Strategic Report for McDonald’s

TEAM II

Overview

History

• started as a small hamburger stand in California, owned by Dick and Mac McDonald.

• Dick and Mac closed their business

for three months and re-opened December 1948 as a self-service drive-in restaurant.

• In 1954, Ray Kroc became the first signs a franchise agreement with Dick and mac McDonald opening his first McDonald’s in Des Plains, Illinois on April 15, 1955.

Mission

• McDonald's brand mission is to be their customers' favorite place and way to eat and drink.

• Their worldwide operations are aligned around a global strategy called the “Plan to Win,” which center on an exceptional customer experience; People, Products, Place, Price, and Promotion.

Core Competencies

• Core intellectual assets.

• Product line enhancements.

• Market leadership and unique brand recognition.

• Technological, financial and physical assets.

Market PerformanceDomestic VS. International

• In the U.S., second quarter comparable sales decreased 2.0% . Operating income for the quarter decreased 6%.

• Europe's second quarter comparable sales increased 1.2% driven by solid performance in the U.K. and Germany. Operating income decreased 20%.

Organizational Structure

• McDonald’s started operating under a new organizational structure with four segments that combine markets with similar characteristics.• U.S., International Lead

Markets, High Growth Markets, Foundational Markets & Corporate.

Major Competitors

• McDonald’s most relevant competitors include Burger King, Wendy’s, Yum! Brands, Popeye’s, and Chipotle. On a broader basis, McDonald’s restaurants compete with international, national, regional, and local food product retailers.

SWOT ANALYSISStrengths:

• 31,000 restaurants serving burgers and fries in almost 120 countries.

• Strong brand name, image and reputation:• SPECIALIZED TRAINING FOR MANAGERS(Hamburger

University)• Technology Innovative:(Brazil ) In 1961, Fred Turner,

McDonald’s former senior chairman and Ray Kroc’s first grill man, founded Hamburger University in the basement of a McDonald’s restaurant in Elk Grove Village, Illinois.

• February 24, 1961, Hamburger University's first class of 15 students graduated

• Today, more than 7,500 students attend Hamburger University each year

• Since 1961, more than 80,000 restaurant managers, mid-managers and owner/operators have graduated from this facility

• GOOD MARKETING MIX• SUPPORTS CHILDREN HOSPITALS

Weaknesses

• Unhealthy food image.• "Supersize Me" by Morgan Spurlock(obesity).•  Customer loses due to fierce competition.•Problem related to health issue.•High employee turnover rate.

Opportunities

• Growth of the fast food industry:

• Low cost menu is preferred by large number of customers.• Diverse tastes and needs of customers: (WIFI AND

ETC…)• HEALTHIER FOOD OPTIONS.

Threats

• Intensity competitors (burger king)

• Public health crisis:( supersized menu)

• Economic recession: (Holidays)

What are the company’s critical success factors in their global competition?

• Custom range• Nutrition• Availability• Affordability

What are the company’s core competencies?

• worked with suppliers to implement chain of custody certification

• 36,000 restaurants in more than 100 countries.

• providing a low cost food and fast service.• cross-cultural competence provides leaders

with knowledge, skills, abilities, and attitudes to operate in any culture.

What are the company’s major business strategies?

• Value of money• Customer service•Digital marketing•Menu standardization• Breakfast menu items

McDonald’s competitive strategic weapons regarding international business implementation:

McDonald’s Across the

World

http://www.indexmundi.com/blog/wp-content/uploads/2013/02/macdonalds-worldwide.png

Global Menu Innovation

Supply Chain

“In business for yourself, but not by yourself.” -Ray Kroc

Strategic Solutions• People• Products• Place• Promotion

Strategic Solution Continue(Play to Win)

•Customer Services improves•1,600 more restaurants•1,000 renovations• Increase Sales by 5%