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Presented by:

Temoor Bakht 5346

Syed Faraz Hussain 5236

Ammar Abid Ali 5972

Hassan Jamali 5179

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McDonalds

McDonalds is the no 1 fast food chain stores with a 40 million customers visiting it per day. It

has over 30,000 branches in 120 countries and currently 20 branches operating in Pakistan.

The McDonald's Brief History

Ray Kroc mortgaged his home and invested his entire life savings to become the exclusive

distributor of a five-spindled milk shake maker called the Multi mixers. Hearing about the

McDonald's hamburger stand in California running eight Multi mixers at a time, he packed up

his car and headed west. It was 1954. He was 52 years old. In 1965 McDonald's went public

with the company's first offering on the stock exchange. A hundred shares of stock costing

$2,250 dollars that day would have multiplied into 74,360 shares today, worth approximately

$3.3 million on December 31, 2006. In 1985 McDonald's was added to the 30-company Dow

Jones Industrial Average. The First Ronald McDonald House in Philadelphia, PA - In 1974 Fred

Hill of the Philadelphia Eagles teamed up with McDonald's to create Ronald McDonald House.

Here the families of critically ill children have a place to call home while they're away from

home as the young patients undergo treatment for their conditions. The greatest strength of

McDonald’s was creating an image in the minds of the people and introducing them to the fast

food culture. Delivery speed, customer care and cleanliness are the core strengths on which

these stores expanded. They created a corporate symbol and their advertisement campaigns

were highly successful in establishing the brand image and logo in the minds of the millions.Two

main global competitors generally identified with McDonalds are the Burger King and the

KFC.McDonald's Corporation sales grew by 4.8% in February 2010 compared to last year.Performance by

segment was as follows: U.S. up 0.6%Europe up 5.4%Asia/Pacific, Middle East and Africa up 10.5%

McDonalds Pakistan

Aiming to be the world's best quick service restaurant, McDonald's Pakistan opened its doors in

September 1998 at Lahore and presently operating in seven major cities with a network of 23

restaurants. McDonald's Pakistan is a part of the Lakson Group of Companies, with a Head

Office in Karachi and a regional office at Lahore. Lakson Group also owns, Lakson Tobacco Co.

Colgate Pakistan Ltd, Century Insurance Ltd. Express Newspaper, Cyber Net and various others

businesses. McDonalds located in Pakistan are currently employing about 1,200 Pakistanis and

each store is managed by Pakistani managers. They have also contributed in other ways than

food service. McDonalds has investment of over Rs300 crore in the country .Since McDonalds is

doing so well in Pakistan they will continue to grow and add more stores in more cities in the

future.

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Below is a chart which we were able to take from McDonalds Pakistan. The chart below shows

the companies weaknesses and strengths and from the results we can clearly see that the

fundamental weakness of McDonalds lie in their distribution and manufacturing cost. This is a

big alarm for McDonalds Pakistan for which McDonalds is making different strategies to lower

its distribution cost.

Strengths Fundamental Strength

Marginal Strength

Neutral Marginal weakness

Fundamental weakness

Marketing Factors

1 Relative market share

2 Reputation

3 Previous performance

4 Competitive stance

5 Customer base

6 Customer Loyalty

7 Breadth of product range

8 Depth of product range

9 Product quality

10 Programme of product modification

11 New products programs

12 Distribution cost

13 Dealer network

14 Dealer Loyalty

15 Geographical coverage

16 Sales force

17 After sales service

18 Manufacturing cost

19 Manufacturing flexibility

20 Raw material advantage

21 Pricing

22 Advertising

23 Unique selling propositions

24 Structure of competition

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McDonalds Mission statement “McDonald's mission is to be our customers' favorite place and way to eat with

inspired people who delight each customer with unmatched quality, service,

cleanliness and value every time ... we invite you to be the part of this winning

team and give yourself an opportunity to grow with the family of people striving

to create smiles on the faces of millions of people everyday

McDonalds Vision "McDonald's 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."

Value McDonald's has an open-door culture; any employee can go to the Restaurant

Manager and can discuss any problem or new ideas for the improvement of the

restaurant. Nobody has any hang-ups; everybody does everything.

McDonald's also believes in value to the customer, that is, why prices are value

oriented as Amin Mohammad Lakhani put it in his word; “… nothing sells forever

unless it is value for money

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McDonalds Pakistan menu and prices

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Shipment of palm oil from Malaysia by McDonalds

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Shipment of apple and strawberry pies from UK

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Shipment of patties from Finlar foods by McDonalds Pak

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Shipment of McArabia from Singapore by Mcdonalds

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Shipment of fries from Newzealand by McDonalds

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McDonald’s main international suppliers

McDonalds have different international suppliers which provide them with different

products.Below are the countries who provide Siza foods with different products.

Malaysia • Chicken patties

• Beef patties

• Palm oil. Supplier (Cargil palm products)

China • Toys for happy meal

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UAE Straws

Newzealand

Potato fries

Supplier

(mccain international)

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SaudiaArabia • Cheese

• Pita bread

UK • Apple pies and strawberry pies

Supplier

(Kitchen range foods)

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America • Provides all kind of machinery and other equipments.

Supplier

(H&K international)

Singapore • Provides McArabia

Supplier

(Perseco Asia Pacific)

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Pakistan

• Packaging (Previously the packing was imported from Kuwait and now Siza foods is

depending on Pakistan to manufacture the packaging for their food items.

• Lettuce

• Cream and the milk is provided to McDonalds by nestle, which is used in making coffee,

icecreams and other items.

• Ketchups, Maya sauce and other sauces ( bigmac sauce etc) from unilever Pakistan.

• Bread and buns rarely from dawn bread. Now they use buns from their own bakery.

• For one of their product they have started using chicken patty from K&N and have

future plans to rely more on K&N and make all their chicken items with the help of local

company K&N.

• Even the coffee is provided to them by nestle.

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Venus distributors Venus is the main distributor of Siza foods (McDonalds) and has been proving its services to

McDonalds Pakistan for the past decade.venus is associated with associated with are

McDonald’s International, Nike, Nestle, Coca Cola, Reckitt Benkiser, Rafhan Best foods,

Packages, Guard Rice, Lamb Weston, Dilmah Tea, and Continental Biscuits .

Basically Venus provides the transfer of all the goods of McDonalds from the port to their ware

house and then they are responsible to provide the retail outlet with all the supplies on time.

Venus has 2 ware houses, one in Karachi and other in Lahore. From Lahore they distribute the

supplies to other different cities near to Lahore. The company generates its own power by way

of 2 x 390 KVA generators at each location thus ensuring a constant temperature of –22°c at all

times

Below is the specification of their warehouses.

• 120,000 sq ft warehouse at Maripur Karachi

• 60,000 sq ft warehouse at Rawind road Lahore,

• 12,000 sq ft of world standard Freezer/Cold Storage facilities in Karachi

• 8,000 sq ft in Lahore, respectively.

The group head office is in Karachi with a nationwide distribution network that is managed in

coordination with our regional offices in Lahore, Hyderabad and Islamabad. The address of

Karachi head office is 9/1, K-28, TRANS LYARI HAWKSBAY ROAD.

For McDonalds Pakistan they maintain a good fleet .for containers they use 40 ft and 20 ft fleet.

Which they use in transferring containers from port to their ware house. On the other hand

they have a reefer express fleet which they use for transferring McDonalds food ingredients to

their retail outlet in order to maintain a good – 22degree temperature while delivering.

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Containers used for shipping. Reefer Containers 40 ft

WEIGHTS Tare 4700-5200 kg (10365-11465 Ibs)

Max. Payload 25780-29250 kg (56845-64495 Ibs)

MEASUREMENTS external internal door opening

length 12192 mm (40') 11575 mm (38') -

width 2438 mm (8') 2280-2290 mm (7'6") 2280-2290 mm (7'6")

height 2895 mm (9'6") 2525-2550 mm (8'3"-

8'4")

2435 mm (8')

CUBIC CAPACITY 66.7-68 m3 (2355-2400 cft)

VOLTAGE 380/440V, 50/60Hz, 3-phase

TEMPERATURE

RANGE

-25/+25 C

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Reefer Containers 20 ft

WEIGHTS Tare 2850-3500 kg (6285-7715 Ibs)

Max.

Payload

17090-27280 kg (37685-60150 Ibs)

MEASUREMENTS external internal door opening

length 6058 mm

(20')

5480-5500

mm

(17'11"-18')

-

width 2438 mm

(8')

2230-2285

mm (7'4"-

7'6")

2165-2285 mm (7'1"-7'6")

height 2591 mm

(8'6")

2135-2255

mm (7'-

7'5")

2160-2210 mm (7'-7'3")

CUBIC CAPACITY 26.2-28.3 m3 (925-1000 cft)

VOLTAGE 180/220V and 380/440V, 50/60Hz, 3-phase

TEMPERATURE

RANGE

-25/+25 C

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From port to the ware house

McDonalds have approx 20 to 25 large and small size shipments every month. Order cycle

maximum 60 days and minimum 30 days.75% of the imports which McDonalds is making comes

in 40 ft containers which are then taken away by Venus distributors for storage, on the other

hand only 25 % of their containers comes in 20 ft containers. But each and every of their

container is insured. The imports that they make may be finished goods for the manufacturers

but for them it’s just an item which will be necessary to make one of their products. For

example cheese .though cheese is a finished good but McDonalds use it in their burgers which

then make the burger a complete finished good. From the ware house Venus takes the control

the very day and usually transfers at night because of the traffic problem .The total lead time

from port to Maripur ware house is 4 hours. The lead time from Karachi port to ware house at

Rawind road Lahore is 15 hours 20 minutes (nonstop) approx 20 hours with break.

Ware house

Venus usually keeps the stock for 1 month and 45 days. As mentioned earlier there are 2 ware

houses 1 in Lahore and 1 in karachi.They usually keep McDonalds supply in Frozen (-18 to – 22

degree) ,chilled( 0 to 4 degree) and dry rooms as required by the product.

From warehouse to retailers

• From ware house it is transferred to retailers in 20 ft containers

• In one day they cover 3 to 4 retail outlets.

• In a week they supply 2 times to the retail outlets.

• If the need arises in the retail outlet they will supply on the same day.

• The total time they will take for each delivery from warehouse to the retail outlets is 4

hours.( it covers 3 outlets in a single route and there are two routes).

• Route A covers seaview,park towers, Tariq road and airport branch and uses 20 ft

containers.

• Route B covers other branches like dolmen mall, stadium road, and lakson branches in

shehzore trucks with customized chillers.

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Retail outlets

• They have total 20 retail outlets

• Karachi 7

• Lahore 8

• Sialkot 1

• Faisalabad 1

• Islamabad 1

• Rawalpindi 1

• Hyderabad 1

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• All retail outlets have their own chiller, freezer and dry rooms.

• If any branch goes out of stock they ask for the inventory from their other branch which

comes on motorcycle and then asks from Venus to deliver, but it rarely happens.

Consumption

• It varies from retail outlet to retail outlet, but as a whole we take average of all retail

outlets so we can say that 70 percent consumers prefer chicken items and 30 percent go

for meat.

Expiry

• In retail outlets there are 2 types of freezers. One is a freezer room in the basement and

is just like a room. The expiry date of the products in this room is 90 days

• The freezer which is on the operational floor is having an expiry of some hours.

Consumption in Mcdonalds Pakistan chicken and meat

Chicken

Meat

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Home delivery

McDonalds also provide home delivery service .delivery phone number is 111244622 .For their

home delivery purpose they have approx 12 bikes and riders present at their branches to do the

home delivery on time. They use cd70 for their deliveries. When asked for their delivery time,

they said that McDonalds globally do not prefer and go for delivery system but in Pakistan they

were forced to do this because of the competition given to them by Kfc and Pizza hut. They take

approx 30 minutes to deliver in the radius of 8 km but conditions apply from outlet to outlet.

They use delivery bags made of material which keeps the temperate of the food item

maintained.

Software

McDonalds Pakistan is not using any type of branded software right now. Previously they used

American software which was used by McDonalds globally and these were provided by

McDonalds international to them. Later on they found out that Siza foods need to customize

the software because the previous software’s not meeting their demand. So now they have

made their customized inventory control software which is not having any specific name for

them.

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After being ask whether they use ERP or not in McDonalds they replied that currently

McDonalds is very small to use an ERP Software.

SWOT ANALYSIS

Always Leave Blank

Strengths – (S)

1. Pioneer in fast food industry 2. Strong brand image 3. Customer Loyalty 4. Successful marketing and

advertising 5. Market-leading position 6. Brand Quality 7. Product Value 8. Strong brand equity 9. Delivery 10. Strong global strategy 11. Cleanliness 12. Quality 13. Flexibility

Weaknesses – (W)

1. Frequent Run-ins with NGOs and Consumer Watchdogs

2. Kids based marketing strategy 3. Increasing Selling, General &

Administrative 4. Margins 5. Coverage

Opportunities – (O)

1. Market Potential – Growing market for fast food

2. People’s need for variety in the food and entertainment sector

3. E-commerce and Technology 4. People’s attraction towards

promotional offers

SO Strategies

McDonald’s can further tap into

other markets by using their brand

equity, brand image and the

diversified menu which allows

them to reach different audiences.

WO Strategies

Threats – (T)

1. Economic problems in the countries

2. Bird flu and Mad cow threat 3. Political problems in the

countries 4. Poor performance in one out-

let effects others 5. Relation between dealer and

franchiser 6. Rising health issues 7. Negative advertising by

competitors 8. Changing tastes of people 9. Rising raw material prices

ST Strategies

McDonalds can overcome their

health related and changing tastes

issues by using their successful

advertising and marketing tools

along with new product

innovations.

It can also increase it customer

base to reduce the effects of rising

raw material prices.

WT Strategies

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Hierarchy of McDonalds Pakistan

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Hierarchy of McDonalds Pakistan

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A B C D E F Kings & Queen Chatkharay The Deli Roasters McDonalds Nawab Zeenan Gazebo Ole Copper Kettle KFC Wimpys The Elbow

Room Guns n Smoke NANDOs

Kaybees Sawasdee Café Zouk PizzaHut Kundun Broast Aqua Lounge Café Aylanto Dominos Hot n Spicy Café Flo BBQ Tonite Subway Eaton Pompei Salt n Pepper

Village Papa Johns

Student Biryani Fujiyama Arizona Grill

Sakura

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McDonalds (Global) Financial Statements in $ million

INDICATORS

year end date 2005/12 2006/12 2007/12 2008/12 2009/12

date preliminary data loaded 2006-01-27 2007-01-24 2008-01-29 2009-01-27 2010-01-25

earnings period indicator F F F F F

quarterly indicator 4 4 4 4 4

basic earnings indicator Y Y Y Y Y

template indicator

preliminary full context ind N N N N N

projected fiscal year date 0000-00-00 0000-00-00 0000-00-00 0000-00-00 0000-00-00

number of months last report period 12 12 12 12 12

INCOME STATEMENT

operating revenue 20,460.2 21,586.4 22,786.6 23,522.4 22,744.7

total revenue 20,460.2 21,586.4 22,786.6 23,522.4 22,744.7

adjustments to revenue 0.0 0.0 0.0 0.0 0.0

cost of sales 12,886.5 13,352.2 13,667.3 13,675.4 12,736.7

cost of sales with depreciation 14,136.0 14,602.1 14,881.4 14,883.2 13,952.9

gross margin 0.0 0.0 0.0 0.0 10,008.0

gross operating profit 7,573.7 8,234.2 9,119.3 9,847.0 10,008.0

Research & Development (R&D)

Expense 0.0 0.0 0.0 0.0 0.0

Selling, General & Administrative (SG&A)

Expense 2,220.6 2,337.9 2,367.0 2,355.5 2,234.2

Advertising 0.0 0.0 0.0 0.0 0.0

operating income 4,021.6 4,445.1 3,879.0 6,442.9 6,841.0

EBITDA 5,353.1 5,896.3 6,752.3 7,491.5 7,773.8

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Depreciation 1,249.5 1,249.9 1,214.1 1,207.8 1,216.2

depreciation (unrecognized) 0.0 0.0 0.0 0.0 0.0

Amortization 0.0 0.0 0.0 0.0 0.0

amortization of intangibles 0.0 0.0 0.0 0.0 0.0

operating profit after depreciation 4,103.6 4,646.4 5,538.2 6,283.7 6,557.6

interest income 0.0 0.0 0.0 0.0 0.0

earnings from equity interest 52.8 76.8 115.6 110.7 94.9

other income net -127.1 -58.9 -90.2 165.7 246.6

income, acquired in process r&a 0.0 0.0 0.0 0.0 0.0

Income, Restructuring and M&A 0.0 38.3 88.9 126.5 0.0

other special charges 28.4 -134.2 -1,670.3 -6.0 61.1

special income charges 28.4 -95.9 -1,581.4 120.5 61.1

EBIT 4,057.7 4,568.4 3,982.2 6,680.6 6,960.2

interest expense 356.1 402.0 410.1 522.6 473.2

pre-tax income 3,701.6 4,166.4 3,572.1 6,158.0 6,487.0

income taxes 1,099.4 1,293.4 1,237.1 1,844.8 1,936.0

minority interest 0.0 0.0 0.0 0.0 0.0

pref. securities of subsid. trust 0.0 0.0 0.0 0.0 0.0

income before income taxes 3,701.6 4,166.4 3,572.1 6,158.0 6,487.0

net income (continuing operations) 2,602.2 2,873.0 2,335.0 4,313.2 4,551.0

net income (discontinued operations) 0.0 671.2 60.1 0.0 0.0

net income (total operations) 2,602.2 3,544.2 2,395.1 4,313.2 4,551.0

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Faisalabad

McDonald's Satyana

329 330- B, Peoples Colony,

Satyana Road, Faisalabad

041-8734812/13

satyanaroad.faisalabad@mcdonalds.com.pk

Sialkot

McDonald's Clover Plaza

8 Div. Army Welfare Complex,

Sialkot Cantt.

052-4297740/3

cloverplaza.sialkot@mcdonalds.com.pk

RawalPindi

McDonald's Jinnah Park

Police line-Opposite Kachehri Road,

Rawalpindi Cantt

051-7150116

jinnahpark.rawalpindi@mcdonalds.com.pk

Islamabad

McDonald's F-9 Park

F-9 Park, Islamabad

051-7137052

f9park.islamabad@mcdonalds.com.pk

Location and addresses of all outlets

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Karachi

McDonald's Lakson Square

Shop No. 16-17, Ground Floor, Lakson Square Building No. 2, Opposite Karachi Press Club, Sarwar Shaheed Road, Karachi. lakson.karachi@mcdonalds.com.pk

McDonald's Najeeb Center 172-B, Block 2, Tariq Road, PECHS, Karachi. 021- 34558054 najeebcentre.karachi@mcdonalds.com.pk

McDonald's Park Towers Shop No. GR-23, Plot No.1, Survey Sheet No.CF 1-5, Clifton Quarters, Park Towers, Karachi. 021- 35824251 parktowers.karachi@mcdonalds.com.pk

McDonald's Stadium Road Plot No. SB-9, KDA Scheme No.1 (Ext.), Opp. National Sports Stadium, Karachi. 021-34949508 / 38277748 stadiumroad.karachi@mcdonalds.com.pk

McDonald's DHA Corniche Plot No. P-58, DHA Beach, Phase V Ext., DHA, Karachi. 021- 38346202 corniche.karachi@mcdonalds.com.pk

McDonald's Airport

Parking Lot, Jinnah Terminal Complex, Quaid-e- Azam International Airport, Karachi. 021-34596051/2 airport.karachi@mcdonalds.com.pk

McDonalds Dolmen Mall Outlet No. 03, 4th Floor, Plot No. D-14, Block-C, Dolmen Mall, Hyderi, North Nazimabad, Karachi

Hyderabad

McDonald's Hyderabad

Plot # A-1/1, Main Autobhan Road, Unit No. 3,

Latifabad, Hyderabad.

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0223-812855

autobhan.hyderabad@mcdonalds.com.pk

Lahore

McDonald's 63- Main Gulberg Lahore 042-35752110/35753299 main63.lahore@mcdonalds.com.pk

McDonalds Park Lane Tower

21E, 21 F-UG, Tufail Road, Lahore Cantt 042-36684577

McDonald's Fortress Stadium

Opposite Khyber Block, Fortress Stadium, Lahore 042-36676680 fortress.lahore@mcdonalds.com.pk

McDonald's Defence Y Block Plot 486/ B, Sector Y, Phase III, LCCHS, Lahore 042-35733826/35731599 defence3.lahore@mcdonalds.com.pk

McDonald's Defence G Block Plot 5, Block G, Sector G, Phase I, LCCHS, Lahore 042-35725561/62 defence1.lahore@mcdonalds.com.pk

McDonald's Model Town 23-Phase II, Govt. Employees Cooperative Housing Society Ltd. Model Town, Township Link Road, Lahore 042-35171327/28 modeltown.lahore@mcdonalds.com.pk

McDonald's Allama Iqbal Town 13 Kashmir Block, Allama Iqbal Town, Lahore 042-37840053/37846757 iqbaltown.lahore@mcdonalds.com.pk

McDonald's Jail Road 89-B, Jail Road, Lahore. 042-37532056/58 jailroad.lahore@mcdonalds.com.pk