McDonalds

History
1948 McDonald brothers open the first McDonalds and names Speedee as their company image. 1954 Ray Krock, a multimixer salesman becomes the franchising agent. 1955- Ray Kroc opens the Des Plaines restaurant. The 1st days revenues - $366.12

1957 Ray Kroc hands out free hamburgers to Salvation Army guests
1958 Sales grow 151% 1961 Ray Kroc buyout the McDonalds brothers for $2.7 million 1963 Ronald McDonald is introduced 1965 - McDonalds goes public with the companys first offering on the stock exchange for $22.50 per share. First television commercial is aired

Cont.
1966 McDonalds stocks split for the first time.
1967 - Big Mac invented McDonalds in Canada and Puerto Rico open

1971 - Makadonaldo (Japan)

1973 - Egg McMuffin invented 1974 - Ronald McDonald House opened 1979 - Happy Meals introduced 1979-present - Continued growth

Problems
Customer Service McDonalds 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.

cont.
Health Issues

SWOT Analysis - Strengths

Worldwide Brand Recognition

41% of all fast-food visits are for hamburgers

McDonalds has 44% of US fast-food hamburger business

Over 70% of the restaurants are independently owned

Ranked number one in Fortune magazines 2008 list of most admired food service companies. Overseas market Over 31,000 restaurants in over 120 countries.

Strengths (cont)
Quality measures through supply chain management Encourage new ideas from within Big Mac Egg McMuffin Large available amounts of capital for future restaurants due to holding a limited number of corporate owned restaurants. Economies of scale

SWOT Analysis - Weaknesses

Weak product development Poor relationships with franchisees Fluctuations in profit (which has been improved in 2008 after the franchising of many corporate owned restaurants)
US Millions

Revenues & Profitability: McDonald's Corporation

25000.00 20000.00 15000.00 10000.00 5000.00 0.00 2004 2005 2006 2007 2008 Year 10.00% 5.00% 0.00% 20.00% 15.00%

Profit Margin (%)

Revenues Net Income Profit Margin

SWOT Analysis - Opportunities

International expansion through continued franchise opportunities Only serving 1% of the worlds population Growth in the beverage industry (by 2011 $71.4 billion in sales with 70.8% being coffee drinks)

Introduction of local offerings (i.e. Tech Burger with special condiments and toppings)

SWOT Analysis - Threats

Mature industry Strength of competition More health-conscious consumers

Changing demographics
Fluctuation of foreign exchange rates Increasing commodity and fuel prices

Competition
Top Burger King 14% Wendys 13% Other strong competitors Sonic 6% Jack in the Box 4% Hardees 3% White Castle 1%

Marketing Techniques
Product Image Customers associate with the brand Domestic Global

cont.
Original symbol Speedee Golden Arches Building structure and colors Local advertising

Slogans
Your kind of place (1967) You deserve a break today (1971) We do it all for you (1965) Have you had your break today (1995) Im lovin it (2003)

Marketing Mix
Five Ps Marketing and Communications Responsibility McSpirit Nights Commercials Atmosphere

Management In McDonalds
Ray Kroc
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

 Created by Fred Turner and Ray Kroc in 1961 All levels of managers in the McDonalds family go through training at this facility.
At McDonalds, our training mission is to be the best

McDonalds Center of Training Excellence

Hamburger University

talent developer of people with the most committed individuals to Quality, Service, Cleanliness and Value (QSC&V) in the world. Our strong commitment to the training and development of our people has resulted in many firsts and honors.

Cont
Hamburger University has given emphasis to consistent restaurant operations procedures, service, quality and cleanliness. Because of its success H.U. has become the global center of excellence for McDonalds operations training and leadership development. With this training it creates unity for the CEO to the local store manager, they all have the same goals in mind which is.

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."

Get the kidsand the parents will follow.

Past Strategies
Product Development
Hits: Fries, Happy Meal, Big Mac, Egg McMuffin, Salads, Apple Slices, Yogurt Parfaits, & Promotions Misses: McPizza, Fajita, Carrot Sticks, McLean, and the Arch Deluxe

cont
Market Development
Hit: International growth Miss: Over-expansion in US
Alternative locations

Forward Integration
Distribution through franchisees with control over store presentation, menu items

New Strategies
Product Development: Focus on core business
Quality and taste issues
Food delivery methods

Family Value Meal

Thursdays $1.59 Happy Meal

cont
Redevelop Franchisee Relationships

Market Penetration and Development

Continue International expansion

Cost Reductions
Home office cost reductions Franchising corporate owned restaurants

Recommendations
Improvements in: Customer Service
Focus on team, not individuals Reward the behavior that you want

Training/Compensation
Training in customer service, speed and accuracy Increase pay to attract more qualified applicants

Technology
Improvement of order verification system

Continued Growth of International Market

Thank you