MCDONALD'S INTRODUCTION

McDonald's fast food restaurant is one of the largest franchises in the United States as well as aboard. Their top menu items include: hamburgers, cheeseburgers, McNuggets, and French fries. They are also known for one of their popular desserts: the apple pie and their breakfast sandwich: the Egg McMuffin. There are more than 32,000 McDonald's restaurants serving in 117 countries. More than 75% of McDonald's restaurants worldwide are owned and operated by independent owners. McDonald's has several ethical and social responsibility policies in place throughout their solely owned and franchised companies. These policies include placing the customer experience at the core of what they do, committing to their employees by nurturing their talent and rewarding their achievements, maintaining high standards regarding the conduct for business, and giving back to the communities in which they are established. All of these values are infiltrated through all levels of the company, which keeps McDonald's thriving as a successful fast food chain restaurant.

HISTORY
1966 McDonalds stocks split for the first time. 1967 - Big Mac invented McDonalds in Canada and Puerto Rico open 1971 - MacDonald (Japan) 1973 - Egg McMuffin invented 1974 - Ronald McDonald House opened 1979 - Happy Meals introduced 1979-present - Continued growth

MC DONALDS SPECIALITY

EXISTING STRATEGIES

OPERATIONAL LEVEL STRATEGY

(A)

Product Strategies

Menu 1) Big Mac 2) Filet-o-Fish 3) Quarter Pounder with Cheese 4) McChicken with Cheese 5) Beef Burger 6) Cheese Burger 7) Filet-o-Fish Meal 8) McChicken with Cheese Meal 9) Quarter Pounder with Cheese Meal 10) Big Mac Meal 11) Happy Meal 12) Fries
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13) Cold Drinks 14) Tea 15) Coffee 16) Hot Apple Pie 17) Milk Shakes 18) Cones 4- pillars for its success QSCV Quality, service, cleanliness and value. No organization can deliver its products without quality even to a child who is a potential customer or target client of that organization. It is consistency which reigns supreme everywhere in the world. a) QUICK SERVICE

Everybody serves quickly with a smile. There is less than a minute between the time customer orders and the food served to him. If somebody has any problem, it must be sorted before coming to the counter. It is the McDonald's culture that customer is doing them a favor by being there and not the staff so he should be received this feeling the same way. b) CLEANLINESS

McDonald do provide cleanliness in all its products and services offering. So they maintain cleanliness at all times. The restaurant is thoroughly cleaned and sanitized after the closure. Thats why more customers are becoming loyal to this organization as compared to the other organizations competing in the same industry. c) QUALITY
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All required supplies and raw materials are imported from abroad and conformed according the strict rules and regulations regarding the requirement and specifications of McDonald's, e.g., for Pakistani market, all McDonald franchisees are importing Halal meat from South Africa, Dubai and Malaysia.

FUNCTIONAL AREA/ MARKETING STRATEGY

Market Strategy Products

Product

Pricing

Place

Promotion

The important thing to remember when offering menu items to potential customers is that there is a huge amount of choice available to those potential customers with regard to how and where they spend their money. Therefore McDonalds places considerable emphasis on developing a menu which customers want. Market research establishes exactly what this is. However, customers requirements change over time. What is fashionable and attractive today may be discarded tomorrow. Marketing continuously monitors customers preferences. In order to meet these changes, McDonalds has introduced new products and phased out old ones over time, and will continue to do so.
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Care is taken not to adversely affect the sales of an existing option by introducing a new option which will cannibalise its sales (trade off). McDonalds knows that sales of products on its menu will vary at different points in their life cycle as is illustrated on the graph to the right. The type of marketing undertaken and the resources invested will be different depending on the stage a product has reached. For example, the launch of a new product will typically involve television and other advertising support. At any time a company will have a portfolio of products, each in a different stage of its cycle. Some of McDonalds options are growing in popularity while arguably the Big Mac is at the maturity stage

Pricing Strategies
McDonald's main concern is to sell in volume and maintain it on long-term basis. They are charging a price, which they think is a fair value to the customer, and not on the basis of competition. McDonald's have MacIndex, and they dont increase prices even in crisis. McDonald's worldwide has the same concept of giving food of high quality at low prices. In England, the prices of their meals are the same for the last five years. Its simple Economics that when price is constant, the demand grows and when the demand grows, their input price comes down and when input price comes down, they can afford to maintain the price as the volume grows. Even the total cost may grow, but the volume is so much that the prices remain stable. So selling on cheap price has a valid justification.

Place Strategies
The first restaurant of McDonald's started its operations in Main Boulevard, Lahore on September 19, 1998 and so in the following week, the second restaurant started in North Nazimabad, Karachi on September 26, 1998. The plan is to have 20 restaurants in the country out of which seven will be in Lahore and rest in Karachi. In Lahore, the expansion plan included the branches at Jail Road, Fortress Stadium, Defense and at LDA Plaza. But why did he choose Main Boulevard, Gulberg, for opening? Ghous Akbar said, Lahore as a whole is a family city and Gulberg is a central area and Main Boulevard is the single most artery of Lahore which is accessible to people of all income levels. We also have customers who come from Faisalabad, Gujranwala, Sialkot, etc. It is three thousand square yard. So the side corners are also included. Its diagonally opposite to Home Economics College and other academic institutions also surround it. We had 30,000 customers a day in the beginning. It was a thoughtfully selected location as it is located near to offices, posh shopping centers and the population of Gulberg, itself, is a good market for fast food. On the other hand, Amin Lakhani, CEO McDonald's, Karachi too has
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strong reasons and arguments about selecting the site of North Nazimabad. It is a strong, education and family oriented middle class area. Most of the families living here have joint family system. I have not seen so many families hanging around as I did in North Nazimabad at the launch of McDonald's. The area is inhibited by several million peaceful people who want to take their children out, but there arent so many places for the purpose. We are cleaning the area and the people out there are very happy and the government functionaries are cooperative with us. McDonald's does not offer home delivery as they are very much conscious about the freshness of their burgers. Presently, Drive-Thru facility is available only at the Main Boulevard Gulberg Branch, Lahore, but both GAM and Siza groups have in their plans to have this facility in their new branches, which are going to open in future.

Promotion Strategies
McDonald's Main Boulevard Gulberg Branch started its operations on September 19, 1998, but quarter-page advertisement about its opening started appearing in different newspapers in the second last week of August. But the real strength of promotion of McDonald's was seen on its opening day when it used almost all the media to tell people that McDonald's was there with them to stay. Its opening. On that day, McDonald's also ran a grand program of twelve hours McDonald's Fun Day on FM-100. On the same day, a live road show was also conducted at the restaurant, in which the leading Pakistani singers and groups participated. This show was attended by a large number of people. Also a well-decorated float carrying musical band, hundred children and Ronald McDonald, the official
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spokesman to children, ran all the day on the roads of the city. The leaflets about the opening of the restaurant were distributed in the whole city. Major medium used by McDonald's is billboards, which are made by MMT to promote their brand. It will be a matter of pride for Lahories that they have the biggest M sign in their city (it is one of only five big M in the world). This M is imported from Singapore and is made up of Pylone. McDonald's around the world put much emphasis on Television commercials, they have produced very expensive TV commercial with such bright stars of show business and sports as Naomi Campbell and Ben Johnson. But presently in Pakistan, McDonald's is not using television medium, as they dont have sufficient information about television viewers, also the cost of television commercials is prohibitive in using this medium. The advertising agency working for McDonald's in Pakistan is Manhattan Communications (Pvt.) Ltd., which is a subsidiary of Manhattan Leo Burnnet, USA. This company handles the promotion of McDonald's in all those countries where its branches, subsidiaries or partnerships are present. As a part of its public relations policy, McDonald's has constructed a beautiful fountain at Jail Road in Lahore with a huge investment of one million rupees. Similarly the company has spent huge sum of money in renovating public places, building green belts and placing dustbins to keep environment good looking, healthy and clean. BUSINESS LEVEL STRATEGY

Differentiation

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McDonalds has Broad Target and it wants to achieve competitive strategy adopted by McDonalds is Differentiation i.e. Mc Donalds wants to a make its products unique and highly differentiated. CORPORATE LEVEL STRATEGIES Mc Donalds is horizontally integrating itself by increasing the number of outlets. At current timing there are Nine outlets operating only at Lahore and they have Twenty one outlets in all over Pakistan. They are also planning firstly to go into the Metro Areas like Islamabad and Rawalpindi and then they will look toward Multan.

Global diversification
McDonald is operating more than 121 countries which means it is following global diversification strategy. SOCIETAL LEVEL STRATEGIES

Community Service
McDonald's is firmly committed to give back to the community where we operate. We are happy to become involved because we recognize that organizations have a role to play in helping communities to work successfully. Even before we had sold a single Big Mac in Lahore, we had donated funds for the construction of Chaman School, a project for under-privileged children. The contribution we enjoy most is the experience of working together with others in the community to achieve worthwhile benefits for those who need it most.

Social Responsibility and Welfare

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McDonald's is actively involved in the welfare of the community, wherever it is operating. In Lahore, McDonald's has granted one million rupees to the Mental Hospital and gifted computers to Jinnah Foundation. As a part of RMCCS (Ronald McDonald's Children Charities), they have plans to introduce part-time jobs concept on daily basis and for summer holidays. Ronald McDonald House Charities provides homes-away-from-home for families of seriously ill children being treated at nearby hospitals. The first Ronald McDonald House was established in Philadelphia in 1974. Today, the program has nearly 200 Ronald McDonald Houses in 16 countries. More than two million families have stayed at a Ronald McDonald House with nearly 100,000 families each year.

STRUCTURAL ANALYSIS
Structural analysis helps to analyze the competitive process as well as the sources of competitive pressure. In the structural analysis, certain questions like what is the strength of these competitive pressures: What type of competition is prevailing? What will be future competitive conditions are included? Generally there are five forces/factors, which affect the competitive position in an industry and these forces are as follows:

Porter Structural Model

Competition between and among the inter organizations may be high or low, it is based on the nature of industry. In fast food industry the competition is
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concerned with the degree of rivalry among the various firms operating in this field like KFC, Pizza hut, and McDonald. In this industry the competition is not like head-to-head as it is prevailing in other industries because in this industry the market size and market share is not equal for all the fast food firms so this leads to less competition bust in certain circumstances the competition is very high like in Karachi market, there are more numbers of branches of KFC and PIZZA HUT than McDonald in Karachi so competition is really tough there. A growing size of fast food market will help to keep competition stable as each competitor will experience growth and will get its share in the market. Yet another concern is the increasing capacity of industry, with the opening of new branches in both major cities, will intensify rivalry and increase the competition. Furthermore, KFC, McDonald, and Pizza hut all are increasing their branches in other cities also like McDonald in Faisalabad. All three organizations are trying to increase their number of branches in other cities of our country.

Buyers Power
Buyers dont have power in this industry as compared to the other industries because in this industry the customers purchase normally in small quantity and they are also dispersed so they can not make a pool of them and can not get maximum value from the McDonald. On the other hand there are very minimum chances for the buyers to switch to any other brand because
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McDonald has created its image in consumer minds through differentiation and uniqueness in all of its products. Hence, the buyers dont have bargaining power.

Suppliers Power
Supplier power is high in this industry because there is lesser number of suppliers and customers can not switch to other brands because each brand has created its own image in consumer minds, thats why consumer can not switch to other brands. On the other hand, McDonald has established long term relations with its suppliers because it purchases in large volume, in this way the supplier power is reduced and McDonald purchsses its supplies on the low price basis and it avails the benefits of economies of scale. And the brand offered by the supplier is not differentiated so it makes easy for McDonald to switch to another supplier and decreases the suppliers power. The only factor that gives some power to supplier is the switching costs for McDonald's if it goes to any new supplier it will have to abolish old arrangements and develop new ones.

Threat of New Entrants

Threat of new entrants will be high in fast food industries because the entry barriers are very low in terms of low capital requirement and easy access to the raw materials. No organization has any kind of exclusive control over resources. Another factor that increases the threat of new entries is the high profit margins in the industry.

INTERNAL RESOURCE AUDIT

Human Resources

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Human resource is most important resource of any business unit wherever in the world. The strength of any organization is not the machine, equipment or its cash flows; rather these are employees that make an organization great and competitive. More than one and a half million people work for McDonald's worldwide. By the year 2003, McDonald's will employ two and a half million people. Presently all the staff of Lahore branch is local and currently 500 people are employed and by the end of this years, Ghous Akbar is planning to employ 1000 people and by the next year, to employ 2,500 people. McDonald's recognizes that employee satisfaction is a critical component in its goal of achieving 100 percent customer satisfaction. Its employees are offered world-class, development. When McDonald's opens restaurants in a new country, the jobs it creates stimulate the national economy and broaden the local tax base. Besides the new jobs directly linked with McDonald's restaurants, the company indirectly supports other segments of a countrys workforce by hiring local construction firms and purchasing from local suppliers, local farmers and local distributors. award-winning training and the opportunity for career

Hiring Personnel
There is no criterion as such for the selection of employees, what is important is integrity, motivation and some educational qualifications from Matric. To PhD. In the workforce, qualities, which are sought, are anatomy, motivation and ability to work late hours. While for manager the characteristics required are leadership, energy and attraction.

Training
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All McDonald's 29,000 outlets serve as training centers where day-to-day coaching and shoulder-to-shoulder interaction between managers and crew are emphasized. Training begins with one-on-one instruction before a crewperson cooks the first French fries and for new entrants to the workforce, the company offers an important foundation: Teaching interpersonal and organization skills. Crewmembers can also learn the importance of teamwork. Discipline and responsibility. Aspiring restaurant managers and franchisees progress through a development program that includes a series of classes in operations and management training, the program culminates in advanced training at one of six management-training centers in the United States, Germany, England, Japan, Australia and Brazil where instructions are given in more than 25 languages and after the training; students are given Bachelors Degree in Hamburger logy.

Motivation
All the staff and employees at McDonald's are given a handsome salary package and attractive incentives in accordance with the level at which the person is working. Thats why employees at McDonalds Lahore are more satisfied and motivated.

Promotion

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The McDonald's management looks not only at financial performance on monthly basis but also at service performance. Employees are given different sales targets, and their performance is evaluated on the basis that whether or not they achieve these targets.

Financial Resources
In October of 1985, McDonald's became one of thirty blue-chip companies included in the Dow Jones Industrial Average. McDonald's was added to the Tokyo Stock Exchange in 1986 and set a new record volume 615,750 shares for opening day trading of a non-Japanese company. McDonald's stock is also listed on the Frankfurt, Chicago, Munich, Paris and Swiss stock exchanges. McDonald's in Pakistan is concerned, now information is available about its financing activities. McDonald's in Pakistan is working with two foreign banks namely SG and ABN Amro Bank. These two banks are taking care of any financial activity for McDonald's inside and outside the country and also provide short-term loans to the company.

Physical Resources
The physical resources of the company include the main Head Office building at Lahore and Karachi and three restaurants located at Main Boulevard, Gulberg, LDA Plaza and North Nazimabad, with an average sitting capacity of 250 persons. These restaurants are equipped with the latest cooking and storing equipment. Two restaurants have the facility of Play Place for children and one has Drive-Thru facility.
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Intangible Resources
McDonald's is worlds third most recognized brand. It is a big asset of the organization. It not only pulls customers but also brings goodwill from suppliers, government officials, general public and creditors.

SWOT Analysis

On the basis of environmental analysis of McDonald's, the structural analysis of fast food industry, and the assessment of internal resources of the company, following strengths, weaknesses, opportunities and threats are there for McDonald's:

Strengths
McDonalds in Pakistan is inherited by a lot of strengths which includes:

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A strong image well reputes organization. No compromise on quality of products. Self-service criteria save a lot of cost. Different incentives and packages for children. Quality raw material (ingredients) in all the products. McDonald's strong financial position, growing cash flow, solid

international presence makes McDonald's one of the consumer products with a high growth rate. Working environment in McDonald's is very friendly and all the

employees of the company are treated as members of McDonald's family. McDonald's has menu, which has more breadth and depth than any

other fast food franchisee in Pakistan. Well documented fair and strict criteria for recruitment of

employees. Updated training programs of employees. Flexible workforce, which can work on more than one jobs at a

time. Skied and motivated workforce. Sufficient funds to invest in marketing efforts. Excellent relations between management employees.
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Secured jobs. Care for the thoughts and moods of customers. Celebrations of main events e.g. independence day etc.

Weaknesses
Along with a lot of strengths there are some weaknesses also by which McDonalds suffers: Management of McDonalds does not consider other fast-food

chains or outlets in Lahore as its competitor e.g. KFC Pizza Hut & local burger market which are their competitors in real sense. With the passage of time the expenses of McDonalds are

increasing. The reason is the big part of fixed costs e.g. fixed overheads & fixed salaries of all the employees, which increases directly with the decrease in production. McDonalds main target market is a child. But McDonalds should

also consider the fact that birth rate in Pakistan has been decreased from about 2.3% to 2. % p. a. In other words the population of children is decreasing gradually so McDonalds should also attract the people who belong to aged class. Dominant class in Pakistan is middle- income class for which it is

difficult to afford the menu items of McDonalds or at least middleclass cannot enjoy McDonalds product more frequently. McDonald's has product portfolio (menu) of greater width and

depth; this broad array of products allows attacks from niche players.
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R e v e n u e s & P ro fita b ility : M c D o n a ld 's C o rp o ra tio n

2 5 00 0 .00 US Millions 2 0 00 0 .00 1 5 00 0 .00 1 0 00 0 .00 5 00 0 .0 0 0.0 0 20 0 42 0 052 0 0 62 00 72 0 0 8 Ye a r 2 0.0 0% 1 5.0 0% 1 0.0 0% 5 .0 0 % 0 .0 0 % Profit Margin (%) R e ven ue s N e t In c o m e P ro fit M a rgin

Opportunities
The marvelous growth in # of stores outlets all over the world in the result of great opportunities granted to McDonalds. As for as McDonalds-Lahore is concerned it has following opportunities: McDonalds can get a big market share by expanding its business to the other cities included in its territory e.g Peshawar, Mardan. Gujranwala, Multan, Sargodha, Sialkot etc. Because a big portion of there target market resides within these areas. McDonalds is the single international quality- burger chain operating in Pakistan, so it has more profit potential in Pakistan uptil now. by Increasing consciousness about low fatty foods which are being provided McDonald's (using vegetable oil). Increasing disposable income in upper and upper-middle social classes of urban areas, which are target market of McDonald's.By strengthening the marketing efforts, company can have more sales as compared to existing sales.
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Threats
McDonalds people say that there is no threat for them and it can also be a big threat for them. Threat of new entrants is also working there because industry is growing at a rapid speed and a lot of attraction is there for new- comers. Entry barriers are also low in Pakistan so this threat really works for McDonalds. Threat of substitutes is also working there for McDonalds. Substitutes for products of McDonalds KFC, Pizza Hut products. A big domestic market can also break at least a little market share of McDonalds. Double digit inflation prevailing in the country, which in turn increases the cost of production. Continuous devaluation of rupee that has increased the import bill of raw materials. Imposition of heavy taxes on fast food industry including Sales Tax and Entertainment Tax. Complex rules and regulations imposed by government.

COMPETITION

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Top Burger King 14% Wendys 13%

Other strong competitors Sonic 6% Jack in the Box 4% Hardees 3%

White Castle 1%

COMPETITORS

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As the McDonald has captured very large market in terms of fast food items it is due to its large number of franchisees and better quality products and services to its potential customers. At the same moment the competitors are also increasing their operations in either way locally or joint venture with the foreign and local investors. Local investors are also putting pressure on McDonald and they are also increasing their branches by offering low cost products to the customers and thats why they are attracting the large number of customers and it will lead to high competition in the market and every one will be competing on the low cost of offering. In this dynamic and uncertain environment McDonald is sustaining its operations smoothly and effectively.

MANAGEMENT IN MCDONALDS
Ray Kroc
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The quality of a leader is reflected in the standards they set for themselves We take the hamburger business more seriously than anyone else You're only as good as the people you hire If there is time to lean there is time to clean Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile. And by doing this we are our customers' favorite place and way to eat."

FINANCIAL HEALTH

We looked at 4 major aspects of financial health of McDonalds and

their competitors Liquidity Leverage Rates of Return Stock Market Ratios We also took Altmans Z-Score into account to see how healthy these

companies were during the recession.

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Liquidity
The ability to meet current obligations We took into account the Current Ratio and the Quick Ratio. Current Ratio = Current Assets/Current Liabilities. Quick Ratio = (cash + marketable securities + net receivables) / Current Liabilities

Leverage
The ratios between debt and equity which provides information about bankruptcy. We will look at the Debt-to Asset Ratio and the Debt-to-Equity
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Ratio
Debt-to-Asset = Total Liabilities/Total Assets Debt-to-Equity = Long-term Debt/Shareholders

Return on Assets
This shows that if MacDonalds net income was generated from their total value of assets, the return would be right around 15 cents per dollar. It is also a great indicator of how efficient MacDonalds is at using their assets to generate income.

On the other side however, Wendys would show a lose of 10 cents on the dollar if their net income is based off their total value of assets. Sonic would have a gain of 10 cents on the dollar while both Burger King and Jack in the Box would have 7 cents gain on the dollar.

Return on Equity
The amount of net income returned as a percentage of shareholders equity.

Return on equity measures a corporation's profitability by showing how such profit a company makes with the money shareholders have invested.

ROE is expressed as a percentage and calculated by dividing net income by shareholders' equity.

ROE is useful for comparing the profitability of a company to that of other firms in the same industry.

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MCDONALDS RATIO

McDonalds has a current P/E ratio of 15.1.

However, the

companys P/E ratio for fiscal year end 2008 was 28.0.

either the stock is overvalued or the company's earnings have increased since the last earnings figure was published

Sonic Co. P/E Ratio

ratio for fiscal year 2008 was 22.5 An end of year Sonic

Corporation has a current P/E ratio of 12.2. The companys P/E

P/E ratio between 17-25 will usually indicate a growth stock, with earnings expected to increase substantially in the near future

Earnings Per Share (EPS)

Earnings per share are the earnings which are returned on the Initial investment amount. This is calculated by: EPS = (net income - preferred dividends) /common shares outstanding

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Fast Food Industrys EPS

Company

Date

Actual EPS

Last AVG Estimate

McDonalds

Dec. 2008

3.76

3.63

Sonic

Aug. 2008

0.97

0.98

Burger King

Jun. 2008

1.38

1.35

Wendys/Arbys

Dec. 2008

-0.75

0.13

Jack in the Box

Sep. 2008

2.01

2.00

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What Does This Mean?

McDonalds has reported an average annual Increase in its EPS since 1998 This makes McDonalds more appealing to an investor because the basis of the EPS ratio is the earnings which are returned on the initial investment

GET THE KIDS AND THE PARENTS WILL FOLLOW

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PROBLEMS

Customer ServiceMcDonalds is currently ranked last amongst its top competitors in the FFHR subsector. #1 Burger King #2 Wendys #3 McDonalds This may not sound bad at first glance, but when you look at the fact that these three competitors hold 73% of the FFHR market, it puts it into perspective.

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RECOMMENDED STRATEGIES FOR McDONALS

Market Development
As we know there is increasing trend in fast food industry and people are more conscious about their health. Similarly McDonald international should open as many branches in other cities of Pakistan like Multan, Gujranwala, Hyderabad, and other cities like these. Because this step will not only reduce their business risk but also improvement in their profitability. In the said cities there is a lot of potential for the fresh investment in the fast food industry. So it should develop the market for its products, only in this way it can maintain its competitive advantage over its competitors like KFC and Pizza Hut.

Diversification
Currently McDonald is importing Potatoes from abroad, this makes the product cost so high, so it becomes very difficult for it to capture the middle-income people. By diversification we suggest that McDonald should go for backward integration because Pakistan is an agricultural country and it also exports potatoes to other countries of the world. By growing potatoes in Pakistan McDonalds can maintain the same quality at lower cost of operations. Similarly McDonalds should go for its own cattle farm in Pakistan so it will reduce its input cost and it will lead to lower market price of its products as compared to its competitors. By this type of diversification McDonalds can also save its time and other energies that can be better utilized in customer service. And can improve the quality because if the inputs are fresh, they can have more quality products. By doing this backward integration McDonalds can avoid the problems like Govt. heavy duties on inputs imported from other countries and similarly it can avoid the problems of continuous devaluation and exchange rate etc.
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Product Development
The natives of Pakistan are more concerned with the taste of the products rather than the other things, so McDonalds should consider the changes in the customer mind about its products and services. So it is highly essential for the McDonald Pakistan to think about it and serve as the changes are taking place in the customer minds. Because the near future period will be a different from today, so it is crucial for McDonalds, it should introduce all the time new products that make it differentiated and it must sustain it so that no other competitor can copy their products and there should be lesser chances of product imitation. If product imitation is possible then it should keep on introducing new products. For this it may altogether change the whole product and can bring a new product or sometimes any major modification in the existing products. So we recommend that McDonald should apply the Product Development at all times whenever the need arises

Market Development
In spite of making a cluster in a single city, McDonald's should open new restaurants in other cities too. There is potential in other cities like Hyderabad, Rawalpindi and Islamabad. It will be of importance to mention that KFC is planning to open its branches in Hyderabad and Islamabad. It will add to the image of being Nationwide company as well it will create more customers. This will eventually reduce the risk, which in other case lies in creating cluster in a single city.

Strategic Alliances

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McDonalds international should go fro strategic alliances with other firms operating in all other countries, in this way it should develop alliances with the petrol pumps owners. It will enable the customers to get their cars filled with petrol along with the purchase of lunch boxes and other lunching and dinner facilities to the community. We think that it should develop alliances with the petrol pumps on our Motor Way. As McDonalds international is doing this in other countries. Likewise the other McDonalds franchisees in Pakistan must do this in order to create extra uniqueness

CURRENT POSITION OF MC DONALD'S

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McDonaldsprofit declined in the second consecutive quarter, the first time in more than three years that the worlds largest restaurant chain experienced such a fall. This turn of events for McDonalds, once praised for its ability to grow in times and in places where others could not, reflects growing competition in the U.S. fast-food market and the poor health of the consumer worldwide.

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FUTURE PLAN
Recently, McDonalds was the target of a San Francisco City law which required the fast food companies to meet certain nutritional standards before they could be promoted with free toys. The U.S. Congress is also contemplating passing a law that would limit the classes of antibiotics used in animal agriculture. In fact, a recent study revealed thata whopping 75% of Americans want legislation passed to restrict the use of antibiotics at animal farms. With increased healthcare under the Federal government now, it wouldnt be surprising to see new laws aimed at fast food companies which are viewed as promoting obesity and related diseases. At the same time, companies meeting certain nutritional standards might get tax benefits. The last few years have also seen consumers showing a predilection for healthier products. All of these steps might force the company to change its basic structure. Structural changes can be potentially damaging for the company as it include introducing new, healthier products which may not be as popular or profitable. Moreover as McDonalds expands its food selection domestically and looks to expand internationally, its supply chain will become more difficult to manage and could be prone to shocks such as cost inflation that may be hard to offset among value oriented customers domestically and price sensitive developing markets internationally.

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CONCLUSION
McDonald's is one of the largest fast food companies in the world. They continue their path for success by keeping their consumers in mind regarding their product selection as well as their prices. They encourage their employees to do a good job, usually promotes from within, and offers several scholarships to encourage education. Though McDonald's is a centralized, "wait and see" company they find ways to use technological products that will increase their productivity, service, and sales, everywhere from using the Nintendo DS to train staff to using New POS touch screen registers. McDonald's will certainly be around for plenty more years to come.

BIBLIOGRAPHY

Love, John . McDonalds: Behind the Golden Arches. Boston: Bantam, 1995.
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" McDonald's History - About McDonald's ." About McDonald's. http://www.aboutmcdonalds.com/mcd/our_company/mcd_history.html (accessed April 1, 2011).

Kroc, Ray, and Robert Anderson. Grinding it out: the making of McDonald's. Chicago: H. Regnery, 1977.

Watson, James L. Golden Arches East: McDonald's in East Asia. Stanford, CA: Stanford UP, 2006. Print.

"About Us" Slow Food International. Accessed March 26, 2011. Http://slowfood.com/international/1/about-us

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