McDonalds Case Analysis

Executive Summary

The business began with two brothers. In 1937, Dick and Maurice McDonalds opened a small drive-in restaurant east of Pasadena, California. They served hotdogs and shakes. This led to the creation of a bigger drive-in which operated successfully and by 1948, the brothers had a made a fortune they never expected. The brothers realized that hamburgers comprised of 80 percent of their sales and closed their doors to re-evaluate their business model. The same year, in 1948 the model was about affordable dining for family who wanted to eat out. The "Speedy Service System" was also implemented that included an assembly line of sorts, a nine-item menu, and an all male staff. The operations were proven successful in 1952 ad the first franchise was sold to Neil Fox who opened a restaurant in Phoenix, Arizona and created the well-known golden arches of McDonalds. Fox had huge success with the store and the brothers were reluctant at first to begin a national franchise system, but soon realized that too many copycats were creeping up and they needed an advantage and a head start. Ray Croc joined the team as the exclusive franchise agent in the United States.

Some of the problems and challenges facing the company is the increase in competition, poor management, bad marketing, and lack of response to the changes in the needs of franchises and customers. This resulted in the strategic issues that needed to be implemented to continue growing success for the company. Going global is critical in the expansion of McDonalds. Over the past couple of decades, the major chains have also begun to expand into the global marketplace and have opened franchises up around the world. McDonald's currently operates in over 120 countries around the world with over 30,000 stores.

In analyzing this company, the strengths, weaknesses, opportunities, and threats were inevitably explored to better understand the current situation. This SWOT analysis shows us that although there are numerous threats against the fast-food industry, McDonald's occupies a relatively strong position in the global marketplace. According to the five forces model, the strongest competitive force is between rival sellers in the industry. This SWOT analysis shows the many strengths that Mc Donald's employs to keep itself at the top of the fast-food industry. Although there are various weaknesses, these can all be turned around following the McDonald's Plan to Win, which was implemented with the hiring of Jim Cantalupo.

Keeping in mind, the core competencies of this company is what makes it so successful today. For the past ten years, one of McDonald's key success factors has been its franchises, taking in approximately 60 percent of total sales. Another success factor is the "Plan to Win" strategy. It is a plan that focuses on five key drivers of success; people, product, place, price, and promotion. The first factor is McDonald's people or employees. McDonald's is striving to do a better job of staffing during busy periods as not to overwhelm and to reward outstanding employees for exception work.

Based on these facts and analysis, we have come up with alternate strategies and have recommended the one that best fits McDonald's current situation. The recommended strategy includes diversification and maintaining customer service through quality training and people development.

General Company Description

Mission statement: "McDonald" vision is to be the world's best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile."

i'm lovin' it is an international branding campaign by McDonald's Corporation primarily aimed at people aged 15-24. It was the company's first global advertising campaign and was launched in Munich, Germany on September 2, 2003, under the German title ich liebe es. The English part of the campaign was launched on September 29, 2003 with the music of Tom Batoy and Franco Tortora (Mona Davis Music) and vocals by Justin Timberlake in which the slogan appears used in many of the introductory spots.

Company history: "Billions served," indeed. McDonald's is the world's #1 fast-food company by sales, with more than 31,800 flagship restaurants serving burgers and fries in more than 100 countries. Almost 30% of its locations are company-owned; the others are run by franchisees. While most of the company's eateries are free-standing units, it does have some quick-service kiosk units located in airports and retail areas. Each unit gets its food and packaging from approved suppliers and uses standardized procedures to ensure that a Big Mac purchased in Pittsburgh tastes the same as one bought in Beijing. McDonald's also owns the Boston Market fast-casual chain and has a minority interest in UK sandwich chain Pret A Manger.

Unique Challenges of McDonald: McDonald's, believe that they have a special responsibility to help protect and preserve our environment for future generations. A business leader must be an environmental leader as well, which is why McDonald analyse every aspect of their business in terms of its impact on the environment and take whatever action is necessary to lead both in word and deed. Here are some of the things McDonald has done so far:

* Setting targets: McDonald have made a commitment that, by 1995, they will have reduced the volume of solid waste by 50%. they believe they will achieve this through use of the three R's: Reduce, Recycle and Reuse.

* Bulk is Better: During 1993, McDonald moved to a bulk delivery system for Coca Cola and a bag-in-box system for other soft drink concentrates. Delivering cola in two 75 gallon stainless steel tanks means that McDonald have no packaging and no waste. The bag-in-box system has also reduced waste by 55%. Together, the two total a reduction in the volume of waste of almost 25%.

* Recycled Materials: McDonald use a minimum of 50% recycled content in corrugated cardboard boxes and ask that our suppliers do the same. All McDonald's food boxes and cartons are made from 72% recycled material, carry out bags are unbleached and made from 60-80% recycled material, while napkins and trayliners are 100% recycled paper. Additionally, all our picnic benches, drive-thru lane traffic bollards and most of the fencing panels at new restaurants are made from recycled polystyrene.

* Use and Use again: Three quarters of all restaurants currently save clean, dry and undamaged cardboard cases - used for the delivery of