STRATEGIC MANAGEMENT

“MCDONALD’S”

Arranged by GROUP 1:
Sheren Rumengan 20061102184
Lisy Kalumata 20061102260
Vanesa Paat 20061102223
Syaloom Sela 20061102195
Chrislee Lumenta 20061102236

INTERNATIONAL BUSINESS ADMINISTRATION

FACULTY OF ECONOMICS AND BUSINESS
2023
Company : MCDONALD’S

CH1 : The Company Profile

History
In 1917, 15-year-old Ray Kroc lied about his age to join the Red Cross as
an ambulance driver, but the war ended before he completed his training. He
then worked as a piano player, a paper cup salesman and a Multimixer
salesman. In 1954, he visited a restaurant in San Bernardino, California that
had purchased several Multimixers. There he found a small but successful
restaurant run by brothers Dick and Mac McDonald, and was stunned by the
effectiveness of their operation. The McDonald’s brothers produced a limited
menu, concentrating on just a few items – burgers, fries and beverages – which
allowed them to focus on quality and quick service.
They were looking for a new franchising agent and Kroc saw an opportunity.
In 1955, he founded McDonald’s System, Inc., a predecessor of the McDonald’s
Corporation, and six years later bought the exclusive rights to the McDonald’s
name and operating system. By 1958, McDonald’s had sold its 100 millionth
hamburger.

1937 - The McDonald brothers start their hot dog stand, getting into the food
service business as a team.
1940 - They open their barbecue restaurant in San Bernardino, the world's first
McDonald's restaurant. There is no current information on whether they sold
barbecue rib sandwiches, but we would like to think they did.
1948 - The McDonald brother turn their restaurant into a hamburger and
milkshake restaurant, and in the process are credited with inventing the modern
service model of fast food. In later memoirs the brothers would credit their
process to Henry Ford, saying that they modeled their restaurant around his
assembly lines in Detroit.
1953 - McDonald's opens its first franchise restaurant in Phoenix. While not a
focus of Maurice and Richard McDonald, they did open multiple restaurants in
Arizona and California during the company's early years.
1954 - Ray Kroc, a traveling appliance salesman, visits the McDonald's
restaurant to discover why a small hamburger shop needs as many milkshake
machines as it does. He buys the rights to franchise McDonald's restaurants
across the country.
1955 - Kroc opens his first franchised restaurant, arguably the first restaurant
of the modern McDonald's company, in Des Plaines, Illinois.
1956 - Kroc and Harry Sonnenborn develop a financial model in which
McDonald's would own the land on which its franchisees build their restaurants.
That model continues to this day, and is often considered one of the most
significant financial decisions the company has ever made.
1959 - Kroc names Sonnenborn the first CEO of the McDonald's company.
1961 - Kroc buys out the McDonald brothers for $2.6 million (approximately
$22.3 million in 2019 equivalent). The brothers keep their original restaurant,
renamed Big M. Kroc later opened a competing McDonald's nearby that drove
them and the first-ever McDonald's out of business by the end of the decade.
1962/63 - McDonald's launches its two most recognizable logos: the golden
arches and Ronald McDonald.
1965 - McDonald's launches its public stock.
1967 - Kroc pushes Sonnenborn out and takes the position of CEO himself.
Meanwhile, McDonald's opens its first international restaurant in Canada.
1974 - The first Ronald McDonald House opens.
1984 - Kroc dies.
1990 - McDonald's opens a restaurant in Pushkin Square, Moscow. Given the
cultural status of the restaurant, this is seen as a symbolic moment in the end
of the Cold War. According to the restaurant's website, it served more than
30,000 Russian citizens on the first day.
1993 - The company opens its first McCafe, McDonald's attempt to run a coffee
restaurant, in Australia.
1996 - McDonald's has entered an era of rapid growth. From 1988 - 1996 the
company doubles its number of restaurants, opening location number 20,000
this year.
1998/1999 - McDonald's as a corporation begins to aggressively expand past
its traditional business model. It acquires companies including Chipotle (CMG)
- Get Free Report and Boston Market, although it would later divest itself of
these holdings.
2000 - By the end of the 1990s, McDonald's has opened more than 11,000
restaurants outside of the U.S.
2013 - In another symbolic moment, McDonald's opens its first restaurant in
Vietnam.
2015 - In an effort to create new energy around its brand, McDonald's launches
its all-day breakfast menu. This has largely been regarded as a failure, as it
generally regarded as splitting an existing customer base rather than bringing
new customers into the restaurant.

McDonald’s Entered Indonesia

McDonald's first entered Indonesia in 1991 by opening its first restaurant in
Sarinah, Thamrin. In 2009 PT. Rekso Nasional Food (RNF), which is a
subsidiary of the Rekso Group, signed a Master Franchise Agreement with
McDonald's International Property Company (MIPCO) which grants permission
to operate all restaurants with the McDonald's brand and to open new
restaurants throughout Indonesia. Until now PT. RNF has opened more than
200 McDonald's outlets in various cities in Indonesia supported by more than
14,000 employees throughout Indonesia. PT. RNF through McDonald's
Indonesia is always fully committed to providing the best service for customers,
presenting leading-edge food quality, and providing great benefits for the
people of Indonesia.
Vision & Mission
• Vision
To be a fast food restaurant with the best service in the world. To achieve
this vision, McDonald's always guarantees the quality of its products,
provides satisfying service, offers clean and safe food products and other
added values. Customer smiles are important to McDonald's.
• Mission
− To be the best company for all our employees in every community
around the world.
− Presenting service with a superior operational system for each of our
customers at every McDonald's branch restaurant.
− Continue to experience development in a profitable direction as a
brand, and continue to develop McDonald's operational systems in
a better direction through innovation and technology.

Business Activities
• Management
CEO & President : Chris Kempczinski
President Director in Indonesia : Sukowati Sosrodjojo (PT Rekso Nasional
Food is the sole franchisee of McDonald's in Indonesia which is acquired
by Rekso Group)

• Facilities
 McD App

Mobile Order & Pay

McDelivery
 Free WIFI

Arch Card: McDonald’s Gift Card

PlayPlaces & Parties

 McD Drive Thru

Comfort Dine-In zone

Branch Offices
PT Rekso Nasional Food - McDonald's Indonesia Head Office
Alamat : VV3V+WH3, RT.18/RW.8, Klp. Gading Bar., Kec. Klp. Gading, Jkt Utara,
Daerah Khusus Ibukota Jakarta 14240
• McDonald's Hero Bekasi
Jl. K.H. Noer Ali No. 177 Bekasi Selatan, Bekasi Kota. (Bekasi Cyber Park Ground
Floor)
• McDonald's Sarinah Malang
Ground Floor,Jl.Jend.BasukiRachmat 2A
• McDonald's Malioboro Jogja
Ground Floor, Jl. Malioboro 52-58
 • McDonald's Citraland Semarang
Ground Floor, Jl. Simpang Lima Raya No. 1
• McDonald's Tebet Shophouse
Jl. Prof. Dr. Soepomo SH, No. 55, Tebet
• McDonald's Bintaro
Bintaro Jaya Sektor IX
• McDonald's New Dewata Ayu
Jl. Panglima Sudirman 20
• McDonald's Bumi Serpong Damai
Jl. Raya Teras Bukit No.614 Sektor VII, Bumi Serpong Damai, Banten
• McDonald's Dufan
Jl. Lodan Timur No. 7, Dunia Fantasi (WAHANA RAMA SHINTA)
• McDonald's Plaza Sentral
Ground Floor,Jl.Jend. Sudirman, Kav.47-48
• McDonald's Kemang
Jl. Kemang Raya No. 10
• McDonald's Plasa Marina
Jl. Raya Margorejo Indah No. 97-99, Surabaya
• McDonald's S'house Pondok Indah
Jl. Metro Pondok Indah Plaza I, Blok UA. Kav. 33-34, Pondok Indah
• McDonald's Depok Plaza
Plaza Depok Lantai Dasar, Jl. Margonda Raya
• McDonald's Hero Padjajaran Bogor
Jl. Raya Padjajaran
• McDonald's Gas Station Cibubur
Jl. Raya Akses Baru, BUPERTA, Cibubur
• McDonald's BatamHarmoniS'house
Jln Imam Bonjol Blok F 1-2 Komplek Hotel Harmoni Sei JodohBatam Island 24932
• McDonald's Java Supermall
Java SupermalLantai 1, Jl. MT. Haryono, 992-994
• McDonald's Kuta Square
KomplekPertokoan Kuta Square, Jl. Bakung Sari I, Blok A/2
• McDonald's GrahaCijantung
Jl. Kenari, Komplek Kopassus
• McDonald's Plaza Tanjung Karang
Jl.RA. Kartini No. 21
• McDonald's Mal Ratu Indah
Mal Ratu Indah. Jl.Dr.SamRatulangi No. 35, Sulawesi Selatan
• McDonald's Ancol Pantai Timur
Jl. Lodan No. 7, Ancol Timur
• McDonald's MayjenSungkono
Jl.MayjendSungkono 153,Sblh Taman MakamPahlawan
• McDonald's PasirKaliki
Jl. PasirKaliki No. 121 - 123, Bandung
• McDonald's Sanur Bali
Jl. By Pass Ngurah Rai 109, Sanur, Bali
• McDonald's Cilinaya Lombok
Jl. PejanggikKompleksMataram Mall, Mataram, Nusa Tenggara Barat.
• McDonald's Sidoarjo
Jl. Pahlawan No 1, Depan GOR
• McDonald's Darmo Surabaya
Jl. Raya Darmo No. 43
• McDonald's Basuki Rahmat Sby
Jl. Basuki Rachmat No. 21-23
• McDonald's Kalibata Mall
Kalibata Mall, Jl. Raya Kalibata
• McDonald's Jimbaran
Jl. Uluwatu II No. 01. Jimbaran, Bali
• McDonald's Plaza Millenium Medan
Plaza Milenium, Lt. 1,Jl.Kapten Muslim No. 111
• McDonald's Central Plaza Samarinda
Samarinda Central Plaza, Jl. Pulau Irian No. 1
• McDonald's Kopo Mas Bandung
Komplek Ruko Kopo Mas Regency, Jl. Kopo No 618
• McDonald's Green Garden
Perumahan Green Garden Blok I - 9, No. 1 - 2,Kedoya Utara KebonJeruk
 • McDonald's ADA Swalayan Semarang
Jl. Setiabudi No. 221 – 225
• McDonald's Sri Ratu Kediri
Sri Ratu Mall, Jl. HayamWuruk No. 46, Kediri
• McDonald's Mulyo Sari Surabaya
Jl. Raya Mulyosari, Komplek Ruko Central Park
• McDonald's Veteran Gresik
PlzMatahari,Jl.Veteran Gresik No.1,Gresik-Jawa Timur
• McDonald's Sudirman Jogja
Jl. Jendral Sudirman 38
• McDonald's Sukabumi Indah Plaza
Jl. R.E. Martadinata 25
• McDonald's Mal DaanMogot
Jl. Raya Daanmogot km 16
• McDonald's Ruko Sudirman Palembang
Jl. Jendral Sudirman No. 149
• McDonald's Simpang Dago
Jl. Ir. H. Juanda no 181,Simpang Dago
• McDonald's Cempaka Mas Jakarta
ITC CempakaMas,Jl.Let.JendSuprapto
• McDonald's TransmartCilandak Mall
TransmartCilandak Mall, Jl. Cilandak KKO, Cilandak Timur
• McDonald's Kayu Tangan Malang
Jl. Brigjend Slamet Riyadi no 1-3
• McDonald's Senayan Trade Center
Sport Trade Center, Shopping Mall, Lantai LG, Jl. Asia Afrika Pintu IX Senayan
• McDonald's Pusat GrosirCililitan
Jl. LetjendSutoyo 76, Cililitan, Kramat Jati
• McDonald's Merdeka Walk
Jl. BalaikotaKomplek Merdeka Walk
• McDonald's Tamini Square
Tamini Square Lt. Dasar , Jl. Taman Mini Raya, Pinang Ranti
• McDonald's Duren Sawit
Jl. Radin Inten, Duren Sawit
• McDonald's Alam Sutera
Jl. Alam Sutera Bulevard Kav. 2
• McDonald's Lodaya Bogor
Jl. Raya Padjajaran 21 C
• McDonald's Pondok Cabe
Jl. RE Martadinata, Perempatan Lampu Merah Gaplek No. 45 Pamulang 15417
• McDonald's Medan Tasbi
Jl. Gagak Hitam, Ring Road ,Tasbi 2
• McDonald's Shinta Tangerang
Jl. Teuku Umar No. 1 RT. 4 RW 3 Kel. Karawaci Tangerang Banten
• McDonald's Megamas Beach Front Manado
Jl. Boulevard 2 Megamas Manado
• McDonald's Lippo St Mark Square Karawaci
Jl. Boulevard Jendral Sudirman No.1298, Kel.Bencongan, Kec. Kelap Dua

• Products : Foods & Beverages

− Chicken & Fish Sandwiches

− Burgers
− McNuggets & Meals

− Breakfast Menu

− Fries & Sides

− Happy Meal
− McCafe & Coffee

− McCafe Bakery

− Sweets & Treats

 − Beverages

• Good Corporate Governance (GCG)

McDonald's success is built on a foundation of personal and
professional integrity. McDonald’s earned that trust every day by serving
safe food, respecting customers and employees and delivering outstanding
Quality, Service, Cleanliness and Value (QSC&V). McDonald’s build on this
trust by being ethical, truthful and dependable. In short, what Ray Kroc,
founder of McDonald's Corporation, said more than 50 years ago was right.
“We are not promoters. We are business people with a solid, permanent,
constructive ethical program that will be in style years from now even more
than it is today.”
- Board of Directors
McDonald’s Corporation’s Board of Directors is entrusted with the
oversight of the Company’s business affairs and assets.
The Board believes that good corporate governance is guided by
ethical, truthful and dependable leadership and is committed to
continually improving its governance policies to ensure the integrity of
the McDonald's System for all stakeholders.
 - Governance Resources
The cornerstone of McDonald's success is a business model built on
integrity. The Board of Directors has long believed that good corporate
governance, guided by ethical, truthful and dependable leadership is
critical to driving long-term success.
- Political Contributions
While McDonald’s does not generally make contributions to political
parties, candidates or organizations, public policy issues may arise that
could impact the McDonald’s System. To address these needs, the
McDonald’s Corporation Board of Directors created the Public Policy &
Strategy Committee to evaluate potential contributions in a manner
consistent with the Company’s core values.
- Impact Strategy & ESG Reporting
To manage the impact carefully and hold ourselves accountable across
a range of environmental, social and governance (ESG) issues,
McDonald’s have strategies, goals, and performance indicators that
they report against annually. Their Purpose & Impact Reporting Suite is
designed to be a living reporting platform on our website where people
can see their progress and understand how they’re doing year over
year.

• Corporate Social Responsibility (CSR)

McDonald's distributed breakfast packages to 2,000 teachers in 203

schools throughout Indonesia.
 McDonald’s visit to the Sayap Ibu Foundation

McDonald’s donation for victims of the tsunami disaster in Banten

Fabiola's birthday celebration, the child with disabilities whose dream was
granted by McDonald's

Assistance from a McDonald's center employee for Biji-Biji Bantar

Gerbang
 Children affected by the Palu disaster receive donations from McDonald's

Visit of McDonald's Literacy Inspiration Volunteers to Community Reading Garden

 McDonald's Indonesia Donates 44,000 Masks for the City of Surabaya

Welcoming Mother's Day, McDonald's Appreciates Mothers Through My Inspirational

Mother Program

McD Shares with Rekso Group Gives Aid to Cianjur Disaster Victims

McDonald's Indonesia Celebrates National Children's Day Virtually with Orphanage

Children
CH2 : The External Assessment
Economic Forces
Every Foreign businesses of Indonesia must pay income tax.
Some of the taxes that need to be considered by McDonald’s include VAT,
withholding tax and permanent establishment tax.
Buying Power
High inflation can affect people's purchasing power. Inflation can make the
value of a currency fall so that purchasing power weakens. this can affect
McDonald's as a company that offers fast food products. If people's purchasing
power decreases, the demand for McDonald's products will also decrease
The rise of the COVID-19 Pandemic in 2020 caused Non-Cash Transactions at
McDonald's in Indonesia to increase 4 times.
During the pandemic, McDonald's focused on McDelivery, drive-thru and
take-away services which were all contactless to support the government's
social distancing measures to prevent the spread of COVID-19. Based on data
recorded by Youtap Indonesia, an increase in non-cash transactions at
McDonald's drive-thru services has started to occur since the first week of the
announcement of the pandemic. During the pandemic, the portion has
increased up to 4 times with an average daily transaction value up to around
170 percent.

Social, Cultural, Demographic & Environmental Forces

The diversity of Indonesia's Natural Resources and Local Commodities as a
Raw Material for McDonald's Menus
Senior Director of Supply Chain and Quality Assurance McDonald's
Indonesia (McD) Bintang Aritonang encourages local products in every dish.
About 80 to 85 percent of the ingredients used come local resources. McD is
committed to empowering Indonesian business actors by using locally sourced
ingredients. For example, chicken meat and vegetables directly from
Indonesian farmers and breeders. McD built local suppliers to provide the best
ingredients to support the desired menu quality. By providing high standards
and an audit that can reach eight stages, the results provided will be maximized.
Local Preference and Taste helps McDonald’s to Innovate with their New
Variant of Menu
One example is McDonald's releasing and innovate with a new menu
which is a modified Indonesian dish with the main menu, namely Crispy
Chicken in Curry Sauce. This menu is an adaptation of McDonald's main menu
in Indonesia, namely fried chicken, which is modified with the addition of curry
sauce on top. The curry itself grows and develops in Sumatra, making this curry
one of Indonesia's specialties.

Political, Governmental & Legal Forces

Indonesia’s legal basis for Intellectual Property Rights (IPR) supporting and
protecting McDonald’s Brand, Copyright, and Production
Indonesia has a legal basis for Intellectual Property Rights (IPR) in various
laws and presidential decrees, including:
− Law No.7 of 1994 concerning Ratification of the Agreement Establishing
the World Trade Organization,
 − Law No.10 of 1995 concerning Customs,
− Law No.12 of 1997 concerning Copyright,
− Law No.14 of 1997 concerning Marks/Brand
Therefore, in the case study at PT RNF as the owner of McDonald's Indonesia,
obtaining permission to use or reproduce intellectual property rights and patents
from the central franchisor of the McDonald's brand, namely McDonald's
International Corp. The McDonald's intellectual property rights and patents that
are permitted to be reproduced by PT RNF are in the form of trademarks,
industrial designs, jingles, mascots, signature menus, receipts, and details of
the McDonald's brand itself, denoted by a logo with the letter "m" in yellow.
In addition, PT RNF is also permitted to reproduce and sell the BigMac Menu
which has a patent as the McDonald's Signature Menu.

Technological Forces
Bank Indonesia's policy on the application of non-cash payment systems such
as QRIS and the growing trend of E-Wallet payments in Indonesia support
McDonald's services
Currently, McDonald's is focusing on McDelivery, drive-thru and take-
away services which are all contactless to support the government's steps in
carrying out social distancing to prevent the spread of Covid-19 during a
pandemic. Even now, McDelivery and DriveThru services are still very popular
and widely used by customers.
The brand has also improved its online platforms such as McDApp
Which they use for taking orders, to improve customer experience.
McDonald’s also add loyalty points to people using their website to increase the
number of returning customers.
McDonald's Is Using AI and Data to Optimize Its Supply Chain
Take the restaurant end of the supply chain, for instance. The automation
of the upselling process could help individual restaurants better manage their
inventory and avoid running out of key products while waiting for a delivery
especially if adverse weather etc. is preventing supplies from reaching them.If
the AI platform is plugged into both the menu and the inventory systems, it can
promote or withdraw items based on stock levels.

Competitive Forces
McDonald's characterizes competitors as "anyone who sells food", according
to Paine Webber, a restaurant business analyst, the main competitors are
legacy fast-food companies, mid-priced family restaurants and supermarkets,
especially franchised food and beverage companies. Here are some
competitors on similar franchise companies:
− KFC
KFC (Kentucky Fried Chicken), an American fast food restaurant owned
by PepsiCo, Inc. who also specializes in fried chicken, which is also one
of the starred menu at McDonald's. KFC also offers the same menu,
such as burgers, french fries, breakfast meals, and also various kinds of
drinks.
− Burger King
One of the fast food restaurants on an international scale which is also
successful in the Indonesian market. Even though it's called a burger, it
doesn't mean that the restaurant only sells burgers, but there are also
many other menus such as fried chicken, french fries, and various types
of drinks.

− AW
This restaurant is a fast food restaurant that has spread in various
countries, one of which is Indonesia. Just like fast-food restaurants in
general, the products marketed by AW are fried chicken, burger nuggets,
Root Beer, and other drinks. AW also has an online ordering system.
CH3 : The Internal Assessment
Human Resources Management
• Talent and Benefit
McDonald’s Indonesia and even McDonald’s around the world committed
to providing training, education and career pathways to empower Restaurant
Staff (people working in a McDonald’s-brand restaurant). They are dedicated
to providing learning and development opportunities for people at all stages of
their journey to build a career with McDonald’s.
McDonald’s also developed an optional toolkit of principles and best
practices to help Franchisees recruit and retain talent. It includes recruitment
and retention workshops, activation guides to bring McDonald’s values to life,
and attraction and employer branding materials. McDonald’s also provide
competitive compensation commensurate with a Company employee’s
position. It influence the employees to keep comitted and engaged with job.
• Safe and Respectful Workplace
McDonald’s committed to prioritizing safety in all our offices and Company-
owned restaurants around the world, as well as supporting their Franchisees in
doing the same in the restaurants they own and operate. Across restaurants
globally, they are working together with our Franchisees in continuing to foster
respectful workplaces, where all the crew can be themselves without fear of
harassment, discrimination, retaliation or violence, also protect the physical and
psychological safety of all workers.
In 2021, McDonald’s developed new health and safety programs and
resources, including a guide on how restaurants can develop a fire prevention
and protection program, a self-assessment tool to identify site-specific fire risks
and guidance on prevention practices for common fire risks.
McDonald's evaluates employee performance based on leadership
competence and the work results they achieve. Mc Donald's identifies which
employees have the potential to become future leaders at McDonald's.
McDonald's evaluates employee performance based on leadership
competence and the work results they achieve. "From here we identify which
employees have the potential to become future leaders at McDonald's,"
Employees who have a success rate of 75% in advancing to a higher level, are
included by the management in the Readiness Matrix on a regional scale. The
size is potential, track record, and of course performance. Employees with the
highest performance can be included in the Ready Now group, namely those
who are ready to be placed at a moment's notice to fill positions above them.
The level below, namely for those who are considered to still need time for self-
development, will be included in the Ready Future group.
All employees participating in the development program at McDonald's
have received modules that can be studied within the specified time. They also
have the opportunity to have multi-skills to support their work. This is because
McDonald's already has a comprehensive training program. For example in the
Operations Department, they have the opportunity to work across all parts of
the kitchen. And, they are provided with clear and transparent career paths, so
that employees can be motivated and challenged to reach higher positions. In
the competency development process as well as career advancement, there is
also a coaching process. For example, in the Operations Department, which is
arguably one of the most important departments at McDonald's, an employee
who starts his career as a crew has the opportunity to move up to the
management level. The path starts from Crew, can get promoted to Crew
Leader, Trainee Manager, Second Assistant Manager, First Assistant Manager,
Restaurant General Manager, Operation Consultant, Operation Manager, even
to Operation Director.
Marketing
• McDonald's Indonesia holds #BedaRodaSatuJalur Campaign at
McDonald's Drive Thru Service
 In the #BedaRodaSatuJalur campaign, McDonald's Indonesia wants to
officially convey that regardless of the vehicle used by consumers, they can still
order food through the Drive Thru route. This campaign wants to emphasize
that even though each consumer drives a different vehicle, McDonald's will still
serve all consumers with any vehicle in the same way.
• McDonald's Indonesia presents the #AntarAkuKeDriveThruMcD initiative
McDonald’s offering a range of unique Promotion oftenly, for example in
October 2021 McDonalds initiated the #AntarAkuKeDriveThruMcD promotion
which invites consumers who are shopping through Drive Thru to treat their
drivers with the McD Chicken Rice Package menu by only paying IDR 1,000
per vehicle. McDonald's Indonesia also invites consumers to share memorable
moments when ordering their favorite menu at Drive Thru McDonald's by
posting it on social media or in the comments column on the Instagram account
@mcdonaldsid by including the hashtag #DiDriveThruMcD in the period 8-31
October 2021. There will be 30 selected winners who will be selected. will get
a McD voucher worth IDR 100,000 and an exclusive Drive Thru pillow.
• McDonald's Provides Convenience to Earn More Profits through the MyM
Rewards Program
MyM Rewards is a loyalty program provided by McDonald's for consumers
in an easy way, by simply accumulating points for every McDonald's purchase,
be it through dine-in, Drive Thru and McDelivery. For every purchase of IDR
10,000 consumers will get 1 point, which if the points have been collected will
be easily exchanged for selected McDonald's products ranging from desserts
to main dishes such as Big Macs or McNuggets.
McDonald's merchandise plan McDonald's provides a lot of visual merchandise
throughout its stores and even the internet. By using visual merchandising,
McDonald's not only looks attractive to customers but is also able to attract
customer interest. Example: McDonald's demonstrates their visual
merchandising by providing comfortable seating and a harmonious
environment in their store to satisfy customers when they come to eat.
McDonald's also uses shelves as a merchandise presentation plan for their
merchandise. McDonald's wants to help arrange their food and drink according
to their individual order. For example, before food is ordered, burger ingredients
such as cheese, lettuce, buns and meat are divided separately into their
respective racks. This helps create a harmonious atmosphere and helps attract
customers with a strong visual stealer to increase McDonald's sales rate.
Pricing strategy implemented by Mcdonald's McDonald's implements three
types of strategies namely bundle pricing, penetration pricing, and
psychological pricing. In a bundle pricing strategy, McDonald's offers food and
other product bundles for a discounted price, as opposed to buying each item
separately. For example, customers can buy a Happy Meal or an Extra Value
Meal to optimize the cost and value of their product. In psychological pricing,
companies use prices that appear much more affordable, such as $_. 99
instead of rounding to the nearest dollar. This pricing strategy helps encourage
consumers to buy the company's products based on perceived affordability. In
setting penetration pricing, every time a new product is released, McDonald's
always provides a relatively low price so that it can enter the market easily. For
example, like in the picture where the price for a bowl of rice and chicken meat
is only IDR 15,000.
Their pricing strategy is also adjusted to reach the lower middle class.
McDonalds target customers are mostly young teenagers who want to be brand
conscious and want convenience. Promotional Strategy implemented by
McDonald's McDonald's uses advertising promotion strategies, sales
promotion, public relations and direct marketing.

Finance
The Company uses major capital markets, bank financings and derivatives
to meet its financing requirements. The Company manages its debt portfolio in
response to changes in interest rates and foreign currency rates by periodically
retiring, redeeming and repurchasing debt, terminating swaps and using
derivatives. The Company does not hold or issue derivatives for trading
purposes. All swaps are over the counter instruments.
In managing the impact of interest rate changes and foreign currency
fluctuations, the Company uses interest rate swaps and finances in the
currencies in which assets are denominated. The Company uses foreign
currency debt and derivatives to hedge the foreign currency risk associated with
certain royalties, intercompany financings and long-term investments in foreign
subsidiaries and affiliates. This reduces the impact of fluctuating foreign
currencies on cash flows and shareholders' equity.
Sources of Liquidity
The Company has long-term revenue and cash flow streams that relate
to its franchise arrangements. Minimum rent payments under franchise
arrangements are based on the Company's underlying investment in owned
sites and parallel the Company's underlying lease obligations and escalations
on properties that are leased.
Uses of Cash
The Company contracts with vendors and suppliers in the normal course
of business. These contracts may include items related to construction projects,
inventory, energy, marketing, technology and other services. These expenses,
along with other standard operating expenses incurred, are funded from
operating cash flows.

Production/Operations
• McDonald's Indonesia uses Local Raw Materials & Ingredients
Not all raw materials at McDonald's are imported from abroad. Several
menus at McDonald's, such as McSpicy Burger, Chicken Burger, McChicken
Burger, and Fried Chicken use local ingredients. Moreover, 75% of the main
ingredients we use, such as: chicken, eggs, rice, chili, vegetables and cooking
oil also come from local suppliers. Including all concoctions such as seasoning
flour for example. Even our bread is processed in Indonesia. All of our chickens
come from selected local breeders who have Halal certificates, food safety and
product quality. To ensure that chickens are always in good and healthy
condition, we implement Biosecurity and Animal Health and Animal Welfare
Principles.
• McDonald's uses vegetables such as iceberg lettuce, tomatoes,
cucumbers, leeks and celery from local farmers assisted by McDonald's itself.
Planted under strict supervision to ensure vegetables are free from pests,
diseases and weeds.
• McDonald's Provides "Self Ordering Kiosk" Service Machines
Selecting a menu with prices and information displayed immediately or
modifying a menu is easier. For example, adding cheese or eggs, removing
pickled cucumbers, and choosing your favorite pieces of chicken. Cashless
payments can also be made directly at this self-service machine. If you choose
cash payment, the customer simply brings the order receipt to the cashier
without the need to repeat the order. This makes McDonald's services more
practical.

Research & Development

McDonald’s anticipate and respond effectively to continuously shifting
consumer demographics and trends in food sourcing, food preparation, food
offerings, and consumer behavior and preferences, including with respect to
environmental and social responsibility matters, in the IEO segment. Because
if they are not able to predict, or quickly and effectively respond to, these
changes, or if their competitors predict or respond more effectively, their
financial results could be adversely impacted.
An example would be the launch of the new ‘McCafé’ specialty coffee
menu in 2008, which is a product of recent development and market research.
This was designed to offer new options to existing customers, and also to entice
a new type of customer, busy business people who get coffees in the mornings.
McDonald’s also generally own or secure a long-term lease on the land and
building for conventional franchised and Company-operated restaurant sites.
They seek to identify and develop restaurant locations that offer convenience
to customers and long-term sales and profit potential.

Management Information System

McDonald’s are increasingly reliant upon technology systems, such as
technology that support digital and delivery solutions, point-of-sale, and other
communication facilities to customer, supplier, and other parties.
• Database
McDonald's combines information from different sources in one database.
Forms, queries, and reports created in the database allow you to quickly and
efficiently update data, obtain a monthly report of expenses, search for relevant
data, analyze data, and print reports, charts, and mailing labels. Mcdonald's
service restaurants use Access databases to avoid errors in raw material
supply, reduce the chance of lost documentation and become more automated.
 • Computing Tools
McDonald's restaurants will shorten the service time by eliminating the
delay of drivers at the cashier's window. To do this, the company is
experimenting with transponders on the windshield of a car, similar to those
used to write off-highway tolls automatically.
• Information Technology
McDonald's has improved the Drive-Thru ("McDrive") electronic menu
offerings to automatically select content to display on screens based on several
factors. For example, on a hot day, the system advises buying a soft drink or
ice cream.
McDonalds use their customer’s data to create meaningful insights and
leverage themselves against their rising competition.
With their daily customer traffic reaching numbers as huge as 60 million in
over 100 countries, it’s clear that McDonalds has a wealth of data on their
customers just waiting to be turned into measurable metrics for analysis.
McDonalds have evolved into a more information-centric company that is
inherently driven by data based decisions. By combining data across every
McDonalds store and creating data visualisations, the chain were able to create
more comparable insights that would help garner a more holistic view of their
customers. This meant that they were more able to create relevant and
actionable outcomes, resulting in time and money saved.

One aspect of McDonalds that has been optimised thanks to big data and
analytics has been the drive-thru experience. By knowing three different factors:
design of the drive-thru, information that is provided to the customer during the
drive-thru and the people waiting in line to order at a drive-thru, McDonalds are
more able to create a more enjoyable drive-thru experience.

For example, knowing what times of day customers are more likely to go
through a drive-thru will help them prepare and improve efficiency for the spike
in demand ahead of time. Finding the optimal solutions for the design,
information and people is an ongoing process that changes over time, context
and cultures.
 Other information that McDonalds collects includes in store traffic, customer
interactions, flow throughs in the drive-thru’s, ordering patterns, point-of-sales
data, video data and sensor data. These factors impact every part of the
McDonalds empire from refining their menu design to optimising their training
programmes.

CH4 : The Internal & External SWOT Analysis

➢ Strength
− High brand recognizion and has become valuable brand
− Many variants of menu
− Using advanced technology : Order system, Payment system
− Good quality control and health
− Offer many discounts and promo
− Health and safety work environment
➢ Weakness
− Heavily depends on the franchises which works independently and
hence they have no control over their day to day performance
− Downfall in McDonald’s breakfast menu consumption
− Sexual harrassment issue
− Negative publicity : Termination of employment (PHK) case
➢ Opportunity
− The lifestyle of young people who spend time at café and fast-food
restaurants has increased
− Global Expansion regulation getting easier
− The use of Go-Food, Grab-Food, Shopee Food increases
− People’s preference of using take-away service
➢ Threat
− Competitors with same business model (Franchise)
− Cultural Threat ; some menu may not suitable in certain operation
areas
− For consumers who are conscious of nutrition, fast food is food
unhealthy
− Economic uncertainty
CH5 : The Strategy Formulation Analytical Framework
• The Input Stage
External Factor Evaluation (EFE) Matrix
Key External Factors Weight Rating Weighted Score
Opportunities
1. The lifestyle of young people who 0.16 4 0.64
spend time at café and fast-food
restaurants has increased
2. Global Expansion regulation getting 0.1 2 0.20
easier
3. The use of Go-Food, Grab-Food, 0.13 3 0.39
Shopee Food increases
4. People’s preference of using take- 0.08 3 0.24
away service
Threats
1. Competitors with same business 0.2 4 0.8
model (Franchise)
2. Cultural Threat ; some menu may 0.09 2 0.18
not suitable in certain operation areas
3. For consumers who are conscious 0.14 2 0.28
of nutrition, fast food is food
unhealthy
4. Economic uncertainty 0.1 1 0.10
Total 1.00 2.83
Competitive Profile Matrix (CPM)
Company 1 Company 2 Company 3
(MCD) (KFC) (Burger King)
Critical Success Factors Weight Rating Score Rating Score Rating Score

Unique Promotion 0.12 4 0.48 4 0.48 2 0.24

Price Competitiveness 0.10 3 0.3 3 0.3 4 0.4
Reputation as Family- 0.10 4 0.4 4 0.4 4 0.4
Friendly
Advertising 0.16 4 0.64 4 0.64 3 0.48
Expansion (Store 0.14 3 0.42 4 0.56 2 0.28
Outlets)
Variety of Menu 0.10 3 0.3 3 0.3 2 0.2
Choices
Market Share 0.05 3 0.15 4 0.2 2 0.1
Product Quality 0.10 4 0.4 4 0.4 3 0.3
Financial Position 0.13 3 0.39 3 0.39 2 0.26

Total 1.00 3.48 3.67 2.22

Internal Factor Evaluation (IFE) Matrix

Key External Factors Weight Rating Weighted Score
Strengths
1. High brand recognizion and has 0.15 4 0.6
become valuable brand
2. Many variants of menu 0.12 3 0.36
3. Using advanced technology : Order 0.13 4 0.52
system, Payment system
4. Good quality control and health 0.08 3 0.24
5. Offer many discounts and promo 0.12 4 0.48
6. Health and safety work 0.1 3 0.3
environment
Weaknesses
 1. Heavily depends on the franchises 0.08 2 0.16
which works independently and
hence they have no control over their
day to day performance
2. Downfall in McDonald’s breakfast 0.09 2 0.18
menu consumption
3. Sexual harrassment issue 0.06 1 0.06
4. Negative publicity : Termination of 0.07 1 0.07
employment (PHK) case
Total 1.00 2.97

• The Matching Stage

Strength, Weakness, Opportunities, Threats (SWOT) Matrix
Strengths Weaknesses
1. High brand recognizion 1. Heavily depends on the
and has become valuable franchises which works
brand independently and hence
2. Many variants of menu they have no control over
3. Using advanced their day to day
technology : Order performance
system, Payment system 2. Downfall in McDonald’s
4. Good quality control breakfast menu
and health consumption
5. Offer many discounts 3. Sexual harrassment
and promo issue
6. Health and safety work 4. Negative publicity :
environment Termination of
employment (PHK) case
Opportunities SO Strategies WO Strategies
1. The lifestyle of young
people who spend time at
café and fast-food
restaurants has increased
2. Global Expansion
regulation getting easier
3. The use of Go-Food,
Grab-Food, Shopee Food
increases
4. People’s preference of
using take-away service
Threats
1. Competitors with same
business model
(Franchise)
2. Cultural Threat ; some
menu may not suitable in
certain operation areas
3. For consumers who are
conscious of nutrition, fast
food is food unhealthy
4. Economic uncertainty
1. Increase the brand 1. Make a sports
reputation by maintaining campaign to attract foot
the products and services traffic in the morning (W2,
quality (S1, O1) O1).
2. Provide a ‘take-away 2. Each franchises should
friendly’ packaging to create a division for
guarantee the food is safe making the report and
until it arrives at transfer to the center
customers’ hands (S3, management (W1, 01).
O3, O4)
3. Improve the design and
ambience of the
restaurant that suitable
and comfort for young
people such as providing
physical game on the
resto tables (O1,S4)
4. Make the restaurant
more modern and
instagrammable to attract
more youngsters (S4, O1)
ST Strategies WT Strategies
1. Make a unique 1. Create a variant
collaboration menu with a breakfast menu that
current trending beverage doesn’t available on the
(S1, T1) competitor’s restaurant
2. Make a seasonal menu (W1,T1)
that is adapted with 2. Improve the store
traditional Indonesian environment control and
food (S2, S4, T2) see the preference of
3. Provide a ‘healthier’ customers to figure out
menu choices like salad which menu is suitable in
 or non-dairy products (S2, that area and which are
T3) not (W1. T2)

Strategic Position and Action Evaluation (SPACE) Matrix

The SPACE matrix is broken to four quadrants where each quadrant suggest a
different type of a nature of a strategy;
- Aggressive
- Conservative
- Defensive
- Competitive
The SPACE Matrix analysis function upon 2 internal and 2 external strategic
dimensions. It based on 4 areas of analysis:
Internal strategic dimensions:
- Financial Strength (FS) range from +1 to +6
- Competitive Advantage (CA) can range from -1 to -6
External strategic dimensions:
- Environmental Stability (ES) values can take -1 to -6
- Industry Strength (IS)

Internal Strategic Position Rate

Financial Position (FP)
1. Return of Investment (ROI) 4
2. Leverage 5
3. Liquidity 4
4. Working Capital 4
5. Cash Flow 5
Financial Position (FP) Average 4.4
Competitive Position (CP)
1. Market Share -1
2. Control over Supplier/Distributor -2
3. Customer Loyalty -1
4. Product Quality -1
5. Technology -1
Competitive Position (CP) Average -1.2
External Strategic Position Rate
Stability Position (SP)
1. Rate of Inflation -3
2. Technology -1
3. Price Elasticity of Demand -3
4. Competitive Pressure -3
5. Barriers to Entry into Market -3
Stability Position (SP) Average -2.8
Industry Position (IP)
1. Growth Potential 5
2. Financial Stability 5
3. Ease of Entry Market 5
4. Resource Utilization 4
5. Profit Potential 5
Industry Position (IP) Average 4.8
4.4 + ( -2.8) = 1.6 y-axis

4.8 + ( -1.2) = 3.6 x-axis

From McDonald's SPACE matrix, McDonald's has the responsibility to ensure

that it maintains its market share in the fast food industry. This can be achieved
by ensuring that it increases customer loyalty, product quality, increases the
amount of cash available in circulation to the business, and resource utilization.
Evidently, MacDonald has a number of weaknesses and threats. The company
must use its strengths and opportunities, to reduce the amount of risk involved
in the business. It should also implement strategies to improve its
competitiveness. Such a strategy will help the company to gain a higher market
share in the fast food industry.

Boston Consulting Group (BCG) Matrix

 Relative Market Share Position in the Industry

High Medium Low

1.0 0.5 0.0
High +20
STARS QUESTION MARK
Industry Sales Growth Rate (Percentage)

Medium 0
CASH COWS DOGS

Low -20

Industry Market Share for Junkfood Restaurant Franchise in Indonesia is 18%

Company Market Share Relative Market Industry Market Share
(%) Share (%)
McDonald’s 30.6 0.82 16.3
KFC 37.3 1 18
(Market Leader)
Burger King 16.8 0.45 15.7

McDonald’s Corporation can be categorized as STAR in BCG Matrix. McDonald

is one of the market leader in the industry with high market share and run their
business in high industry growth.
McDonald’s just need to maintain or hold: the strategy used so that these
products remain in the same category. But also McDonald's must improve the
quality of products and services in order to compete with competitors by
innovating products and services with the aim of increasing the market share
they currently have.
 Internal-External (IE) Matrix

THE IFE TOTAL WEIGHTED SCORE

Strong Average Weak

3.0 to 4.0 2.0 to 2.99 1.0 to 1.99
3.0 2.0 1.0
4.0
I. II. III.
THE EFE TOTAL WEIGHTED SCORE

High
3.0 to 4.0

3.0
IV. VI.
Medium V. IFE : 2.97
2.0 to 2.99
EFE : 2.83

2.0
VII. VIII. IX.
Low
1.0 to 1.99

1.0

The Total Weighted score of IFE : 2.97

The Total Weighted score of EFE : 2.83

Because McDonald’s Company falls into cells V, so it can be managed best

with hold and maintain strategies; market penetration and product development
are two commonly employed strategies for these types of divisions.
 Grand Strategy Matrix
Rapid Market Growth

Quadrant II Quadrant I

Weak Strong
Competitive Competitive
Quadrant III Quadrant IV Position
Position

Slow Market Growth

According to the previous SPACE Matrix, McDonald’s strategic position is on

Competitive position, and also according to the BCG Matrix, the industry of food
service especially junkfood franchise in Indonesia is 18%, means it can be
classified into rapid market growth (more than 5%).
So in this Matrix, can be seen that McDonald’s is in Quadrant 1, which is Strong
Competitive Position and Rapid Market Growth.

• The Decision Stage

Quantitative Strategic Planning Matrix (QSPM)
Strategic Alternatives
1 2
Make the restaurant Provide a ‘healthier’
more modern and menu choices like
instagram-able to salad or non-dairy
attract more products
youngsters
Key Factors Weight AS TAS AS TAS
Opportunities
1. The lifestyle of young people 0.16 4 0.64 3 0.48
who spend time at café and
fast-food restaurants has
increased
2. Global Expansion regulation 0.1 - -
getting easier
3. The use of Go-Food, Grab- 0.13 - -
Food, Shopee Food increases
4. People’s preference of using 0.08 - -
take-away service
Threats
1. Competitors with same 0.2 3 0.6 2 0.4
business model (Franchise)
2. Cultural Threat ; some menu 0.09 - -
may not suitable in certain
operation areas
3. For consumers who are 0.14 1 0.14 4 0.56
conscious of nutrition, fast food
is food unhealthy
4. Economic uncertainty 0.1 - -
Total 1.00
Strengths
1. High brand recognition and 0.15 1 0.15 3 0.45
has become valuable brand
2. Many variants of menu 0.12 1 0.12 4 0.48
3. Using advanced technology : 0.13
Order system, Payment system
4. Good quality control and 0.08 2 0.16 4 0.32
health
5. Offer many discounts and 0.12 - -
promo
 6. Health and safety work 0.1 - -
environment
Weaknesses
1. Heavily depends on the 0.08 - -
franchises which works
independently and
hence they have no control over
their day to day
2. Downfall in McDonald’s 0.09 1 0.09 4 0.36
breakfast menu consumption
3. Sexual harrassment issue 0.06
4. Negative publicity : 0.07
Termination of employment
case
Total 1.00 1.9 3.05

Based from the measurement from Quantitative Strategic Planning, the right
strategy among the two strategies that has been brought up is to Provide a ‘healthier’
menu choices for the consumers. This might be an aggressive strategy since
McDonald’s has been known for its junk food menu. But people are now more aware
of healthiness and that’s why McDonald’s needs this innovation to serve consumers
what they need both junk food and healthy food.

CH6 : Conclusion
From the analysis above, it can be concluded that McDonald's has a good
position in the market, this can be seen from the BCG Matrix where McDonald's is
classified as a Star which has a high relative market share as well as fast sales growth.
But this does not mean that McDonald's can continue like that, there are several
weaknesses and threats in the development of McDonald's, such as many competitors
with the same business model.
Therefore, through this strategy analysis, McDonald's Indonesia obtains
alternative strategies to continue to survive and advance in the market. So through the
final QSPM Matrix, it can be concluded that the chosen alternative strategy is to
provide a 'healthier' menu choices like salad or non-dairy products at McDonald's. This
is in line with people's increasing awareness of health to consume healthy food, while
many competitors are not yet available with healthy menus. Therefore this could be
the best opportunity or strategy that can be taken by McDonald's at this time.