experimentation through the addition or removal of
food items based on local trends and popularity among consumers.

In the U.S. McDonald’s offers McRib’s for a limited time. In Japan, the Teri Tama Burger is
a spring menu item while the Tsukimi Burger is offered in autumn.

The localized marketing plans work great for McDonald’s. For the Japanese market, it
adjusts its name for katakana (used for foreign words) by using the name Makudonarudo,
which not only sounds attractive but also quite appropriate.

Because the appetite of the Japanese differs from the Americans, the serving sizes of
burgers, fries and drinks in Japan are smaller.

Examples of McDonald’s model via Collaboration and Innovation?

The agency’s advertising research is exhaustive, supplying it with all the way to interact and
include a wide variety of cultures while nevertheless maintaining its sturdy emblem
photograph. McDonald’s Golden Arches logo is without problems identifiable wherever you
cross.

It’s very thrilling how it adapts to different cultures, that is a valuable lesson in marketing.
right here are some examples:

1. Germany

because Germans love to devour meat, its burgers integrate Nürnberger sausages with beef.
And it’s an acknowledged fact that Germans love their beer with food, so McDonald’s shops
in Germany additionally serve beer.

2. Indonesia

most people of the population in Indonesia is Muslim, therefore, McDonald’s tailored to the
consuming wishes of the populace with the aid of changing pork with fish. McDonald’s
retailers in Indonesia are Halal and seeing that Indonesians pick rice over bread, they serve
rice as well, collectively with a few highly spiced meals that locals opt for.

3. India
India has a totally huge client base and McDonald’s tailored its menu to cater to the locals’
tastes and preferences. red meat is changed with chook. The Maharaja Mac is the
neighbourhood model of the standard large Mac. To cater to vegetarian clients, McDonald’s
in India gives Masala Grilled Veggie Burger, McAllo Tikki and McVeggie. In 2013, the
organization opened its first vegetarian restaurant to cater to the nearby vegetarian
consumers. one in every of McDonald’s India’s functions is the McCurry Pan, a baked menu
object with curried vegetables.

4. Morocco

In Morocco, pita bread sandwiches are available. The outlets additionally use traditional
spices consisting of coriander and cumin. McDonald’s offers special menu for Ramadan.
They name it fetor (give up of fasting) and the meal includes a massive Mac, milk, dates and
conventional Moroccan soup.

5. Japan

Jap delicacies are very distinctive from the relaxation of the sector. within the preliminary
stage, McDonald’s in Japan retained the menu for the U.S. market. however slowly it
changed and introduced menu items to cater to eastern alternatives. The agency delivered
green Tea ice cream, Rice Burger, Seaweed Shaker and Teriyaki Burger. the Japanese
McDonald’s franchise additionally introduced shrimp burgers, shrimp nuggets, milkshakes
flavoured with green tea and breakfast meal with hotdogs, mustard, ketchup and appreciate.

6. Switzerland

The McRaclette is most effective served in McDonald’s shops in Switzerland. it's far a pork
sandwich with raclette cheese, unique raclette sauce, onions and gherkin pickles.

SWOT
McDonald’s Strengths
The following factors are McDonald’s most powerful components that have ensured the
organization’s profitability, improvement and universal logo photo.

1. Maximum treasured brands

McDonald’s is the 9th most valuable emblem within the international. With a tremendous
emblem cost, the agency regulations the restaurant industry regardless of the fierce
competition.

2. Tasty food

McDonald’s fries are considered the first-rate tasting fries inside the fast food industry.
McDonald’s fries are nice-tasting fries says patron survey.

3. McDonald’s – A actual property company

Only a few humans know that apart from selling burger and fries, McDonald’s has a multi-
billion actual property empire. consider having lots of premium places around the globe.

In 2021, there have been 37,295 franchised eating places and 2,736 enterprise operated
restaurants making it a total of forty,031 restaurants spread across 119 international
locations.

McDonald’s franchise works barely differently. McDonald’s now not best provides their
brand name, recipes, components, procedures to franchisees however also owns the land and
operates as a landlord and makes sales through hire bills.

4. Technology Initiatives

McDonald’s is taking modern era tasks to make their ‘enjoy of the future’ dream come real.
tasks like imposing self-provider with kiosks, cellular order and payment systems are reaping
benefits McDonald’s image as the ‘eating place of the destiny.’

5. Generation Acquisitions

The agency’s modern day acquisition of ‘Dynamic Yield ‘is any other step toward more
desirable personalized marketing and customizations. Dynamic Yield is an Israeli start up
that assists manufacturers like McDonald’s to enhance their customer enjoy with
manufacturers personalize offerings.

6. Highest brand cost in speedy food brands

McDonald’s enjoys the privilege of being the most valuable speedy food emblem within the
world. consistent with Interbrand, in 2021, McDonald’s brand cost extended to $45.eight
billion (about 7% increase from 2020). No other rapid-food logo was even near McDonald’s
well worth in terms of the brand value. subsequent close competitor is Starbucks with a
brand fee of $13 billion.

McDonald’s Weaknesses

Right here are a number of the shortcomings of McDonald’s’ approach and based
composition, which affects its common boom.

1. The Franchise business model

McDonald’s is the first-class example of global franchising fashions. but, having this
complicated internet of franchised and company-operated restaurants reveal the emblem to
positive risks.

The dangers of economic deterioration, mismanagement, client dissatisfaction, and coffee

sales era. The agency heavily depends at the franchises which works independently and
hence they haven't any control over their everyday overall performance, however it
influences the brand without delay.

2. Supply chain interruptions

McDonald’s being one of the busiest meals chains often faces problems because of
disruption in the deliver chain. also, it limits the supply of products, which are critical to the
operations.

Consequently, while a franchise studies such interruptions, the operational cost will increase,
which there via results in reduce revenue and lower profitability.

3. Loss of worker satisfaction

Because of recent employee right revolutions international and elevated salary limits, many
groups have faced crucial dissatisfaction from personnel.

Recently McDonald’s has confronted extreme backlash from their workforce. The workers
went to several protests and strikes with a call for to boom their minimal wage to $15 an
hour, causing the organisation reputational harm.

4. McDonald’s Breakfast Menu Has lost Its allure

For almost a decade, McDonald’s breakfast sales remained unbeatable in particular inside
the US. however, in may additionally 2018, the employer’s CFO prevalent that they have got
been watching a downfall in McDonald’s breakfast menu consumption and that they ought to
do something to repair it.
But with such fierce competition around, it gained probable be easy to regain the recognition
for breakfast meals.

5. CEO became fired because of violation of enterprise coverage

In Nov 2019, McDonald’s CEO, Steve Easterbrook, became fired after having a consensual
dating with a worker. It violated business enterprise coverage. also, the organisation’s board
stated that Steve had “proven poor judgment.”

6. Poor employee protection

In may additionally 2020, five employees sued McDonald’s for failing to undertake
authority’s safety steering. The lawsuit argues that McDonald endangered the lives of its
personnel and their families by failing to provide hand sanitizer, gloves, and mask all
through the recent health crisis.

7. Sexual Harassment

organizations are required to nurture a secure running surroundings for all personnel
irrespective of gender. In a lawsuit filed by over a hundred woman personnel in April 2020,
McDonald’s is accused of creating a hostile paintings surroundings and subjecting them to
sexual harassment. The lawsuit erodes consider and taints its reputation similarly.

8. Bad exposure

In June 2020, McDonald’s changed into accused of firing an employee for suing the
employer over its failure to protect employees for the duration of the latest health crisis. The
termination is unethical because it seeks to deter different personnel from exercising their
right to criminal redress towards their enterprise.

McDonald’s Opportunities

The subsequent opportunity segment for McDonald’s emphasizes the rising chances of
increase. it can assist the enterprise to enhance its business performance, management
structure, and strategic boom and different aspects.

1. Price meals

In 2018, McDonald’s released its “$1, $2, $3” menu and “2 for $5 blend and fit deal”
proposed in the direction of its fee-aware purchasers. The menu turned into a a hit addition,
ensuing in multiplied income.

2. Modern products
McDonald’s have to placed efforts to introduce new, innovative gadgets on their menu to
make clients pick them in place of the new fast food outlets.

In 2018, the corporation commenced to serve an specific beverage – blend by using Sprite
Tropic Berry in their big apple stores. It became an immediate hit and is likely to be served
in all of the US.

Launching greater gadgets like this according to the geographical situations and culture can
assist McDonald’s preserve their allure for a longer time period.

3. International expansion

McDonald’s guidelines over the united states, however it's far regularly that it struggles in
the global marketplace. however, the company has high ability to retain its global growth via
focusing extra on global markets as opposed to unique states of the united states.

4. Rebuilding the brand photo

While rapid-meals restaurants are struggling to combat the photo of ‘junk producing
facilities’, McDonald’s can play it well by using continuing its aggressive projects in the
direction of, wholesome and customized offerings.

Those trends have begun to show development, with wonderful similar sales main to a boom
in income. The re- franchising project have truly pushed the sales lower back, but in the end,
the healthful picture of McDonald’s can continue to amplify variations.

5. Cellular order and McDelivery

McDonalds has initiated a partnership with UberEats and Door sprint for US meals shipping.
these cellular order and delivery initiatives help McDonald’s to reach and fulfil customer’s
ever-converting needs.

McDonald’s Threats

The chance aspect is attached with the phenomenon which stops the company from taking
full blessings of the benefits that can be derived from the available strengths. therefore, those
are the few chance that McDonald’s faces.

1. Unstable Investments on era initiatives

Even though the revolutionary adjustments executed by way of McDonald’s have a

wonderful outlook, the investment in generation is still volatile.

the public pace of adapting new technology may slow down the return on investment, and
the consequences of enhancing customer enjoy might not generate the predicted returns.
2. Fierce opposition from competition like Chick-Fil-A

We'd think that burger giants like ‘Burger King’ are McDonald’s best competitors, however
the table is starting to show.

Recently, restaurant enterprise found out that Chick-fil-A is now McDonald’s biggest
competitor in the wildly aggressive short Serve restaurant (QSR) region.

3. Cultural chance whilst running in numerous countries

Being a global speedy-food chain, McDonald’s has often faced a couple of cultural threats in
one-of-a-kind components of the sector, inflicting harm to the image of the brand.

also, it gets hard to adapt and perform in another way as according to the region of the
franchise. as an example, some years ago, McDonald’s faced pretty a huge scandal for the
usage of elements which were not ‘halaal’ in Muslims nations.

Such controversies make it hard for McDonald’s to fulfil consumer expectancies with
inherited dangers inside the worldwide running surroundings, deteriorating the brand photo.

4. New Age speedy food tendencies

McDonald’s frequently for millennial is considered an antique school with its traditional
menu and flavour. In this example, food chains like shake shack and Wendy’s take complete
advantage with their often experimented menu and recipes to include range.

as an example, McDonald’s failed to compete with Wendy’s “Signature-Crafted Burgers.”

and subsequently needed to stick with its traditional region Pounders to save face.

5. McDonald’s Social commercials are Impacting worldwide children health

In step with a new look at, it become revealed that famous rapid food manufacturers which
includes McDonald’s is targeting their social advert campaigns on underprivileged or low
profits communities across the world.
 MCDONALDS PORTER’S FIVE FORCES
ANALYSIS

Threat of New Entrants

The threat of new entrants is relatively low. Although it is not too expensive to start up a fast
food restaurant, it is difficult to compete with established leaders in the industry such as
McDonald’s, Burger King, and Wendy’s. With their standardized products and services at
low prices, combined with a very strong brand, it is extremely difficult for a new entrant to
compete directly with these existing businesses. The risk of new entrants is always there and
there are local fast food places that are created every year. However, it will take a significant
amount of capital investment and many years of operations to build up a recognizable name
and be able to compete with the well-known brands.

Bargaining Power of Buyers

The bargaining power of buyers is low in the industry as well. McDonald’s, Burger King,
Wendy’s, among others, are highly competitive with their product pricing as it stands. Price
floors are already being experimented with through dollar menus at McDonald’s and Burger
King, and 99¢ menu at Wendy’s, at which some of these companies actually operate at a loss
for each sale from this value menu. Therefore, with low prices already established in the
industry, the bargaining power of buyers will be low because fast food restaurants already
offer selections at various price points that cater to all budgets.

Bargaining Power of Suppliers

The bargaining power of suppliers is moderate. Based on the good relationship that
McDonald’s has with suppliers, the bargaining power is fairly stable currently. The reliance
that McDonald’s has on suppliers is equal to the reliance suppliers have on McDonald’s. On
one hand, McDonald’s has a good supply chain of quality materials at fair prices. On the
other hand, suppliers are surely content with supplying to a large consuming company such
as McDonald’s.

However, there are many substitute suppliers out there that can replace current suppliers (i.e.,
Pepsi could replace Coca Cola) without a significant drop in quality, should there be a rift in
the buyer-supplier relationship.

Threat of Substitute Products and Services

The threat of substitute products and services is high. Since McDonald’s can be categorized
as a fast food service franchise, we have to take into account other fast food restaurants’
products and classify them as substitute products. Restaurants with similar hamburger
substitutes include nationwide chains Burger King, Wendy’s, White Castle, and Sonic Drive-
In, to name a few.

Regional chains with similar hamburger substitutes include the West Coast’s InN-Out
Burger, the Midwest’s Culver’s, and the East Coast’s Five Guys. Diverse fast food
substitutes include fried chicken from Kentucky Fried Chicken, sandwiches and subs from
Subway, and fish from Long John Silver’s. As we can see, substantial substitute products
exist, whether they are similar in nature or completely different, yet still classifiable as fast
food.

Intensity of Rivalry among Competitors in an Industry

The intensity of rivalry among competitors in the fast food industry is at a high level. Over
the years, fast food restaurants have done more to compete not only with similar quick
service institutions, but with high end food and beverage companies as well. For example,
McDonald’s introduced premium customizable coffee beverages recently to compete with
higher-end Starbucks Coffee. Along with Burger King and many other fast food chains, they
added a breakfast menu in the 1970s, to compete with the breakfast chains every morning.
There are multiple reports on the number of fast food restaurants in the US, ranging from
85,000 – 300,000. With so many fast food establishments around, as well as competition
with non-fast food restaurants, it is logical that rivalry is high and intense in the industry.
 PESTEL ANALYSIS
The company focused on restructuring and innovation and improving its operations. With
implementation of this the company was able to retrieve its position within the food industry.

Political

Currently governments of certain groups in United States and Europe are tending to control
the business of fast food because of health reasons (2005). Governments are also applying
restriction for issuing license for franchises. There should be good relationships with
government in giving tax and employments in international markets. McDonald is also
pressurized by china because they are disrupting the culture.

Economical

Working in an international market McDonalds must face international rules of business like
about tax because each company has different rules for tax and for McDonalds franchise it
must pay some percentage of its revenue to McDonald’s hade office in United Kingdom.
Local markets cannot maintain the supply of materials that’s the reason McDonald import
beef and potato to fulfil its demand. In international markets the economies of the country
also affect the sales of the products because if the economy is not stable and people of the
country have not much income it will affect the business.

Social

In developing countries, the lifestyle of people changing very fast like Malaysia because of
their developing economy more people of the country are financially able to eat fast food. In
Middle East countries urban young generation wants new technology in their lives like
wireless internet, credit card payment and other attractions like music.

Technological

Advertisement is the most powerful toll of McDonalds to create a demand of its products and
especially McDonalds works hard to create the demand of its product in the minds of young
generation. Recently McDonalds implemented new technology to increase the speed of
proceeding of its products such as a Big Mac takes 60 seconds to process in three stages

Bun toasted by an oven (20 sec), Meat fries (20 sec) and decorating bun (10 sec)’Packaging
(10 sec)

Environment

As a world’s largest fast food chain obviously the consumption of “beef, potato, chicken” is
more than any other food chains that’s the reason they had been critics and McDonalds is
also disrupting the culture and McDonalds is trying to cover these issues especially in china.

Legal

McDonalds cares its reputation in fast food market they follow 20 working hours for student
employees in UK as according to the rule in UK and also internationally they respect all the
polices which are applied for fast food chain.

McDonald’s Value Chain Analysis

Primary Activities in McDonald’s Value Chain Analysis

In McDonald's value chain, the primary activities can be described in five key points, which
include all the actions in McDonald’s value chain analysis. They are:

Inbound Logistics:

McDonald’s has its pre-defined, fixed suppliers. The organization purchases the uncooked
vegetables and other important raw substances only from them. McDonald’s practices
backward vertical integration, which ultimately facilitates the enterprise to reduce extra
prices and ensure pinnacle-quality merchandise. The milk and beef required in McDonald’s
merchandise come from their farms. For sparkling veggies, McDonald’s is predicated at the
local grocery stores. tender liquids are served by Coca-Cola, a best friend of McDonald’s. a
few different essential uncooked materials like sugar, yeast, flour, and many others., also are
supplied from the constant wireless suppliers.

Operations:

McDonald’s has totally changed the idea of a conventional eating place kitchen, thanks to
the brothers. instead of a whole lot of stations and exceptional gadget, McDonald’s kitchens
include some basic gear, which helps them inside the speedy reaction. right here are the
primary gear that McDonald’s kitchens have.

A massive grill: The grill is so huge that an unmarried man or woman can cook numerous
burgers on it at the equal time.

A fryer: French fries are one of the maximum demandable items in McDonald’s eating
places. The restaurants include a fryer in which a person could make French fries.

A dressing station: a few human beings maintain adding the identical condiments to all
burgers right here.

Beverage machine: For dessert gadgets and liquids, McDonald’s consists of a milkshake
gadget and a soda fountain.

Counters: client’s location their orders in those counters and receive them from the identical
location.

McDonald’s requires mass manufacturing due to its large quantity of restaurants. as a result,
McDonald’s warehouses save big amounts of every necessary item for each eating place.

This chain is likewise claimed to be computerized, meaning that computers preserve track of
what each eating place has and ought to have in its keep. The distribution middle then ships
the essential items on a regular basis.

Outbound Logistics:

McDonald’s managed to reach the top due to its highest best food and top-exceptional
service. They try this at the same time as making sure a welcoming surroundings, that is easy
and has a exceptional value, as properly. The whole business enterprise, alongside its
employees, suppliers, and franchises, works to serve food choices with a balanced array,
which lets in the clients to access the proper dietary information. As a result, they can
effortlessly make a sound decision.
McDonald’s makes a speciality of sustainable packaging, energy conservation, waste
control, and so on. The eating place employer constantly works for a better surroundings,
worthwhile wireless commercial enterprise, and others.

Marketing and sales:

McDonald’s restaurants are now available in over 100 countries and territories, 119 to be
exact. They serve these territories with over 31,000 restaurants, which employ over 1.5
million people. McDonald’s operates other restaurant brands, as well.

McDonald’s always ensures extensive advertising campaigns, along with its usual media
coverage that includes television, newspaper, radio, and other social media. McDonald’s
uses signage and billboards largely, as well, not to mention the company’s participation in
various social events.

Service:

Besides its outstanding food quality, McDonald’s offers some additional services, which
makes it one of the greatest food company of all time. Here are some of the additional
services.

Free Wi-Fi: McDonald’s meals now come with Wi-Fi, ensuring a better connection with
your friends and family. McDonald’s has over 11,500 restaurants with Wi-Fi connections in
them.

Gift Card: McDonald’s offers pre-paid cards, which allow the customers a convenient and
quick way to pay. These can also be used as perfect gifts.

Play Places: McDonald’s is ready to throw parties for your children. You can bring your kids
and give them an enjoyable time of their lifetime, while remaining stress-free yourself.

MCDONALD’S MARKETING MIX (4PS)

ANALYSIS
McDonald’s Products (Product Mix)

As a food provider enterprise, McDonald’s has a product mix composed specially of meals
and beverage products. This element of the marketing mix covers the various organizational
outputs (goods and services) that the enterprise provides to its goal markets. McDonald’s
product blend has the following essential product strains:

- Hamburgers and sandwiches

- Fowl and fish
- Salads
- Snacks and sides
- Liquids
- Desserts and shakes
- Breakfast/All-day breakfast
- McCafé

The various 4Ps, products are an essential determinant of McDonald’s emblem and company
photo. The agency is usually acknowledged for its burgers. But, the commercial enterprise
regularly expands its product blend. At present, customers should buy other products like
chook and fish, desserts, and breakfast food. McDonald’s widely wide-spread approach and
extensive increase techniques influence the product traces included on this element of the
advertising mix. In diversifying its product lines, the organisation satisfies marketplace call
for, improves its revenues, and spreads risk in its enterprise. In phrases of hazard, an extra
various product mix reduces the corporation’s dependence on simply one or some
marketplace segments. This element of McDonald’s advertising mix suggests that the firm
innovates new products to draw extra clients and improve its commercial enterprise balance.

Place/Distribution in McDonald’s Marketing Mix

This element of the advertising mix enumerates the venues or places where merchandise is
offered and wherein clients can get entry to them. restaurants are the maximum prominent
locations wherein the organisation’s products are disbursed. however, the business utilizes
various locations as a part of this 4P variable. the primary locations through which
McDonald’s distributes its merchandise are as follows:

- Restaurants
- Kiosks
- McDonald’s cellular apps
- Post mate’s internet site and app, and others

McDonald’s eating places are wherein the employer generates most of its sales revenues. a
number of those eating places also manage kiosks to promote a restricted selection of
products, along with sundae and other cakes. some kiosks are temporary, as in the instances
of kiosks used in expert sports activities competitions and different seasonal events. This
element of McDonald’s advertising blend also includes the employer’s cell apps. these
digital places are where clients can get entry to statistics about the enterprise’s products and
purchase those products. as an instance, the organization’s cell apps for iOS and Android
allow clients declare unique deals, discover restaurant locations, place orders, and pay for
such orders regarding taking part McDonald’s restaurants. moreover, customers can area
their orders thru the Post mate’s internet site and cell app. This element of the advertising
and marketing blend helps McDonald’s company imaginative and prescient and venture
statements, in particular in serving greater clients round the arena.

McDonald’s Promotion (Promotional Mix)

This element of the advertising blend defines the strategies that the enterprise makes use of
to communicate with clients. most of the 4Ps, this variable specializes in advertising
communications with target customers. as an example, the company provides new records to
steer purchasers to purchase new products. McDonald’s uses the following approaches in its
promotional mix, arranged consistent with significance inside the commercial enterprise:

- Advertising and marketing (most good sized)

- Sales promotions
- Public members of the family
- Direct marketing

Classified ads are the maximum first-rate amongst McDonald’s promotion strategies. The
organization makes use of tv, radio, print media and on line media for its advertisements.
Alternatively, sales promotions are used to attract more customers to the enterprise’s
restaurants. For instance, McDonald’s gives bargain coupons and freebies for sure
merchandise and product bundles, as a manner of attracting greater customers. similarly, the
employer’s public members of the family activities help sell the commercial enterprise to the
target market through goodwill and logo strengthening. As an instance, the Ronald
McDonald residence Charities and the McDonald’s worldwide best of green environmental
program help groups even as boosting the fee of the corporate emblem. Every now and then,
the business enterprise uses direct marketing, together with for company shoppers, nearby
governments, or network events and events. In this element of its marketing mix,
McDonald’s enterprise emphasizes advertising as its most important approach to promote its
merchandise.

McDonald’s Prices and Pricing Strategies

This element of the advertising blend specifies the rate points and fee stages of the
company’s food and beverage products. The intention is to use prices to maximize earnings
margins and sales volume. McDonald’s uses an aggregate of the subsequent pricing
techniques:

- Bundle pricing method

- Psychological pricing method

Within the package pricing method, McDonald’s gives food and different product bundles
for fees which might be discounted, compared to buying every item one by one. For
example, customers should purchase a glad Meal or an additional price Meal to optimize cost
and product value. Then again, in psychological pricing, the organisation makes use of
expenses that seem significantly extra low priced, together with $__.99 in place of rounding
it off to the closest greenback. This pricing approach helps inspire customers to purchase the
organisation’s merchandise based totally on perceived affordability. For that reason, this
element of McDonald’s advertising mix highlights the importance of package pricing and
mental pricing to encourage customers to buy more merchandise.

MCDONALD’S COMPETITIVE
ADVANTAGE / PROBLEMS FACED BY
MCDONALD’S
Advantage

Cost Leadership

- Supply chain: McDonald’s buys supply in bulk and, to get lower prices
- Real Estate: McDonald’s leases land and property they own to franchises–
- Marketing: McDonald’s is such a well-known brand name and Ronald McDonald such
a well-known mascot McDonalds has to do much less advertising than many other
chains to maintain awareness of their brand.
- Strategic/predatory customer selection (see “Supersize Me”) Mc Donald’s
purposefully aims their brands at kids who can be taught to over-eat fast food and, in
addition, serves things like ultra-fatty sauces with salads and fatty foods in general
with sugar baked into breads and often soda-only drink selections, all designed to
make McDonalds customers unhealthily addicted to compounds in their food.
Differentiation

McDonald’s does not believe in opening its restaurant without any knowledge of the local
culture and tastes.

The company caters to a large customer’s market with varying tastes and thus can’t afford to
introduce products without familiarizing itself with provincial prefences in food. For this
reason, McDonald’s distributes its products in foreign locations with the help of franchises
who are well aware in of that works in their country.

This is an extremely intelligent distribution method because on the one hand, it doesn’t
create rifts between governments and McDonald’s official, and on the other hand, it helps in
providing people with the kind of products they desire. It is important to understand that
McDonald’s doesn’t change its basic product range for any country but tries to introduce
certain changes in secondary products in order to make them suitable for local tastes.

McDonald’s predominantly sells hamburgers, various types of chicken sandwiches and

products, French fries, soft drinks, breakfast items, and desserts. In most markets,
McDonald’s offers salads and vegetarian items, wraps and other localized fare. On a
seasonal basis, McDonald’s offers the McRib sandwich. Some speculate the seasonality of
the McRib adds to its appeal. Various countries, especially in Asia, are currently serving
soup. This local deviation from the standard menu is a characteristic for which the chain is
particularly known, and one which is employed either to abide by regional food taboos (such
as the religious prohibition of beef consumption in India) or to make available foods with
which the regional market is more familiar (such as the sale of McRice in Indonesia). In
Germany, McDonald’s sells beer.

Problems faced by McDonald’s

Bad food image

To protect the photo of its meals, McDonald’s released a social media campaign inviting
customers to ask questions about the ingredients it uses. displaying simply how bad
perceptions may be, many of the first questions McDonald’s addressed were “Why doesn’t
your meals rot?” and “Do you operate real chicken for your chook McNuggets?”

The organisation has run comparable programs in Canada and Australia, where it says this
system has constructed agree with clients.

Lack of flexibility

Consistency has long been one of McDonald’s attractions — people like knowing exactly
what they’ll get after they order a massive Mac. However, now people are gravitating
towards places like Chipotle that permit human beings tailor their orders. To offer extra
customization down the line, McDonald’s lately rolled out prep tables in its kitchens which
can hold greater toppings and sauces.

The corporation is also checking out a “construct-Your-very own-Burger” offering in

Southern

California that shall we human beings select the bun, patty and toppings they need. In
Australia, McDonald’s has already stated it plans to roll out the format national.

Slow, inaccurate service

McDonald’s executives have stated they brought too many items too quickly final year, such
as McWraps and the choice to replacement egg whites for its breakfast sandwiches. That
slowed down service and led to erroneous orders. On Tuesday, McDonald’s stated it'd
cognizance on a simplified menu that highlights its maximum popular gadgets but did no
longer give specifics.

Price sensitivity

Elevating prices without using away customers has been complicated for McDonald’s. At
one time, as an instance, the famous greenback Menu blanketed a huge N’ Tasty, which
become made with a quarter-pound of beef. But through the years, McDonald’s has had to
change out objects as charges for pork and cheese have climbed.

Overdue closing 12 months, McDonald’s remodelled its greenback Menu to be known as the
“dollar Menu & greater,” with quite a number fees as much as $5.

Increased competition

Similarly, to more modern gamers like Chipotle, long-time opponents Burger King and
Wendy’s had been intensifying competition, too. And Taco Bell launched a national
breakfast menu to head after the developing breakfast marketplace, which McDonald’s has
lengthy ruled.
CORPORATE OVERVIEW
Statistics and figures

Company emblem used from 1960 till November 18, 1968

Corporate emblem used from November 18, 1968, until 2003

Corporate brand used from 1993 to 2010

With the aid of 1993, McDonald's had sold greater than one hundred billion hamburgers so -
digit signs had been left at "99 billion".

The McDonald's in Northport, Alabama commemorates U.S. President Ronald Reagan's visit

McDonald's restaurants are in 120 countries and territories and serve 68 million customers
each day. McDonald's operates 37,855 eating places worldwide, using greater than 210,000
humans as of the end of 2018. There are a total of 2,770 business enterprise-owned locations
and 35,1/2 franchised locations, which incorporates 21,685 locations franchised to standard
franchisees, 7,225 places licensed to developmental licensees, and 6,175 locations licensed
to foreign affiliates.

Focusing on its centre emblem, McDonald's started out divesting itself of other chains it had
received for the duration of the Nineties. The organization owned a majority stake in
Chipotle Mexican Grill until October 2006, while McDonald's absolutely divested from
Chipotle through a stock trade. until December 2003, it owned Donato’s Pizza, and it owned
a small proportion of Aroma Café, from 1999 to 2001. On August 27 2007, McDonald's
offered Boston marketplace to solar Capital partners.

McDonald's has expanded shareholder dividends for 25 consecutive years, making it one of
the S&P 500 Dividend Aristocrats. The company is ranked 131st at the Fortune 500 of the
largest united states agencies with the aid of sales. In October 2012, its monthly income fell
for the first time in 9 years. In 2014, its quarterly sales fell for the first time in seventeen
years, when its sales dropped for everything of 1997.
Within the U.S.A., it's miles suggested that power-through account for 70 percentage of
income. McDonald's closed down 184 restaurants inside the U.S.A. In 2015, which was 59
greater than what they planned to open. This flow was the primary time McDonald's had a
net decrease inside the quantity of places inside the usa on the grounds that 1970.

The McDonald's on-demand shipping concept, which started out in 2017 with a partnership
with Uber Eats and delivered Door Dash in 2019 (with select places including Grub hub in
2021), debts for up to three% of all commercial enterprise as of 2019.

The $a hundred billion in income generated via McDonald's company-owned and franchise
eating places in 2019 bills for almost 4% of the expected $2.5 trillion global restaurant
enterprise.

Finance

For the monetary yr. 2018, McDonald's suggested income of us$5.9 billion, with an annual
sales people$21.0 billion, a decrease of 7.9% over the previous economic cycle. McDonald's
stocks traded at over $145in line with proportion, and its marketplace capitalization changed
into worth over US$134.5 billion in September2018.

ANNEXURE
Executive Summary

McDonald’s is a “Centralized, global organization”, which competes inside the rapid meals enterprise
providing hamburgers, French fries and other consumable items the usage of standardization, heavy
expansion and branding as the driving pressure. McDonald’s operates in over 121 countries and has over
30,000 eating places global.
McDonald’s utilized an intense, fast expansion into overseas international locations through 3 number one
strategies, franchising, corporation owned eating places, and joint ventures. With most people of
international eating places stemming from franchising agreements, McDonald’s control relied on this
technique to aid within the acceptance of a brand new fashion of eating into unfamiliar markets. With
minimal risk and maximum gains, franchising maintains to make contributions heavily to McDonald’s
international fulfilment.

With a centralized, global shape, McDonald’s keeps a decent grasp on operations, fee and high-quality. With
an ethnocentric control strategy, McDonald’s is based on domestic based logic and attitudes and transfers
them to their worldwide shops and restaurants.

With the intention to manipulate its distant places operation, McDonald’s uses a combination of processes.
The majority of control could fall underneath the rules approach, that means that control lies with
headquarters developing methods and policies for the subsidiaries to follow. but, there is additionally a little
of the cultural method that has surfaced and is being utilized judging by means of the version that has come
about in a number of the remote places eating places. This has befallen in spite of the tight internalized
norms that are constantly offered and enforced by headquarters.