Name – Nehal Mhatre

Class - BBA SEM 6

Strategic Management
Assignment

Case let - 04
28-1-2021.
BORN IN 1940: NOW 80 Years Old and a Globally Recognised ENTITY.

Q1. In your next visit to McDonald’s try to observe the issues, policies and model explained in this outlet.
Observe the customers; their economic profiles; kids and happiness on their face and their love for small gifts
if you have to sum-up McDonald’s business Model in 150 words, How will you do it ?Is it really Blue-Ocean
Strategy ?
Answer -
Summarisation: A McDonald’s Burger made in India contains Indian spices is made by Indian service boys,
Indian chef s, oils which are Indian, for customers mostly Indians.The contents of Maharaja Burger or McBurger
is global in taste and brand value is 100 % Indian material. What a transformation from local
to global! McDonald’s targets low income/middle income customers and offers value meal
under Rs.100/-.McDonald is very good at targeting young kids as they are the INFLUENCER in the family and
want to eat at McDonald’s because of Happy Meals/Snack Meals/Gift of Small Toy. The-kids love food
at McDonald’s. Actually at McDonald’s it is availability of value meal everyday which attracts large number of
people.Mc Donald has local people, local-products, local responsiveness, local price and global reputation.
Essentially, McDonald's makes money by leveraging its product, fast food, to franchisees who have to lease
properties, often at large markups that are owned by McDonald's. As reported in their 2019 10-K, 36,059 of the
38,695 restaurants were franchised with McDonald's operating the remaining 2,636 restaurants.11 So,
approximately 93% of total capacity are franchises, which is still below McDonald's long-term goal of 95%.
The advantage of this model is that the revenue stream (rent and royalty income received from franchisees) is far
more stable and, most importantly, predictable, while the operating costs are measurably lower, allowing for an
easier path to profitability. McDonald's, because it has control over the land and long-term leases, can leverage
its market position to negotiate deals. As has been noted by analysts, this is akin to a subscription, where the
subscriber (the franchisee) pays a fixed amount each month.
McDonald's has notoriously strict criteria for its franchisees (net worth, liquidity, etc.). Additionally, the franchisees
are also responsible for paying salaries, ordering supplies, and paying rent/owning the premises. So, why
become a franchisee? The lure is that McDonald's provides them with an almost guaranteed moneymaker due, in
large part, to the impressive margins. The restaurant industry is infamous for its turnover, and as any
restaurateur will tell you, one major reason for this is that the margins can be thinner than a slice of processed
American cheese. Yet, McDonald's operating margins are Double Quarter Pounder thick.
Q2.Should McDonald expands its menu? Yes or No? Why?
Answer-
Summarisation: A McDonald’s Burger made in India contains Indian spices is made by Indian service boys,
Indian chef s, oils which are Indian, for customers mostly Indians.The contents of Maharaja Burger or McBurger
is global in taste and brand value is 100 % Indian material. What a transformation from local to global!
 McDonald’s targets low income/middle income customers and offers value meal under Rs.100/-.McDonald is
very good at targeting young kids as they are the INFLUENCER in the family and want to eat at McDonald’s
because of Happy Meals/Snack Meals/Gift of Small Toy. The kids love food at McDonald’s. Actually at
McDonald’s it is availability of value meal everyday which attracts large number of people.Mc Donald has local
people, local products, local responsiveness, local price and global reputation.
McDonalds do not need to expand its menu. McDonalds has been famous and liked for its very short and well
prepared traditional menu, which people loves to have in their day to day life. Even expanding the menu requires
more resources for varieties and more skilled persons. Though it can add some items according to regional taste
but it should not change its traditional menu of burgers.

Q3.Why McDonald is successful in many countries around the world?

Answer-
Summarisation - A McDonald’s Burger made in India contains Indian spices is made by Indian service boys,
Indian chef s, oils which are Indian, for customers mostly Indians.The contents of Maharaja Burger or McBurger
is global in taste and brand value is 100 % Indian material. What a transformation from local to global!
McDonald’s targets low income/middle income customers and offers value meal under Rs.100/-.McDonald is
very good at targeting young kids as they are the INFLUENCER in the family and want to eat at McDonald’s
because of Happy Meals/Snack Meals/Gift of Small Toy. The kids love food at McDonald’s. Actually at
McDonald’s it is availability of value meal everyday which attracts large number of people.Mc Donald has local
people, local products, local responsiveness, local price and global reputation.
McDonald is successful in many countries around the world because of the possible reasons as follows:
• Analysing strength and utilising opportunities to overcome threats and weakness
• Proper marketing strategy
• Providing services as per customer taste and culture.
• Maintaining QSC&V always
• Overall focus on customer satisfaction