Analysis of the McDonald's mini case for internship under Prof. Sameer Mathur, IIM Lucknow

1. cDonald’s Case Study
Why Is Everyone Lovin’ It

2. Histor
y
Flow Of Presentation
TheCompany
Today
Competitors &
Revenues
Reasons For
Success
RisksTacklingCase StudySummar

3. How It All Began
Started by Richard and Maurice McDonald in1940
withhotdogs. Yes, that’s right! Not burgers.
Nationallyfranchised by businessmanRay Croc in
1955 who eventually boughtthe chainfrom the
McDonald brothers
The world famousgolden arches were
incorporated in thecompany logo in 1962
and themascot Ronald McDonald was
introducedin 1967.

4. Timeline

5. So How Big
Really Is The
Company
Today?

6. The Company Today
Operates more than35,000 outletsin more than119
countries.
More than1.9 million employees worldwide
Feeds more than 68million people worldwide everyday.
(In case you are wondering,that’s more thanthe
population of UK!)
Generated $25.4 billion in revenues in theyear 2015. Also
owns assets worth $38 billion worldwide.

7. Competition

8. Miles Ahead Of Competition
0
5
10
15
20
25
30
35
40
McDonalds BurgerKing Starbucks Dominos Subway KFC
SystemWideSales(billion
$)

9. Where Do These Revenues Come
From?
US Europe APMEA
Others
39.7% 33.7% 21% 5.5%

10. Reasons For Success

11. Consistency: Same quality throughoutthe world both in terms
of products and services
Innovation:Introduction of innovative products and services
to enhancecustomer experience
Strong emphasis on cleanliness, quality and customer service.

12. Strong focuson building ofbrand equity
through:
Smart choice of brand elements
&
Holisticmarketing activities

13. Affordability of products. Attracts masses and
youngsters.
Localized product offeringssatisfies local
tastes
Brand revitalization throughbrand extension

14. Innovativeand targetedadvertisingcampaignsand products
Ads and promotions targeted at kids and teen
Promotes theidea of sharing with
friends
Emphasis on cheapness and affordability

15. Risks Faced By The Company
Associated withobesity all over the world.
Healthconscious customers shiftingto healthier
alternatives. Food safety issues also exist.
Rivals are offering more customization
options to lure in customers.
Expandingtoo fast  Dip inquality

16. Tackling Risks
Introducing healthieritemsin themenu
Slimmingthemenudown &focusingon
customization
Controlled expansion will keep focus on
core brand values and undilutedquality
of products and services.

17. What are McDonald’s core brand values? Have these changed
over the years?
• The core values ofthe brandhave includedquality,cleanliness,service andvalue.
• Their core values are reflected in their outlets,the pricingof their products and
their employees.
• Althoughthe company lost focus during expansioninthe 80s, the company has
learntfrom itsmistakes.
• Even after so many years, the company does try its best tostick totheir core values
whichis the center of their businessmodel.

18. McDonald’s did very well during the recession in the late 2000s. With
the economy turning around for the better, should McDonald’s
change its strategy? Why or why not?
• The company did exceptionally wellin therecession especially when compared to its
peers.
• The reason it didwell was because of its cheap offerings whichattracted customers in
timesof financialtroubles.
• The company should definitelystick withtheir strategy even now because if it has done
wellin financiallytrying times, it is favored to do well whenthe situationeases.
• Certain changes can be made to theexistingstrategy after in-depthstudy of thecurrent

19. What risks do you feel McDonald’s will face going
forward?
• Healthconscious consumers mightmove to brands offeringhealthieroptions.
• Changingtastesand lifestyles pose a big threat. Thecompany will needto adapt to changes
to be able to tacklesuch problems effectively
• Competitionfrom local fast food chains as they have to focus only on a smallarea .
• Training employees rapidly and effectivelyduring expansion drives.

20. Summary
• Started in 1955(franchise), the company has grown to be theworld’s largest fast food chain
withassets worth around $38 billion and 1.9 million employees.
• Miles aheadof its competitionin terms of sales.
• Has managedto builda very strong brand. The 6th most recognizable brand in theworld.
• Continuesto expand and grow at am alarming rate.
• Innovativemarketingcampaign along withgood quality and affordability of both services
and products and localization fuelinggrowth.
• Oftenassociated withincreased obesity which mightlead to customers migratingto
healthieralternatives.
• Plaguedwithfood safety issues in many countries.
• Needs to introducehealthieroptions and control its expansionto maintainlead in the fast
food industry.

21. DISCLAIMER
Created by Anchit Basu, Fr. Conceicao Rodrigues Collegeof Engineering,Bandra,
during a marketinginternshipby Prof. Sameer Mathur, IIM Lucknow