Beruflich Dokumente
Kultur Dokumente
MCDONALDS
Group members
: Khurram Hayat
Adnan Madni
Fiza Murtaza
Fatima Zahra
Maryam Rafique
Class
: MBA 3.5
Submitted To
ACKNOWLEDGEMENT
I have taken efforts in this project. However, it would not have been possible
without the kind support and help of many individuals and organizations. I
would like to extend my sincere thanks to all of them.
I thank my God for providing me with everything that I required in completing
this project.
I would like to express my gratitude towards my parents for their kind cooperation and encouragement which helped me in the completion of this project.
I would like to express my special gratitude and thanks to industry persons for
giving me such attention and time.
My thanks and appreciations also go to my classmates in developing the project
and to the people who have willingly helped me out with their abilities.
MCDONALDS
AN INTRODUCTION
McDonald's Corporation (NYSE: MCD) is the world's largest chain
of hamburger fast food restaurants , serving around 68 million customers daily
in 119 countries.
Headquartered in the United States, the company began in 1940 as a barbecue
restaurant operated by Richard and Maurice McDonald ; in 1948 they
reorganized their business as a hamburger stand using production
line principles. Businessman Ray Kroc joined the company as a franchise
agent in 1955.
Ray Kroc subsequently purchased the chain from the McDonald brothers and
oversaw its worldwide growth.
A McDonald's restaurant is operated either by a franchisee, or an affiliate, or
the corporation itself. The corporation's revenues come from the rent,
royalties and fees paid by the franchisees, as well as sales in companyoperated restaurants.
McDonald's revenues grew 27 percent over the three years ending in 2007 to
$22.8 billion, and 9 percent growth in operating income to $3.9 billion.
McDonald's primarily sells hamburgers , cheese burgers , chicken, French
fries, breakfast items, soft drinks, milkshakes and desserts . In response to
changing consumer tastes, the company has expanded its menu to
include salads, wraps, smoothies and fruits.
In July 2011, McDonald's announced that their largest restaurant in the world
will be built on the 2012 London Olympics site. The restaurant will contain
over 1,500 seats and is half the length of an American Football field. Over
470 staff will be employed serving on average (during the 2012 Olympics)
100,000 portions of fries, 50,000 Big Macs and 30,000 Milkshakes. This
HISTORY OF MCDONALDS
The McDonald's restaurant concept was introduced in San Bernardino,
California by Dick and Mac McDonald of Manchester, New Hampshire . It was
modified and expanded by their business partner, Ray Kroc, of Oak Park,
Illinois, who later bought out the business interests of the McDonald brothers
in the concept and went on to found McDonald's Corporation .
Early history
In 1937, Patrick McDonald opened "The Airdrome", an octagonal food stand,
on Huntington Drive in Monrovia, California . In 1940, his two sons, Maurice
and Richard ("Mac" and " Dick"), moved the entire building to 1398 North E
Streets in San Bernardino, California . The restaurant was renamed
"McDonald's Famous Barbeque" and served over forty barbequed items.
In 1953, the McDonald brothers began to franchise their successful
restaurant, starting in Phoenix, Arizona and Downey and California . The
McDonald brothers created Speedee to symbolize the quick and efficient
service system that they had devised. Downey's Speedee is one of only a few
remaining and Downeys restaurant is the oldest operating McDonald's in the
world.
Recognizing the historic and nostalgic value of the intact 1953 structure, the
McDonald's Corporation acquired the store in 1990 and rehabilitated it to a
modern but nearly original condition.
In 1954, Ray Kroc, suggested that they franchise their restaurants throughout
the country. He got the rights to set up McDonald's restaurants throughout the
country, except in a handful of territories in California and Arizona already
licensed by the McDonald brothers.
Kroc's first McDonald's restaurant opened in Des Plaines, Illinois ,
near Chicago, on April 15, 1955, the same day that Kroc incorporated his
company as McDonald's Systems, Inc. (which he would later rename
McDonald's Corporation).
restaurant mark in only eight more years, in mid-1996. By the end of 1997 the
total had surpassed 23,000, and by that time McDonald's was opening 2,000
new restaurants each year, an average of one every five hours.
In 1993, a new region was added to the empire when the first McDonald's in
the Middle opened in Tel Aviv, Israel.
As the company entered new markets, it showed increasing flexibility with
respect to local food preferences and customs. In Israel, for example, the
first kosher McDonald's opened in a Jerusalem suburb in 1995. In Arab
countries, the restaurant chain used " Halal" menus.
McDonald's entered India for the first time in 1996, where it offered a Big
Mac made with lamb called the Maharaja Mac.
Overall, the company derived increasing percentages of its revenue and
income from outside the United States. In 1992 about two-thirds of
systemwide sales came from U.S. McDonald's, but by 1997 that figure was
down to about 51 percent. Similarly, the operating income numbers showed a
reduction from about 60 percent derived from the United States in 1992 to
42.5 percent in 1997.
The company made several notable blunders in the United States in the 1990s.
A seemingly weakened McDonald's was the object of a Burger King offensive
when the rival fast-food maker launched the Big King sandwich, a Big Mac
clone. Meanwhile, internal taste tests revealed that customers preferred the
fare at Wendy's and Burger King.
In response to these difficulties, McDonald's drastically cut back on its U.S.
expansion. Plans to open hundreds of smaller restaurants in Wal-Mart and
gasoline stations were abandoned because test sites did not meet targeted
goals.
2010s
In July 2011, McDonald's announced that their largest restaurant in the world
will be built on the 2012 London Olympics site. The restaurant will contain
over 1,500 seats and is half the length of an American Football field. Over
470 staff will be employed serving on average (during the 2012 Olympics)
100,000 portions of fries, 50,000 Big Macs and 30,000 Milkshakes. This
restaurant will overshadow the current largest McDonald's in the world in
Moscow, Russia. In January 2012, the company announced revenue for 2011
reached an all-time high of $27 billion, and that 2400 restaurants would be
updated and 1300 new ones opened worldwide.
LIST OF PRODUCTS
Burgers
All beef patties are seasoned, consisting primarily of salt and black pepper.
Big Mac : Along with the Quarter Pounder with cheese, this is one of the two
McDonald's signature menu items, introduced in 1967 as a response to the
flagship burger at Big Boy restaurants. Two 1.6-ounce ground beef patties,
special Big Mac sauce, shredded iceberg lettuce, cheese, two gherkin slices,
and re-hydrated onions on a toasted sesame seed bun, with an additional
middle bun separating both beef patties.
Big N' Tasty : The Big N' Tasty consists of a seasoned quarter-pound beef
patty with ketchup, mayonnaise, slivered onions, two dill pickle slices, leaf
lettuce, and one tomato slice on a sesame seed bun.
Quarter Pounder : Along with the Big Mac, this is one of the two
McDonald's signature menu items. 4-ounce of ground beef patty with
ketchup, mustard, slivered onions, two gherkin slices, and two slices of
cheese.
Hamburger and cheeseburger : A 45 g ground beef patty, with ketchup,
mustard, a single dill pickle , re-hydrated onions, on a toasted bun. Also sold
as a double or triple, adding an extra pickle slice for each beef patty added
Double Cheeseburger: It has two 45 g ground beef patties, with ketchup,
mustard, two slices of dill pickle , re-hydrated onions, and two pieces of
cheese on a toasted bun.
McDouble: It similar to a Double Cheeseburger, but with just one slice of
cheese. It was reintroduced as a permanent dollar-menu item in December
2008.
Daily Double: Similar to the double cheeseburger, however the toppings are
different. The Daily Double is made with lettuce, tomato, slivered onions,
and mayonnaise. It also has only one slice of cheese, rather than the two
slices that are on the double cheeseburger.
The Big N' Tasty : It was introduced in 1997 and has beef patty with ketchup,
cheese, mayonnaise with a grill flavouring, diced onions, two pickles, leaf
lettuce, kebab meat and a tomato slice, on a toasted bun. It was devised to
resemble Burger King's Whopper sandwich.
McFeast: A hamburger with lettuce, tomato, and mayonnaise, the McFeast
contains a quarter pounder patty, lettuce, and modified mayonnaise with
lemon juice, ketchup, onion and tomato.
CORPORATE OVERVIEW
Facts and figures
McDonald's restaurants are found in 119 countries and territories around the
world and serve 58 million customers each day. McDonalds operates over
31,000 restaurants worldwide, employing more than 1.5 million people. The
companies also operate other restaurant brands, such as Piles Caf.
Focusing on its core brand, McDonald's began divesting itself of other chains
it had acquired during the 1990s. The company owned a majority stake
in Chipotle Mexican Grill until October 2006, when McDonald's fully
divested from Chipotle through a stock exchange. Until December 2003, it
also owned Donatos Pizza. On August 27, 2007, McDonald's sold Boston
Market to Sun Capital Partners . Notably, McDonald's has increased
shareholder dividends for 25 consecutive years, making it one of the S&P 500
Dividend Aristocrats.
Types of restaurants
Most standalone McDonald's restaurants offer both counter service and drivethrough service, with indoor and sometimes outdoor seating. Drive-Thru,
Auto-Mac, Pay and Drive, or "McDrive" as it is known in many countries,
often has separate stations for placing, paying for, and picking up orders,
though the latter two steps are frequently combined; it was first introduced in
Arizona in 1975, following the lead of other fast-food chains. The first such
restaurant in Britain opened at Fallowfield , Manchester in 1986.
In some countries, "McDrive" locations near highways offer no counter
service or seating. In contrast, locations in high-density city neighbourhoods
often omit drive-through service. There are also a few locations, located
mostly in downtown districts that offer Walk-Thru service in place of DriveThru.
To accommodate the current trend for high quality coffee and the popularity
of coffee shops in general, McDonald's introduced McCaf, a caf-style
accompaniment to McDonald's restaurants in the style of Starbucks . McCaf
is a concept created by McDonald's Australia, starting with Melbourne in
1993. Today, most McDonald's in Australia have McCafs located within the
existing McDonald's restaurant. In Tasmania, there are McCafs in every
store, with the rest of the states quickly following suit. After upgrading to the
new McCaf look and feel, some Australian stores have noticed up to a 60%
increase in sales. As of the end of 2003 there were over 600 McCafs
worldwide.
Some locations are connected to gas stations/convenience stores , while others
called McExpress have limited seating and/or menu or may be located in
a shopping mall . Other McDonald's are located in Wal-Mart stores. McStop is
a location targeted at truckers and travellers which may have services found
at truck stops.
Since 1997, the only Kosher McDonald's in the world that is not in Israel is
located in the " Abasto de Buenos Aires ", Argentina .
Global operations
McDonald's has become emblematic of globalization, sometimes referred to
as the "McDonaldization" of society.
The Economist newspaper uses the " Big Mac Index": the comparison of a Big
Mac's cost in various world currencies can be used to informally judge these
currencies' purchasing power parity . Norway has the most expensive Big Mac
in the world as of July 2011, while the country with the least expensive Big
Mac is India .
Some observers have suggested that the company should be given credit for
increasing the standard of service in markets that it enters. A group of
anthropologists in a study entitled Golden Arches East looked at the impact
McDonald's had on East Asia, and Hong Kong in particular.
When it opened in Hong Kong in 1975, McDonald's was the first restaurant to
consistently offer clean restrooms, driving customers to demand the same of
other restaurants and institutions.
McDonald's has taken to partnering up with Sinopec, the second largest oil
company in the People's Republic of China, as it takes advantage of the
country's growing use of personal vehicles by opening numerous drive-thru
restaurants.
McDonald's has opened a McDonald's restaurant and McCaf on the
underground premises of the French fine arts museum, the Louvre.
The company stated it will open vegetarian-only restaurants in India by mid2013.
Redesign
In 2006, McDonald's introduced its "Forever Young" brand by redesigning all
of its restaurants, the first major redesign since the 1970s. McDonald's has
invested $1 billion to redesign nearly all of the 14,000 restaurants by 2015.
Business model
McDonald's Corporation earns revenue as an investor in properties, a
franchiser of restaurants, and an operator of restaurants. Approximately 15%
of McDonald's restaurants are owned and operated by McDonald's
Corporation directly. The remainder are operated by others through a variety
of franchise agreements and joint ventures.
The McDonald's Corporation's business model is slightly different from that
of most other fast-food chains. In addition to ordinary franchise fees and
marketing fees, which are calculated as a percentage of sales, McDonald's
may also collect rent, which may also be calculated on the basis of sales.
As a condition of many franchise agreements, which vary by contract, age,
country, and location, the Corporation may own or lease the properties on
which McDonald's franchises are located. In most, if not all cases, the
franchisee does not own the location of its restaurants.
The United Kingdom and Ireland business model is different than the U.S, in
that fewer than 30% of restaurants are franchised, with the majority under the
ownership of the company. McDonald's trains its franchisees and others
at Hamburger University in Oak Brook, Illinois.
In other countries, McDonald's restaurants are operated by joint ventures of
McDonald's Corporation and other, local entities or governments.
As a matter of policy, McDonald's does not make direct sales of food or
materials to franchisees, instead organizing the supply of food and materials
to restaurants through approved third party logistics operators.
According to Fast Food Nation by Eric Schlosser , nearly one in eight workers
in the U.S. have at some time been employed by McDonald's. It also states
that McDonald's is the largest private operator of playgrounds in the U.S., as
well as the single largest purchaser of beef, pork, potatoes, and apples. The
selection of meats McDonald's uses varies with the culture of the host
country.
MARKETING MIX
The marketing mix of a company consists of the various elements as
follows which form the core of a companys marketing system and
hence helps to achieve marketing objectives. The marketing mix of
McDonalds is as follows:Product: - McDonalds places considerable emphasis on developing a
menu which customers want. Market research establishes exactly what
this is. However, customers requirements change over time. In order
to meet these changes, McDonalds has introduced new products and
phased out old ones, and will continue to do so. Care is taken not to
adversely affect the sales of one choice by introducing a new choice,
which will cannibalise sales from the existing one (trade off).
McDonalds knows that items on its menu will vary in popularity.
Their ability to generate profits will vary at different points in their
cycle. In India McDonalds has a diversified product range focussing
more on the vegetarian products as most consumers in India are
primarily vegetarian. The happy meal for the children is a great seller
among others.
Other than the main four elements mentioned above there are a
few other elements too in the marketing mix, which are as follows:-
SWOT ANALYSIS
Strengths
McDonalds holds a very strong brand name worldwide.
They have large partnerships with other companies that provide them with
their desired products; this increases the goodwill of the company.
McDonalds is one of the most reputed firms who are socially responsible.
Loyal employees & management & customer are their biggest strength.
McDonalds makes sure that cultural & regional barriers are kept in mind
while providing food to different countries.
Clean environment and play areas for children where they can enjoy their
time.
Weakness
The weakness that hits the list of employee turnover rate. Every year many
of their employees are fired out of the restaurant.
Health conscious people often complain that they do not provide us with
the organic and healthy food. This becomes their weakness when they get
in the complaints.
They also face quality issue at times. This affects the business as they are
running the outlet worldwide, if one franchise gets affected others also get
a bad name.
Opportunities
It can open up online services for their customers so that they can easily
order their desired meals sitting at home.
Discounts given on every food item may help them gain more customers.
They can go for a joint venture with the retailers they work with.
They can introduce healthy hamburgers and healthy drinks for the people
who are health conscious.
Threats
People facing heart problems and obesity accuse McDonalds for not
providing them with the healthy food.
McDonald's Corporation
Ticker Symbol:
MCD
Web Address:
www.mcdonalds.com
CEO:
Mr. Donald Thompson
No. of Employees:
420,000
Common Issue Type: CS
Business Description: McDonald's Corporation franchises and operates
McDonald's restaurants in the food service industry.
The Company and its franchisees purchase food,
packaging, equipment and other goods from numerous
independent suppliers.
Industry
LEISURE - Restaurants
Information:
KEY FIGURES (Latest Twelve Months Day Change
Bid
LTM)
87.18
-0.02 87.06 $
Yesterday's Close
Market Cap (mil)
Shares Outstanding (mil)
Beta
Price
PE Ratio LTM
87,526.7
Market Capitalisation
1,004.0
16.4
Ask
EPS
Open
87.43
DPS
High
Low
Volume
87.43 86.76
P/E
Yield
87,526.7
3658828
52-Wks-Range
102.22 - 83.31
9.10
0.00
44.7
EBITDA Margin
35.6
29.1
% DIVIDEND INFO
09/20/2012
% Dividend Declared Date
Dividend Ex-Date
11/28/2012
price performance previous 3 years
% Dividend RecordShare
Date
12/02/2012
12/16/2012
% Dividend Pay Date
Dividend Amount
770
% Type of Payment
Cash Payment
% Dividend Rate
3.08
Current Dividend Yield
3.5
%
Assets Turnover
0.8
16.1
39.2
20.4
Current Ratio
1.0
2.4
Interest Cover
16.6
0.96
LT Debt/Total Capital
48.0
Working Capital pS
0.06
Cash pS
2.17
Book-Value pS
13.83
Tangible Book-Value pS
11.10
Cash Flow pS
6.89
1.25
48.0
53.0
%
$
$
$
$
$
$
6.30
7.85
Price/Cash Flow
12.6
69.9
42.0
77.0
%
%
3.1
Payout Ratio
PRICE/VOLUME
High
Low
Close
% Price Chg
Total Vol
1 Week
0.0
101
54,041
66,217
4 Weeks
87.43
83.31
84.74
2.7
101
57,129
856,929
13 Weeks
94.16
83.31
91.02
-4.4
98
61,288
3,554,700
26 Weeks
94.16
83.31
87.75
-0.8
93
59,419
7,189,758
52 Weeks
102.22
83.31
98.03
-11.2
79
59,272
14,521,666
YTD
102.22
83.31
-13.2
77
59,774
13,807,695
Moving Average
5-Days
10-Days
10-Weeks
30-Weeks
200-Days
Beta (60-Mnth)
Beta (36-Mnth)
86.61
86.31
88.25
89.31
91.74
0.39
0.31
GROWTH
RATES
SOLVENCY
Revenue
5-Year
Growh
RATIOS
R of 5-Year
Growth
3.81
77.6
3-Year
Growth
NA
NA
NA
6.66
9.78
2.71
1.3
1.0
0.67
21.5
17
6.2
Working Capital pS
0.88
Cash-Flow pS
6.77
Free Cash-Flow pS
2.09
4.85
2.3
Debt Ratio
56.4
0.87
LT Debt/Equity
0.84
LT Debt/Capital Invested
56.9
LT Debt/Total Liabilities
65.2
Interest Cover
17.3
Interest/Capital Invested
1.67
CHANGES
YTD vs.
Last YTD
Annual vs.
Last Annual
10.52
Revenue %
2.1
-0.2
12.2
0.00
Earnings %
-1.4
-3.5
11.3
9.79
EPS %
1.0
-1.4
15.1
EPS $
0.04
-0.02
0.69
10.16
Identification of System
We have Visited branch, which is located Opposite Khyber Block, Fortress Stadium Lahore,
Pakistan.
We got detail about old system and new one
Purpose was to gather the information about
System /Design Layout
Equipment /Machinery
Time used for process
Labour
for both process
First MFY in McDonald fortress stadium branch was launch in 5th May 2011
Productivity and quality of products
The most important stations in McDonald
Service
Production
These departments are directly attached to each other
P.O.S
(Point of
Sale)
K.V.SKitchen
Video
System
( for
runner)
K.V.S
(for
drink
drawer)
Heat
treat
Touch
tower
T O TA L
CUSTOM ER
T IM E
90
second
s (fro m
T O TA L
CUSTO M ER
E X P E R IE N C
E T IM E
g re e tin g to
c o m p le tio n
o rd e r )
3
m in u te s
, 30
seconds
T O TA L L IN E
T IM E
2 m in u te s
K.V.S
(Kitchen
Video
System)
Toaster/stea
mer
Prep table
H.L.Z
(Heated
Landing
Zone)
Grill
U.H.C
(Universal
Holding
Cabinet)
Peoples (for Preparing Product)
There are 3 peoples in production at
Initiator
React
accordin
g to the
KVS and
insert
buns in
Toster
Batch
cooker
Assem bler
Prepare
food &
place in
the HLZ
volume
Prepare
the raw
products
such as
frozen
products
chicken
low
Initiator
reaction
Buns
toasting
3-5 sec
Assembler
17-19 sec
35-50 sec
Equipments Zones
Toaster
Prep
Temperature 121-131F
UHC (Universal
Handling Cabinet)
HLZ (Heated
Landing Zone)
Fried product
temperature: 200 degree
Fahrenheit
Grilled product
temperature 185 F
Temperature 165 F
Toaster
Dressing tale
Vats/fryer
Toaster
Dressing table
Grill
Steamer
Dressing table
Fryer
Layouts
Fried
Statio
n
Grilled
Statio
n
FishFillet
station
Comparison of layouts
DG
System
MFY System
Comparison
Products
order
Quality
of
product
extraordinary high
Products
prepared
to
Extra
products
prepared
took
time
always
just
prepared
100% guarantee
product
Critical to operate
Easy to operate
of
on
is
fresh
Calculations
MFY system have
low energy expense
Low labour (3 people)
More production output
Less costly equipment
As compared to DGS System
Total Productivity of Increase by implementation is about 21.75%
Findings
MFY system increased productivity of production department Because of the Criteria;
Conclusion
McDonald increased 21-25% productivity by replacing DGS with MFY.
MFY system have simple design and low equipment as compared to
DGS.
THE TOP FIVE REASONS WHY MCDONALDS IS SO POPULAR
SERVICE
QUALITY
FOOD
PREPARATION
PEOPLE
PROFITABILITY
1. The System
This is the first thing that makes McDonald's so successful, by having an
effective and efficient system in place, which exploits the minimum wage
labour available, in the form of young teenagers who are just looking to make
some cash or pick up fundamental job skills.
2. Convenience
The second reason why McDonald's is so popular is because it's everywhere.
There a McDonald's at every corner of the map, at every major shopping
centre, district, highway, freeway, every place which attracts even, remotely
more than 10 people, will have a McDonald's restaurant not too far from
them. McDonald's is having the best Real Estate locations around the world
which makes it so popular around the globe.
3.
Likability
and
Familiarity
4. The Menu
McDonald's has one of the most diverse menus, targeting all ages from little
kids to old pensioners, and everyone else in between. There's Big Macs for
the big kids and junior burgers for the little. The menu's versatility is
accentuated when they introduced the "healthy tick" concept, which target
those people who wants to watch what they eat (even though it doesn't make
sense to go to a fast food restaurant to eat healthy).
5. Consistency
The last reason is, McDonald's is so successful because of its
consistency. The expectations that we have about everything
surrounding the store are fulfi lled in almost every store
Logo of McDonalds
Downeys restaurant;
the oldest operating McDonald's in the world.
McArabia
McDonalds Salads