Business Plan for McDonald's

Table Of Content

 Executive Summary

 McDonald’s in Pakistan

 Vision&Mission Statement

 Key Sucess Factors and Critical Issues

 Situation Analysis

 Market Analysis and Market Share Model

 Compeititive Analysis

 Pest Analysis

 Swot Analysis

 Marketing Strategy&Market Segmentation

 McDonald’s Marketing Mix

 Product&Price

 Place&Promotional Mix
  Financial Position

Executive Summary
Mc Donald's is one of the world's largest chains of fast food restaurants. They operate thirty two
thousand restaurants serving more than sixty million customers daily. The key to rapid and
successful international expansion of Mc Donald's is the franchise model pioneered by them.

Mc Donald's recognized early in their life that overseas market required an extremely high
degree of local responsiveness and that they needed to manage business spread across
different regions effectively and efficiently which would be achieved only through
"Transnational Strategy". The value chain was constructed taking into consideration of local
culture, legal-political and economic environments in mind.

McDonald’s Pakistan
Being a capable corporate resident, McDonald's solidly has confidence in offering back to the
groups and different background peoples who works in it. We love to deliver and want to give
backing, help and comfort to the general population those needed it most. Each and every our
café is delivering to the public as well as every time we facilitate set up and help number of
learning institutions, charitable trust, funding programs, sports which are organized to facilitate
learning institutions, charitable trust, funding programs, sports which are organized to
facilitate.huge number of communities.
McDonald's has a proactive approach to charities and sponsorships. McDonald believes that
these kind of help will definitely motivate and support and care for the public of Pakistan,
particularly the deprived ones, to live a better life. McDonald is committed in distributing great
knowledge’s through their continuous public funding programs (mcdonalds.com, 2014).

Mission & Vision Statement

VISION
McDonald's vsion is to be the world's best quick service restaurant experience.Being the best
means providing outstanding quality,servce,cleanliness and value so that so that we make every
customer in every restaurant smile.

OBJECTIVES
"McDonald's brand mission is to be our customer favourite place and way to eat and drink.Our
worldwde operations are alighned around a global strategy called the plan to win,which centre
on an exceptional customer experience -People,product,place,price and promotion.We are
commited to continuously improving our promotions and enhancing our customer's
experience."

Keys to Success
To succeed in this business we must:

 Create a unique, innovative, entertaining menu that will differentiate us from the
rest of the competition.
 Control costs at all times, in all areas and implement a conservative approach
to growth policy. Although, we provide more than enough fund to open more than
 one outlet, we want to be on the safe side of the business.
 Sell the products that are of the highest quality, as well as keeping the
customers happy with all of our product categories from food to store
merchandising.
 Provide 100% satisfaction to our customers and maintaining the level of
excellent services among other competitors.
 Encourage the two most important values in fast food business: brand
and image, as these two ingredients are a couple of main drivers in
marketing communications.
 Get access to high-traffic shopping malls near the target market.
 Promote good values of company culture and business philosophy.
Key Critical Issues
Price Sensitivity
 Increasing prices without driving heading out clients has been precarious for McDonald's
Cut Operation Costs
 It will be basic for McDonald to roll out intense improvements in wasteful and pointless
operational territories.
.
Deal with the terrible PR by paying personnel more
 McDonald's has reputation for paying its staff fruitlessly. The organization has been hit by
dissents from laborers, a number of whom win the lowest pay permitted by law notwithstanding
having been with the organization for quite a long time (Monaghan, 2015)

Future Plans & long term aim:

If the business is meeting its projections by one year, we will start seeking for a second
location and develop plans for the next unit. Our five-year goal is to have at least 2-3 outlets
in the Dhaka area.
 Capture fair market share in the fast-food restaurant market within5 years of
operation

 Product differentiation. Introduce a Variety of local and global product

and charge premium price.
McDonald's COMPANY :BUSINESS OVERVIEW
According to Adams (2007), McDonald's is a popular destination for fifty million
customers every day, making the company one of the largest fast food
restaurants in the world. McDonald's is considered as the world's leading fast-
food Company in terms of revenues and
number of restaurants. At present, there are about 32,500 McDonald's stores in
over 100 countries across the globe, employing a total of 385,000 employees
worldwide (McDonald's 2010). The company is headquartered in Oak Brook,
Illinois, but its operations span from the United States to Europe to the Middle
East and to the Asia Pacific region (McDonald's 2010).
McDonald's stores sell a standardized menu, but there are slight variations
depending on the country where the store operates. For example, aside from its
standard menu, McDonald's sell coconut water in Brazil, rice burgers in Taiwan,
and porridge in the UK to suit the local taste of the customers (Adams 2007). The
key or standard products served at McDonald's stores include hamburgers and
cheeseburgers, chicken sandwiches, French fries, wraps, chicken nuggets, salads,
desserts, sundaes, soft served cones, pies, as well as cookies. Furthermore,
McDonald's also serves a wide range of beverages including milk shakes, soft
drinks, coffee, and flavored tea. In addition, McDonald's also sells breakfast items
especially in the US and many international markets, whereby breakfast offerings
include muffins, biscuits, hotcakes, and bagel sandwiches. McDonald's markets
its products under the following global brands: Big Mac, Big N' Tasty, Filet-O-Fish,
McNuggets, McFlurry, McMuffin, and the McGriddles (McDonald's, 2010).
McDonald's Head Quarters
 Situation Analysis

Market analysis and Market Share Model

McDonalds is a usually acknowledged marketplace Leader in the quick nourishment Industry or
also called the "Burger" business. The organization has productively perceived a prominent
brand picture. Indeed the extensions of quick nourishment have been named subsequent to the
association as 'McDonaldization'. Advertising includes distinguishing what clients require and
endeavoring towards satisfying their requests. Promoting Audit includes investigating the
organization's different viewpoints and assessing the organization's advertising technique. It
includes in drawing out the pitfalls in the associations execution. McDonald's is the world 'stop
organization in the fast food industry. It has more than 30,000 eateries in more than 100 nations
serving millions individuals around the worldwide. The organization's accomplishment was as a
consequence of the arrangement they take after, famous as the Q.S.C. &V.
The association obtain after a particular plan of action depicted as the “three legged stool
“wherein the three legs are the proprietors/chiefs, suppliers and Company workers. It is a
connection that makes, works, establishments and associations a general game-plan of coffee
shops that course of action, collect, bundle and offer an obliged set of choices of straight away
sorted out, inconspicuously regarded sustenance. McDonalds has started sustenance quality
purposes of enthusiasm, progressing and arranging programs, and prepared and deliver
structures, every part of those are deliberate the models of the commerce all through the world
(A market analysis of the McDonalds corporation, 2015).
McDonald’s Market Share Globally

McDonalds Market Share

In Pakistan MacDonald's piece of the overall industry is less then KFC. As McDonalds is
business sector pioneer all around yet in Pakistan it is not ruling and they need to expand piece
of
the overall industry. Pakistan is the extensive business sector and they are working in just real
urban communities of Pakistan like Karachi, Lahore, Islamabad, and Hyderabad. MacDonald's
needs to consider its less piece of the overall industry in Pakistan and they ought to build their
establishment in different urban communities of Pakistan also, and do some kind of offering
which is cost cordial to Pakistani client and dispatch that in country ranges of Pakistan so they
can expand their piece of the pie and beat KFC and get to be business sector pioneer in Pakistan
too (Ali, 2014).

Competitive analysis
McChicken while KFC was all the while testing its own particular chicken sandwich. This
deferral essentially expanded the expense of creating customer mindfulness for the KFC
sandwich. (Aeishah, 2009)
Competitive Advantage

Cost leadership
McDonald's buys supplies in mass and, to get lower costs Real Estate: McDonald's leases zone
and property they claim to foundations Marketing McDonald's is such a clearly comprehended
brand name and Ronald McDonald such a without a doubt comprehended mascot McDonald
needs to do significantly less publicizing than various diverse chains to keep up awareness of
their picture (fagansusanto, 2012).
Differentiation
McDonald's does not place stock in opening its diner with no learning of the area society and
tastes. The association considers an immense customers market with contrasting tastes and
thusly can't remain to present things without accustomed itself with basic slants in support.
Along these lines, McDonald's passes on its things within external territories through the assist
of foundations that are especially aware of with the purpose of mechanism in their country
(fagansusanto,2012)
PEST Analysis
Political:
 Government Pakistan has increased GST for service industry.
 Changes in the rules and regulations in Pakistan can affect the sales of McDonald.
 The political instability in Pakistan causes export as well as import policies are
change
rapidly as the government changes that cause McDonalds Pakistan numerous troubles
in the import of raw material. .
 McDonald’s Pakistan is enjoying an additional benefit in Pakistan because there
consumer protection regulations are not strong as compare to other countries.
Wherever laws are strong breaching quality can or in any thing can face lawsuits.
Economic:
 Due to economic downturn sales might be exaggerated
 There can be risk of currency, interest rate as well as exchange rates
 Increasing material prices and labor cost in production countries can effect
McDonald
 There are numerous variables, which can influence the operation of an
organization. In
 There are numerous variables, which can influence the operation of an organization. In Pakistan
McDonalds offer the sustenance at higher rates in contrast with the neighborhood nourishment eateries.
A large portion of the general population in Pakistan fall in the classification of middle class and it is not
moderate for them to have McDonalds at standard premise. Because of cutbacks and other financial
downturn of the present retreat period the benefits of McDonalds may have lessen as individuals
consider it as an extravagance to go and eat out at some outside QSR.
Social:
 Consumers are turning out to be more committed towards the brand and getting
to be brand cognizant.
 Changes in way of life and expanding working couple, which is expanding the
interest of
their items.
 A negative part of a social variable event in Pakistan is once in a while the way
 that multiple occasions hostile to Americans emotions ascending for various reasons
may a great deal or a little influence the organization by boycotting Americans
merchandise.
Technological:
 They have Google apps and diverse offices and site from which clients can do internet
shopping
 In practice, informal contacts with the help of marking their sources to the extent the
company will like face book and Google+.
 It is regular that innovation has helped McDonald and particularly its representatives, as
they need to serve brisk administrations. The workers utilize PCs and keen clerks so they would
not get befuddled and they are given altered database administration framework.
SWOT Analysis of McDonald’s
 Business ownership Overview
McDonald's Corp. engages in the franchise and management of restaurant chains.

It operates through the following segments: U.S.; International Lead Markets; High Growth Markets;
Foundational Markets & Corporate.
The U.S. segment manages fast food restaurants and provides mobile application for promos and orders.
The International Lead Markets segment operates in Australia, Canada, France, Germany, and the United
Kingdom.
The High Growth Markets segment expands its franchise and store operations in China, Italy, Korea,
Poland, Russia, Spain, Switzerland, and the Netherlands.
The Foundational Markets & Corporate segment refers to the firm's administrative activities.
The company was founded by Raymond Albert Kroc on April 15, 1955 and is headquartered in Oak Brook,
IL.
Company Profile
McDonald's is the world's leading global food service retailer with over 36,000 locations in over 100
countries. More than 80% of McDonald's restaurants worldwide are owned and operated by independent
local business men and women.

Reporting Segments
Beginning July 1, 2015, McDonald’s started operating under a new organizational structure with the
following four segments that combine markets with similar characteristics, challenges, and opportunities for
growth:

U.S. Market

 The U.S. is the largest market in the McDonald's System in terms of number of
restaurants, revenues and operating income
 We have a unique and powerful field organizational structure that, when optimized, gives
us a significant competitive advantage
International Lead Markets

 Includes some of the largest, best resourced and most established markets in the System
with strong, developed economies and, in most cases, similar competitive dynamics and
opportunities for growth
 Operating from a position of strength: largely reimaged asset base significant McCafé
presence across most markets, and high average unit volumes and franchisee cash flows
 Track record of innovation and sustained investement, particularly around our menu,
operations and Brand
High Growth Markets

 Relatively higher restaurant expansion and franchising potential

 8 key markets across Asia and Europe (China, Korea, Russia, Poland, Italy, Spain, the
Netherlands and Switzerland)
 All share a similar landscape of unpenetrated growth
Foundational Markets

 Largest and most diverse geographical segment spanning over 80 markets across parts of
Asia, Europe, Middle East & Africa and Latin America
 Markets with potential to operate under a largely franchised model
 Contains almost all of our DL markets globally
 Home to about 60% of the world's population and represents about one third of global
GDP growth.
Market Segmentation
We are targeting young Singaporeans as our primary market. Orchard Road is the place to meet and
hang out after school. Due to heavy extra-curricular activities among Singapore's youth, it is common
for high schoolers to have lunch inside shopping malls, and not at home. They tend to flock to fast food
joints inside shopping malls across Orchard Road.
Our secondary market segment is the "Working Singaporeans." With so many shopping malls in the
vicinity, Orchard Road is the haven for shoppers and job seekers alike. In the new Paragon Shopping
Centre, there are more than 8,000 workers currently working as sales persons and boutique staff.
There are more than 10 major shopping malls across Orchard Road, including Ngee Ann City, the
biggest shopping mall in the nation, employing more than 50,000 workers.
Lastly, Orchard Road is also the destination for tourists staying in the area. The Meritus Mandarin,
Crown Prince Hotel, the Hilton, and Popular Hotel are a few of the biggest accommodations in
Singapore. Tourists will stroll Orchard Road, hunting for the latest trend in fashion and have no time to
stop for a full meal during shopping. Fresin Fries is the alternative for a quick bite while shopping
the fancy boutiques in the area.

We are Segment our market by:

• Geographically: Dhaka city(Banani)

• Demographically: Age (6-11, 12-19-20-34, 35-49, 50-64, 65+) Gender (male, female)
family size, Income, occupation, Religion.
• Psychographic (social class, lifestyle, personality)
• Behavioral (occasions, benefits, loyalty status)
Target Market Segment Strategy:

 Our fast food items intends to young and university students. We have chosen this group
for several important reasons. It is our goal to be "the extraordinary fast food place" and we
believe that the age group from 15 to 34 is the primary age where brand building efforts could
take place.
 Our secondary target is between the ages of 35 and 39, which are a heavy
lounge/restaurant user group. The general people who have fast food going habit as we it earlier
mention it.
Main Competitors
Our main competitors in this segment are any food outlets within the 300 meter radius along the
Orchard Road. In our location, there are Tori-Q, Pizza Walker, Starbucks, Bread Talk,
 KFC,CFC,NANDOS,PIZZA HUTand Rotiboy.
McDonald’s Marketing Mix
Products
The major and most important thing while offering a menu to the customer is that you should
provide them a choice. The reason for this is that customer has number of ways to spend their
money on various places according to their need. So by providing them a choice you are
actually catering their need. McDonalds always try to create a menu, which is actually
customers’ want or need. However due to rapid changes in technology and others factors
customers are changing over time. May be what is fashionable today may not look attractive
tomorrow. So here the Research and Development of McDonalds monitors consumer’s
preferences closely. They do cater these changes through introducing new products and also
by elimination old ones or those, which are not actually working for them (malik, 2011).
McDonald’s mainly deals with the food and beverages products in a wide range. They use to
offer various types of gifts with their products to attract kids. This may not be counted in
their products list but can be mentioned as the innovative way of offering the products. It will
15
be further discussed in promotion mix part. The following main unique product lines with
having a unique test as followings.
 Pesto Mayo
 Satay Sauce
 Teriyaki Sauce
 Thai Chili Ketchup
 Creamy Wasabi Mayo
 Roasted Pepper Mayo
 Lava Cheese
 Black Pepper Sauce
 Curry Ketchup
 Barbecue
 Jalapeno Ketchup
 Caribbean Islands
 PRICE
The creation of value preposition in the minds of customer is an important determinant of price
to be charged. Customer is keener towards drawing the mental picture that how much does it
worth. May be sometimes a product is perceived more than its actual cost because of
psychological meanings for the customers (Khoso et al., 2014).
McDonald’s has been best in creating the value in the minds of customers due to which they are
successful in satisfying customers on what they are charging. In Pakistan they are using two
types of pricing strategies Price bundling along with psychological pricing. McDonalds is
basically offering various deals and discounts in price bundling and are using psychological
pricing strategy in a way that it looks much easier to be affordable, For example Rs.99 or Rs.299
instead of rounding it off to the nearest rupee.
McDonalds has also been successful for implementing the Integrated Pricing Strategy globally
by having the following formula:

C3 model of Pricing Cost

easily create the differentiation in the minds of customer on the basis of price. Also from this model they are
able to create integration in terms of price between their franchises in various parts of the world, So that
there should be synergy and equality among diverse customers. This is the important mantra for
McDonald’s for setting their price

PLACE
Physical presence or distribution points for any products are not known as place in the marketing
mix but it is consist of management range of process. These processes are engaging to provide
products to the end customers. Here McDonalds Pakistan has adopted this strategy and is
providing their customers with the prominent places where they are going to distribute their
products. So the element indicated that there should be location where firm product can be
offered. So McDonald Pakistan has virtual and non-virtual locations for selling their products
like following

1. Restaurant’s
2.Kiosk
3. Websites and apps
4. McDonald mobile app specially designed to get customer familiar about the products and services been
offered..

In Pakistan the restaurants of McDonalds are generating more sales revenues than other types
where the products are been offered. Also kiosks are coming under these restaurants for selling
some selected products. In Pakistan it is done lesser but in other countries like USA kiosks are
been second-hand in regular actions and specialized events like sports competition. In Pakistan
and all around the world the websites or post mates are used to give the orders. Also you can
download the app of McDonalds and can get benefit from that by placing your order without
going physically. In Pakistan the most common way is going towards in restaurants (Ahmed, et
al., 2014)

Promotional Mix
This aspect of marketing mix covers all the ways of communicating with customers and also
defines the approaches to be used while having communication with the customer. In every
sector it depends upon what to promote services you are giving or the product, which you are
offering. Here in the case of McDonald they are basically promoting their products to attract the
customers but in some example McDonalds has also created differentiation in the minds of
customers through their services. For example the 2012 or 2013 campaign has you done your
Break? Was based on how quick services can be offered you by MacDonald’s. While promoting
this idea they have shown that how they have minimized 20 sec from their overall process while
preparing the order. This idea was very useful for the office workers those who want to grab a
quick lunch due to a lot of work. McDonald’s communicates these types of messages through
various tactics as followings

IMC (Integrated marketing communication) Strategy

1) Advertising: Mostly advertisements of McDonald are used to convey the messages through
various mediums like TV, Print Media, Radio and various others. In India, USA and other countries
McDonald’s use the TV ads to convey their messages. In Pakistan McDonalds on national channels is less
founded or hardly founded because of the fact the use social
media to promote their advertisements. They do promote their videos on Facebook and
YouTube in Pakistan. For example when MacDonald’s was in rumors for the obesity
issues than they used social sites and various others to defend their self’s. In that
advertisement they have shown the process that how from an ordinary potato it turns into
the Mac-Fries with in hygiene environment. This again shows that how the MacDonald is
trying promote their services along with their products.

2)Sales Promotions: we propose MacDonald’s to increase their sales promotions in

Pakistan. In Pakistan with in the fast food industry there is a lot of competition due to
small local restaurants and these restaurants are offering cheaper rates with having
exciting deals. McDonald’s deals in Pakistan are less cheap as compared to the local
restaurants. KFC is catering more market share due to their sales promotions in Pakistan.
No doubt company is offering discounts coupons but still as compared to the other
competitors customers are not easily drawn to the McDonald’s restaurants.

3) Public Relations: In Pakistan recently McDonald’s has not done PR related any activity but I still
remember the Ronald McDonald house philanthropies and the McDonald's Global Best
of Green ecological project bolster groups while boosting the estimation of the corporate
brand. These were not done in Pakistan but as you may see the second one green
environmental activity, which helps McDonald’s to increase its corporate and social
image among various customers globally

4) Direct selling:In Pakistan hardly seen that McDonald’s is involved in direct selling but may be
company is using it occasionally in other countries, such as for corporate client business,
local government or may be community events and parties
McDonald’s has always emphasis towards advertising their products in this element of marketing
mix and is succeeded in various countries. So we will recommend McDonald’s to start
advertising their product to the television channels of Pakistan and also to increase the sales
promotion.

Example of New Product Development

 McDonald's- is always within the fast-food industry,but frequently markets
new burger.
Örganizatonal Structure

Financial Position
“McDonald’s worth is rapidly increasing; you can see and analyze by the above statistical chart
with the time its market value increasing (Institute)."
Start-up Funding
Currently, the company is owned by the original 4 founders, who each will contribute
£200,000 for the same amount of share, 25%. This will more than cover start-up
requirements, and provide the business with a cash cushion to use for expansion over the
first three years.
Start-up Expenses to £68,800
Fund
Start-up Assets to Fund £50,000
Total Funding Required £118,800
Assets
Non-cash Assets from Start-up £30,00
0
Cash Requirements from Start- £50,00
up 0
Additional Cash Raised £681,20
0
Cash Balance on Starting Date £731,2
00
Total Assets £761,200
Liabilities and
Capital Liabilities
Current Borrowing £
0
Long-term Liabilities £
 0
Accounts Payable (Outstanding Bills )

£0 Other Current Liabilities (interest-free)

£0 Total Liabilities

£0
Capital
Planned Investment
Eric Yam £200,000
Martin Ng £200,000
David Lu £200,000
Sagita Suwandi £200,000
Additional Investment £0
Requirement
Total Planned Investment £800,0
00
Loss at Start-up (Start-up (£68,80
Expenses) 0)
Total Capital £731,200
Total Capital and £731,2
Liabilities 00
Total Funding £800,000
Break-even Analysis
Our break-even analysis shows that we need unit sales over 9,700 per month to break even.
We do not expect to begin turning a profit until year three.
Break-even Analysis
Monthly Units Break-even 9,70
6
Monthly Revenue Break- £32,1
even 04
Assumptions:
Average Per-Unit Revenue £3.3
1
Average Per-Unit Variable Cost £0.73
Estimated Monthly Fixed Cost £24,9
79

Income Statement of McDonald’s

Cash Flow Statement

Balance Sheet
 Ratio Analysis OfMcDonald’s

Conclusion Recommendations
According to the market and analysis McDonalds’ have its worth to do its objectives by own. It
is capable to launch and offer new products plus services to the public, McDonalds’ can enlarge
its share by observing its worth.

Following are the points for strategies and Objectives, such as:

• McDonalds should have “Order via Digital Screens” (On/Near Tables)

• McDonalds should increase “Social Media Marketing Campaigns”
• McDonalds focuses on “Vegetarian Meals and Salads”
• McDonalds should focuses “More Economical Price Products”
• McDonalds should lunch “Order Customization”
• McDonalds should focuses on “Wheels on Meal”