MCDONALD’S DELIVERY SERVICE

A new era in getting fast food to go

TABLE OF CONTENTS

• Marketing and Project Objectives

• Target Markets

• Points of Difference

• Positioning

• Marketing Program

• Product

• Price Strategy

• Place Distribution Strategy

• Promotion Strategy

• Financial Data and Projections•

• Five-year Projection

• Implementation Plan

• Rollout Schedule for the First 5 Years

• Evaluation

• Company Description

• Strategic Focus and Plan

• Mission Statement

• Goals

• Nonfinancial Goals

• Financial Goals

• Core Competency and Sustainable Competitive Advantage

• Situation Analysis

• SWOT Analysis

• Industry Analysis

• Competitor Analysis

• Company Analysis

• Customer Analysis

• Market Product Focus

IN THE BEGINNING…

Born in 1948

Turned to Franchise in 1954

700 locations by 1965

Ronald McDonald introduced in 1966

Egg McMuffin and Happy Meals introduced in 1975 & 1979

Can be found in 32 countries by 1981

Patent phrases “Have you had breakfast today”, “Did somebody say McDonald’s?”, and “I’m loving it” advertised in 1995-1997

Today is operating in 119 countries… and growing!

OUR MISSION AND GOALS“McDonald's brand mission is to be our customers' favorite place and way to eat and drink. Our

worldwide operations are aligned around a global strategy called the Plan to Win, which centers on an exceptional customer experience – People, Products, Place, Price and Promotion. We are

committed to continuously improving our operations and enhancing our customers' experience.” (aboutmcdonalds.com, 2014)

GOALS CONTINUED5 YEAR PLAN

Nonfinancial Goals

Continue to build the McDonalds brand by focusing on customers needs.

Insure that as the brand grows the company is gaining long-term repeat customers.

Continue to introduce new items as well as phase out old items.

Promote and insure a menu, which contains an array of healthy alternatives

Introduce delivery service in several metropolitan areas with the intent to eventually offer delivery in 85% of Mc Donald’s restaurants.

Financial Goals

A system wide sales growth of 3-5% in addition to a 2% per year increase in revenue due to delivery implementation

Operating income growth of 6-7%

Return on incremental invested capital in the high teens. (news.mcdonalds.com)

CORE COMPETENCY & COMPETITIVE ADVANTAGE

“We always strive to be better tomorrow than we are today. This, more than

anything, speaks to who McDonald's is as a company. The overarching goal of our

sustainability efforts is focused on continuous improvement through our five focus areas: Nutrition & Well-Being, 

Sustainable Supply Chain, Environmental Responsibility, 

Employee Experience, and Community.” (aboutmcdonalds.com,

2014)

SWOT Analysis

Strengths

1. Largest fast food market share in the world

2. Brand recognition valued at $40 billion 3. $2 billion advertising budget 4. Locally adapted food menus 5. Partnerships with best brands 6. More than 80% of restaurants are owned

by independent franchises 7. Children targeting

Weaknesses

1. Negative publicity 2. Unhealthy food menu 3. Mac job and high employee turnover 4. Low differentiation

Opportunities

1. Increasing demand for healthier food 2. Home meal delivery 3. Full adaptation of its new practices 4. Changing customer habits and new

customer groups

Threats

1. Saturated fast food markets in the developed economies

2. Trend toward healthy eating 3. Local fast food restaurant chains 4. Currency fluctuations 5. Lawsuits against McDonald’s

INDUSTRIAL ANALYSIS

Mostly known in the pizza industry

Growing interest in delivery and more convenient food options

Catering a big option in competitors such as Panera Bread, account for 8% of company sales

Franchises moving to adding additional drive-thru’s for added convenience and express services

Studies have shown an increase in catering and delivery

COMPETITOR ANALYSIS

Obvious competitors are Chinese, Pizza, and Burger King

In addition to many pizza, Chinese franchises, and local businesses, Burger King has started its venture into delivery

75 Burger King delivery cities in New York, Maryland, Virginia, Texas, and Florida

While McDonald’s has only ventured in New York

4 Reasons why it may be a bad idea:

1. Fewer burger parties- pizza staple for parties

2. Impulse buy- you usually crave burgers when you are already out and about

3. Cold Burgers- YUCK!

4. Execution Risk- McDonald’s has no experience in delivery which is an art form

COMPANY ANALYSIS

McDonald’s is a major brand, expanding its name in multiple

countries, along with coping with new “health trends”. Our company strives to continue growing in the

future. We plan to expand into Asia, and Africa, as well as offering new

menu options to better suit our customers.

CUSTOMER ANALYSIS

We like to think that we are able to fit all customers; Children, busy parents, teenagers, college students etc. With the new healthier options, we have given more varied menus, including apple slices instead of fries, varied salads, wraps and yogurts.Customer Reasons

Children 12yr & younger Toys in Happy Meals, Play sets in locations

Young Adults 16-25 Fast service, price, convenience, Wi-Fi

Busy Parents Fast and Easy, price, cater to children

MARKETING AND PRODUCT OBJECTIVES

Current Markets: Current markets will continue to bring in revenue. With continued advertisements, repeat purchases, the dollar menu, and coupons, sales will grow.

New Markets: The new market will bring a delivery service by the end of year 5. This delivery service will be expanded to cities all around the country, and in countries’ where access to roads and vehicles are obtainable. The objective is to eventually have 85% of McDonald restaurants to have this delivery service.

Food Service: This will include all sales made by delivering a McDonald’s food product to a location. Sales are expected to grow 2% or $480,000,000 for the first year the service will be in place.

New Products: The first year of the delivery service will consist of setting up the market strategy, setting protocols, and safety standards for maximum customer satisfaction and employee safety. The delivery service will first be implemented in several metropolitans, cities, and towns across the United States for the next two years. The product will then be expanded to more cities in the country, and to major cities around the world where a McDonald’s restaurant is located for the last two years. By then the service would be fully brought into the market.

TARGET MARKET

The primary targets for this service will be for youths and adults who want a McDonald’s meal but do not

have the capabilities or resources to get to a McDonald’s restaurant. These individuals are usually

the group that is interested in eating food from a restaurant that is familiar or home-like, and who find

value in the McDonald’s food items.

POINTS OF DIFFERENCE & POSITIONING

Point of Difference

Unique tastes and convenience: McDonald’s is known for its tasty, quick meals that are perfect for an individual who has a tight budget. The restaurant is also known to be in locations close to residential areas, and cities, for the convenience of the residents in and around these areas.

Taste trends: McDonald’s looks at certain flavor preferences in certain areas in and around the chain of restaurants and also looks at the taste preferences in gender and age. This is to ensure that every segment of the market is satisfied with the McDonald product.

Familiar Packaging: McDonald’s is known for its unique golden arches, and its slogan “I’m lovin’ it”. This brands a product as having the McDonald’s quality, fast service that only McDonald’s is able to provide.

Positioning

In the past McDonald’s has never delivered their product to individuals in

and around their restaurants. McDonald’s will put their quality, fast service into the meal delivery that will leave customers

satisfied, as McDonald's slogan says “Lovin’ it”, and wanting more.

MARKETING PROGRAM

Product Product line- deliver any item

on menu

Product Quality- remains equal and will stay true to quality standards and higher

Packaging- Continue using the infamous golden arches

Price Starting at $10 at 5% delivery

charge

$11-$20 a 4% delivery charge

$21-$30 a 3% delivery charge

$31-$40 a 2% delivery charge

$41-$50 a 1% delivery charge

$50> no charge

Charges vary based on gasoline prices

MARKETING PROGRAM CONTINUED

Place We operate in most major

cities in the U.S and internationally.

We also have teamed with locations such as Walmart and airports

We have many suppliers, of which we may need to expand depending on how fast the delivery service may grow

Promotion Advertisement- commercials online

and television, billboards, magazine ads, newspaper ads

Online Delivery orders- convenience of ordering without interference of calling

Coupons- 5 ways Newspaper inserts Direct mail At locations Online Mobile apps

Financial Data and Projections

Year 2009 Year 2010 Year 2011 Year 2012 Year 2013

Currency in Millions 22,745 24,075 27,006 27,567 28,106

22,745

24,075

27,00627,567

28,106

Revenue

FIVE-YEAR PROJECTION

Year 1 Year 2 Year 3 Year 4 Year 5

Actual Delivery Service

Delivery Service

Delivery Service

Delivery Service

Delivery Service

Financial Element 2013 2014 2015 2015 2017 2018 McDonalds in US 14278 1428 3212.5 3212.5 3212.5 3212.5 Net Sales (Millions) 4,744.30 4,839.20 4,936 5,035 5,136 5,238 Gross Profit (Millions) 2742.8 2797.66 2853.61 2910.7 2968.91 3028.29

McDonald’s five- year financial projection for the delivery service, will forecast an annual revenue increase to the sum of approximately 2 to 4 percent. These percentages are based on how much the customers utilizes the delivery service, it also depends on the market overview of McDonald’s competitors once the delivery service has been implement.

Targeted areas

% of

stores*

Year 1

2014

% of

stores*

Year 2

2015

% of

stores*

Year 3

2016

% of

stores*

Year 4

2017

% of

stores*

Year 5

2018

Downtown

Area

5%

15%

20%

25%

25%

Metropolitan

Area

5%

15%

20%

25%

25%

Implementation and Rollout Schedule

Here we see a rollout schedule, the delivery service is to target the consumers that have visited our restaurants throughout the duration of the current year (2014), and to focus on increasing those consumer numbers for the next 4 proceeding years. McDonald’s implementation of the delivery services will also increase our popularity.

EVALUATION

Through McDonald’s five-year plan, the increase and traffic from current and new customers will rev up revenue from 2-4%. This will assist in meeting company goals, and moving the company into a new era of delivery. With McDonald’s already spectacular reputation, the company plans to build on this by providing customers with a “bring it to you” evolution. After the rollout schedule has begun, we can prefect our processes by listening to our customer’s feedback, and using surveys to make our delivery option smoother and easier for our loyal customers. Overall the implementation will bring a guaranteed increase in revenue, and an increase in customer traffic, in turn, in the long run continue to make McDonald’s more accessible in multiple ways, and bring more customer satisfaction resulting in continuous long-term success.

REFERENCE PAGE

Financial Highlights :: AboutMcDonalds.com. (n.d.). AboutMcDonalds.com. Retrieved March 22, 2014, from http://www.aboutmcdonalds.com/mcd/investors/financial_highlights.html

Friend, E. (2013, June 7). Fast Food Delivery Part 2: Risks and Opportunities in the US - Analyst Insight from Euromonitor International. Analyst Insight from Euromonitor International. Retrieved March 20, 2014, from http://blog.euromonitor.com/2013/06/fast-food-delivery-part-2-risks-and-opportunities-in-the-us.html

Martin, K., & Barker, H. (2013, November 14). McDonald's – Official Global Corporate Website :: AboutMcDonalds.com. McDonalds. Retrieved March 17, 2014, from http://news.mcdonalds.com/Corporate/Press-Releases/Financial-Release?xmlreleaseid=123040

McDonald's Corporation: NYSE:MCD quotes & news - Google Finance. (2014, March 22). McDonald's Corporation. Retrieved March 22, 2014, from https://www.google.com/finance?q=NYSE:MCD &fstype=ii&ei=OkRCU6CcAenhsQfbLw

McDonald's Mission and Corporate Values :: AboutMcDonalds.com. (n.d.). McDonald's Mission and Corporate Values :: AboutMcDonalds.com. Retrieved March 17, 2014, from http://www.aboutmcdonalds.com/mcd/our_company/mission_and_values.html

McDonald's Reports Fourth Quarter And Full Year 2013 Results. (2014, January 23). The Wall Street Journal. Retrieved March 22, 2014, from http://online.wsj.com/article/PR-CO-20140123-907102.html

Our Focus Areas :: AboutMcDonalds.com(n.d.) Our Focus Areas :: AboutMcDonalds.com. Retrieved March 17, 2014, from http://www.aboutmcdonalds.com/mcd/sustainability/our_focus_areas.html

Pizza Delivery Q&A. (2009, August 13). Retrieved April 21, 2014, from http://www.tipthepizzaguy.com/qna/2dollarfee.html

Rosenburg, M. (2012, June 1). How Many McDonald's Restaurants Operate Worldwide?. About.com Geography. Retrieved March 21, 2014, from http://geography.about.com/od/lists/qt/mcdonalds.htm

REFERENCE CONTINUED…

Schneider, S. (n.d.). McMarketing: McDonalds Marketing And Advertising Hits And Pits. noupe. Retrieved March 21, 2014, from http://www.noupe.com/inspiration/mcmarketing-mcdonalds-marketing-and-advertising-hits-and-pits.html  Strachan, M. (2013, October 21). McDonald's Billion-Dollar Profit Is Awkwardly Close To The Amount It Costs Taxpayers Every Year. The Huffington Post. Retrieved March 21, 2014, from http://www.huffingtonpost.com/2013/10/21/mcdonalds-profit-taxpayers_n_4136336.html Strategist, A. (2014, March 20). McDonald's - Bright Long-Term Prospects. McDonald's Corporation (MCD) news:. Retrieved March 20, 2014, from http://seekingalpha.com/article/2099693-mcdonalds-bright-long-term-prospects SWOT analysis of McDonalds. (n.d.). McDonalds SWOT analysis 2013. Retrieved March 20, 2014, from http://www.strategicmanagementinsight.com/swot-analyses/mcdonalds-swot-analysis.html Tice, C. (2012, November 28). Will McDonald's and Burger King Deliver...to Your House?. Forbes. Retrieved March 20, 2014, from http://www.forbes.com/sites/caroltice/2012/11/28/will-mcdonalds-and-burger-king-deliver-to-your-house/