Mcdonalds Corporation Is The Worlds Largest Chain Marketing Essay

Mcdonalds Corporation Is The Worlds Largest Chain Marketing EssayMcDonalds Corporation is the worlds largest bowed stringed instrument of tumultuous food restaurants, serving roughly 47 million customers daily through more than 31,000 restaurants in 119 countries worldwide. McDonalds sells various fast food items and soft drinks including, burgers, chicken, salads, fries, and ice cream. Many McDonalds restaurants have included a playground for children and advertising geargond toward children, and some have been redesigned in a more natural style, with a particular emphasis on comfort introducing loll atomic number 18as and fireplaces, and eliminating hard plastic chairs and tables.Each McDonalds 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. McDonalds revenues grew 27% over the three years ending in 2007 t o $22.8 billion, and 9% growth in operating income to $3.9 billion.1History analysisThe business began in 1940, with a restaurant opened by brothers Dick and Mac McDonald in San Bernardino, California.Their introduction of the Speedee Service System in 1948 established the principles of the modern fast-food restaurant.The original mascot of McDonalds was a man with a chefs hat on top of a hamburger shaped head whose name was Speedee. Speedee was eventu every(prenominal)y replaced with Ronald McDonald in 1963.The present corporation dates its installation to the opening of a franchised restaurant by Ray Kroc, in Des Plaines, Illinois on April 15, 1955 , the ninth McDonalds restaurant overall. Kroc later purchased the McDonald brothers equity in the company and guide its worldwide expansion and the company became listed on the public stock markets in 1965.With the expansion of McDonalds into many international markets, the company has become a symbol of sphericization and the spre ad of the American way of life. Its prominence has also made it a frequent topic of public debates about obesity, corporate ethics and consumer responsibility.2VisionTo be the best and leading fast food provider around the globeMissionMcDonalds brand mission is to be our customers favorite place and way to eat, and repair our operations to provide the most delicious fast food that meet our customers expectations.ValuesOur values summarized in Q.S.C. V.. Provide good character reference, services to customer. Have a cleanliness environment when customer enjoys their meal. The value of food product steels every customer is smiling.SuppliersSubstitutesBuyersPotential entrantsCompetitive rivalryThe Five Forces FrameworkThe Threat of EntrantsLarge established companies with substantial brand identities such as McDonalds BKC, YUM, and WEN do make it more difficult to enter and succeed in spite of appearance the marketplace new entrants find that they are faced with price competition from existing chain restaurants.Bargaining Power of BuyersLow bargaining power of buyers.Bargaining power of suppliersBargaining power of suppliers within the fast food industry would be relatively small, unless the main ingredient of the product is not readily available.Threat of SubstitutesThis could range from a competitive fast food restaurant to family restaurant to a home cooked meal.Competitive RivalryThe strength of competition in this industry is very high the main rivals are BKC, YUM, and WEN. They compete with international, national, regional, local, retailers of food products (restaurants, quick service, pizza, coffee shops, and supermarkets).PESTEL FrameworkPoliticalThe international operations of McDonalds are highly influenced by the individual state policies enforced by each government.EconomicMcDonalds has the tendency to experience hardship in instances where the economy of the respective states is hit by inflation and changes in the exchange rates.Market leader. in truth high target market.Low damage and more incomes.The rate at which the economy of that particular state grows determines the purchasing power of the consumers in that country.Social functional within many social groups.Increase employments.TechnologicalAdvanced technology development.Quality standards.EnvironmentalQuality packing.Local manufacture using foreign supplies. legalLegislation for product.Sustained logo.SWOT ANALYSISOpportunitiesThreatsGrowing health trends among consumersGlobalization, expansion in other countries (especially in chinaware India).Diversification and scholarship of other quick-service restaurants. harvest-tide of the fast-food industry.Worldwide deregulation.Low cost menu that will attract the customers.Freebies and discounts.wellness professionals and consumer activists accuse McDonalds of contributing to the countrys health issue of high cholesterol, heart attacks, diabetes, and obesity.The relationship surrounded by corporate level McDonalds and its franchise dealers.McDonalds competitors threatened market share of the company both internationally and domestically.anti-American sentiments.Global recession and fluctuating foreign currencies.Fast-food chain industry is anticipate to struggle to meet the expectations of the customers towards health and environmental issues.StrengthWeakness difficult brand name, image and reputation.Large market share.Strong worldwide presence.Specialized training for managers known as the Hamburger University.McDonalds Plan to win pointes on people, products, place, price and promotion.Strong financial performance and position.Unhealthy food image. mettlesome Staff overthrow including Top management node losses due to fierce competition.Legal actions related to health issues use of trans fat beef oil.Uses HCFC-22 to make polystyrene that is contributing to ozone depletion.Ignoring breakfast from the menu.COMPARISIONMcDonaldsBurger KingYum BrandsWendysCritical Success Factors clogRati ngWeighted stigmaRatingWeighted ScoreRatingWeighted ScoreRatingWeighted ScorePrice0.1540.6030.4530.4530.45Financial bewilder0.0840.3230.3230.2420.16Consumer consignment0.1040.4030.4030.3020.20Advertising0.1030.3030.3040.4020.20Product Quality0.1040.4030.4040.4020.20Innovation0.1530.4530.4530.4520.30Market Share0.1040.4020.2030.3020.20Management0.0740.2830.2130.2130.21Global Expansion0.1540.6020.3030.4510.15Total13.753.033.202.07 outside Factor Evaluation (EFE) MatrixKey External FactorsWeightRatingWeighted ScoreOpportunitiesGrowing health trends among consumers0.0830.24Globalization, expansion in other countries (especially in China India).0.1240.48Diversification and acquisition of other quick-service restaurants..0430.12Growth of the fast-food industry..1030.30Worldwide deregulation.0420.08Low cost menu that will attract the customers..0820.16Freebies and discounts..0810.08ThreatsHealth professionals and consumer activists accuse McDonalds of contributing to the countrys healt h issue of high cholesterol, heart attacks, diabetes, and obesity.0.1030.30The relationship surrounded by corporate level McDonalds and its franchise dealers.0.0930.27McDonalds competitors threatened market share of the company both internationally and domestically.0.1240.48Anti-American sentiments..072.14Global recession and fluctuating foreign currencies..043.12Fast-food chain industry is expected to struggle to meet the expectations of the customers towards health and environmental issues..042.08Total1.002.85Financial Ratio Analysis 12/2007Growth Rates %McDonalds assiduitySP 500 sales (Qtr vs year ago qtr)-3.304.20-3.80Net Income (YTD vs YTD)84.7047.908.40Net Income (Qtr vs year ago qtr)-22.60-59.90-94.80gross revenue (5-Year Annual Avg.)6.538.1413.26Net Income (5-Year Annual Avg.)23.3915.3014.45Dividends (5-Year Annual Avg.)32.3622.3612.30Price RatiosCurrent P/E Ratio14.714.213.0P/E Ratio 5-Year HighN/A9.512.5P/E Ratio 5-Year LowN/A4.72.0Price/Sales Ratio2.621.881.47Price/Book Value4.623.543.00Price/Cash Flow Ratio11.2010.009.00Profit margins %Gross Margin36.732.139.4Pre-Tax Margin26.217.213.2Net Profit Margin18.312.09.15Yr Gross Margin (5-Year Avg.)33.933.339.15Yr PreTax Margin (5-Year Avg.)19.814.216.65Yr Net Profit Margin (5-Year Avg.)13.79.811.45Financial ConditionDebt/Equity Ratio0.76.801.03Current Ratio1.41.21.4Quick Ratio1.31.11.1 delight CoverageN/A1.229.9Leverage Ratio2.1-5.31.9Book Value/Share12.0010.0019.75Investment buffets %Return On Equity32.244.427.9Return On Assets14.911.38.1Return On Capital17.013.711.2Return On Equity (5-Year Avg.)19.722.820.6Return On Assets (5-Year Avg.)10.08.988.5Return On Capital (5-Year Avg.)11.411.011.5Management EfficiencyIncome/Employee10,7839,40191,499Revenue/Employee58,80698,2071,000,000Receivable Turnover23.744.715.8Inventory Turnover125.798.712.3Asset Turnover0.81.11.0Internal Factor Evaluation (IFE) MatrixKey Internal FactorsWeightRatingWeighted ScoreStrengthsStrong brand name, image and reputation.0.1240. 48Large market share.0.1040.40Strong global presence.0.0430.12Specialized training for managers known as the Hamburger University.0.0430.12McDonalds Plan to Win focuses on people, products, place, price and promotion0.1240.48Strong financial performance and position.0.0840.32Introduction of new products.0.0640.24Customer focus (centric).0.0640.24Strong performance in the global marketplace.0.0840.32WeaknessesUnhealthy food image.0.0810.08High Staff Turnover including Top management0.0410.10Customer losses due to fierce competition.0.0410.04Legal actions related to health issues use of trans fat beef oil.0.0420.08McDonalds uses HCFC-22 to make polystyrene that is contributing to ozone depletion.0.0420.08Ignoring breakfast from the menu.0.0610.06Total1.003.16SPACE MatrixFinancial StrengthRatingEnvironmental StabilityRatingReturn on investment4Rate of inflation-3Leverage4Demand Changes-3Net Income6Price Elasticity of demand-1EPS5Competitive pressure-3ROE5Barriers to entry new markets- 3Cash Flow4Risk involved in business-2 clean4.67Average-2.5Y-axis2.17Competitive AdvantageRating manufacture StrengthRatingMarket share-1.00Growth potential5Product Quality-1.00Financial stability5Customer Loyalty-1.00 comfortableness of entry new markets4Control over other parties-2.00Resources utilization4Profit potential5Demand variability3Average-1.25Average4.33X-axis3.08Directional vector point is 3.08, 2.17)ConservativeAggressiveCompetitiveDefensiveFSISCAESGrand Strategy MatrixQuadrant IIQuadrant IQuadrant IVQuadrant IIIRapid Market GrowthStrong CompetitivePositionWeakCompetitivePositionSlow Market GrowthThe Boston Consulting Group (BCG) MatrixQuestion MarksCash CowsDogsRelative Market Share PositionIndustrySalesGrowthRateStarsMCDThe Internal-External (IE) MatrixThe IFE Total Weighted ScoreStrong Average Weak3.0 to 4.0 2.0 to 2.99 1.0 to 1.99IIIIIIHigh3.0 to 3.99VIVIVThe EFE Total Weighted ScoreMcDonaldsMedium2.0 to2.99IXVIIIVIILow1.0 to 1.99The Quantitative Strategic Plannin g Matrix(QSPM)Strategy 1Expand further in Asia by adding 500 restaurantsStrategy 2Applying 0 grams Trans fat in all worldwide McDonalds restaurantsKey Internal FactorsWeightASTASASTASStrengthsStrong brand name, image and reputation0.1240.4840.48Large market share0.1040.4020.20Strong global presence0.0440.1220.08Specialized training for managers known as the Hamburger University0.04McDonalds Plan to Win focuses on people, products, place, price and promotion0.1240.4840.48Strong financial performance and position0.0840.3240.32Introduction of new products0.06Customer focus (centric)0.0610.0640.24Strong performance in the global marketplace0.0830.2410.08WeaknessesUnhealthy food image0.0810.0840.32High Staff Turnover including Top management0.10Customer losses due to fierce competition0.0430.1210.04Legal actions related to health issues use of trans fat beef oil0.0410.0440.16Uses HCFC-22 to make polystyrene that is contributing to ozone depletion0.04SUB heart1.002.342.40Strategy 1Expand further in Asia by adding 500 restaurantsStrategy 2Applying 0 grams Trans fat in all worldwide McDonalds restaurantsKey External FactorsWeightASTASASTASOpportunitiesGrowing health trends among consumers0.0810.0840.32Globalization, expansion in other countries (especially in China India)0.1240.4810.12Diversification and acquisition of other quick-service restaurants0.04Growth of the fast-food industry0.1040.4040.40Worldwide deregulation0.0440.1610.04Low cost menu that will attract the customers0.08Freebies and discounts0.08ThreatsHealth professionals and consumer activists accuse McDonalds of contributing to the countrys health issue of high cholesterol, heart attacks, diabetes, and obesity0.1010.1040.40The relationship between corporate level McDonalds and its franchise dealers0.0940.3610.09McDonalds competitors threatened market share of the company both internationally and domestically0.1240.4840.48Anti-American sentiments0.07Global recession and fluctuating foreign currencies0. 04Fast-food chain industry is expected to struggle to meet the expectations of the customers towards health and environmental issues0.0410.0440.16SUBTOTAL1.002.102.01SUM TOTAL ATTRACTIVENESS SCORE4.444.41.ConclusionMcDonalds faces some difficult challenges. Key to its future success will be maintaining its core strengths-an unwavering focus on quality and consistency-while carefully experimenting with new options. These innovative initiatives could include launching higher-end restaurants under new brands that wouldnt be saddled with McDonalds fast-food image. The company could also look into expanding more aggressively foreign where the prospects for significant growth are greater.The companys environment efforts, while important, should not overshadow its marketing initiatives, which are what the company is all about.RecommendationsExpand further into Asia markets over a 2-year period by adding 500 restaurants per year at a cost of $4 billion annually, and applying 0 grams Trans fat in all worldwide McDonalds restaurants.