BDO UNIBANK INCORPORATED

Vision Statement
We shall be at the forefront of the leasing and financing industry in the Philippines and in the
Asia Pacific Region. We shall have the most extensive market reach and shall be composed of
highly trained, technically competent and upright professionals working as a team and
contributing to the growth of the nation and the communities we serve. Recognizing that the
customer is the focus of our activities, we shall lead the industry by providing modern and
relevant financial services which exceed their expectations.
 
Mission Statement
We are in business for our customers, shareholders and employees. We shall deliver creatively
innovative products and cross-sell the BDO Unibank Group’s services supported by procedures,
systems and processes which will ensure utmost customer satisfaction. We shall recognize and
reward excellence in our employees and shall provide an environment conducive to maximizing
their potentials as we work cohesively as a team. We shall generate consistently high returns for
our shareholders.

SAN MIGUEL CORPORATION

OUR VISION

We are San Miguel.

Guided by a strong sense of social, environmental and economic responsibility, our businesses

will lead efforts to deliver on national goals, setting the pace of progress in the Philippines.

OUR MISSION:

To provide goods and vital services well within the reach of every Filipino, making every day

life a celebration.

GOAL
San Miguel’s goal is to help people enjoy and make progress in their lives through the many
products and services that our company offers. We want to give every customer and consumer
we touch access to the best we can offer—whether in terms of quality, or affordability or choice.
KEY OBJECTIVES
EMPLOYER-EMPLOYEE RELATIONSHIP

MCDONALDS
Mission & Vision
The mission of McDonald’s is to be the customer’s favorite place to eat and drink (McDonald's,
Mission & Values, 2014). The company strives to provide a superior service experience to its
customers all over the world. It also aims to grow its business profitably while contributing to
community development.

McDonald’s also emphasizes the growth and development of its employees, focusing on their
higher education and training within the organization. Such polices and values together with
workforce diversity have created a positive brand image for the organization. They also represent
an investment rather than a cost: more highly-trained employees are more valuable employees.
They are worth more to the organization of which they are a part, either present or future.
McDonald's Overview

The leading fast food restaurant in the United States, McDonald's is a global food service
provider with 35,000 restaurants globally that serve about 70 million customers in more than 100
countries every day (McDonald's, 2014). It was established in April 15, 1955
and headquartered in Oak Brook, Illinois.

The company has been a successful global fast food brand in major regions of the world due to
its menu customization and its adaptation to the tastes and the culture of its target markets. For
example, McDonald’s offers the McArabia in Saudi Arabia and the McAloo Tikki Burger in
India. Both sandwiches use local food ingredients, and both have received an overwhelming
response from local customers. The company operates on a franchise model and has consistently
expanded its business operations on the basis of this model.
 Corporate strategy
Expansion strategy
McDonald’s has adopted a Market Development strategy for expanding into growing economies,
especially those of Asian countries. The Golden Arches have set their sights on penetrating
Asian markets, as those markets have high income potential. McDonald's already enjoys
unqualified success in Tokyo, Seoul, Beijing, India, and the United Arab Emirates, to name a
few Asian markets. There are many other markets throughout the Asian region that offer the
promise of high sales, market share and profit for the creative fast food company that is fast
enough on its feet to set up operations there.
Franchising
To carry on the expansion strategy the company used the franchising strategy worldwide. It has
successfully replicated its business model, not in the US but also in the global locations. Today
more than 80% of the restaurants of the company are operated through the franchisees. The
contribution of the franchisee business is as follows:

Source: Market Realist, 2013

Adaptation strategy
Due to different rules and regulation in foreign countries, the company sometimes cannot follow
standard practices everywhere. For instance, meat is purchased in a specific way in Russia due to
local regulations. Adaptation in the standardized process is done to meet legal and cultural
demands. There used to be a McCenter in Russia for purchasing all the raw materials that go into
McDonald's meals, but now meat, potatoes, buns, vegetables, milk, soft drinks, etc., are
purchased from wholesalers. It is now more of a challenge for the fast food giant to maintain
uniformity of quality and cost for its outlets in Russia. This affects everything from quality to
profit, and from market share to food cost.

Business Strategy
Value for Money
McDonald’s aims to lure price sensitive customers with its value for money meals such as the
Buffalo Ranch McChicken and the Jalapeño McDouble (Lutz, 2014). The company initially
targeted high-priced value items in its menu but has recently shifted its focus towards lower-
priced products

Customer Service
McDonald’s has always focused on its service excellence to provide customers with high-quality
food served quickly and in clean surroundings. However, with increasing demand and a complex
food menu, the restaurant has been experiencing service delays due to the longer preparation
time required for menu items (Lutz, 2014). Speed of service is one of the most crucial aspects of
fast food. During peak traffic times (lunch and dinner rush times), customers expect to receive
their orders within about one minute after placing them. During slower times, customers are
willing to wait two or three minutes for their orders before they start to form negative opinions
about the company. McDonald's has realized that a return to its former reputation for serving
quality fast food quickly means elimination of certain menu items and greater focus on its more
traditional menu items, such as Big Macs, Quarter Pounders, Fish, Chicken, and French Fries.
Brand Marketing
McDonald’s has been adversely affected by the growing health concerns of consumers all over
the world. The products of McDonald’s have been labeled as junk food and declared unfit for
daily consumption. McDonald’s now aims to increase the trust of its customers in the food
quality and brand of McDonald’s products as healthy food options (Lutz, 2014). To do this, it
has started offering salads, iced tea, sugar free drink options, fruit juices, and other options that
are either low in calories and/or low in carbohydrates.
Menu Standardization
McDonald’s has implemented menu customization for various countries of
operations that has actually complicated the menu items and increased the
preparation time and thus wait time for customers (Lutz, 2014). McDonald’s
needs to standardize and simplify its menu items to include food items that
can be prepared quickly and served in the shortest possible time. Again,
McDonald's is focusing on its traditional menu of Big Macs, Quarter
Pounders, McFish, McChicken, French Fries, sugar-free drink options, juices,
and breakfasts.

Digital Marketing
McDonald’s has shifted its focus on digital marketing strategy so as to engage and target the
young online audience through social media networks such as Facebook and Twitter. The
company hired its first digital marketing officer Atif Rafiq in the year 2013 (Morrison, 2014).
Digital marketing is paying off, as results show that more young people are visiting McDonald's
than before. The drop-off in sales and market shares is among families; that is where McDonald's
Corporation's challenge lies.
Breakfast Menu Items
McDonald’s has recently launched new additions in its menu items and offers
an expanded breakfast menu with coffee, milkshakes and pastries for
customers (Moskowit, March 2014). The strategy is quite successful for the
brand and the demand for breakfast menu items have increased substantially
for the company. One possible solution that McDonald's might want to
consider is to follow the lead of one of its smaller regional competitors, Jack-
in-the-Box, which sells breakfast 24 hours per day. With the popularity of the
Golden Arches' breakfasts, it might be a successful way to snag some
additional market share and bolster sales and profits.

PESTEL Analysis of McDonald’s

Political Factors
McDonald’s operates in over 100 countries, so its political exposure is all over the board.
Generally, McDonald’s, like any other restaurant, has to comply with government regulations
pertaining to health and hygiene. Some governments have been pressuring the fast food industry,
because fast food has increasingly been seen as junk food, leading to obesity, cardiovascular
difficulties and high cholesterol. Moreover, the current tumult in relations between the United
States and Russia may threaten McDonald’s ability to function and turn a profit in the Russian
Federation.
Economic Factors
Economic factors are of paramount importance to McDonald’s, especially considering that it
operates in over 100 countries. The decision whether to import raw materials or buy them locally
is one important factor; another is tax rates. How much are tariffs on imported raw materials?
How much are foreign corporations taxed? What is the unemployment rate, and how much are
unemployment taxes in a given country? How much severance pay must an employer pay an
employee upon termination?
Socio-Cultural Factors
Evolving lifestyles can have an effect on sales performance. People increasingly are seeking
more sophisticated fare when they eat out. Hamburgers and fried potatoes are not as special as
they once were. Moreover, while people in western countries such as the United States may
enjoy hamburgers and French fries, people in Asian countries, for example, prefer rice. A few
years back, McDonald’s promoted a rice burger in China; it is now promoting rice for dinner in
that nation.
Technological Factors
While technology may seem to play a very limited role in the fast food industry, nothing could
be further from the truth. In fact, high technology helps organizations improve their management
and productivity, while reducing wasted time and resources. It can help with scheduling,
ordering, forecasting sales and foot traffic, and easy customer payment for food. Technology can
also be used for easy, inexpensive advertising on the Internet, providing Wi-Fi and even
computing devices to satisfy customer needs.
Environmental Factors
Today more than ever, people care about protecting the environment. They care about problems
such as air and water pollution, and the effects waste packing are having on the environment. A
few years ago, McDonald’s found itself in the crosshairs of environmentalist wrath over the
polystyrene packaging it was using for its sandwiches. With over 60 million people buying food
from McDonald’s daily, that was a great deal of polystyrene waste packaging finding its way
into landfills. McDonald’s responded to criticism by phasing out polystyrene in favor of paper-
based packaging, which breaks down into organic ingredients much more quickly in the
environment.
Legal Factors
Regulation is always the biggest concern to a company. As a company in the fast food industry,
McDonald’s must adhere to many legal requirements, such as the labor and employment law,
corporate law and tax requirements, to name a few.

ompany Background

Key Facts
 Name McDonald’s Corporation

Founded May 15, 1940

Logo

Industries
Restaurants
served

Geographic
Worldwide (37,241 restaurants in 120 countries)
areas served

Headquarters Oak Brook, Illinois, United States

Current CEO Stephen J. Easterbrook

Revenue (US$) 22.820 billion (2017) 7.3% decrease over 24.622 billion (2016)
 Profit (US$) 5.192 billion (2017) 10.8% increase 4.687 billion (2016)

Employees 235,000 (2018)

Burger King Worldwide, Inc., Darden Restaurants, Inc., Doctor's Associates,

Main Inc. (Subway), Domino’s, Inc., Dunkin' Brands Group, Inc., Yum! Brands,
Competitors Inc. (KFC), Starbucks Corporation, Wendy’s Company and many other
restaurant chains.

McDonald’s Corporation’s business overview from the company’s financial report:

"General

The Company operates and franchises McDonald’s restaurants, which serve a locally-relevant
menu of quality food and beverages sold at various price points in more than 100 countries.
McDonald’s global system is comprised of both Company-owned and franchised restaurants.

McDonald’s franchised restaurants are owned and operated under one of the following structures
- conventional franchise, developmental license or affiliate. The business relationship between
McDonald’s and its independent franchisees is of fundamental importance to overall
performance and to the McDonald’s Brand.

This business relationship is supported by an agreement that requires adherence to standards and
policies essential to protecting our brand.

The Company is primarily a franchisor, with more than 90% of McDonald's restaurants currently
owned and operated by independent franchisees.

Franchising enables an individual to be their own employer and maintain control over all
employment related matters, marketing and pricing decisions, while also benefiting from the
strength of McDonald’s global brand, operating system and financial resources.

The Company’s typical franchise term is 20 years. The Company requires franchisees to meet
rigorous standards and generally does not work with passive investors. The business relationship
with franchisees is designed to ensure consistency and high quality at all McDonald’s
restaurants.

Conventional franchisees contribute to the Company’s revenue through the payment of rent and
royalties based upon a percent of sales, with specified minimum rent payments, along with initial
fees paid upon the opening of a new restaurant or grant of a new franchise.

Products

McDonald’s restaurants offer a substantially uniform menu, although there are geographic
variations to suit local consumer preferences and tastes. In addition, McDonald’s tests new
products on an ongoing basis.

McDonald’s menu includes hamburgers and cheeseburgers, chicken sandwiches, wraps, french
fries, salads, oatmeal, shakes, desserts, sundaes, soft serve cones, pies, soft drinks, coffee and
other beverages. In addition, the restaurants sell a variety of other products during limited-time
promotions.

McDonald’s restaurants in the U.S. and many international markets offer a full or limited
breakfast menu. Breakfast offerings may include Egg McMuffin, Sausage McMuffin with Egg,
McGriddles, biscuit and bagel sandwiches and hotcakes.

Quality, choice and nutrition are increasingly important to our customers and we are
continuously evolving our menu to meet our customers' needs.”[1]

You can find more information about the business in McDonald's official website or Wikipedia’s
article.

McDonald's SWOT analysis

Strengths

1. The second-largest restaurant network serving customers in over 120 countries

As of 2018, McDonald’s operates the second-largest restaurant network in the world. In total, the
company and its franchisees operate 37,241 restaurants in 120 countries.
 Figure 1. Largest quick service restaurant (QSR) chains by number of locations in 2018

Rank Brand Name Locations

1. Subway 43,772

2. McDonald's 37,241

3. Starbucks 27,339

4. KFC 21,487

Source: The respective Companies’ financial reports and official websites [1][2][3][4][5]

In terms of sales, McDonald’s outrivals any other QSR chain in the world with US$22.820
billion in sales in 2017 alone (earning slightly more than Starbucks). The sheer size of the
company’s restaurant network is a strength that provides many advantages over competitors,
including:

 Economies of scale. The company can share its fixed costs over many restaurants
locations, which makes McDonald’s one of the cheapest places to eat at.

 Huge gains from implementing best practices. The company can identify better ways
of performing tasks, managing restaurants or hiring new employees and can achieve huge
gains by implementing these best practices in its vast network of restaurants.

 Market power over suppliers and competitors. Due to its size, McDonald’s can
exercise its market power over suppliers by requiring lower prices from them. The
company clearly demonstrates this with The Coca Cola Company.

Because of McDonald’s and The Coca Cola Company’s agreement, no other restaurant
chain can sell Coca Cola drinks for lower prices than McDonald’s, even if it means losing
the business to PepsiCo.

The Coca Cola Company could easily get out of such agreement if McDonald’s wouldn’t
be so huge and would generate less income for The Coca Cola Company. McDonald’s
can also use its size to affect the competition by underpricing some of its items or driving
them out of the best locations.
  Wide audience reach. McDonald’s restaurant network allows the chain to reach more
customers than most of its rivals could reach. According to the Company’s CEO[6], in five
of its largest markets, 75% of population lives within 3 miles of McDonald’s restaurants.

Wide audience reach does not only help the company to target more customers and
increase brand awareness, but also to introduce new services, such as home delivery.

2. The most recognizable brand in restaurant industry

McDonald’s opened its first restaurant in 1940.[7] Since then, the company has become the
world’s largest restaurant chain in terms of revenue with the most recognizable brand in the
market.

According to Forbes[8] and Interbrand[9], McDonald’s brand is 9th and 12th most valuable brand
in the world, worth US$40.3 billion and US$41.533 billion, respectively. No other restaurant
brand, except Starbucks, is included in the list of the top 50 most valuable brands.

The brand value is closely related to the brand recognition and reputation. Usually, the more
valuable a brand is the better it is recognized worldwide. McDonald’s, which operates in 120
countries, where billions of people live, enjoys some of the greatest brand awareness among all
global corporations.

Only KFC operates in more countries (131)[4] than McDonald’s and can compare in brand

awareness with it. Brand awareness also helps to introduce new products or sell the current ones
faster as the company needs to spend less money on advertising.

While, McDonald’s reputation has suffered a lot during the years, the company is still recognized
for its innovations in fast-food industry and the American business values it brings to other
countries.

Figure 2. McDonald’s brand value 2000-2017

 Source: Interbrand [9][10][11][12][13]

Few direct competitors have such a valuable and recognizable brand, which strengthens the
company.

McDonald’s Corporate Mission Statement

McDonald’s corporate mission is “to be our customers’ favorite place and way to eat and
drink.” This mission statement highlights the significance of customers as the business focus,
while maintaining the company as a major influence on their food and beverage purchase
decisions. McDonald’s corporate mission statement has the following main components:

1. Customers’ favorite place to eat and drink

2. Customers’ favorite way to eat and drink
 In its mission statement, McDonald’s Corporation emphasizes becoming the favorite of target
customers. Based on this aspect, the company considers customers’ preferences as a major
determinant of its business. For example, to become such a favorite place, McDonald’s develops
its menu and recipes to satisfy consumers’ preferences with regard to fast food products like
burgers and fries. The components of the corporate mission statement focus on two points:
becoming the favorite place and becoming the favorite way. As a fast food service business, the
company develops restaurant designs and layouts to optimize productivity and customer
experience (see McDonald’s Operations Management Strategy and Productivity). This factor,
along with menu development, helps make the company’s restaurants and franchised locations
the favorite place to eat and drink. The “favorite way” component of the corporate mission
statement shows that the company aims to influence how people eat and drink. This point
presents challenges to the business in terms of effectively influencing people’s
behavior. McDonald’s marketing mix or 4P helps in reaching this corporate mission, especially
by promoting the company, its brand, and its products, to influence consumers.

McDonald’s Corporate Vision Statement

McDonald’s corporate vision is “to move with velocity to drive profitable growth and become
an even better McDonald’s serving more customers delicious food each day around the
world.” This statement is included in the growth plan that the company introduced in 2017. The
company’s previous vision statement was “Our overall vision is for McDonald’s to become a
modern, progressive burger company delivering a contemporary customer experience.” The
following are the main components of the company’s new corporate vision statement:

1. Move with velocity to drive profitable growth

2. Become an even better McDonald’s
3. Serve more customers delicious food each day around the world

The first and third components of McDonald’s vision statement show that the business aims to
grow and expand its operations. This aim entails opening more locations and improving
operational efficiency to improve profit margins. McDonald’s generic competitive strategy and
intensive growth strategies support the growth and expansion objective embodied in this
corporate vision statement. The second component focuses on improving the business. The
company does not specify the type of improvement stated in the corporate vision. However, it is
realistic that McDonald’s aims to implement comprehensive improvements of its business to
include various aspects, such as product development, marketing, franchising, and human
resource development. In following this corporate vision statement, the company expects growth
and an overall enhancement of the various areas of the fast food restaurant chain business.

McDonald’s Corporate Vision & Corporate Mission – Recommendations

McDonald’s mission statement satisfies many but not all of the criteria for developing ideal
mission statements. For example, the company includes products (food and beverage) and part of
its business philosophy and self-concept (becoming the favorite place and way) in its corporate
mission. However, McDonald’s does not include information about its target consumers (every
consumer), target markets (global), and stakeholders (employees and others). The company can
improve its corporate mission through the inclusion of such additional information. This
recommendation aims to make the corporate mission statement easier to implement in all areas
and aspects of McDonald’s business organization and its network of franchised locations.

McDonald’s vision statement is strong in satisfying the criteria for developing ideal vision
statements. For example, the company’s corporate vision is clear and concise. It is also focused
on the future. Such focus makes the statement stable in terms of suitability for future business
situations. Also, the emphasis on becoming an even better McDonald’s makes the corporate
vision statement challenging and inspiring. These characteristics make the company’s corporate
vision satisfactory. However, a suitable improvement would be to include information about how
the company can make itself better.

Competitive advantage is determined by the presence of smart and prudent goals. Business
organizations need to have strong strategies that leverage their key strengths as a means of
attaining economies of scale. The business strategy of the organization should be based upon
operational efficiencies. Additionally, successful organizations strive to create an environment
where they are able to achieve their critical targets through dynamic business processes and
functions. Organizations need to have the ability to successfully deploy strategies that can take
advantage of new opportunities. Additionally, they must be able to respond to complex situations
in an efficient and effective manner. McDonald’s is an industry leader in the fast food industry.
Its key competitive advantages have included nutrition, convenience, affordability, innovation,
quality, hygiene, and value added services. The success of the organization has been its ability to
leverage its key strengths so that it can overcome weaknesses. The long term profitability of
McDonald’s will depend upon its ability to embrace change. It needs to improve operational
efficiencies to reduce costs. It should integrate technology as a means of ensuring that its key
standards can be attainable. Burger King and KFC are two competitors of the organization.
Burger King has been successful because it has been able to focus on product diversification,
reliable customer services, and continuous innovation. KFC has been successful because of its
emphasis on quality food along with huge restaurants that provide considerable excellence to its
customers.

Company Profiles

McDonald’s is one of the leading firms that is operating in the fast food industry. It has been
successful because of its cheap food. It has offered nutritional value while raising awareness
about health. Additionally, it has expanded into different markets through the use of innovative
and creative strategies. Burger King has also been a major player in the fast food industry. Its
success is its ability to target niche markets in a proficient manner. Kentucky Fried Chicken
(KFC) is renowned for its recipes including the famous fried chicken. The organization expands
rapidly in international markets while offering quality food at affordable rates.
 McDonald's Competitive Advantage

    Very simply, the term competitive advantage means the positioning a firm takes in relation to other firms in i
are three different way to sustain a competitive advantage.  These three different strategies are cost leadership,
leadership describes when a firm provides the same or similar services or products as other firms but does so at
firm offers a superior product at a similar cost to other firms’ inferior products.  This “superiority” is often just
positioning comes into play.  For example, a company may choose to have their product smaller and sacrifice a
product different than another firms, and this difference may make consumers believe their product is superior
term is focus.  This term means a company or firm will focus on a narrow segment of the market.  They will be
niche consumer base.  

              Here at McDonald’s, we have a very specific set of competitive advantages we try to achieve.  We stri
that cannot be matched by our competitors.  In order to do this, your store must be efficient and keep everyday
will allow for our stores to be superior to other fast food restaurants because we can serve our food at lower pri

important competitive  advantage we have her

food.  In order to maintain this advantage over other fast food chains, you must make the processes of cooking
easy to learn and easy to execute with a low failure rate to ensure the quick production and delivery of your foo
directly with the vision of the company which is as follows: “McDonald's vision is to be the world's best quick
means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every r
McDonald’s competitive advantages are what makes it stand out when compared to other companies.  These as
the number one fast food distributor in the world. 
cDonald’s is a famous fast food brand with operations around the world in more than 100 countries. It is both
company mainly operates its business through franchisees. Independent franchisees own and operate more t
globe. The success of McD’s can be attributed to several factors including food quality, menu diversity, flavou
changing consumer trends. Over the long term, McD’s aims to manage 95% of the restaurants in its sys
substantially uniform menu except for minor regional variations. The main items on its menu include hamburg
with Cheese, Filet-O-Fish, several chicken sandwiches, Chicken McNuggets, wraps, french fries, salads, oatme
cones, pies, soft drinks, coffee, McCafé beverages and other beverages. 

Competition in the fast food industry has grown intense due to the rise of several local and international brand
brands including Dominos, KFC, Burger King, SubWay, Wendy’s and similar more that are competing for m
spends a significant sum on marketing every year. However, it is still a leading fast food chain and has achieve
this article,  you will read about the sources of competitive advantage which have helped McDonald’s grow into

Global Presence:

One major source of competitive advantage for McD is its extensive global presence. McDonald’s restaurants a
more than 100 countries. The franchisees own and operate more than 90% of McDonald’s restaurants glo
McDonald’s accounting for more than 30% of the company’s revenue. In 2017, its revenue from U.S. was m
continued to grow its presence in the other significant markets too. Apart from its global network of franchis
suppliers. The total number of McDonald’s restaurants globally rose to 37,241 in 2018. Out of these, only 3,13
the franchisees. Its franchisees achieved net sales of 78.2 Billion dollars and the company’s revenue from the c
was 22.8 Billion dollars. Global presence has led to higher sales and revenue for the brand.

Product range & quality:

While McD’s mainly serves a uniform menu globally with no substantial variations except for small regional
The main items included on its menu are hamburgers and cheeseburgers, Big Mac, Quarter Pounder with C
Chicken McNuggets, wraps, french fries, salads, oatmeal, shakes, McFlurry desserts, sundaes, soft serve cones
other beverages.  A large and varied product range is meant to cater to the taste and needs of various groups o
are mainly the millennial generation, they are only the largest group. The number of baby boomer customers of

Apart from it working professionals who need a quick bite also rely on McD’s for it offers the right food at th
and in several international markets too offer a full or limited breakfast menu. Breakfast offerings include
McGriddles, biscuit and bagel sandwiches and hotcakes mainly. Quality, choice and nutrition are highly im
conscious people. McD’s is continuously evolving its menu to meet its customers’ needs and choices. In this
advantage for McDonald’s which is the favourite fast food brand of a very large group of customers from all ge

Brand equity:-

Brand equity is also a major source of advantage for a fast food brand. Today’s customers are both quality a
good in terms of quality and low on calories. Their taste has changed a lot and they would rely only upon brand
a strong image as a fast food brand that only offers great quality. It has also managed a large supply chain to en
As a fast food brand, it is trusted by millions around the world. However, apart from food, it has all focused o
and a good customer experience inside the stores have also helped the brand build strong equity. It helps r
manage a healthy bottom line. Brand equity is an important competitive strength that helps businesses even in
rising competition is leading to higher operational and marketing costs.

Customer loyalty:-

Creating customer loyalty is difficult in the 21st century. Apart from intense competition and pricing pressure, t
struggle to retain their existing customers and build strong customer loyalty. Moreover, customers have high
them to switch brands. In such a case there are some important factors fast food businesses should mind to b
quality, customer service, in-store environment as well as marketing are all important to building higher custom

McDonald’s has focused on all these things. Strong brand equity has resulted in high customer loyalty but
higher customer engagement. Even as a fast food brand, it has to retain heavy focus on customer service so as
menu, better in-store customer experience also helps retain customers. Today, McDonald’s is the favourite fast
advantage helping the company get ahead of its rivals.

Supply chain:-

A strong supply chain is the backbone of a large and global business. To run a major fast food chain, you ne
materials. McDonald’s and its franchisees buy food, packaging, equipment and other goods from several inde
and enforces high quality standards and product specifications. It has quality centers around the globe which en
consistently met. The quality assurance process involves ongoing product reviews as well as on-site supplier v
of McDonalds’ technical, safety and supply chain specialists, as well as suppliers and outside academia, prov
food safety.

Apart from that McD’s works closely with suppliers for encouraging innovation, best practices and to drive co
chain infrastructure and risk management strategies, it also collaborates with its suppliers for achieving comp
long term (McDonald’s Annual Report 2017) . In this way, the company has managed a strong supply chain wh
menu.

Marketing:-

Due to intense competition in the fast food industry, marketing has become more important than ever. It is es
them so that they do not switch brands. McDonald’s uses a mix of traditional and digital channels for ad
incurred advertising expenses of 532.9 Million dollars and other marketing related expenses of around 100
expense because the franchisees also bear and contribute to the costs of advertising and promotions. The fo
efforts is on value, quality, food taste, menu choice, nutrition, convenience and the customer experience. H
products and offers, marketing also tries to achieve higher user engagement and retention. It has helped McD
among the fast food brands which works as a source of competitive advantage achieving higher brand recall an

Customer service:-

McDonald’s has always tried to achieve higher customer satisfaction. It’s why the brand has retained heavy
customer service. It also uses digital channels to collect customer feedback and to address complaints and issu
more essential than ever for businesses around the globe. It is because apart from helping them build higher cus
high, it also helps the business maintain a strong image and grow its popularity. Several brands like Starbucks
customer service.  Businesses also use it for differentiating themselves from others. McDonald’s has also maint
helped it engage customers and achieve a competitive advantage.

Conclusion:

McDonald’s is the leading  and one of the most popular fast food brands of the world. It has achieved s
franchisees. However, the company plans to increase the percentage of franchisee managed restaurants from
popular for its diverse menu. However, apart from that it has  some other sources of competitive advantage to
resulted in strong brand equity. It has managed its supply chain well which helps it ensure continuous supply
for its customers. It is enjoying high customer loyalty and is in a position to achieve faster growth in future. T
has grown intense and each brand must have several sources of competitive advantage if it wants to be a leadin

cDonalds business strategy utilizes a combination of cost leadership and international market expansion str
market entry is utilized within McDonald’s business strategy to a great extent.

Moreover, product and service standardization lies in the cornerstone of McDonalds business strategy. McDona
that comprises  hamburgers and cheeseburgers, Big Mac, Quarter Pounder with Cheese, Filet-O-Fish, several c
french fries, salads, oatmeal, shakes, McFlurry desserts, sundaes, soft serve cones, pies, soft drinks, coffee, McC

It is important to note that along with maintaining product and service standardization, McDonald’s takes
developing its menu and engaging in marketing efforts.

McDonald’s competitive advantage is based on the following points:

1. Cheat prices is McDonald’s main competitive advantage. The company is engaged in an extensive util
advantage.

2. True to ‘fast food’ format of its restaurants, McDonald’s is famous for the speed of customer service wi

3. Universality of the taste to a great extent represents another base of McDonald’s competitive advantage
the use of the same ingredients in the same quantities and application of the standardized ways of cook
has positive implications on consumer loyalty.

It is important to note that McDonald’s competitive advantage based on costs can be difficult to sustain in lo
emerge with access to cheaper resources….

McDonald’s Corporation Report contains more detailed discussion of the company’s business strategy. The re
analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter’s Five Forces, Valu
McDonald’s Corporation. Moreover, the report contains analyses of McDonald’s leadership and organizat
company and its marketing strategy and discusses the issues of corporate social responsibility.
 McDonalds SWOT

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At the bottom of this page is a McDonalds SWOT analysis and color report / graph. We used SWOT Manager s

McDonalds SWOT Strength

 Ranks very high on the Fortune Magazine's food service companies that are most admired list.
 One of the best brand recognition in the world, the golden arches and Ronald McDonald.
 Community oriented business models.
  Very socially responsible.
 Global operations all over the world.
 Cultural diversity in the foods that are provided based on location of the restaurant.
 A large part of the restaurants are franchised out.
 Excellent locations in theme parks, airports, Wal-Mart stores, and along most well traveled roads.
 Efficient operating guidelines in the assembly line fashion.
 Use of top quality beef and chicken products.
 Use of brand name processed items like Kraft cheese, Dannon Yogurt, and Dasani Water.
 Food safety guidelines are strictly adhered to.
 Provide nutritional information to the consumers.

SWOT Manager lets you manage and quickly create your brainstorm SWOTs. Compare the past and track the f

SWOT Manager

McDonalds SWOT Weaknesses

 Failing pizza test market thus limiting their ability to complete with fast food pizza providers.
 Training costs are elevated due to high turnover.
 Very minimal concentration on providing organic foods.
 Large fluctuations in their net and operating profits making impacts on the investors.
 Not much variation in seasonal products that are offered.
 Quality concerns due to franchised operations.
 Focus on burgers and grease fried foods and not on healthier options for their customers.

McDonalds SWOT Opportunities

 Opening more joint ventures with several different retailers.

 Being more responsive to the social changes to healthier options.
 Advertising the capabilities of Wifi internet services in the branches.
 Creating more play places for the children in more of the restaurants.
 Expanding on the advertising in regards to being more socially responsible in the environment.
 Expansions of business into newly developed parts of the world.
 Creating a more upscale appearance to attract a more upscale clientele.
 Open products up to allergen free options such as peanut free and gluten free foods.
 Continue to venture into more enticing beverage choices.

SWOT Manager lets you manage and quickly create your brainstorm SWOTs. Compare the past and track the f

SWOT Manager
Threats

 Their marketing strategies that entice people from small children all the way to adults and the criticism
 Lawsuits for offering unhealthy foods that have alleged addictive additives.
 Contamination risks that include the threat of e-coli containments.
 The vast amount of eat in fast food restaurants that are open as competition.
 Social changes to a more balanced meal including fruits and vegetables in servings of five per day.
 Focus on healthier dieting by consumers.
 Down turn in economy affecting the ability to eat out as much.

Read more: https://www.quality-assurance-solutions.com/mcdonalds-swot.html#ixzz6d0r38BFr
Sample SWOT Analysis for McDonald’s Fast Food

STRENGTHS FOR MCDONALD’S

Effective new product development process

Good understanding of the market

Beneficial economies of scale

Effective sales and service culture

High share of target markets

Broad product range

Great value products

Attractive store design/layout

Broad sales area coverage

Global coverage and reach

Highly convenient locations

Strong value proposition

Broad market appeal

Clear brand associations

Strong brand equity

Strong international brand

Digital marketing expertise

Strong relationships with online “influencers”

Good bargaining power with suppliers

Strong franchisee relationships

WEAKNESSES FOR MCDONALD’S

Poor customer database information

Mixed quality staff

Undifferentiated products

Many negative attitudes to the brand

Seen as being disinterested in corporate social responsibility

Broad competitive set

Dynamic competitive landscape

Low barriers to entry to the market

Many emerging new entrants

Many substitute competitive products

Strong existing competitors

OPPORTUNITIES FOR MCDONALD’S

Leverage our big data

Further develop our sales/service team

Develop and implement a loyalty program

Improve offering to increase net promoter scores

Map out and target the steps in the customer journey

Add increased product augmentation

Add more product line extensions

Broaden our product range to eliminate product gaps

Develop higher quality products to target new segments

Streamline product features to reduce costs

Acquire a competitor’s successful brand

Improve attitudes towards our brand

Increase our corporate social responsibility image

Pursue co-branding opportunities

Acquire key competitors

Aggressively challenge substitute offerings

Demand for home delivery services

Promote an “environmentally-aware” corporate image

Use environmental issues to reduce our cost structure

THREATS FOR MCDONALD’S

Being too slow to adapt to change

High staff turnover

Consumers becoming more demanding

Reaching market saturation

Weakening customer satisfaction

New products cannibalizing our existing sales

Possible new product failures

Inability to grow the customer base long-term

Increased market fragmentation

Increased media fragmentation

Poor publicity in the media

Weakening value proposition

Limited corporate social responsibility brand image

Negative attitudes to the brand

Deteriorating franchisee relationships

Competitors introducing better/improved products

Competitors providing more “value add”

Competitor’s strengthening their brand

Disruptive new competitors

Economic downturn
SUMMARY SWOT FOR MCDONALD’S (IMAGE)
  MCDONALD’S STRATEGIC HISTORY

Ray Kroc wanted to build a restaurant system that would be famous for providing food of
consistently high quality and uniform methods of preparation. He wanted to serve burgers, fries
and beverages that tasted just the same in Alaska as they did in Alabama.

To achieve this, he chose a unique path: persuading both franchisees and suppliers to buy into
his vision, working not for McDonald’s but for themselves, together with McDonald’s. He
promoted the slogan, “In business for yourself, but not by yourself.” His philosophy was based
on the simple principle of a 3-legged stool: one leg was McDonald’s franchisees; the second,
McDonald’s suppliers; and the third, McDonald’s employees. The stool was only as strong as
the three legs that formed its foundation.

“If I had a brick for every time I’ve repeated the phrase Quality, Service, Cleanliness and Value,
I think I’d probably be able to bridge the Atlantic Ocean with them.” – Ray Kroc

Source: McDonald’s History

AuthorGeoff FrippCategoriesretailing, swot
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