-Think Global, Act Local and Sell like a Retailer

McDonalds Mission statement:To be worlds best quick service restaurant experience. Being the best means of providing outstanding quality , service, cleanliness and value so that we make every customer in every restaurant smile.

About McDonald's Corporation (NYSE: MCD):McDonalds is the world's largest chain of hamburger fast food restaurants, serving more than 58 million customers daily. In addition to its signature restaurant chain, McDonalds Corporation held a minority interest in Pret A Manger until 2008, was a major investor in the Chipotle Mexican Grill until 2006, and owned the restaurant chain Boston Market until 2007. A McDonald's restaurant is operated by either a franchisee, an affiliate, or the corporation itself. The corporation's revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants. McDonald's revenues grew 27% over the three years ending in 2007 to $22.8 billion, and 9% growth in operating income to $3.9 billion. McDonald's primarily sells hamburgers, cheeseburgers, chicken products, french fries, breakfast items, soft drinks, shakes, and desserts. In response to obesity trends in Western nations and in the face of criticism over the healthiness of its products, the company has modified its menu to include alternatives considered healthier such as salads, wraps and fruit.

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McDonalds Global presence:-

McDonald's worldwide is well known for the high degree of respect to the local culture of each market it operates in. In line with this respect for local culture, India is the first country in the world where McDonald's does not offer any beef or pork items. McDonald's has developed a menu especially for India with vegetarian selections to suit the Indian palate and has also re-engineered its operations to address the special requirements of vegetarians. Special care is taken to ensure that all vegetable products are prepared separately, using dedicated equipment and utensils. This separation of vegetarian and non-vegetarian food products is maintained throughout the various stages of procurement, cooking and serving. So much so that the mayonnaise and soft serves are also 100% vegetarian and McDonald's uses only vegetable oil as a cooking medium in India.

Name:- Ravish Kumar Roll no:- U111158 Section C

McDonalds SWOT analysis :-

Brand equity 42% of US fast food hamburger business. Consistency of food. Successful items:- fries, aloo tikki etc. Overseas market Great balance sheet position. Company delivers with great speed, is customer centric and maintains hygene

Declining market share. Weak product development. Lesser variety Quality and taste of product.

Strength

Weakness

Opportunity
Further International expansion. Only serving 1% of the world population. Growing dining out market.

Threat
Matured Industry. Strong competition More health concious customers. Fluctuation in foreign exchange

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Porters Five forces analysis for McDonalds:-

Competition
1) Restaurant industry is highly competitive industry. There are many small fast food businesses in the industry who fight with each other to improve their customer base. 2)Local competitors which have a better idea of the taste and preferences of the customers also add to the competition.

Ease of Entry
1)Although it is hard to enter the restaurant business, it is hard to establish a distinct brand name. There is a high cost of entry in the market and there is a high research and development cost. 2) Large established companies with strong brand identities such as McDonalds do make it more difficult to enter and succeed within the marketplace; new entrants find that they are faced with price competition from existing chain restaurants.

Strength of Buyer
1) Usually low in this segment. 2) Increases as the competition increases. 3) Low switching cost.

Substitutes
1) There are many substitutes to a fast food like burger. Pizzas,subs,beverages,pastas,chinese etc. 2) Also local fast food is the major competitor for McDonald's products.

Strength of supplier
1) It is relatively low unless the ingredient is not readily available. 2)McDonald's has done an excellent job of backward integration via its cold chain network and tie ups with farmers. 3) It has kept the sourcing of the critical ingredients to itself.

3)Restaurant business in itself is very competitive with new substitutes enytering everyday

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Mc Donalds Organizational structure

There are two sides of the McDonalds organizational structure 1) Senior Management side

CEO

Chairman

Director 1

Director 2

...Director 11

CFO

COO

Human Resource Officer

Inclusion and Diversity

Legal and Secretary

Chief Restaurant Officer

Canada and Latin America

APAC and MEA

Europe

USA

2) At Restaurant side General Manager Assistant Manager

Shift Running Manager

Floor Manager

Crew Members

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Organizational structure
McDonalds has a hierarchical organizational structure where major decisions are taken at the top:a) CEO, 11 directors and a chairman form the top of the line management team. b) The next level has COO,CFO, Legal secretary, Human resource officer, Chief restaurant officer and Inclusion and diversity manager. c) Under COO we have regional Operations heads for geographies like Asia, Europe, USA ,Latin America etc.

The restaurant side team :1) 2) 3) 4) 5) At the top we have General Manager. Below we have Assistant Manager. Shift Running Manager. Floor Manager. Crew Members

Key Reasoning for McDonalds Organizational structure:1) Since the delivery mechanism is very standardized hence it requires such a structure that leaves less room for variation of quality, service and customer experience at different places. 2) In such an organization, amount of power with a person is determined by the height of position in the hierarchy pyramid. Now, such characteristics helps McDonalds execute plans across different at different geographies.

Lets evaluate advantages and disadvantages of hierarchical structure:-

Advantages:
Authority and responsibility clearly defined. Clearly defined promotion path. Encourages effective use of specialist managers. Promotes loyalty towards the organization.

Disadvantages:
Organization can become bureaucratic and respond slowly to customers changing needs. McDonalds being from restaurant business should be particularly be wary of incorporating customer needs. Communication can be poor. To handle this McDonalds has highly standardized process of operation and also it makes sure the staffs are in line with company goals and objectives. On geography level decision making power is given for quick and apt decision making.

Note:- All the above features are essential for an organization like McDonalds to function efficiently Name:- Ravish Kumar Roll no:- U111158 Section C

Key Policies:1) To recruit people who have a positive attitude towards customers, themselves and other employees and who are capable of delivering the highest standards of quality, service and cleanliness to our customers. 2) To employ local people wherever possible. 3) To ensure that employees and job applicants are selected, trained, promoted and treated on the basis of their relevant skills, talents and performance and without reference to gender, marital status, disability, race, colour, nationality, ethnic origin, religion or belief or sexual orientation. 4) To provide a clean, safe, healthy and enjoyable working environment. 5) To provide training and development for all employees to enable them to achieve the highest level of skills possible. 6) To provide career opportunities which allow employees to develop to their full potential. 7) To provide challenging and rewarding work. 8) To pay for performance. 9) To communicate effectively with all employees via crew meetings, one-to-one discussions, publications and regular employee opinion surveys.

Conclusion:While a appropriate organizational structure can be a competitive advantage for any organization and can even become its core competency, at the same time, a poor and unfitting organizational structure can make an organization slow, poorly managed, inefficient and even throw it out of business. Clearly, in case of McDonalds, it works to its advantage and is in sync with the mission and vision of the company. However, company needs to take care of two aspects that come as disadvantage of hierarchical structure ,that is, poor communication within organization and slowness to respond to changing market.

Name:- Ravish Kumar Roll no:- U111158 Section C