IN1kCDUC1ICN CI INDUS1k

Mcuonalds CorporaLlon ls Lhe worlds largesL chaln of burger fasL food resLauranLs servlng around 64 mllllon
cusLomers dally ln 119 counLrles Mcuonalds operaLes over 31000 resLauranLs worldwlde employlng more Lhan
13 mllllon people 1he company also operaLes oLher resLauranL brands such as lles Cafe. eadquarLered ln Lhe
unlLed SLaLes Lhe company began ln 1940 as a barbecue resLauranL operaLed by Lhe eponymous 8lchard and
Maurlce Mcuonald ln 1948 Lhey reorganlzed Lhelr buslness as a hamburger sLand uslng producLlon llne prlnclples
8uslnessman 8ay kroc [olned Lhe company as a franchlse agenL ln 1933 e subsequenLly purchased Lhe chaln
from Lhe Mcuonald broLhers and oversaw lLs worldwlde growLh
A Mcuonalds resLauranL ls operaLed by a franchlsee an afflllaLe or Lhe corporaLlon lLself 1he corporaLlons
revenues come from Lhe renL royalLles and fees pald by Lhe franchlsees as well as sales ln companyoperaLed
resLauranLs Mcuonalds revenues grew 27 percenL over Lhe Lhree years endlng ln 2007 Lo $228 bllllon and 9
percenL growLh ln operaLlng lncome Lo $39 bllllon
Mcuonalds prlmarlly sells hamburgers cheeseburgers chlcken french frles breakfasL lLems sofL drlnks shakes
and desserLs ln response Lo changlng consumer LasLes Lhe company has expanded lLs menu Lo lnclude salads
wraps smooLhles and frulL

,ISSICN S1A1L,LN1
#McuooolJs vlsloo ls to be tbe wotlJs best polck setvlce testootoot expetleoce 8eloq tbe best
meoos ptovlJloq ootstooJloq poollty setvlce cleoolloess ooJ voloe so tbot we moke evety
costomet lo evety testootoot smlle#

IS1Ck CI CC,9AN
1he buslness began ln 1940 wlLh a resLauranL opened by broLhers 8lchard and Maurlce Mcuonald ln San
8ernardlno Callfornla 1helr lnLroducLlon of Lhe Speedee Servlce SysLem ln 1948 furLhered Lhe prlnclples of Lhe
modern fasLfood resLauranL LhaL Lhe WhlLe CasLle hamburger chaln had already puL lnLo pracLlce more Lhan Lwo
decades earller 1he orlglnal mascoL of Mcuonalds was a man wlLh a chefs haL on Lop of a hamburger shaped
head whose name was Speedee Speedee was evenLually replaced wlLh 8onald Mcuonald by 1967 when Lhe
company flrsL flled a uS Lrademark on a clown shaped man havlng puffed ouL cosLume legs
8ay kroc was Lhe excluslve dlsLrlbuLor of a mllk shake maker called Lhe MulLlmlxer Meanwhlle Lwo broLhers
8lchard and Maurlce Mcuonald owned and ran a hamburger resLauranL ln San 8ernadlno Callfornla ln Lhe 1930s
8ay kroc heard how well Lhe Mcuonald broLhers were dolng uslng hls MulLlmlxers Lo serve Lhelr cusLomers e
meL up wlLh Lhem and acqulred Lhe franchlslng rlghL from Lhem Lo run Mcuonalds resLauranLs A greaL success
sLory was ln Lhe maklng ln 1933 8ay kroc founded Lhe Mcuonalds CorporaLlon and opened Lhe flrsL resLauranL
ln ues lalnes llllnols ln 1961 he boughL ouL Lhe Mcuonald broLhers
And Lhe resL as Lhey say ls hlsLory Mcuonalds grew lnLo Lhe largesL resLauranL organlzaLlon ln Lhe world 1oday
Lhere are more Lhan 30000 Mcuonalds resLauranLs servlng 47 mllllon cusLomers each day ln over 121 counLrles
8ay kroc dled ln 1984 buL hls legacy ls very much allve ls success sLory conLlnues wlLh Mcuonalds famllles of
employees franchlsees and suppllers ls commlLmenL dedlcaLlon and achlevemenLs conLlnue Lo llve on aL
Mcuonalds resLauranLs across Lhe world
Mcuonalds flrsL flled for a uS Lrademark on Lhe name Mcuonalds on May 4 1961 wlLh Lhe descrlpLlon
urlveln 8esLauranL Servlces whlch conLlnues Lo be renewed Lhrough Lhe end of uecember 2009 ln Lhe same
year on SepLember 13 1961 Lhe company flled a logo Lrademark on an overlapplng double arched M symbol
1he overlapplng double arched M symbol logo was Lemporarlly dlsfavored by SepLember 6 1962 when a
Lrademark was flled for a slngle arch shaped over many of Lhe early Mcuonalds resLauranLs ln Lhe early years
AlLhough Lhe Colden Arches appeared ln varlous forms Lhe presenL form as a leLLer M dld noL appear unLll
november 18 1968 when Lhe company applled for a uS Lrademark
Mcuonalds corporaLe logo used from 1968 Lo 2006 lL sLlll exlsLs aL some resLauranLs
1he presenL corporaLlon daLes lLs foundlng Lo Lhe openlng of a franchlsed resLauranL by 8ay kroc ln ues lalnes
llllnols on Aprll 13 1933 Lhe nlnLh Mcuonalds resLauranL overall kroc laLer purchased Lhe Mcuonald broLhers
equlLy ln Lhe company and led lLs worldwlde expanslon and Lhe company became llsLed on Lhe publlc sLock
markeLs ln 1963 kroc was also noLed for aggresslve buslness pracLlces compelllng Lhe Mcuonald broLhers Lo
leave Lhe fasL food lndusLry 1he Mcuonald broLhers and kroc feuded over conLrol of Lhe buslness as documenLed
ln boLh krocs auLoblography and ln Lhe Mcuonald broLhers auLoblography 1he slLe of Lhe Mcuonald broLhers
orlglnal resLauranL ls now a monumenL
WlLh Lhe expanslon of Mcuonalds lnLo many lnLernaLlonal markeLs Lhe company has become a symbol of
globallzaLlon and Lhe spread of Lhe Amerlcan way of llfe lLs promlnence has also made lL a frequenL Loplc of
publlc debaLes abouL obeslLy corporaLe eLhlcs and consumer responslblllLy



,CDCNALD'S IS1Ck IN 9AkIS1AN
Mcuonald's ls Lhe largesL and besL known global food servlces reLaller wlLh more Lhan 30000 resLauranLs ln 121
counLrles Cur ouLsLandlng brand recognlLlon experlenced managemenL hlghquallLy food slLe developmenL
experLlse advanced operaLlonal sysLems and unlque global lnfrasLrucLure ensure a poslLlon LhaL enables us Lo
caplLallze on global opporLunlLles We plan Lo expand our leadershlp poslLlon Lhrough greaL LasLlng food superlor
servlce everyday value and convenlence Mcuonald's aklsLan ls parL of Lhe Lakson Croup of Companles a
leadlng buslness house ln aklsLan
Mcuonald's flrsL resLauranL opened lLs door Lo Lhe people of aklsLan ln SepLember 1998 ln Lahore 1hls launch
was meL wlLh unprecedenLed enLhuslasm from Lhe clLlzens of Lahore who are known for Lhelr llvellness vlgor
and penchanL for quallLy food karachl opened lLs flrsL resLauranL a week afLer Lahore Lver slnce we opened Lhe
doors of our resLauranLs boLh ln karachl Lahore we have been proud Lo provlde our cusLomers Lhe same greaL
LasLe ouLsLandlng value and superlor servlce LhaL ls synonymous wlLh Lhe Colden Arches all over Lhe world
1here are now 21 resLauranLs ln 7 ma[or clLles of aklsLan (8 ln karachl 1 ln yderabad 8 ln Lahore and 1 ln
lalsalabad 1 ln SlalkoL 1 ln lslamabad 1 ln 8awalplndl)
1oday mllllons of aklsLanls place Lhelr LrusL ln Mcuonald's every day LrusLlng Lhe company Lo provlde Lhem wlLh
food of a very hlgh sLandard qulck servlce and value for money So nexL Llme you walk lnLo one of our
resLauranLs please remember Mcuonald's aklsLan ls here now Lo puL a smlle on your face each and every Llme
you vlslL us
Mcuonald's ls flrmly commlLLed Lo glvlng back Lo Lhe communlLy where lL operaLes We are happy Lo become
lnvolved because we recognlze LhaL organlzaLlons have a role Lo play ln helplng communlLles Lo work successfully
1he conLrlbuLlon we en[oy mosL ls Lhe experlence of worklng LogeLher wlLh oLhers ln Lhe communlLy Lo achleve
worLhwhlle beneflLs for Lhose who need lL mosL

,CDCNALD'S 9AkIS1AN
8elng a responslble corporaLe clLlzen Mcuonald's flrmly belleves ln glvlng back Lo Lhe communlLles lL operaLes ln
We love Lo provlde supporL and encouragemenL Lo Lhe people who need lL Lhe mosL All our resLauranLs
conLrlbuLe Lo Lhelr local communlLy and every year we help seL up and supporL numerous educaLlonal sporLlng
and charlLy programs deslgned Lo help a wlde range of people
Mcuonalds has a proacLlve approach Lo charlLles and sponsorshlps We belleve Lhese help lnsplre and supporL
Lhe people of aklsLan especlally Lhe underprlvlleged ones Lo llve a beLLer llfe We are dedlcaLed Lo dellverlng
greaL experlences Lhrough our ongolng communlLy supporL programs




9kCDUC1S IN CC,9AN'S 9Ck1ICLIC
1he followlng are Lhe producLs of Mcuonald's aklsLan orLfollo





CompeLlLlon
McDonald`s (NYSE:MCD) Iocus on expanding its international presence, mainly in emerging markets
like India, China and Russia, is paying oII. Its comparable store sales, a retail metric to measure a
company`s proIitability, increased by 4.4 in the U.S. versus 5.5 across Asia-PaciIic, the Middle East
and AIrica in Q4 2010.
|1|
International Iranchising has proved to be a successIul strategy Ior the
company. However, McDonald`s could come under pressure Irom competitors like Burger King,
Denny`s, Subway, Wendy`s (NYSE:WEN) and Yum! Brands (NYSE:YUM) that are also Iocusing on
growth in these markets as well.
While we anticipate McDonald`s number oI Iranchised & aIIiliated restaurants will approach 29,000 by
the end oI our Iorecast period, TreIis members predict the number will reach close to 32,000, implying an
upside oI 7 to our MCD stock price estimate.
Very simply, the term competitive advantage means the positioning a firm
takes in relation to other firms in its industry. According to Michael Porter,
there are three different way to sustain a competitive advantage. These
three different strategies are cost leadership, differentiation, and
focus. The term cost leadership describes when a firm provides the same
or similar services or products as other firms but does so at a lower
price. The term differentiation means a firm offers a superior product at a
similar cost to other firms inferior products. This "superiority is often
just perceived by the consumer. This is also where positioning comes into
play. For example, a company may choose to have their product smaller
and sacrifice a quality such as durability. This may make their product
different than another firms, and this difference may make consumers
believe their product is superior to other similar products in the
market. The last term is focus. This term means a company or firm will
focus on a narrow segment of the market. They will become specialized in
this area and appeal to a niche consumer base.


Here at McDonalds, we have a very specific set of competitive
advantages we try to achieve. We strive to be cost leaders and offer our
food at prices that cannot be matched by our competitors. In order to do
this, your store must be efficient and keep everyday operations costs as
low as possible. Doing so, will allow for our stores to be superior to other
fast food restaurants because we can serve our food at lower prices than
any other fast food company. Another important
competitive advantage we have here at McDonalds is the speedy delivery
of our food. In order to maintain this advantage over other fast food
chains, you must make the processes of cooking food simple for all your
employees. It must be easy to learn and easy to execute with a low
failure rate to ensure the quick production and delivery of your
food. These two competitive advantages comply directly with the vision of
the company which is as follows: "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. Just like any other firm,
McDonalds competitive advantages are what makes it stand out when
compared to other companies. These aspects of McDonalds are what
helped it become the number one fast food distributor in the world.

Fit is one of the elements that a company must consider when trying to
create a sustainable competitive advantage. What the term fit actually
means in regards to the business world is the integration of all of a
companys activities so that it all works towards a common goal. Through
the successful execution of fit, a company can develop a sustainable
advantage that makes it hard for competitors to imitate. Attaining a good
fit for a company can be a challenging task however. It is difficult
because every decision a company makes, from the shipping methods to
the packaging, has to complement its goal and vision. If a competitor
were to try and imitate a company with a good fit and steal some of their
market share, the competitor would have to copy the entire organization,
whereas a company without a good fit, a competitor can come in, improve
the product and steal the market share. Although difficult, achieving this
fit is highly beneficial and an organization that has an excellent internal
and external fit is McDonald's.

When a customer goes into McDonald's he or she expects two
things. They expect the food will come out fast, and it will be
inexpensive. That is what we aim for here at McDonalds, cheap and fast
food, and everything we do within the organization works towards these
goals. Our fit started all the way back in 1948 when we had a "mascot
named "Speedee Man. This immediately let the customers know that
if they needed a meal quick, McDonald's was the place to go. Sometimes
fit comes at a cost however. The cost for us is food that is not perceived
as high quality. Our speedy service fits well throughout our organization
and is very convenient to the customer. We built on this idea of
convenience by building a McDonald's store everywhere. So whenever a
customer is driving down the road and begins getting hungry, there is
sure to be a McDonald's close by. Another goal that we at McDonald's
work towards is being a low cost restaurant. We have this sustainable
advantage because all of our activities are working towards cutting
costs. Once again, we have to make sacrifices to cut costs. Instead of
buying high grade meat and ingredients, we must settle for the lower
grade meat in order for it to fit within their organization. Also, they keep
employee wages low, and minimal training is required for a job at
a McDonald's store. These two characteristics go a long way in
keeping our food cheaper than many of its competitors. Due to the lack of
training, turnover for us is also not as expensive as other companies. Our
McDonald's corporation is a very hard organization for competitors to copy
as our fit, both internally and externally, works very well.




oslLlonlng
McDonaId's Brand Positioning and Messaging
One of the greatest attributes of McDonald's is its "everyday affordability" message that drives customers to
McDonald's restaurants. Think of your children - they know McDonald's by the time they are two years old.
Chanting "Mickey D's", you can't possibly drive by a 'golden arches' without having to stop.
Flanked by great integrated campaigns centered around such initiatives as the Olympics, the Kung Fu Panda film
and fresh "'m Lovin' it" ads, McDonald's continues to keep their marketing edge (and brand) ahead of the pack (its
sales are three times that of No. 2 burger chain Burger King).
ngoing Innovation and Knowing When to Make Changes
For McDonald's it will continue to be a year of innovation. According to CMO Mary Dillon: "We are the kind of
business and brand that is never happy with yesterday. We are always looking to tomorrow and how do we get
better?" This type of thinking and marketing philosophy has always kept the fast-food giant in the black.
IobaI Reach
By combining fundamentally sound operational practices with innovative marketing strategies, Ray Kroc
(McDonald's originator) laid the foundation for McDonald's global success. Today, McDonald's values transcend
borders and cultures. Each and every day, 47 million consumers worldwide visit McDonald's because they know
and love the Golden Arches, Ronald McDonald and Big Mac sandwiches.
McDonald's positioning-wbat do you tbink?
osLed by Av|nash Naru|a
CcLober 17 2007


I am giving below excerpts oI interview oI Vikram Bakshi, CEO oF McDonalds in Economic Times
(17/10/2007):
'I`m lovin` it` cuts across all age groups. One oI the learnings over a period was that while the world was
changing, McDonald`s remained Iocused on kids. But young adults cannot be ignored. Look at the coIIee
caIe and the multiplex revolution. We were losing out on young adults. So we tried to address them
keeping our communication contemporary, Iresh and Iun-loving. It worked Ior us because India has the
largest youth population in the world. But we position ourselves as a Iamily restaurant, where all age
group converge. We want to make sure that we don`t lose out on Iamily as a unit.
At the end oI the day, McDonald`s is a mass marketer. Competition is always good but it is important to
see that we don`t lose Iocus in our oIIerings. Our products cut across age groups, and don`t cater to a
niche. That`s the reason we`ve had a menu development team right Irom the beginning, which basically
carries out consumer surveys on changing Iood habits and comes out with a menu Ior that purpose. Our
menu reIlects changing consumer behaviour, and that`s what the brand is all about Iresh, peppy and
contemporary.
I thought it would be interesting to analyze this statement and see iI there are any inconsistencies. I think I
would let you guys do it Iirst and I will give my comments later. However, I would like to narrate a story
to you. I have a client who specializes in recruitment Ior the pharmaceutical industry. He is good at it and
charges higher than all the other consultants. He has developed a very comprehensive database oI the
people in pharmaceutical industry. By the way, the person heading the company is a chartered accountant.
We were talking once and he told me that when an HR executive (his client) leaves the pharmaceutical
industry and joins another, lets say telecom, they call him to recruit people Ior them but he reIuses to take
the assignment. When I asked him why, he told me that he does not want to dilute the image oI his
company. He said that he wants to be known as the leading HR consultant Ior pharmaceutical industry. I
was impressed to hear this coming Irom a chartered accountant. Maybe this story will assist you in
analyzing what Vikram Bakshi has said.
Strategic Positioning is defined as doing different activities than your
competitors or doing the same activities differently. This is the way your
company becomes a superior performer in the industry. Many people
describe their positioning based on their customer base. For
example, Burger King focuses on young adult males as their target
customer. There strategy and positioning is directed to satisfy this sector
of the market. Wendy's on the other hand has a different
positioning. They base their positioning to satisfy the older health
conscious individuals. They both differ from our strategy. When you
simplify things down it turns out there are only two basic types of
positioning; low cost or differentiation. This is how you choose to serve
your customer base, or how your customer base guides you to
operate. You choose your customer base to be either broad or narrow
scope. The company needs to select one or the other in both categories
or they will achieve below average results and be mediocre. We have
selected one and are doing it well



McDonalds has made itself to be the family friendly low cost restaurant
in the fast food business. We have a narrow scope for a customer base
and a low cost strategy. In recent years we have tended to broaden our
scope to appeal to more customers. In recent years due to lost sales we
have started to make our menu a more healthy option. We still try to
keep our target market narrowed down to families, but others deserve
attention as well. We are focused on cutting delivery time and cutting the
cost of food. We have the most modern and technologically advanced
equipment in our restaurants to make your job easier. The computer
operated machinery allows you to keep cost low by only needing a few
employees to do the work of several. It also allows your employees to do
it quicker. Our strategy is conveyed throughout all of our business
operations. If you notice, many McDonald's have dual drive-through to
decrease wait time and to increase volume of customers served. This may
be a good idea for your location. We have stuck to our core market
throughout the years even through the changing times. We have included
playgrounds in many of the restaurants and our marketing schemes
feature family friendly ads and slogans. The term happy meal is said and
begged for by children worldwide and has become a house hold
name. McDonald's does things differently than its competitors by
marketing to the family market where as its competitors market to a
broader base in some cases or to different generations such as Burger
King marketing to young adults. McDonald's has positioned itself on the
forefront of fast-food technology and sets the standards for the rest of the
industry.
Many multinational Iast Iood chains (MFFC) like McDonald's and KFC are opening outlets in India. A
Iascinating aspect oI these companies is the intricate marketing process they employ to gain a stronghold
on the market. The marketing process becomes even more involved due to the behaviour oI Indian
customer being diIIerent Irom that oI the western countries, where these chains have typically been
operating. Even with several outlets in various locations in India, the marketing process oI a new outlet
typically has to be thought Irom scratch due to the wide diversity across the country.
Recently, McDonalds has decided to expand into Bangalore in a big way. Praveen Bose Bangalore
Burger chain McDonalds plans to invest Rs 50 crore annually in India. It has already brought in Rs 500
crore oI FDI on the 56 outlets it has in India. "We are here Ior the long haul," Amit Jatia, joint venture
partner, McDonalds India (western region) said while announcing the opening oI its Bangalore outlet.
McDonalds is Iinally up and running in Bangalore, trying to seduce Bangaloreans with their oIIerings
aIter conquering the people oI 119 countries. The world's largest restaurant chain has opened its 57th
restaurant in India and the Iirst restaurant in Bangalore, at the Forum.
The investments will be towards launching new restaurants and building up the supply chain. The chain
has had to improvise on their way to India and Bangalore will be served the same Iare as in the other 56
restaurants. So out goes beeI and pork Irom their US and European oIIerings. It has added some
Indianised items.