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CHALLENGES of MCDONALDS

Pakistan

By: Rida, Sidra,


Shumaila, Waleed &
Saira

INTRODUCTION
Worldwide Revenue: $ 24 billion
The golden arches span in more than 120 countries with over 30000
locations.
Ray Kroc perfected the McDonald brothers first burger stand in 1954 and set
up a fast-food chain called McDonalds.
Eating out, increase in single-home families and combining food with fun.
International Expansion
1990s Performance Deterioration:
Other healthier formats were catching up
Customers desired variety.
The allegation on fast-food consumption leading to
obesity.
In these times, the corporate strategy adopted was
market development by expanding internationally.

02

FRANCHISING
Apply extensive rules and regulations,
training opportunities and severe quality
control measures.
Every activity is prescribed by the
franchisor
Systematic monitoring
is executed to ensure
no let-ups
Network: 34 franchises in 8
major cities of Pakistan

Entrepreneurial View Point


This methodology is an
imitation where tested
processes are
implemented with no
room for creativity or
entrepreneurial
experiment

AUTONOMY IN OPERATIONS
Autonomy
Design their own respective ambience and dcor.
Golden Arches is always present as the logo
The interior is diverse across the globe keeping in mind the local architecture and
community feelings.
Pakistans Case:
Family rooms are located on the second floor
Children play areas are made towards the corner of
the building
New products added to McDonalds menu

Mc Donald's Franchise
Traditional restaurant:
Location: freestanding buildings, store fronts, food courts, and
other locations.
Menu: Operates full-menu restaurant, offering the public a high
standard of quality and uniformity in food and service.
Term Duration: 20 years.
Satellite locations:
Location: retail store, strip center, airport, universities, hospitals,
and other diverse locations.
Menu: serve a scaled-down menu
Term Duration: depends on the location.

Mc Donald's Franchise
STO and STR locations:
Small Town Oil locations are situated in fuel
stations/convenience stores, and operate a full-menu
McDonalds restaurant within the shared space.
Small Town Retail locations that anchor a small retail
center in rural communities.
BFL franchises:
Business Facilities Lease franchises grant franchises with
leases that include the business facilities.
Conditional option: to purchase certain restaurant assets
after the first year and extend the franchise for up to 20
years after the beginning of the term.

McDonald's Service
Factors

Vision Statement
To emerge as the best quick service restaurant in the world; provide
outstanding quality service, cleanliness and value, so that every customer
smiles (Hunger et al,. 1996, p.30).
Mission statement
To be our customers favorite place and way to eat with inspired
people who delight each customer with unmatched quality, service,
cleanliness and value (QSC&V).
Purpose of the organization
Goes beyond the narrow financial objectives and strives to win the
minds and hearts of customers by providing them elated satisfaction
besides it compels the employees to overstretch their service.

McDonald In Pakistan
Franchise License: Lakson Group of Companies in
September1998.
Franchise Holder Profile: Lakson Group is a conglomerate
whose business portfolio includes Tobacco, Insurance and
consumer goods.
Location: Lahore
Brand Promise:
McDonalds Pakistan is here now, to put a smile on your
face, each and every time you visit us.

Awards In Pakistan
2009

LPGR Award 2009


Customer Satisfaction
Opportunities and Peoples
Commitment Award
Top Performance Regional

2010

Customer Satisfaction Award


Outstanding Quality & Supply Chain
Excellence" Award

2011

McDonald's APMEA Award


McDonald's Golden Arch Award 2011
McDonald's Regional Award 2011

02

Product Line
Cheese burger
Spicy Chicken burger
Double Cheese burger
Beef burger
File-o-Fish
Nuggets
Chicken Big Mac
McRoylae
McArabia
Big Tasty

02

Location
Initial Dilemma: Should it open the initial outlet in
Karachi or Lahore?
Location Trade-off: A trade-off between accessibility to
target market, image impact factor and cost.
Marketers consider social classes, buying pattern and
status can play a decisive role.
These early adopters act as a catalyst in molding the
opinions of other strata of market.
Decision Criteria:
Lahore-outlet - liveliness, vigor, fondness for quality
foods.
Karachi-outlet - densely populated with majority of
middle-class and working class

02

FAST FOOD INDUSTRY


Traditional, eastern and western food
segments the restaurant industry in
Pakistan
The market share of fast food
industry in Pakistan is around 13
percent.

KFC has 43 outlets; Pizza

Hut has 47 outlets whereas


McDonalds has only 34
outlets..

McDonalds has 43% market


share in fast food industry

Industry Categories
Sandwich Chains
Pizza Chains
Family Restaurant
Grill Chains
Dinner Houses
Chicken Chains
Non-dinner
Concepts

McDonald In Pakistan
Business Strategy: Low Cost Leadership
Company Policy: Food & Fun Together
Pricing Strategy: Value pricing giving more for less
Co-Branding: Ufone & Coca Cola
CSR Philosophy: if you are going to take money out of a
community, give something back
Environmental Defense Fund - Green Park since 2006, in
Islamabad in line with the Green Wave
Supports the Thalassemia Society
Imports most food related raw material
Publishes nutrition content values of their products on their web
site

Problems
2005: the bird flu
To convince the public that
followed by, mad
halal meat or chicken is
cow fear.
used.
Create trust that the
Food safety practices, import from
meat they are using is
MALYSIA, CHINA (Beijing), Halal
not contaminated and is
certificates are featured
100% clean and halal.
prominently in restaurants
Rising raw material cost
Prices were increased to
McDonalds is only for
cover high duty taxes.
elite class.
Aggressive marketing efforts
Intense competition from
local and western
formats.

Changing Trends
The right human resource
compatible with the
values of McDonald
Solution: Trained labor
force

In 1990s, waitresses were


unheard
McDonald culture prevailed and
educated girls ventured into this
profession without inhibitions.

Employees to be always
smiling while interacting with
customers.
Result Oriented Training:
Strategy: Managers to probe
Most outlets serve time is 90
employees and assign
seconds after receiving
troubled workers to be in
orders and 30 mins for home
kitchen rather than to the
order Intense
counterscompetition fromdelivery
local and western
formats.

Future Perspective
What was once
accepted, as a
newer concept
may no longer be
relevant

Competition
from Eastern
cuisine

Narrow
product line

Thank You