aarzoo chopra
TRANSCRIPT
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By:Aarzoo chopra
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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
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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
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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...
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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
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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 $2.7million
1963 Ronald Mc Donald
1979 Happy Meal
1988 Fortune magazine 100 products America
makes the best
1996 20 ,00 restaurant mark2000 low calorie menu items, healthy cooking ways
2003 advertisement campaign, tag line”Im lovin it”
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Recession Effect…
McDonalds reported net income of US$ 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% .
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Contd…Cut down on fine dining restaurants
Adding local items to its menu
Adjusted prices according to the prevailingeconomic conditions.
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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.
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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.
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• 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.
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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.
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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.
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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
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Perceptual map for IndiaPerceptual map for India
Promotional Strategy
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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.•
Promotional Strategy
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Promotional Strategy
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
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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
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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
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New McStrategies Joint Venture (Franchisee): Change
methods of dealing with franchisees
To better motivate owners and foster teamspirit
Enhance owners’ participation in process
improvements
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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
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Hurdles in Way…Opposition from:
Anti-WTO,
Anti-America,
Anti-Globalization activists & Organizations
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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.
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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.
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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
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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
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Questions/Answers
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Thank You