A story of expansion, moderation and international success

By Malvika (Overview), Milena (The Mistakes), Alzahra (Way forward)

McDonald’s & you

Value for Money?

Convenience?

Outlet Experience?

Healthy options?

Status?

Finally, do you go to it or not?

History

Kroc was selling milkshake machines to Maurice and Richard McDonald in San Bernardino, CA, before taking the firm to 8,300 locations in 30 years.

Today

34,000 restaurants

In 118 countries

Serve 68 million customers daily

Format: Stand-alone + Drive-throughs

Talking revenues…

McDonald’s Leadership

James Cantalupo(CEO 2003-2004)Jack Greenburg

(CEO 1998- 2003)Jim Skinner (CEO 2004 -2012 )

It takes A McDonald's worker 4 months to earn what the makes in an hour: $9,247

A LOOK AT THEPROBLEMS

THE MENU

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=V_ENB9lnFmSU9M&tbnid=-h1-WbrCNTwKuM:&ved=0CAUQjRw&url=http://www.ibtimes.com/return-mcrib-10-best-and-worst-mcdonalds-cash-ploys-and-comebacks-553090&ei=p3VYU7tMsYjxAevIgMgL&bvm=bv.65397613,d.b2U&psig=AFQjCNHuNEA50qps9Dc5rnnULHX_ScPfDg&ust=1398392595357893

THE FRANCHISE PROBLEM

• Conflict between corporate and franchise owners

• Too many restaurants cannibalization

• Franchising 2000

• American Franchisee Association Current no. of McD outlets around you right now

THE TOO-MUCH-TO-HANDLE ACQUISITIONS

McDONALD’S SUFFERING PR

• Public perception of cleanliness, food and service slips

• Increasing health awareness

• Europe: mad cow disease affecting consumption

WAY FORWARD

Focus on Existing Restaurants

- Tastier food.

- Renovation.

- Bearding Starbucks with upscale coffee drinks.

Competition, domestic

1980: Pizza Hut, Taco Bell, Burger King

1991: “Extra Value Meals,” to keep up with Taco Bell’s value pricing

1995: PRICE PROBLEM- Prices are no longer attracting customers- Received low marks on food quality, value, service, and cleanliness. Top honors instead went to Wendy’s

Late 1990’s: WORKERS PROBLEMLow unemployment. Finding good help was hard while others were doing better.

2001: - McDonald’s: 1% same-store sales growth - Burger King & Wendy’s: 4% average

Competition, international

Germany: - Burger king which expanded from 268 stores in 2000 to 390 in 2002.- local retailers such as gas-station food marts and traditional mom-and-pop

bakeries.

UK:- Service and cleanliness issues.- consumer tastes.

Japan:saturated market, local competitors became stronger- Same-store sales fell 12.1% in 2002- fell additional 4.4 percent in 2003

McCafe

SWOT

Strengths- Market share- Convenient - Familiarity - Price consistency - Well known old brand- Restrooms cleanliness

Weaknesses - Franchisee relations - Brand image - Food quality - Menu problems - Low growth and quality

control

Opportunities- Coffee drinks - Change positioning. - Quality improvement.- Interiors renovation.

Threats- Health awareness - Criticism - Competition- Decreasing sales

FUTURE?