WELCOME

A brief history of McDonald's

McDonald's is a restaurant that everybody knows. The first

McDonald's was built in 1940 by the McDonald brothers
(Dick and Mac), who opened a drive-in restaurant that
specialized in hamburgers and milkshakes.

The McDonald brothers (Dick

is on the right and Mac is on
center) discussing plans with
an executive

 They later met Ray Kroc, who bought out their hamburger
business and renamed the franchise McDonald's System
Incorporated.
In 1954, Ray Kroc became the first franchisee appointed
by Mac and Dick McDonald in San Bernardino, California.
McDonald's franchises grew swiftly: by the end of the
1960s, there were more than 1,000 across the U.S. The
first international franchise opened in 1967 in British
Columbia

RAY KROC

In 1957, Quality, Service, Cleanliness and Value (Q.S.C. & V.)

became the company motto.

In 1963, Ronald McDonald made his debut as a way to

attract more children and families.

In 1970, McDonald's created more characters; the Ham

burglar, Grimace.

INTRODUCTION
This wonderful phrase echoes around the world 50 millions
times a day, in 30,000 locations, in multitude of languages, in
more than 120 countries around the globe.

And this simple thought sums up the reason McDonald's has

become the best known and most popular quick service
restaurant around the world, quite a tribute to Ray Kroc, who
founded this company nearly 50 years ago with the simple
vision expressed by his phrase 'Take good care of

those who work for you, and you will float to

greatness on their achievements.

We provide our customers with the quality of our great tasting

food; our fast, friendly service; our clean restaurants and
facilities; the value of our food and the McDonald's experience.

 McDonald's restaurant still in

operation

Key people

James A. Skinner (Chairman) &

(CEO).

Revenue US$ 22.6 billion (FY 2008)

Operating income US$ 6.51 billion (FY 2008)

Net income US$ 4.31 billion (FY 2008)

Total assets US$ 29.2 billion (Q2 2009)

Total equity US$ 13.2 billion (Q2 2009)

Employee s 400,000 (2008)

McDonalds Pakistan
McDonalds first opened a store in Pakistan in September 1998, in
Lahore. Since then they have opened seventeen new stores through
Pakistan. Today millions of Pakistanis place their trust in McDonald's
everyday to provide them with food of a very high standard as well as
good service. In the past five years, the response to McDonalds
coming to Pakistan has been overwhelming.

Lakson Group Companies

Today has taken over McDonalds Corporation, USA and a
local partner making it a 100% owned and operated
Pakistani company. McDonalds located in Pakistan are
currently employing about 1,000 Pakistanis and each store
is managed by Pakistani managers. They have also
contributed in other ways than food service. McDonalds has
investment of over Rs 300 crore in the country and
payment of taxes and duties amounting to more than Rs
100 crore. Since McDonalds is doing so well in Pakistan they
will continue to grow and add more stores in more cities in
the future.

Islamabad:
A lush green park location in the beautiful F-9 Sector in
Islamabad has been designed and developed and is
maintained by McDonalds. Covering an area of about 5
acres, the park was inaugurated in residents of the capital
city, who visit it regularly for jogging and sightseeing, while
kids have a great time on the swings.

Lahore:
McDonalds has developed and maintain Defence
Recreational Park in DHA, Lahore, making it one of the citys
most popular and attractively landscaped parks.

Karachi:
McDonalds, along with Defence Housing Authority, has adopted
the park around Corniche, Seaview. Its maintenance and
beautification is done by McDonalds as a social responsibility and
community service. A beautiful additional to the Clifton beach, it
has become a recreational facility and an option for people who
dont want to go out on the sand.

Ronald McDonald Field Programs

The worlds most popular character, Ronald McDonald, frequently
visits the paediatrics department of local hospitals to entertain
sick children and distribute gift among them. His visits to various
schools and orphanages are always eagerly awaited by children.

 McSaviors Public Awareness

Program

To make people realize that the worlds natural resources are fast
diminishing and something must be done about it, McDonalds has
created a public awareness program called McSaviors. Launched
as a special initiative on the part of McDonalds to protect the
environment, McSaviors involves children as they are going to be
in charge of the future.
McSaviors children are empowered to penalize adults found
wasting water and electricity. The minimum penalty amount is Rs.
10. McDonalds will use the penalty money to promote measures
that will prevent further wastage, such as replacing regular bulbs
with energy savers, repairing leaking water supply lines, etc. The
program has been launched in association with the express news.

McDONALDs OTHER ACTIVITIES

McDONALDs CELEBRATES TEACHERS DAY
McDONALDs celebrates teachers day.

RAMADAN OFFERS
McDONALDs offers his costumers with great deals in ramadan.

OCCASIONAL ACTIVITIES
McDONALDs celebrates eid day with his costumers like his
family.

GOALS AND OBJECTIVES

McDonalds vision is to be the worlds best quick service

restaurants experience.
McDonalds is committed to maintaining and developing the best
food products in the quick service restaurant market.
In order to deliver this, the company has made a number of
commitments to food safety and nutrition.
Lead the Quick Service Restaurant market by a program of site
development and profitable restaurant openings, and by attracting
new customers. Increasing sales through promotions will enable
them to continue their program of expansion.
McDonalds have an objective to continual enhance and improve
their menu. This will better satisfy their customers and give
customers more reason to visit. Many ideas for new items on the
menu come from the franchisees responding to customer demand.
Consumer tastes change over time and McDonalds has to respond
to these changes.

 MISSION STATEMENT
"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."

CORE COMPETENCY AND

SUSTAINABLE COMPETITIVE
ADVANTAGE
McDonalds core competency is providing convenience when people
need and want to eat fast food at prices that are competitive and provide
best value for the customers money. One of McDonalds competitive
advantages is its focus on consistency of quality, production of food and
use of raw materials all around the world. The world recognition
associated with the brand McDonalds itself is also one of McDonalds
competitive advantages.

KEY SUCCESS FACTORS

McDonald's Pakistan has an aggressive plan to expand in all other cities
of Pakistan and is rapidly growing with the focus to provide friendly and a
quick service restaurant experience to its customers.

 McDonalds FRANCHISES

Becoming a McDonald's franchisee is not for everyone. You'll need a

significant financial investment, a habit of hard work, a long term
commitment and a hands-on approach to running a customer-orientated
business.
Although your work will be rewarding both financially and personally, don't
think of a McDonald's franchise as a licence to print money. The rewards are
certainly there, but they're for the earning, not the taking. And if you're
looking for an investment where you can sit back and not be involved, this
isn't for you. We're not trying to put you off - we just want you to be aware of
some of the realities before you go further.
Like we said, a career as a McDonald's franchisee is not by any means for
everyone. Equally, we don't accept just anyone either. Ideally, you'll already
have a successful business or career and will have demonstrated significant
team leadership.
There's more to running a McDonald's franchise than serving burgers and
french fries - much more. You'll need a remarkable aptitude for connecting
and communicating with people. You'll be completely committed for at least
20 years, with no other business interests. And we only offer franchises to
individuals although many of our franchisees run their businesses as
husband-and-wife teams.

McDonalds FRANCHISE
As a guide, the cost of an average restaurant is 200,000. You will
COST
need to provide at least 25% of the value as unencumbered funds, the
remaining 75% can be funded through a bank loan with favourable
funding terms.
There's also a one-off franchise fee of 30,000 and a training deposit
of 5,000 which will be refunded when you complete your training.

There are also ongoing fees. These include:

- Monthly rent on the premises, based on sales and profitability
(usually about 12%)
- Service Fee for use of the McDonald's system - 5% of sales

Other Requirements to Open a

McDonald's
Significant business experience - Individuals who have
demonstrated successful ownership or management of multiple business
units or have managed multiple departments.
Rapid growth - Individuals who possess the capability to grow rapidly
with McDonald's.
Business plan - The ability to develop and execute a business plan.
Manage finances well - Ability to manage finances including a
thorough understanding of business financial statements.
Good management skills - Commitment to personally manage the
day-to-day operations of the restaurant business.
Training - Willingness to complete a comprehensive world class training
program and become proficient in all aspects of operating a McDonald's
restaurant business.
Exceptional customer experience - The capability to effectively
manage an organization that recruits, trains, and motivates restaurant
employees who deliver an exceptional customer experience.
Good credit history - An acceptable credit history

Ongoing Fees to McDonald's

During the term of the franchise, you pay McDonalds the
following fees:
Service fee- A monthly fee based upon the restaurants sales
performance (currently a service fee of 4.0% of monthly sales).
Rent - A monthly base rent or percentage rent that is a
percentage of monthly sales. McDonald's usually owns the
property and also acts as the landlord.

McDonalds COMPETITORS
McDonalds doesnt offer just burgers. Their well diversified
menu is also one of the key success factors as most of
McDonalds competitors are quite specialized:
KFC in chicken
Pizza Hut in pizzas etc.
When it comes to eating out during Ramadan in any fast food
restaurant, the name that clicks to the customers is McDonalds.
The reason is the affordable deals that they offer, that seem to
beat all others when it comes to prices.
Another advantage that McDonalds has on its
competitors is the location of its franchises.
Its main advantage is that it is located in vicinity that is easily
approachable. Secondly it has got in its surroundings other very
attractive places to be visited by people who want to enjoy their
life to the full. These places are a source of attraction not for the
services they provide but for McDonalds as well.

McDONALDs

VS PIZZA HUT

At one time, the biggest marketing problem Pizza Hut faced was lunch.
As compared to McDonalds, its restaurants had virtually no lunch time
sales, and neither did any of its pizza competitors. The reason, of
course, is that it takes 20 minutes to cook a pizza from scratch in a
traditional pizza oven, and most people wont spend that long at lunch
time waiting to be served.

McDONALDs

VS KFC

The increased health concerns of the masses has put KFC at

a great disadvantage because of the word 'fried' attached to
it's brand name which gives an instant idea that the food
would be oily and unhealthy.
Because of the nature of the chicken segment of the fast
food industry, innovation was never a primary strategy for
KFC. However, during the late 1980's, other fast food chains,
such as McDonald's, began to offer chicken as a menu
option. During this time, McDonald's had already introduced
the McChicken while KFC was still testing its own chicken
sandwich.
This delay significantly increased the cost of developing
consumer awareness for the KFC sandwich.

McDONALDs

VS SUBWAY

One of the major problems that can be identified with

Subway right now is related to the franchises. Although
Subway has long been named as the number one franchise
opportunity by The Entrepreneur magazine but it seems
that Subway has developed a myopic focus regarding the
franchises. Subway has regional managers who have the
opening of new franchises as their sole aim and their
bonuses and incentives are tied to the opening of new
franchises. These managers at Subway even don't care if
the new franchises are detrimental for the existing ones
and because of this; many of the franchises are becoming a
victim of internal competition or cannibalization. For
example, in Lahore alone, Subway has 20 outlets. Instead of
this, Subway could have targeted Cities like Faisalabad
andexplored a new market. Franchise owners believe that
Subway has been irresponsible with allocating the
franchises and uses bloated store sales projections as part
of their sales pitch for encouraging new franchises.
The opening up of a lot of new stores in close proximities
are also resulting in decline in sales per store because of

The environment at the Subway stores cannot be compared

with that of McDonald's, KFC or Pizza Hut. The Stores are small
and suffocating and do not even provide the necessary privacy
to the people eating there. Subway has no standard size for any
of its store because of which the sales oriented Franchisees try
to fix them at as smaller a place as possible. This is tarnishing
the image of Subway as an international brand.

The quality of the sandwiches and standards of cleanliness

at Subway are going down day by day due to the
greaterand greater autonomy that franchisees enjoy. The
Subway at Rawalpindi was recently closed down due to
quality issues as well.

The quality of the sandwiches and standards of cleanliness at Subway

are going down day by day due to the greaterand greater autonomy
that franchisees enjoy. The Subway at Rawalpindi was recently closed
down due to quality issues as well

McDONALDs

VS HARDEES

It is easily visible that both the burgers are of same size ,

but the quality and cleanliness is different from each
other .

 McDonalds PLAY PLACE

Many McDonald's restaurants have included a playground for
children and advertising geared toward children, and some have
been redesigned in a more 'natural' style, with a particular
emphasis on comfort: introducing lounge areas and fireplaces, and
eliminating hard plastic chairs and tables. This has given a new
outlook to the McDonalds as a quick service restaurant that is still
not be seen on other fast food restaurants.

REMODELING OF
LOCATIONS

An estimated 7,000 U.S restaurants will be rebuilt,

relocated or refreshed as part of the far reaching plan to
upgrade its public persona with updated restaurant designs
intended to boost the bottom line.

LOCAL PERFECTION GLOBAL

RECOGNITION

McDONALDs Pakistan wins 3 international awards

and gives the nation a reason to smile.

Food quality & safety

McDonald's buys and serves the same wholesome foods
our customers use at home, supplied by brand name
companies Canadians know and trust. Essentially, we
shop where you shop - our shopping basket is just a
little bit bigger. It has to be when you're serving millions
of hungry Canadians every day.
McDonald's serves a wide range of quality foods that
can easily fit into individual diet needs based on the
principles of balance, variety and moderation. Our
varied menu and range of serving sizes make it easy to
fit our food into a balanced diet and to create a range of
meal combinations that fall within recommended
guidelines for calories, fat and other nutrients.

PEOPLES COMMITMENT
At McDonald's, we are committed to
doing what is right, to being a good
neighbour and a valued partner in
every community in which we live and
work. At McDonald's, giving back to the
community is more than simply a
commitment -- it is the foundation upon
which our company has been built.
McDONALDs is a place where people
are free to talk , weather they are
muslims or non-muslims.

RESTURANTS CLEANLINESS &

HYGIENE

Firstly we would like to point out that

maintaining hygiene and cleanliness
in McDonald's restaurants is a top
priority.
Cleanliness and hygiene is one thing. Exceeding
the standards of cleanliness and hygiene
required by law is another. Fulfilling the
standards expected by our customers is
another, yet again! Therefore, a full
understanding of hygiene requirements and
wholehearted commitment to these
responsibilities is essential. Don't worry though;
you'll be given thorough training on this before
you start your first shift.
To achieve our high standards, you'll use of a
variety of cleaning utensils and equipment
together with a range of chemical cleaning
products. Where necessary, protective
equipment will be provided and some work will
require the use of a stepladder (even those
hard to reach places must be spotless!).

 BCG Matrix

According to BCG Matrix McDonalds is a star. The reason for

this is its high market growth and high market share in the
Pakistani market. On the other hand KFC and Pizza Hut are the
cash cows because of their low growth rate and high market
share. During past some years KFC and Pizza Hut have lost
their market growth because of the fact that they lost their
standard war to their competitor i-e McDonalds.
Another direct competitor of McDonalds is Subway. According
to BCG Matrix it is a dog. Some of the reasons that are
responsible for its low market share and low market growth are
the less expansion strategies being followed by the company.
Secondly they are not focusing at all on all the major cities;
rather they are only focused on the target segments of Lahore
and Karachi.

Product life Cycle Analysis:

In the Pakistani market McDonalds has been placed in the

growth phase as it is still growing and has the potential to
grow further. There are many strategies that have been
employed in the other countries but are still to be made a part
of the McDonalds franchises in Pakistan.
Following are some of the strategies that can be made a part
of the Pakistani market so as to increase its market growth:
McDonalds in Pakistan can introduce breakfast in its menu to
cater to the needs of those who are in a hurry to get to office
in time. This will give them an edge on its competitors and its
growth will increase.
To gain advantage in the local market, McDonalds should
introduce coffee at all the franchises.
To maintain its brand image as a twenty four seven customer
restaurant, McDonalds must make its timings more flexible to
the needs of those who are usually very busy with their work
schedules.

SWOT ANALYSIS

STRENGHTS
McDonalds has been able to maintain its market share in the QSR
market of Pakistan since 1998 and this is actually the major strength
of McDonalds that has made it so popular. Other major strengths are
listed below:

PRODUCTS
The reputation of the various products each season has made it
possible for the company to attract customers having different
tastes and to try out the season specialties. A major strength is
the various deals that McDonalds offers so that it could be
made affordable. Recently McDonalds offered a deal for Rs.85
only, containing a beef burger along with a drink.
McDonalds offers many flavors of Mcflurry ice cream from a
mix of M&Ms to Oreo cookies. The M&Ms flavor was introduced
about a year back and is still popular among the M&Ms lovers.
McDonalds has also customized its meal according to the
tastes of Pakistan. People in Pakistan do not eat bacon so
McDonalds does not offer such sort of meals in the country.

Social Responsibility:
The social responsibility acts of McDonalds are commendable. It
has been able to maintain a reputation as a socially responsible
and aware enterprise all over the world. Its practice of going
green and serving in an environment friendly way has made it
possible for McDonalds to gain fame.
On 27th March 2008, McDonald's announced that it is giving
further backing to Rainforest Alliance certification by offering a
cup of tea with a conscience in all of its 1,200 restaurants in the
UK.
In Pakistan however, McDonalds has not yet come up with an
effort that can show the companys goodwill towards the masses
here. Like KFC, McDonalds should also involve itself in
educational and social activities so that people should know that
McDonalds isnt yet another business oriented corporation
aimed at just making money but it actually care

Employment Opportunities:
The equal employment opportunities regardless of race, color,
sex, national region, age, disability etc are offered to people.
People looking for jobs can also upload their CVs online.
.

BRAND RECOGNITION
McDonalds has gained recognition worldwide. The chain is
present all over the world in more than 122 countries. In
Pakistan a large number of franchises are present, majority of
them in Karachi and Lahore and McDonalds is regarded as a
symbol of value and quality for your money .

GOOD COMMUNICATION AND FRIENDLY

ENVIORONMENT
McDonalds has always ensured a friendly environment to offer
to its customers. Children love going there, having a happy
meal and the toys that they get as a gift. Play places also
serve as a significant attraction where children can go and
make friends and play. Employees are also very polite and they
Party
celebrations
are
always
ready to serve you in every best possible way that
McDonalds
offers its clients, especially children to celebrate
they
can.
their birthdays there. One can invite friends, they decorate the
party area, various party games are organized along with face
painting activity etc. Children are provided with an opportunity
to celebrate their day in the way that they want

 GOOD COMMUNICATION AND FRIENDLY

ENVIORONMENT
McDonalds has always ensured a friendly environment to offer
to its customers. Children love going there, having a happy
meal and the toys that they get as a gift. Play places also serve
as a significant attraction where children can go and make
friends and play. Employees are also very polite and they are
always ready to serve you in every best possible way that they
can.

PARTNERSHIP WITH COCA COLA

McDonalds and Coca Cola are official global partners. Coca cola is
a big brand nameserving people all over the world with beverages.

PARTNERSHIP WITH TELECOM COMPANY

McDonalds offered special deals to its clients with up size
meals who are the users of a particular company such as
Warid.

WEAKNESSES
Product Variety:
McDonalds needs to develop more and more products to stay in
the competition. After the opening of international QSRs in
Pakistan, many local QSRs have also been opened in various
cities. The tastes are a bit different but they too are offering
chicken and cheese burgers, drinks and fries at competitive
prices. This situation requires McDonalds to be more
innovative and price competitive.

More advertising:
In Pakistan, McDonalds rarely advertises at TV, however
billboards often show off juicy McDonalds burgers but this
could affect its popularity in future. It definitely needs to
advertise more to reach the target and the potential customers.

Drive-ins:
The service at McDonalds drive-ins has been subject to criticism all
over the world and a lot of people complaint that the orders are
either missing some of the items or are entirely wrong. The service
time at the drive ins is also subject to great variations and needs to
be improved

OPPORTUNITIES
Reasonable Prices:
McDonalds can broaden its market by offering meals at more
competitive prices in comparison to other local QSRs such as AFC, Al
Maida etc. This way it could get hold of the potential customers too

Opportunity to be innovative
McDonalds could make itself more innovative by offering deals that
appeal more to Pakistani consumers e-g it can introduce desi flavors
in the present products such as Barbeque, Tandoori, Masala and
other spicy tastes which are staple of the country.

Breakfast and special noon meals :

Now in Pakistan most the trend of women going to work and
opting for profession is increasing as a result of which they are
running short of time to carry out all the home chores along
with their work. McDonalds can offer deals to such market by
catering them in the morning for breakfast.
During the office hours people mostly go out for their lunch to
restaurants. McDonalds can avail this potential market too.

Growing dinning out Market

In Pakistan the dining out trend is increasing especially in
youngsters and upper middle class. McDonalds has the
opportunity to grasp this market quite well. It is already doing
well by serving them but it could arrange various activities for
the people of this age.

Dine in Cafes
McDonalds can open up with small-sized cafes for the
teenagers in their universities and colleges.

McCafes:
McDonalds has opened coffee shops by the name of McCafes
in UK. Pakistan can serve as a new potential market for these
cafes.

More health conscious customers:

With increasing awareness about food and the importance of a balanced diet, people
are opting for low calorie food e-g salads and food with high fiber content. To remain in
the scope, McDonalds needs to serve this market as well as the present customers, this
could be posed as a threat to McDonalds. Subway is offering its low fat veggie and
chicken sandwiches at prices almost the same as McDonalds. For McDonalds diet meals
could be a way out of this situation. Until now, McDonalds in Pakistan has nothing to
offer to health conscious customers.

Foreign as well as local competitors:

In the growing market QSR market of Pakistan McDonalds competitors
are entering not only from other countries but from within the country
too. Their competitive prices could be a reason due to which McDonalds
can lose its share in the Pakistani market.

Changing customer styles:

Pakistani culture has been changing for years now with new
technologies and trends. People who are not brand loyal move with the
changing times. Some competitor can easily enter into the market and
make better offers to its consumers by focusing on their needs and the
satisfaction that they want. To remain competitive, McDonalds needs to
be innovative and should change along with the Pakistani consumer
styles.

OBSTACLES

Public purchasing power is less.

Security Concerns.
Religious Concern, that McDonalds are backed
by Jews
Zionist.
People make rumors that they are not providing
Halal meat.

CONCLUSION
McDonalds is one of the best fast food restaurant in the whole world. It
provides a good quality and hygienic food to its customers daily. If a person
has enough resources to meet the requirements of McDonalds he must get
its franchise, it will be a financially rewarding and life-changing experience