BUSINESS ENVIRONMENT PROJECT

Group No. 3
MCDONALD’S
Harshit Sharma - 2K18/MBA/713
Akashdeep Kumar - 2k18/MBA/720
Dhiraj Gupta - 2K18/MBA/726
Akshay kumar Gupta - 2K18/MBA/741
Shubham Gupta - 2K18/MBA/745
ABOUT MCDONALD’S
The Mcdonald’s Corporation is the world’s first largest chain of ham burger fast
food restaurant outlets, delivering service to around 68 million customers daily
in 119 countries across 35,000 outlets. This company, headquartered in United
States, began in 1940 as a barbecue restaurant outlet which was operated by
Maurice and Richard Mcdonald.
In 1948, they restructured their business into a hamburger stand using
principle of production line. Businessman Ray Kroc joined the company as a
franchise agent in 1955. He subsequently purchased and acquired the chain
from the Mcdonald’s brother and oversaw its worldwide growth. A Mcdonald’s
restaurant is operated by a franchisee, an enterprise corporation, or an affiliate
itself. The Mcdonald’s business revenue are generated from the rent, royalties
and fees paid by the franchisees, as well as sales in company managed
restaurants. In 2012, the company had annual revenues of $27.5 billion and
profits of $5.5 billion.
Mcdonalds’s is the world second largest private employer after Wal-Mart with
1.9 million employees, 1.5 million of whom work for franchises. Mcdonald’s
primarily sell cheese burgers, chicken, French fries, hamburger, soft drinks,
milkshakes, breakfast items and dessert. In response to uncertain and
changeable customer taste and preferences, the company has broadened and
enlarged its menu to introduce wraps, fish, salads, fruits and seasoned fries.
Mcdonald’s business enterprise is the predominant brand in the global fast
food industry out of all the active fast food brands around the world,
Mcdonald’s is the amongst the most acknowledged by the people world over.
The company has created a standard for the world when it comes to serving
burgers. The company’s key to success is its brand name, healthy food, quality
of customer service, and its target on “play to win” game plan approach.
Mcdonald’s is focused on being socially and environmentally responsible which
helps the company with its positive revenue growth. Mcdonald’s is the largest
fast food chain in the world.
McDonald’s corporate mission is “to be our customers’ favorite place and way
to eat and drink.”
MCDONALD’S IN INDIA
 First restaurant was opened in 1996.
 Is a 50-50 joint venture partnership between McDonald’s corporation
and two Indian businessman Amit Jatia and Vikram Bakshi.
 Vikram Bakshi, under Connaught Plaza Restaurants Pvt. Ltd in Northern
and Eastern Region(Headquartered in New Delhi)
 Amit Jatia under Hardcastle Restaurants Pvt. Ltd. in the Western and
Southern Region (Headquartered in Mumbai)
 McDonald’s philosophy of QSCV.
 Diverse culture and religions were the biggest hurdles.
 Increase in vegetarian items in menu like veg zinger, veg snacker and veg
zing kong.
 The prices of the menu were kept less considering in mind to keep it
more affordable as well as maintain the quality and standard.
 Different staff members for vegetarian and non- vegetarian sections.
 The vegetarian departments crew was made to wear green aprons to
appeal to the vegetarian customers.
 The first adjustment for Mcdonalds in India was replacing the beef patty
of big mac, which was its specialty with something that was permitted in
Indian culture.
 Mcdonal’s introduce the McAloo Tikki – a burger in which potato was
used as the patty instead of meat.

SWOT ANALYSIS
 Strength
1. Largest food market share in the world- mcdonalds have
about 32000 restaurants in 100+ countries.
2. Generate more revenue than it’s competitors-
mcdonalds earn US$22.8 billions on revenue annually.
3. Adapted food menus- mcdonalds try to adapt its menu
according to culture followed in country.
4. Partnership with best brands- partnership with coke,
heinz ketchup etc
5. Competitive price- lowest price than its competitors
6. Professionally trained employees- employees are trained
by mcdonalds own crew.
Weakness
1. Negative publicity- was providing unhealthy food in start
that caused negative publicity.
2. Employees underpaid- low level staff are usually
underpaid and mostly quit jobs or switch to other similar
industry
3. Weak product development- mcdonalds still need to add
more healthy food to its menu.
Opportunities
1. Introduce healthy food- add new items in veggies
product
2. Growing dining out market- mcdonalds is more focused
now on teenagers it can focus on other consumer also.
Mccafe introduction in India is a good start
3. Change customer habits and find new customer groups-
focus on full meal product for family or business class
Threats
1. Competitors- subway, burger king and various local
players have emerged now
2. Trend toward health consciousness- more customers are
now conscious towards their health and like to have healthy
meal
3. Expensive lawsuits- various lawsuits filed by customers
for providing unhealthy food.
PESTLE ANALYSIS
1. Political Influence
India is quite rich as far as Political structures and Policies are concerned, this is
the reason why International Organizations face difficulties when they are
entering in India.
Some of the political parties are against fast food chains in India as they want
to see only vegetarian restaurants in their country as the existence of meat in
their menus in India is apparently offensive to Hindu religion.
There is an impending legal dispute as well in the McDonald’s franchise in India
where certain infringement of rights and violations of religious laws pertaining
to the contents of the food.

2. Economical Influence
 Variables such as currency exchange, employment, interest rate,
tax ratio and need of international supply affects the economical
influence of McDonald’s in India.
 Business for McDonald’s for India with high unemployment rate,
dealing in rupees as currency and millions of people living below
poverty line is a concern for McDonald’s
 India on the other hand is having a booming economy, low tax
rate, availability of labour and development of middle class society
is a positive sign for the company.

3. Social Cultural Influence

 The social factors that are associated with McDonald’s in India are
the suppliers and the workforce of the organization is fragmented
and they are diversified.
 McDonald’s also have to face the pressure of different social and
ethnic groups that are relevant in the socio-cultural environment
of India.
 McDonald’s was quick in removing their pork products from
India’s menu using the concept of consumer behaviour and
product personality.

4. Technological Influence
 Mcdonald’s has taken advantage of technology to streamline their
processes and improve efficacy.
 Radhakrishna foodland (p) ltd , which is responsible for getting
products from various supplier and delivering products to various
Mcdonald’s outlets on time.
 This is possible because of the company’s installation of enterprise
resource planning (ERP) software which provides data of what is selling
where.

5. Legal Influence

 Mcdonald’s works in have some manifestation of health and safety legal

system , especially concerning food processing planning.
 There are also various employment laws such as daily and weekly
working hours , the requirements for employee breaks and facilities, tax
and pay role requirements.
 The company has provided their customers the relevant data that they
need with reference to the nutritional substances of their products.

6. Environmental Influence
 The first adjustment for Mcdonald’s in India was replacing the beef
patty of big mac.
 Mcdonald’s sponsors various community realted activities such as “ keep
our city clean” to promote environmental consciousness.
 Mcdonald’s also put up pro advertisements like “we love green”.
 Mcdonald’s is currently focusing on fine tuning its fast food image by
adding healthy food options to its products list.
TIMELINE
• IN 1996, MCDONALDS AND CANAUGHT PLAZA
RESTRAUNTS LIMITED STARTED A 50-50 JOINT VENTURE.
• IN 2013 MIPL TERMINATED FRANCHISE AGREEMENT OF
169 RESTRAUNTS ACROSS NORTH AND EAST INDIA ON
THE BASIS OF NON PAYMENT OF ROYALTIES.
• VIKRAM BAKSHI , M.D OF CPRL FILED A CASE IN VARIOUS
COURTS NCLT,NCLAT. THEN HE MOVED TO DELHI HIGH
COURT.
• MIPL ARGUED THE HEARING SHOUD BE DONE UNDER
London Court of International Arbitration (LCIA). AS THIS
CONDITION WAS SIGNED UNDER CONTRACT BEETWEEN
MIPL AND CPRL.
• BAKSHI EVEN GOES TO SUPREME COURT BUT BOTH THE
COURT SAID THE JURIDICTION SHOULD BE UNDER LCIA.
Competetive analysis
 “McDonald’s in India owns a large chunk of real estate and employees,
which unfortunately are now low-hanging fruit for other people.
1. Macdonalds Vs dominos
• Till 2012, McDonald’s was the market leader, with 10.9% of the QSR
market, followed by Jubilant Food Works Ltd-operated pizza chain
Domino’s, which had 10.2% of the market.
• Jump four years to 2015 and Domino’s is more than double the size of
McDonald’s, with a 16% market share, with the latter’s share dropping to
7.4%
• Analysts say McDonald’s has been losing ground due to the growing
acceptance of pizza over burgers across consumer segments.
2. Macdonalds vs kfc
• Macdonalds has locational advantage. More no. of outlet in rural and
urban.
• Kfc is only confined till non veg food only.
3. Macdonalds vs pizza hut

 Macdonals is quiker in service also cheaper hence people find it much

alluring.
 Macdonalds is core qsr but pizzahut is somewhat fine dine also.
 Despite all controversies madonalds hols a better market share.however
its growth is declined.

4. Macdonalds vs burger king

 Macdonads has more outlet and serving in rural areas as well.

 Macdonaldburger king is s is cheaper than burgerking.
 In urban areas, burger kings market share of growing.