McDonald Case Study

Group Members
Monu Tulsyan 717
Neha Gogia
718
P.S.Roy
719
N.Priyanka
722
Vidhi Varu
738

About McDonald
Brief History of McDonalds
The first McDonald's was built in 1940
by the McDonald brothers (Dick and
Mac) .
Started off as a hot dog stand in 1937
The McDonald brothers realized that
hamburgers were their most profitable
menu item, and changed their business
to serve a limited menu.

About McDonald
McDonalds is a large corporation
in the fast food industry.
They have been around since 1955
when Ray Kroc started the chain of
McDonalds. They have been
growing ever since.
The majority of the restaurants are
owned through franchises.

About McDonald

They employ 447,000 people.

They have over 3,200 restaurants in over 119
countries.
The majority of the McDonalds franchises are
owned by individual franchises.
Their primary competitors are other fast
food chains such as Burger King and
Wendys.
in 1996 entered into a $1 billion 10year agreement with Disney to promote
it by opening restaurants in Disneys
theme parks.

Going International
The first McDonalds Drive-Thru
opened in Sierra Vista, Arizona in 1975
Happy Meals were added to
McDonalds menu in 1979
McDonalds launched the new
worldwide Balanced Active Lifestyles
public awareness campaign in 2005

Going International
1971 McDonalds really starts going global
Asian: Tokyo Ginza District, Japan
European: Netherlands, Munich,
Germany
1967 - Canada & Puerto Rico (first
restaurants outside the U.S.)
1971 - Tokyo, Japan, Amsterdam,
Netherlands & Sydney, Australia
1979 - Rio de Janeiro, Brazil
1990 - Moscow, Russia & China

SWOT Analysis
Strengths:
Brand Awareness
Broad geographic locations
McDonalds standard and conformed
changes in large areas efficiently

SWOT Analysis
Weaknesses:
There is lower operating income in
Europe and Canada In Canada the
operating income fell 12.6%, likewise the
European restaurants operating income
also fell at 1.5%.
There is a relatively small revenue
growth - In the last 5 years McDonalds
revenues have grown at a rate of 7.5%
compared to industry growth at 13.6%

SWOT Analysis
Opportunities:
Newer products
More franchises - less risk
High Growth in China and Russia

SWOT Analysis
Threats:
Competition - global, national,
regional, and local.
Growing health conscious
population
Food safety bacteria, e. coli, 41 150

PEST ANALYSIS
To analyze the current status of
McDonalds corporation, we chose to
use the PEST method to evaluate the
following categories
P
E
S
T

Political
Economic
Social
Technological

Political Challenges
Health and Safety Guidelines

Increase calorie intake, promote weight gain

and elevate risk for diabetes.
Ecological/environmental issue
Largest consumers of paper products in the US.

Economic Challenges
McDonalds must consider economic challenges when
expanding internationally.
Low set up costs = rapid expansion
One of the challenge for fast food industry is
to keep the price which is low for customer.
Franchising facilitates set ups
McDonalds corporation provides financing
assistance and training for new franchise
owners to manage cash flow and keep
businesses profitable.

Social Challenges
The main reason is the consumers worries had greatly
increased with health fears so customers now opted for
more healthier options like subway which offered more
of a variety for health conscious customers.
To ease customers concern about health issues,
McDonalds has made changes to the following:
Offering salads and vegetarian burgers.
McDonalds serves a range of high-quality
foods that can fit into a balanced diet. The
accurate and accessible nutrition information
help guests make informed menu choices.

Technological Advantages
McDonalds has taken advantage of technology to
streamline their processes and improve efficiency.
Through technology enhancements such as FPI's Help
Desk Service, network and application consolidation,
and other technology implementations, operations of
the company are greatly improved.

Technological Advantages
Touch Order Allows You To Place Order At
McDonalds Via Handset

Technological Advantages
The customers can place their order directly
from their tables, dubbed as Touch Order.
Its the first self-ordering system in the world
to use RFID*
Technology
Spotlight:
McDonald's tests
Speed pass
cashless payment
system

Technological Advantages
McDonalds has also
implemented
technology to
improve supply chain
management, and
allows customers to
access this
information to make
more informed
decisions about what
they eat.

Case facts / Snippets

The reason for success of McDonald is its brilliantly
articulated food chain in India.
Successful in India because of 4 main reasons:
Limited menu, fresh food, Fast service and affordable
price.
Customized product variety
Efficient supply chain
85% of McDonalds restaurants are
owned and operated by franchisees.

 October 1996 First outlet in India. trained local

farmers to produce the ingredients required and
even the suppliers.
McDonalds supply chain SCM one of the decisive
factors for normal function of any business.
The unique structure of McDonalds supply chain
gives them an opportunity to reduce costs,
increase profitability and high standards of
product quality.
Working with 38 suppliers in India.
Distribution centers in India : Noida,
Kalamboli (Mumbai), Bangalore, Kolkatta,
Hyderabad.

 In distribution centers the company is responsible for

sourcing, storage, quality inspection programs,
inventory management, supply to restaurants, data
collection, accounting and reporting.
In search of perfect logistics- the concept of Coldchain. Helped in reducing waste and keeping its
freshness and nutritional value of raw and processed
foods.
Cold chain projects or suppliers include :
Amrit foods, Vista processed foods,
Dynamix dairies, trikaya lettuce and Mrs.
Bectors specialty foods.
Trying to enter tier III cities.

> The company has earmarked Rs.400 crore investment

over next 3 years in India.
> Also looking at setting up restaurants on highways
> Managing logistics for McDonalds is complicated.
> It requires restaurants not to stock more than 3 days of
inventory.
> Time limit for distribution centers was 14 days
to minimize costs and optimize quality control.
And all this required monitoring of pick-ups
and truck movements.
Use of sophisticated technology to eliminate all
chances of contamination.

Questions for discussions:

1. What is a cold chain? Explain how McDonalds
managed the components of the cold chain. Critically
comment on the role played by the unique distribution
systems in McDonalds supply chain.
2. McDonalds is one of the few companies tat
have placed substantial emphasis on effective
and efficient SCM systems as a means to
leverage for competitive advantage. Analyze
the steps taken to standardize the supply chain
in India.
3. Analyze the opportunities to enter in two tier
and three tier cities of India.

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