A case study on McDonald's

1. “One world, One Burger”- McDonald’s

3. How It All
Began
Started by Richard and Maurice McDonald in
1940 with hotdogs. Yes, that’s right! Not
burgers.
Nationally franchised by businessman Ray
Croc in 1955 who eventually bought the chain
from the McDonald brothers
The world famous golden arches were
incorporated in the company logo in
1962 and the mascot Ronald McDonald
was introduced in 1967.

4. Today
• McDonald‘s is world‘s largest
restaurant chains.
• Serving approximately 68 million
customer‘s daily in 119 countries
across approximately 36,615 outlets.
• It has over 1.9 million employees
worldwide.

5. Competitors

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

7.  Declining market share
 Weak product development
 Quality and taste of products
 Brand Equity…world-wide
 42% of US fast-food hamburger business
 Consistency of food
 Successful items: Fries, Happy Meal, Aloo
tikki, Egg McMuffin, Promotions
 Overseas market
 Balance sheet position
 International expansion
 Only serving 1% of the world’s population
 Growing dining-out market
 Mature/overstored industry
 Strength of competition
 More health-conscious consumers
 Fluctuation of foreign exchange rates;
Economies
McDonald’s SWOT Analysis

9. PRODUCTS

10. PRICE

11. PLACE

12. Promotion

13. Reasons For Success

14. Consistency: Same quality throughout the world both
in terms of products and services
Innovation: Introduction of innovative products and
services to enhance customer experience
Strong emphasis on cleanliness, quality and customer
service.

15. Strong focus on building of brand equity
through:
Smart choice of brand elements
&
Holistic marketing activities

16. Affordability of products. Attracts masses and
youngsters.
Localized product offerings satisfies
local tastes
Brand revitalization through brand
extension

17. Core values
•Quality
•Cleanliness
•Service
•Value
What are McDonald’s core brand values? Have these changedover the years?

19. The major risk's that McDonald's will face going forward is that:
•McDonald's faces fierce competition in abundance from direct rivalslike Yum Brands Inc. which
owns TacoBell, Pizza Hut and other brands Wendy's Co., Burger King Corp. and Jack in the Box Inc.
•These so-called"fast casual"restaurants are rapidly expanding, despite somewhat more expensive
menus, because of a reputation for having a wider array of healthier, more wholesome food choices.
•Rising energy prices and spiking costs for key product ingredients will certainly squeeze the margins
and bottom lines of McDonald's and its competitors.
Because McDonald's is the world's leader in fast food, it takes most of the blame for the linkbetween
fast food and obesity and for other types of bad publicity that affect the industry, even though
competitors have similar products. Thisadded burden places the stock at higher risk.
What risks do you feel McDonald’s will face going forward?

20. Summary
• Started in 1955(franchise), the company has grown to be the world’s largest fast food
chain with assets worth around $38 billion and1.9 millionemployees.
• Miles ahead of its competition in terms of sales.
• Has managed to build avery strong brand. The 6th most recognizable brand in the
world.
• Innovative marketing campaign along with goodquality andaffordability of both
services and products andlocalization fueling growth.
• Health conscious society might move on to healthier options.
• Needs to introduce healthier options to stayin the competition

21. Disclaimer
Tarun Bajaj
IIT Bombay
Professor Sameer Mathur
IIM Lucknow
Presentation by TARUN BAJAJ, IIT BOMBAY during a Marketing
Internship under Prof. Sameer Mathur, Professor, IIM Lucknow