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 Marginal Neutral Marginal Fundamental

Strength Strength weakness 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"- 2435 mm (8')
8'4")
CUBIC CAPACITY 66.7-68 m3 (2355-2400 cft)
VOLTAGE 380/440V, 50/60Hz, 3-phase
TEMPERATURE -25/+25 C
RANGE

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Reefer Containers 20 ft

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

Max. 17090-27280 kg (37685-60150 Ibs)

Payload

MEASUREMENTS external internal door opening

length 6058 mm 5480-5500 -

(20') mm
(17'11"-18')

width 2438 mm 2230-2285 2165-2285 mm (7'1"-7'6")

(8') mm (7'4"-
7'6")
height 2591 mm 2135-2255 2160-2210 mm (7'-7'3")
(8'6") mm (7'-
7'5")

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

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

TEMPERATURE -25/+25 C
RANGE

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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.

Consumption in Mcdonalds Pakistan chicken and

meat

Chicken
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.

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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
Strengths – (S) Weaknesses – (W)

1. Pioneer in fast food industry

2. Strong brand image
3. Customer Loyalty 1. Frequent Run-ins with NGOs
4. Successful marketing and and Consumer Watchdogs
advertising 2. Kids based marketing strategy
Always Leave Blank 5. Market-leading position 3. Increasing Selling, General &
6. Brand Quality Administrative
7. Product Value 4. Margins
8. Strong brand equity 5. Coverage
9. Delivery
10. Strong global strategy
11. Cleanliness
12. Quality
13. Flexibility
Opportunities – (O) SO Strategies WO Strategies

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
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.

Threats – (T) ST Strategies WT Strategies

1. Economic problems in the

countries
2. Bird flu and Mad cow threat McDonalds can overcome their
3. Political problems in the health related and changing tastes
countries issues by using their successful
4. Poor performance in one out-
advertising and marketing tools
let effects others
5. Relation between dealer and along with new product
franchiser innovations.
6. Rising health issues
7. Negative advertising by It can also increase it customer
competitors base to reduce the effects of rising
8. Changing tastes of people raw material prices.
9. Rising raw material prices

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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 Guns n Smoke NANDOs
Room
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 Papa Johns
Village
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)

0.0 0.0 0.0 0.0 0.0
Expense

Selling, General & Administrative (SG&A)

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

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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Location and addresses of all outlets

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

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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

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