29690896 mcdonald strategic mgmt project

7/28/2019 29690896 Mcdonald Strategic Mgmt Project

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According to a McDonald's corporate press release:

"i'm lovin' it is a key part of McDonald's business strategy to

connect with customers in highly relevant, culturally significant

ways around the world."

Translation: the focus groups they used happen to listen to rap

and hip-hop. In an effort to show that McDonald's is "down" with

their customers, they bought off a few rap artists to pose with this

goofy white guy and their dumbass mascot:


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Introduction

McDonald as being ninth most valuable brand in the world

which has replaced the US army as the Nations largest job

training organization &Controls the market share of more than 3

food chains taken together in America started in 1940.

McDonald's Corporation (MCD) is the world's largest chain of fast

food restaurants, serving nearly 47 million customers daily.

McDonald's primarily sells hamburgers, cheeseburgers, chicken

products, French fries, breakfast items, soft drinks, milkshakes

and desserts. More recently, it has begun to offer salads, wraps

and fruit. Many McDonald's restaurants have included a

playground for children and advertising geared toward children,

and some have been redesigned in a more 'natural' style, with a

particular emphasis on comfort: introducing lounge areas and

fireplaces, and eliminating hard plastic chairs and tables.

Company has also expanded the McDonald's menu in recent

decades to include alternative meal options like salads and snack

wraps in order to capitalize on growing consumer interest in

health and wellness.

Each McDonald's restaurant is operated by a franchisee, an

affiliate, or the corporation itself. The corporations' revenues

come from the rent, royalties and fees paid by the franchisees, as

well as sales in company operated restaurants. McDonald's

revenues grew 27% over the three years ending in 2007 to $22.8

billion, and 9% growth in operating income to $3.9 billion


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McDonaldss success is the result of superior products, high

standards of performance, distinctive competitive strategies and

the high integrity of our people. McDonalds is continuing to

expand and introduce new alternative beverages in the market.

Approximately 85% of McDonalds restaurant businesses world-

wide are owned and operated by franchisees .All franchisees are

independent, full-time operators. McDonalds was named

Entrepreneurs Number-one franchise for 1997

McDonalds corp. is currently one of the most successful

consumer products company in the world with annual revenues

exceeding $23 million and has more than 1.6 million employees.

McDonalds products are recognized and are most respected all

around the globe. Currently, its divisions operate in all over the

world in beverages, snack foods, and restaurants. Thecorporations increasing success has been based on high

standards of performance, marketing strategies, competitiveness,

determination, commitment, and the personal and professional

integrity of their people, products and business practices.

McDonalds believes their success depends upon the quality

and value of their products by providing a safe, whole some,

economically efficient and a healthy environment for their

customers; and by providing a fair return to their investors while

maintaining the highest standards of integrity.


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McDonald's - A Global Phenomenon

McDonald's opened its doors in India in October 1996. Ever

since then, our family restaurants in Mumbai, Delhi, Pune,

Ahmedabad, Vadodara, Ludhiana, Jaipur, Noida Faridabad,

Doraha, Manesar and Gurgaon have proceeded to demonstrate,

much to the delight of all our customers, what the McDonald's

experience is all about. Our first restaurant opened on 15th April

1955 in Des Plaines, Illinois, U.S.A. Almost 50 years down the line,

we are the world's largest food service system with more than

30,000 restaurants in 100 countries, serving more than 46 million

customers every day.

Locally Owned


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McDonalds in India is a 50-50 joint venture partnership

between McDonalds Corporation [USA] and two Indian

businessmen. Amit Jatias company Hardcastle Restaurants Pvt.

Ltd. owns and operates McDonald's restaurants in Western India.

While Connaught Plaza Restaurants Pvt. Ltd headed by Vikram

Bakshi owns and operates the Northern operations.

Amit Jatia and Vikram Bakshi are like-minded visionaries

who share McDonald's complete commitment to Quality, Service,

Cleanliness and Value (QSC&V). Having signed their joint-ventureagreements with McDonald's in April 1995, they trained

extensively, along with their Indian management team, in

McDonald's restaurants in Indonesia and the U.S.A. before

opening the first McDonalds restaurant in India.

History


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The McDonald's History - 1965 to 1973

McDonald's Comes To Wall StreetIn 1965 McDonald's went public with the company's

first offering on the stock exchange. A hundred

shares of stock costing $2,250 dollars that day

would have multiplied into 74,360 shares today,

worth approximately $3.3 million on December 31,

2006. In 1985 McDonald's was added to the 30-

company Dow Jones Industrial Average.

A Big Idea Called "Big Mac""Introduced systemwide in 1968, the Big Mac was

the brainchild of Jim Delligatti, one of Ray Kroc's

earliest franchisees, who by the late 1960s

operated a dozen stores in Pittsburgh."

The Egg McMuffinIntroduced in 1973, the Egg McMuffin was

developed by owner operator Herb Peterson.


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The First Ronald McDonald House in Philadelphia, PAIn 1974 Fred Hill of the Philadelphia Eagles teamed

up with McDonald's to create Ronald McDonald

House. Here the families of critically ill children

have a place to call home while they're away from

home as the young patients undergo treatment for

their conditions.

The Happy MealSince 1979 the Happy Meal has been making kids

visits that much more special. Clubs the world over

collect Happy Meals toys & boxes.

The Future Begins NowMcDonald's Express for a world that can't slow

down! McDonald's is popping up in more non-

traditional locations like Amoco & Chevron

stations, with full menu offerings & dining roomseating, just like you'll find in a traditional

McDonald's.

Another slide

History ofMcDonalds.


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McDonald's has come a long way ever since its beginning

in 1955. Here are a few milestones of the McDonald's

journey...

1955 Ray Kroc opens his first restaurant in Des Plaines, Illinois

and the McDonald's Corporation is created.

1957 Quality, Service, Cleanliness and Value (QSC& V) becomes

the company motto.

1959The 100th McDonald's opens in Chicago.

1961 Hamburger University opens in Elk Grove, near Chicago.

1963 One billion hamburgers sold. Ronald McDonald makes his

debut.

1964 Filet-O-Fish sandwich is introduced.

1965 McDonald's Corporation goes public.

1967The first restaurants outside of the USA open in Canada and

Puerto Rico.

1968The Big Mac is introduced. The 1,000th restaurant opens in

Des Plaines, Illinois.


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1972 A new McDonald's restaurant opens every day. The Quarter

Pounder is introduced.

1973 Egg McMuffin is introduced.

1974The first Ronald McDonald House

1983 Chicken McNuggets is introduced. New Hamburger

University campus opens in Oak Brook, Illinois. Set in 80 wooded

acres. Training is provided for every level of McDonald's

management worldwide.

1984 50 billionth hamburger sold. Ronald McDonald Children'sCharities is founded in Ray Krocs memory to raise funds in

support of child welfare.

1989 McDonald's is listed on the Frankfurt, Munich, Paris and

Tokyo stock exchanges.

1990 McDonald's opens in Pushkin Square and Gorky Street,

Moscow.

1993The first McDonald's at sea opens aboard the Silja Europa,

the world's largest ferry sailing between Stockholm and Helsinki.

1994 Restaurants open in Bahrain, Bulgaria, Egypt, Kuwait,

Latvia, Oman, New Caledonia, Trinidad and United Arab Emirates,

bringing the opens in Philadelphia. The Happy Meal is launched.

total to over 15,000 in 79 countries on 6 continents.

1996 McDonald's opens in India the 95th country.

Background


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Founded: 1955 Franchising since: 1955

Ray Kroc, a milkshake mixer salesman, ventured to

California in 1954 to visit McDonald's hamburger stand, where he

heard they were running eight mixers at once. Kroc was

impressed by how rapidly customers were served and, seeing an

opportunity to sell many more milkshake machines, encouraged

brothers Dick and Mac McDonald to open a chain of their

restaurants. Kroc became their business partner and opened the

first McDonald's in Des Plaines, Illinois in 1955. McDonald's and

the Golden Arches have since become an internationally-

recognized symbol of quick-service hamburgers, fries, chicken,

breakfast items, salads and milkshakes.

Franchisor is a publicly-held company with 885 employee(s); 20

employee(s) in franchise department.

Franchise Units

YearU.S.

Franchises

Canadian

Franchises

Foreign

Franchises

Company

Owned

2009 12,221 1,070 12,510 6,357

2008 12,136 1,046 12,283 6,502

2007 11,674 927 10,498 8,078

2006 11,608 890 10,056 8,269

Products of McDonalds


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Beverages

Cold-Coffee Ice-Tea

Hot Serves McShakes


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Coca-Cola Frozen Desserts


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Flavour Burst Floats


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Non- Veg Menu

Filet-O-Fish Chicken Maharaja Mac


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Chicken McCurry Pan McChicken


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Chicken McGrill Chicken Mexican Wrap

Veg Menu


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Crispy Chinese McALOO Tikki


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McCurry Pan McVeggie


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Pizza McPuff Paneer Salsa Wrap

Services of McDonalds


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McDonald's - More Than 15,000 Wi-Fi Enabled Restaurants

Around the Globe!

We believe in bringing you innovative and convenient

services that enhance your McDonald's restaurant visit, and Wi-Fi

is a perfect example.

As McDonald's continues to deliver fast and friendly food

service at more than 30,000 convenient locations around the

world. To access the Wi-Fi services in a restaurant, you need a Wi-Fi enabled device, such as a laptop or PDA.

Our local service providers provide high-quality Wi-Fi service

through several convenient connection options: on-line credit card

payment, subscriptions, prepaid cards, or (sometimes)

promotional coupons. If you have questions or need technical

help, the Wi-Fi provider's customer support number should be

handy in the restaurant.


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Currently there are no roaming capabilities between different

countries, neither for customers nor McDonald's employees. You

will have to connect separately with the respective Wi-Fi service

provider.

Enjoy surfing and working in your local McDonald's!

Connectivity and/or usage fees may apply and be required for Wi-

Fi services. Access details, fees and availability subject to change

without notice.


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Management structure

Managing Director

Head of Marketing Director of Finance Human Resource head

Accounts Manager

Senior marketing executive Finance manager Employees

Marketing executive Brand Manage Research & Development officer

Assistant Brand Manager

Customer service manager Product Development

Sales manager Market research Team Compensation officer

Branch manager Recruitment & Selection

Training & Development

Branch employees


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Levels of strategic Management

The products and services mentioned above reflect three

types of major strategies employed by the organization at various

levels. Namely they are:

Corporate strategy

Corporate level strategy fundamentally is concerned with

the selection of businesses in which the company should compete

and with the development and coordination of that portfolio of

businesses.

McDonald's is engaged in. Mc Donalds only deals in the

restaurant business, so its corporate strategy is a single business

unit strategy, likely of growth. To make this clearer, GE's

corporate strategy is of interrelating business units. Consumer

electrics, submarines, locomotives, light bulbs etc share some

synergies and each is a separate business unit.


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Corporate level strategy is concerned with:

Reach - defining the issues that are corporate

responsibilities; these might include identifying the overall

goals of the corporation, the types of businesses in which the

corporation should be involved, and the way in which

businesses will be integrated and managed.

Competitive Contact - defining where in the corporation

competition is to be localized. Take the case of insurance: In

the mid-1990's, Aetna as a corporation was clearly identified

with its commercial and property casualty insuranceproducts. The conglomerate Textron was not. For Textron,

competition in the insurance markets took place specifically

at the business unit level, through its subsidiary, Paul

Revere. (Textron divested itself of The Paul Revere

Corporation in 1997.)

Managing Activities and Business Interrelationships -

Corporate strategy seeks to develop synergies by sharing

and coordinating staff and other resources across business

units, investing financial resources across business units,

and using business units to complement other corporate

business activities. Igor Ansoff introduced the concept of

synergy to corporate strategy.

Management Practices - Corporations decide how

business units are to be governed: through direct corporate

intervention (centralization) or through more or less


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autonomous government (decentralization) that relies on

persuasion and rewards.

Corporations are responsible for creating value through their

businesses. They do so by managing their portfolio of businesses,

ensuring that the businesses are successful over the long-term,

developing business units, and sometimes ensuring that each

business is compatible with others in the portfolio.

Business strategy:

A strategic business unit may be a division, product line, or

other profit center that can be planned independently from the

other business units of the firm.

At the business unit level, the strategic issues are less about

the coordination of operating units and more about developing

and sustaining a competitive advantage for the goods and

services that are produced.

This might be low-cost strategy, differentiation, or focus

strategies. McDonalds has pursued two strategies since 2003. To

keep up with rapidly changing consumer preferences,

demographics, and spending patterns, McDonald's has introduced

new items (Premium Chicken sandwiches and the Angus Beef

Burger) and campaigns to create more healthy foods (Premium

Salads). The strategy reflects the philosophy that novelty, as

opposed to loyalty to traditional products, is the key determinant

of sales in the fast food industry.


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Functional Level Strategy

The functional level of the organization is the level of the

operating divisions and departments. The strategic issues at the

functional level are related to business processes and the value

chain. Functional level strategies in marketing, finance,

operations, human resources, and R&D involve the development

and coordination of resources through which business unit level

strategies can be executed efficiently and effectively.

Functional units of an organization are involved in higher

level strategies by providing input into the business unit level and

corporate level strategy, such as providing information on

resources and capabilities on which the higher level strategies

can be based. Once the higher-level strategy is developed, the

functional units translate it into discrete action-plans that each

department or division must accomplish for the strategy to

succeed.


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KEY STEPS TOWARDS STRATEGIC PLANNING

The preparation of a strategic plan is a multi step process

covering Vision, Mission, Objectives, Values, Goals, Strategies and

Programmes.

Vision

Mission

Objectives

Goals

Value

Strategies

Programmes


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Vision Statement

"McDonald's vision is to be the world's best quick service

restaurant experience. Being the best means providing

outstanding quality, service, cleanliness, & value, so that we

make every customer in every restaurant smile."

Mision statement

Be the best employer for our people in each communityaround the world

Deliver operational excellence to our customers in each of

our restaurants;

Achieve enduring profitable growth by expanding the brand

and leveraging the strengths of the McDonald's system

through innovation and technology.

Objectives

In a business when a number of brains are working together,

there are always different views on a certain aspect, therefore


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aims and objectives are used to help them focus on one view on

the aspect which either seems right or is right.

Aims & Objectives help an organisation grow; it is used as a

guideline, a plan & goal. What the organisation is heading for &

how it is heading there & where it is heading? All the answers for

these questions are answered by Aims & Objectives.

The Main Objectives of a Business are:

Sales Sales revenue is the total amount of money a company

has earned by providing their service or selling their stock.

Growth An increase in the Business capacity to produce more

stock or provide better or greater service.

Profit Residual value gained from business operations after

cutting out expenses such as stock cost etc.

Customer Satisfaction Providing service to customers to their

satisfaction level such as hygienically clean place or high quality

food.

S M A R T

Before a business can set objectives it is important that they

follow the SMART criteria. Specific Detailed and Exact

Measurable Targets should be measurable

Achievable Something that can be achieved


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Realistic Targets must be realistic, so that they can be met

Time Specific That can be achieved by a deadline

Aims & Objectives of McDonalds its what I eat andwhat I doIm lovin it

McDonalds objectives are to reverse the decline of sales, to

continue staying ahead of the competition in the fast food

industry and to find new strategies that would help the restaurant

successfully compete in the a fiercely competitive market.

Goal

McDonalds goal in laid our in their second Worldwide

Corporate Responsibility Report is to communicate our progress

and direction related to the most relevant and material corporate

responsibility - related aspects of their business. To that end, the

report is structured according to key elements of our businessstrategy - the Plan to Win.

The Plan is a global alignment around five drivers of

exceptional customer experience, all beginning with the letter P.

They have focused on three of the five Ps: Products, People and

Place. (The remaining two are Price and Promotion.)


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Values

We place the customer experience at the core of all we do:

Our customers are the reason for our existence. We

demonstrate our appreciation by providing them with high

quality food and superior service, in a clean, welcoming

environment, at a great value. Our goal is QSC&V for each &

every customer, each & every time.

We are committed to our people

We provide opportunity, nurture talent, develop

leaders and reward achievement. We believe that a team of

well-trained individuals with diverse backgrounds and

experiences, working together in an environment that fostersrespect and drives high levels of engagement, is essential to

our continued success.

We believe in the McDonalds System

McDonalds business model, depicted by the three-

legged stool of owner/operators, suppliers, and companyemployees, is our foundation, and the balance of interests

among the three groups is key.


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We operate our business ethically

Sound ethics is good business. At McDonalds, we hold

ourselves and conduct our business to high standards of

fairness, honesty, and integrity. We are individually

accountable and collectively responsible.

We give back to our communities

We take seriously the responsibilities that come with

being a leader. We help our customers build better

communities, support Ronald McDonald House Charities, and

leverage our size, scope and resources to help make the

world a better place.

We grow our business profitably

McDonalds is a publicly traded company. As such, we

work to provide sustained profitable growth for our

shareholders. This requires a continuing focus on our

customers and the health of our system.

We strive continually to improve


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We are a learning organization that aims to anticipate

and respond to changing customer, employee and system

needs through constant evolution and innovation.

Strategy

"McDonalds possesses a highly visible and popular

brand image around the world. The firm has grown to become one

of the most popular food brand names in the world, with

continuous increases in exposure in new markets, such as Asia

and Europe, amongst others.

Although McDonalds has been in existence in North

America for many decades, the increasing popularity in new

markets has positioned the firm for continued growth in market

share and customer buying power. The McDonalds strategy map

encompasses four key perspectives:

1) Financial;

2) Customer;

3) Internal Process;

4) Learning.

These perspectives have evolved over time into a well-

defined vision for the corporation, which is to become the most

positive dining experience in the world ("McDonalds")."


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Key steps towards business strategies

A scan of the internal and external environments forms an

important part of the strategic planning process. Environmental

factors internally affecting the firm can be classified as Strengths

or Weaknesses and those externally affecting to the firm can beclassified as Opportunities and Threats. This is referred to as

SWOT Analysis.

Strengths

Global brand


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McDonalds has a well-established global brand that

appeals to all age groups and customer segments. In 2005,

McDonalds placed ninth in the top 100 global brands

ranking of Business Week magazine and Interbrand, a

branding consultancy.

Strong operational capabilities

McDonalds has strong operational capabilities which

allow it to provide high quality products and customer

service across its restaurants. The company has a world-

class supply-chain and standardized processes to deliver

products of uniform quality across restaurants, regardless of

their location or nature of operation (company-owned or

franchisee-operated). The company and its partners

purchase food and related items from an approved group of

suppliers.

Successful items

Some of its products such as Big Mac, and Chicken

McNuggets and have become brands in their own right.

Strong brand draws customers to the companys restaurants

and provides it with a recognized brand currency in new

markets.

Quality Products

McDonalds is the symbol of quality with respect to its

offering.


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Weakness

Weak revenue growth

Low revenue growth suggests that the company has

not been able to expand customer traffic at existing

restaurants thanks mainly to the maturation and saturation

of its key markets.

Weak product development

McDonalds faces a strong competition and its weak

product development creates problem.

Opportunities

Expansion

McDonalds is serving only in few cities of Pakistan.

There is a large market for McDonalds still to serve.

Furthermore it has few outlets within cities in which it is

currently serving, so McDonalds also has opportunity to

expand within cities.

Franchisee-operated restaurants

McDonalds intends to sell about company-operated

restaurants in the Pakistan to franchisees. The operatingmargin of franchisee-operated restaurants is higher than

that of company-operated restaurants.


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Increased Sales Tax

Sales tax has increased which results in the increased

customer prices and reduced sales level.

Strategic Management Process

The strategic management process of McDonalds is made

up of four elements: situation analysis, strategy formulation,

strategy implementation, and strategy evaluation. These

elements are steps that are performed, in order, when developing

a new strategic management plan. Existing businesses that have

already developed a strategic management plan will revisit thesesteps as the need arises, in order to make necessary changes and

improvements

Environmental

Analysis

Internal

Assessment

Strategy

Implementatio

n

Strategy

Formulation

Strategy

Control


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Situation Analysis

Situation analysis is the first step in the strategic

management process. The situation analysis provides the

information necessary to create a company mission statement.

Situation analysis involves "scanning and evaluating the

organizational context, the external environment, and the

organizational environment". This analysis can be performed

using several techniques. Observation and communication are

two very effective methods.

To begin this process, organizations should observe the

internal company environment. This includes employee

interaction with other employees, employee interaction with

management, manager interaction with other managers, and

management interaction with shareholders. In addition,

discussions, interviews, and surveys can be used to analyze the


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internal environment.

Organizations also need to analyze the external

environment. This would include customers, suppliers, creditors,

and competitors. Several questions can be asked which may help

analyze the external environment. What is the relationship

between the company and its customers? What is the

relationship between the company and its suppliers? Does the

company have a good rapport with its creditors? Is the company

actively trying to increase the value of the business for itsshareholders? Who is the competition? What advantages do

competitors have over the company?

Strategy Formulation

Strategy formulation involves designing and developing the

company strategies. Determining company strengths aids in the

formulation of strategies. Strategy formulation is generallybroken down into three organizational levels: operational,

competitive, and corporate.

Operational strategies are short-term and are associated

with the various operational departments of the company, such

as human resources, finance, marketing, and production. These

strategies are department specific. For example, human resource

strategies would be concerned with the act of hiring and training

employees with the goal of increasing human capital.

Competitive strategies are those associated with methods of


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competing in a certain business or industry. Knowledge of

competitors is required in order to formulate a competitive

strategy. The company must learn who its competitors are and

how they operate, as well as identify the strengths and

weaknesses of the competition. With this information, the

company can develop a strategy to gain a competitive advantage

over these competitors.

Corporate strategies are long-term and are associated with

"deciding the optimal mix of businesses and the overall direction

of the organization" (Coulter, 2005, p. 216). Operating as a sole

business or operating as a business with several divisions are

both part of the corporate strategy.

Strategy Implementation

Strategy implementation involves putting the strategy into

practice. This includes developing steps, methods, and

procedures to execute the strategy. It also includes determining

which strategies should be implemented first. The strategies

should be prioritized based on the seriousness of underlying

issues. The company should first focus on the worst problems,

then move onto the other problems once those have been

addressed.

"The approaches to implementing the various strategies

should be considered as the strategies are formulated. The

company should consider how the strategies will be put into


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effect at the same time that they are being created. For example,

while developing the human resources strategy involving

employee training, things that must be considered include how

the training will be delivered, when the training will take place,

and how the cost of training will be covered.

Strategy Evaluation

Strategy evaluation involves "examining how the strategy

has been implemented as well as the outcomes of the strategy.

This includes determining whether deadlines have been met,

whether the implementation steps and processes are working

correctly, and whether the expected results have been achieved.

If it is determined that deadlines are not being met,

processes are not working, or results are not in line with the

actual goal, then the strategy can and should be modified or

reformulated.

Both management and employees are involved in strategy

evaluation, because each is able to view the implemented

strategy from different perspectives. An employee may recognize

a problem in a specific implementation step that management

would not be able to identify.

The strategy evaluation should include challenging metrics

and timetables that are achievable. If it is impossible to achieve

the metrics and timetables, then the expectations are unrealistic

and the strategy is certain to fail.


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Conclusion

The strategic management process is a continuous process.

"As performance results or outcomes are realized - at any level ofthe organization - organizational members assess the

implications and adjust the strategies as needed". In addition, as

the company grows and changes, so will the various strategies.

Existing strategies will change and new strategies will be

developed. This is all part of the continuous process of improving

the business in an effort to succeed and reach company goals.

BCG Matrix

The need for strategy in order to expand its existing product

in very promising markets for McDonalds is very essential.

McDonalds along with KFC and other major fast food chains have

dominated the American continent as well as elsewhere. BCG

Matrix:

The market growth rate measures industry attractiveness.

The underlying theory for examining market growth rate is the

industry life cycle. The BCG assumes that growth rates, life cycle

stages affect a firms finances.


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Placing products in the BCG matrix results in 4 categories in a

portfolio of a McDonalds:

1. Stars (=high growth, high market share)

o Frequently roughly in balance on net cash flow. However if

needed any attempt should be made to hold share, because

the rewards will be a cash cow if market share is kept. So,

McDonalds USA is under Star position.

2. Cash Cows (=low growth, high market share)


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o Profits and cash generation should be high, and because of

the low growth, investments needed should be low. Keep

profits high.

3. Dogs (=low growth, low market share)

o Avoid and minimize the number of dogs in a company.

o Beware of expensive turn around plans.

4. Question Marks (= high growth, low market share)

o Have the worst cash characteristics of all, because high

demands and low returns due to low market share

GE Matrix

Growth matrix The GE Matrix is a model to perform business

portfolio analysis on the Strategic Business Units of a corporation.

The General Electronics of USA with the support of consulting firm

Mckinsey and Co. developed a more complicated matrix as a

technique of portfolio analysis. The GE business screen can be

shown with the help of the following diagram:


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McDonald dont have GE matrix

7s MCKINSEYs MATRIX

Mckinsey developed a new framework to better represent

the challenges of Services Marketing and for analysis and

improving organizations effectiveness i.e. the 7S model which

can be shown with the help of the following diagram:


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Most of us grew up learning about 'the 4Ps' of the marketing

mix: product, price, place, promotion. And this model still works

when the focus is on product marketing. However most developed

economies have moved on, with an ever-increasing focus on

service businesses, and therefore service marketing.

To better represent the challenges of service marketing,

McKinsey developed a new framework for analyzing and

improving organizational effectiveness, the 7S model:

The 3Ss across the top of the model are described as 'Hard Ss':

Strategy: The direction and scope of the company over the

long term.


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Structure: The basic organization of the company, its

departments, reporting lines, areas of expertise, and

responsibility (and how they inter-relate).

Systems: Formal & informal procedures that govern everyday

activity, covering everything from management information

systems, through to the systems at the point of contact with the

customer (retail systems, call centre systems, online systems,

etc).

The 4Ss across the bottom of the model are less tangible, morecultural in nature, and were termed 'Soft Ss' by McKinsey:

Skills: The capabilities & competencies that exist within the

company. What it does best.

Shared values: The values and beliefs of the company.

Ultimately they guide employees towards 'valued' behaviour.

Staff: the Companys people resources and how they are

developed, trained, and motivated.

Style: The leadership approach of top management and the

company's overall operating approach.

In combination they provide another effective framework for

analyzing the organization & its activities. In a marketing-led

company they can be used to explore the extent to which the

company is working coherently towards a distinctive & motivating

place in the mind of consumer.


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Organizational Chart


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Supply Chain


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Our growth plan for the next three years is more a

function of getting our logistics and cold chain right rather

than going to far off places.

- Amit Jetia, managing director, McDonald's India, MumbaiJoint Venture,

Strategies of McDonalds

Following are the strategies adopted by McDonalds

Suppliers Manufacturing Distributors Retailers Customers

Supply Chain

Supplychain

Overvie

w

Supplier

sCold

chain

Local

Sourcin

g


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International Growth

McDonalds has expanded to international markets in

the face of increasing regulations in the United States and

domestic market saturation. They initially entered

international markets by leveraging standardized product

offerings, clean and bright environments, and American

brand equity.

However, recent years have seen McDonalds adapt to

local regions by remodeling its retail space while changing

the product line to appeal to local tastes. While the strategy

has paid off well in the short term and McDonalds has

realized that they must adapt to each country they enter,

their tactics of both catering to local tastes and changing the

restaurants design and appeal is diluting brand equity. This

will have disastrous consequences in the long term.

US Market Saturation Slow Expansion

Focus on Same Store-Sales Growth and Improving

Delivery Outlets


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Forward Integration

A business strategy that involves a form of vertical

integration whereby activities are expanded to include control

of the direct distribution of its products.

Distribution through Franchisees

Backward Integration

Acquiring ownership of one's supply chain, usually in thehope of reducing supplier power and thus reducing input

costs.

Local Sourcing, Cold Chain, Suppliers

Market penetration & Development

Market penetration occurs when a company

enters/penetrates a market with current products. The

best way to achieve this is by gaining competitors'

customers (part of their market share).

Other ways include attracting non-users of your

product or convincing current clients to use more of your

product/service (by advertising etc). Ansoff developed the

Product-Market Growth Matrix to help firms recognise if

there was any advantage of entering a market.

McDelivery
http://www.businessdictionary.com/definition/ownership.htmlhttp://www.investorwords.com/4823/supply_chain.htmlhttp://www.investorwords.com/4821/supplier.htmlhttp://www.investorwords.com/3762/power.htmlhttp://www.businessdictionary.com/definition/input.htmlhttp://www.investorwords.com/1148/cost.htmlhttp://en.wikipedia.org/wiki/Product-Market_Growth_Matrixhttp://www.businessdictionary.com/definition/ownership.htmlhttp://www.investorwords.com/4823/supply_chain.htmlhttp://www.investorwords.com/4821/supplier.htmlhttp://www.investorwords.com/3762/power.htmlhttp://www.businessdictionary.com/definition/input.htmlhttp://www.investorwords.com/1148/cost.htmlhttp://en.wikipedia.org/wiki/Product-Market_Growth_Matrix


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New Product Development

Product development is the process of designing,

creating, and marketing an idea or product. The product

can either be one that is new to the marketplace or one

that is new to your particular company, or, an existing

product that has been improved.

In many instances a product will be labeled new and

improved when substantial changes have been made.

Aloo Tikki, Salad


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Recommendation

Increase and Provide Delivery Services to every

Potential Customer-Potential Segment. Increase Drive through Branches.

Remove U.S. Branding Consciousness.

More Awareness to remove Obesity link with

McDonalds.

Understand Local Tastes.

Conclusion


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If the Golden Arches are more representative of America

than GEORGE BUSH is, McDonalds isnt exactly an alien entity

in India too. After spending Rs. 25 crores on its Indian

operations, the global food-chain is out to make its presence

felt in every part of the country and it has succeeded in

serving up an exciting new combo to Indian customers.

Take two pieces of bun, put in a patty and garnish it with

two equations. Price leads to volumes. Children bring in thefamily that explains why McDonalds is the only food chain in

India that can afford to stand tall.

McDonalds is in the throes of a major expansion. Rs.30

crores plan will be funded through internal accruals and loans.

It is adding 10 outlets to the 25 existing ones-13 in Delhi and

12 in Mumbai. Early next year, McDonalds will foray into the

southern metros, starting with franchisee operations.

McDonalds in corporate India is also associated with the

excellent in Supply Chain Management

Increase its product line. To have more variety to choose

from, to include more deserts and more items like Pizza McPuff. It


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should continue to provide better and quick service. By lower the

supply chain cost so that it helps in cost reducing. McDonald is

willing to expand their Happy Meal choices to attract and retain

customers& can also Introduction of MacAfees serving premium

and specialty coffees and other beverages and other products

such as cakes, pastries etc in the existing McDonalds. Focus on

gifts for all generations i.e. youth, kids especially senior citizen

which is a completely new concept.

McDonald should provide special promotions duringfestivals. They should increase the space for provision of birthday

party areas& try to sponsor college festivals. After analyzing the

marketing mix of McDonalds, it is clear that the company can be

said to be `global, i.e. combining elements of globalization and

internationalization. McDonalds have achieved this through

applying the maxim, `think global, and act local

29690896 mcdonald strategic mgmt project

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