Skip to main content
“One world, One
Burger”
McDonald’s
HISTORY
• Founded in 1940
• By Dick and Mac McDonald in California
• Introduction of “speedee service system” in
1948
• Ronald McDonald introduced in 1963
• Ray Kroc gives the idea of franchising.
COMPANY’S OBJECTIVE
• Achieving sustainable ,profitable growth
• Designed to increase restaurant visits and grow
brand loyalty among new & existing customers
• McDonalds is committed to maintaining and
developing the best food products in the quick
service restaurant market.
• Complete commitment to quality, service,
cleanliness and value
EXTERNALANALYSIS
PESTLE
Political Factors
Economical
Factors
Social -Culture
Factors
Technological
Factors
Legal Factors
Environmental
Factors
Political
factors
Religious
Laws
Tax
Obligations
Employment
Laws
Economic
factors
Inflation
Changes in
Exchange Rates
Socio-
culture
factors
Cultural
Norms
Population
Changes
Education
Levels
Consumer
Individuality
Technological
factorsAdverti
sements
Inventory
Manage
ment
Supply
Chain
Management
Daily
Operations
Legal
factors
Religious
Laws
Tax
Obligations
Labor and
employment
laws
Quality
Certification
Environmental
Factors
Green House
Effect
Slaughter of
Animals
Use of
Polystyrene
in past
Excessive
Plantation
Extinction of
Animals
Abuse of
Environment
Styrofoam
5 FORCES
FRAMEWORK
 COMPETITIVE RIVALRY: There is intense rivalry in fast food.
Although, McDonald’s, with more than 32,000 local restaurants
serving more than 60 million people in 117 countries .
 THREAT OF NEW ENTRANTS: The threat is high as there are no
legal barriers to enter. However, its difficult to enter the market
because new entrants are faced with price competition from
existing chain restaurants
 SUPPLIER BARGAINNING POWER: It is high because McDonald’s
restaurants use the same products from the same suppliers and it
doesn’t matter if you are in Rochester, MN or Beijing, China you
can get the same Big Mac everywhere.
 BUYER BARGAINNING POWER: Bargaining power of customers of
McDonald’s is low because of low customer switching costs which
are nearly zero. quality of the product or service in the fast food
industry is very important as customers have full information of
the products they buy and consume.
 THREAT OF SUBSTITUES: As there is intense competition between
rival sellers in the fast food industry, the competition between
firms selling substitute products is intense as well.
COMPETITIVE
ANALYSIS
INTERNALANALYSIS
Resources
• Tangible
• Physical - Restaurant Location
• Technological– Touch Based Screens
• Financial - CIMB and May Bank and its own sales
• Organizational Structure
• Intangible
• Human
• Innovation
• Reputation
Capabilities
• Systemization
Competencies
• Product Variety
• Unique flavors and taste
• Core Competency
• Customer oriented policy
STRATEGIES ADOPTED BY
MCDONALD
 Hummer of a Summer PR strategy:
•In August 2006, McDonald’s in US launched a PR effort by the
name of ‘Hummer of a Summer.”
•McDonald's staged a three-mile long parade down Chicago's
Michigan Avenue during lunch hour. Ronald McDonald led the
parade on the hood of a HUMMER and was followed by the life-
size versions of the trucks that will be available in the Happy
Meals.
•The strategy proved to be a win-win one for both GM and
McDonald’s because it not only attracted the kids to the happy
meal even more than before but also magnified the iconic brand
status that HUMMER has acquired over the years.
STRATEGIES ADOPTED BY
MCDONALD
 McMommy Blogging Society:
• In December’ 2007, McDonald's opened up its kitchens to an
army of mother bloggers, who will be reporting their allegedly
unedited findings on McDonald's website, and their verifiably
unedited findings on blogs around the Internet
• The burger giant apparently also was hoping that the program
will help contradict stories of fattening, unhealthy food that have
been detailed in books such as "Fast Food Nation" and movies
such as "Super Size Me."
• Selected moms were expected to participate in as many as three
"field trips" lasting two to three days, and received payment for
"reasonable travel expenses."
STRATEGIES ADOPTED BY
MCDONALD
 Tier Pricing Strategy:
• For McDonald’s, tier-pricing is becoming part of its global
strategy. To stay competitive in an era of food inflation, the US
franchise is abandoning its ‘one price fits all’ approach.
• McDonald's has implemented a tier-pricing system in Taiwan,
partitioning the island into three districts to counter the impact of
food price inflation.
• Future prices will be adjusted according to income levels, the
consumer price index and other factors for each district.
STRATEGIES ADOPTED BY
MCDONALD
 Global Best of Green:
• McDonald’s has also been trying to show consumers
its “greener” side with a new institutional marketing
effort, “Global Best of Green.” McDonald’s around
the world has taken a number of initiatives around the
world as a part of this marketing effort which include
the following.
• About 80 percent of packaging used by McDonald’s
Europe comes from renewable resources.
• In Canada, switching from bleached white napkins to
plain brown has saved $1.3 million annually, while
reducing energy, wood and water use.
• U.S. restaurant locations recycle about 13,000 pounds
of used cooking oil per year, on average.
• Using a fryer that requires less oil allows restaurants to
cook the same product with 40 percent less oil, saving
4 percent in energy over other fryer models.
STRATEGIES ADOPTED BY
MCDONALD
Increasing sales at existing restaurants by
Remodelling:
•McDonald's, whose restaurants are visited by more than 40
million people every day, has moved aggressively over the past
three years to revamp its menu and attract a new breed of
customer.
•The traditional McDonald's yellow and red colors will remain,
but the red will be muted to terra cotta and olive and sage green
will be added to the mix.
•To warm up their look, the restaurants will have less plastic and
more brick and wood, with modern hanging lights to produce a
softer glow.
•The dining area will be separated into three sections with
distinct personalities.
•The "linger" zone will offer comfortable armchairs, sofas, and
Wi-Fi connections.
•The focus is on young adults who want to socialize, hang out,
and linger.
• BYE BYE SEE U AT McDonald’S