Aarzoo Chopra

8/14/2019 Aarzoo Chopra

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By:Aarzoo chopra



Mc Donald's Beginning….Late 1930s

Richard and Maurice Mc Donald

drive in, in California

1937

hot dog stand Airdrome California

1940Mc Donald barbeque restaurant

1948 decided to streamline the

business

Need of hour quick service andmass production

80% of sales by hamburgers



1948

reopened the store with newstrategies quick service at a low price

An assembly line kind of approach to preparefood “Speedee System”

15 cents as compared to 30 cents

First mascot Speedee



Franchising1953 ,franchising in order to expand

For 1000 dollars Mc Donalds name

a basic description of their service system

services of Art Bender

• In 1954. Ray Kroc, distributor for milkshakemachines. finalized a deal with the McDonaldbrothers

• He established a franchising company, theMcDonald System Inc. and appointed franchisees

• In 1961, he bought out the McDonald brothers'share for $2.7 million and changed the name of the company to McDonald's Corporation

• In 1965, McDonald's went public...



Over the years..Business divided into four segments:

US , Europe, Asia Pacific middle east andAfrica(APMEA) and other countries

2003

quarterly loss for first time

As of now 2008

Headquartered in Oak Brook

Illinios,USA

Chairman and CEO: James A Skinner



Key Milestones..1954 Ray Croc, franchising agent

1960 renamed the co as Mc Donald’s corporation

1961 Co logo from “Speede” to letter “M”

1961 Croc buys out Mc Donald’s for US $2.7million

1963 Ronald Mc Donald

1979 Happy Meal

1988 Fortune magazine 100 products America

makes the best

1996 20 ,00 restaurant mark2000 low calorie menu items, healthy cooking ways

2003 advertisement campaign, tag line”Im lovin it”



Recession Effect…

McDonalds reported net income of US$ 1.19billion in second quarter of the year 2008.

A rise in 4% in revenue backed by 6.1%growth in same store at the global level whilethe comparable sales in the US grew by 3.4%.

Mconalds industrial average has shed only

3.4% that,s better than its fast food rivals likeburger king, down 24.6% and yum!Brands,28.6% .



Contd…Cut down on fine dining restaurants

Adding local items to its menu

Adjusted prices according to the prevailingeconomic conditions.



GLOBAL EXPANSION• First international restaurant in Canada on June 1,

1967.

• July 1971, started operating in Tokyo.

• Started its operations in Europe (Netherlands) in thesame year.

• Also opened restaurants in Munich, Germany andAustralia.

• In early 1970s it also entered France and England.



GROWTH STRATEGIES1. Think Global Act Local

• McDonalds tried to expand into global arena withstandardized operations, modified a little to fit in with

the local culture, tradition, social practices and laws.

• It invested a lot in researching the market and thendevelop its products to suit local tastes.

• They tried to localize the products and ingredientskeeping in mind the sentiments and religious practicesin different countries.



• Starting their in venture in Indian market they learntthat Hindus consider cows as sacred, so beef product

was not offered in the restaurants.

• Also to cater to the large vegetarian population theyintroduced vegetarian burgers called McVeggie, McAloo

Tikki, Pizza McPuff etc.

• Considering the muslim population don’t eat pork, non-vegetarian products included only chicken and lamb.



In Jerusalem, McDonald’s are closed on

Saturdays, the Jewish Sabbath Day.

In all islamic countries it offered a “Halal” menuand prepared food according to Islamic laws.

However the basic structure of McDonald’s Menuremained same comprising of burger orsandwich, fries and coca cola.



2. Adjusting Price

• It adjusted its price according to the value of currency of thetarget country.

• While fixing prices it considered various factors like locationand income distribution in the region.

• The price was fixed keeping in mind the target group of middle and upper class people.

• In some markets company gave discounts on certain food

items from time to time , to promote a particular item or toboost up its sales during lean periods.



1–18

Television Advertisements Television Advertisements Significant use of Billboards andSignificant use of Billboards and

SignageSignage Sponsoring Sports EventsSponsoring Sports Events

Drive-Through ServiceDrive-Through Service Use of different punch lines inUse of different punch lines in

different countriesdifferent countries

Promotional Strategy

http://en.wikipedia.org/wiki/Image:Ronald_McDonald.jpg







Perceptual map for IndiaPerceptual map for India




1–20

In India it popularised with theIn India it popularised with thepunch linepunch line

““Aap ke zamane mein ,baap keAap ke zamane mein ,baap ke

zamane ke daam”zamane ke daam”

““Mc Donald’s mein hai kuch baat”Mc Donald’s mein hai kuch baat”

•Communications through paper matsCommunications through paper mats

and trays when faced withand trays when faced with

controversy in Indiacontroversy in India•Re-engineering the menuRe-engineering the menu• McDonald’s a fun place to eat.McDonald’s a fun place to eat.•Facilities like Wi-Fi in the outlets likeFacilities like Wi-Fi in the outlets like

the one at Vile Parle in Mumbai.the one at Vile Parle in Mumbai.•





1–22

In Russia, Ads focused on the quality of food.In Russia, Ads focused on the quality of food. In France the company replaced Ronald Mc.In France the company replaced Ronald Mc.

Donald in 2002 with AsterixDonald in 2002 with Asterix

Happy meal - Toys according to the marketingHappy meal - Toys according to the marketingtheme of the countrytheme of the country

In 2008, McDonald’s U.K. ran a promotion of In 2008, McDonald’s U.K. ran a promotion of

“Buy one get one free” for Big Mac by way of “Buy one get one free” for Big Mac by way of

press voucherspress vouchersMcDonald’s Japan opened a new conceptMcDonald’s Japan opened a new concept

restaurant called Quarter Pounder in Tokyorestaurant called Quarter Pounder in Tokyo

In ol ement in Local



Involvement in LocalCommunities

1–23

Employment OpportunitiesEmployment Opportunities

80% of restaurants franchised to local people80% of restaurants franchised to local peopleMcDonald’s in several countries hired localMcDonald’s in several countries hired local

people for top positionspeople for top positions

Sourced Raw materials from local suppliesSourced Raw materials from local supplies In 2002 it became a part of fundraisingIn 2002 it became a part of fundraising

campaign for SOS Children Villagescampaign for SOS Children Villages In 2008, McDonald’s China donated RMB 1In 2008, McDonald’s China donated RMB 1

million for the victims of the earthquakemillion for the victims of the earthquake Awarded in Australia by EOWA in recognition forAwarded in Australia by EOWA in recognition for

boosting employment for women in the yearboosting employment for women in the year

20082008

Trained suppliers besides training employees Trained suppliers besides training employees



New McStrategiesLeverage Brand Equity

Product Development: Focus on

core business

Quality and taste issues

Food delivery methods

MBX (McDonald’s Big Extra)

Family Value Meal



New McStrategies Joint Venture (Franchisee): Change

methods of dealing with franchisees

To better motivate owners and foster teamspirit

Enhance owners’ participation in process

improvements



New McStrategiesMarket Penetration and Development

Continue International expansion

Retrenchment

Home office cost reductions

Splitting into five geographic divisions

Horizontal Integration

Purchase competition with differing target

markets



Hurdles in Way…Opposition from:

Anti-WTO,

Anti-America,

Anti-Globalization activists & Organizations



Agitated Acts…

In 1994, activists of “london greenpeace”distributed leaflets titled “what’s wrong with mcdonald’s”. The trial ran for 313 days.

French farmers dismantled mc donald’s franchisein millau as a protest against uncheckedglobalisation.

In 2002, there were attempts to bomb two outletsof mc donalds in saudi arabia, which turned out tobe unsuccessful.



In Mc Donald’s Favour

Allegations of it being a “greedy”multinational was not true as it held very lowmargins.

Products were moderately priced to serveeven the lower strata of the economy.

Provided employment to the local people andtook material from local suppliers.



Impressive Results in Tough

TimeIn October

11 % increase in Net Income

GrowthDomestic Market Increased by 9%

European Operations Saw 23% growth

Asian Middle east witnessed 28% growth

Growth margin Improved25.8 to 29.1

Slump a boon



Contd…December 2008

7.7% increase in Global Comparable Sales

4.5% accounted for US

Europe Accounted for 7.8%

Asia stood at 13.2%

Good performance countered economicslowdown in US

Change in customer trend

Re-emphasizing McDonald’s Basic Strategy

Took CSR initiatives



Questions/Answers



Thank You

Aarzoo Chopra

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