McDonald’s

Parker Strader & Antonio Eaton

BACKGROUND
The original McDonald’s was
founded by two brothers
Richard and Maurice McDonald,
listed as Dick and Mac on the
McDonalds.com site, in San
Bernadino California in 1940.
The McDonald’s that we know
today was created by Ray Kroc in
1954. The acquisition by Kroc
was viewed by many as a hostile
takeover. Headquarter in Oak
Brook Illinois.
Mission Statement
“Our mission is to be our customers favorite place and way to eat &
drink. We’re dedicated to being a great place for our people to work;
to being a strong positive presence in your community; and to
delivering the quality, service, cleanliness, and value our customers
have come to expect from the Golden Arches – a symbol that’s trusted
around the world.”

Ray Kroc – Took over McDonald’s in 1954

Vision Statement
“Our overall vision is for McDonald’s to become
a modern, progressive burger company
delivering a contemporary customer
experience. Modern is about getting the brand
to where we need to be today and progressive
is about doing what it takes to be the
McDonald’s our customers will expect
tomorrow. To realize this commitment, we are
focused on delivering great tasting, high-
quality food to our customers and providing a
world-class experience that makes them feel
welcomed and valued.”
Financial Statement (Revenue/Profit)
Revenue/Gross Profit Summary 2014 - 2017
Period Ending: 12/31/2017 12/31/2016 12/31/2015 12/31/2014

Total Revenue $22,820,400,000 $24,621,900,000 $25,413,000,000 $27,441,300,000

Cost of Revenue $12,199,600,000 $14,417,200,000 $15,623,800,000 $16,985,600,000

Gross Profit $10,620,800,000* $10,204,700,000 $9,789,200,000 $10,455,700,000

* Notice the total revenue decreasing throughout the past 4 years but the gross profit is the highest in
2017 with the lowest total revenue in the period above. The cost of revenue is the lowest for the four
year period as well.
Locations

• McDonald’s restaurants had 30,765 locations worldwide in 2005

with 37,241 in 2017 according to statista.com.
• The restaurant is located in 120 of the 193 countries.
Company Rivals/Competition

• Fast food restaurant • 2nd largest hamburger

chains chain and 4th largest in
Summary/Overview • 44,000 locations in 135 the world.
countries. • 15,738 locations in 100
countries.
Competitive Advantage Analysis

The analysis above reflects McDonald’s competitive advantages with YUM being closely behind.
The link to this chart is http://mba-lectures.com/wp-content/uploads/2010/10/image6.png
Market Opportunities
McDonald’s SWOT Analysis - Opportunity
• Considering its dependence on Western markets, McDonald’s has the
opportunity to grow and expand in developing countries, such as Asian
economies. The company can also use a market development strategy to
establish operations in Middle Eastern countries that it has not yet entered.

McDonald’s Target Market

• Parents with young children
• Young children
• Business customers
• Teenagers
 Potential Expansion Countries
• Bermuda* - 62,932 – Stable Economy
• 86% is within the target market
• Barbados* - 277,821 – Declining Economy
• 87% is within the target market
• Jamaica* - 2,809,325 – Growing Economy
• 92% is within the target market
• Yemen – 28,000,000 - Contracting Economy
• 97% is within the target market
• North Korea – 25,405,000 - Growing Economy
• 91% is within the target market
* McDonalds have had a location there before which closed.
 McDonald’s North Korea
• Stability in relations between the US and North
Korea dictator has recently been in the news. The
instability may make the venture risky but would
pursue it with the approach of political recovery
by opening the nations to economy to the west.
The opportunity is limitless with the growing
economy of North Korea. 91% of the 25 million fit
within the McDonald’s target market. Create a
joint venture with the government.
• The market place should be similar to that of their
southern neighbors of South Korea.
• The menu in South Korea is different than the one
we have in the United States with offerings such a
beer and premium burgers to lure young adults.
There is no alcoholic beverages served in the US
but is a staple in Asia and Europe. The menu
should include some of the Korean food
preferences as well for North Koreans.
 McDonald’s Jamaica
• McDonald’s was once located in Jamaica with 10 restaurants
which closed in 2009 while other restaurants that are part of
the YUM group mentioned earlier in this presentation were
successful. The owner of the franchises sold them to the
McDonald’s headquarters even though she felt like she was
gaining ground on becoming part of the Jamaican culture.
• Reasons for failure
• Food items too small
• Like of training and full time commitment
• The business culture and exclusivity agreements that
McDonald’s has along with licensing agreement.
• The $2 million US dollars in required capital investment.
• The slowing economy when entering the Jamaican
marketplace.
• Locals being short sighted with McDonald’s importing
tons of beef.
 McDonald’s Jamaica
• Adjustments needed to re-enter the Jamaican economy and the
first steps:
• Make the burgers bigger instead of the cocktail burgers make
them Jamaican size.
• Purchase 100% of your beef from local farmers and advertise it
is 100% locally grown.
• Lower the franchise fees and provide local training instead of
requiring the franchisees to come to the United States and bring
their staff.
• Limit the initial capital investment and allow owners to have
additional businesses without exclusivity requirement fees.
• Reduce the percentage of marketing fees.
• When the franchises become a success then consider
restructuring agreements and fees.
• The menu should have exclusive Jamaican burgers and food that
the country is known for.
• Tourism will also contribute to the success of the restaurant as it
has increased the economy in the recent years.
McDonald’s Recommendation
• The best approach for McDonald’s to
pursue both the North Korean market
and the Jamaican marketplaces for
different reasons and the challenges
will be different for both:
• Jamaica has the ease of entry into the
country but it will be the most challenging
be accepted by the local citizens. The
new menu will be a must along with
leveraging the goods of local farmers and
producers. Social contribution is a must
by McDonald’s corporate.
• North Korea difficulty will be entry and
acceptance into the country by the
government/dictators. The North Korean
culture will welcome a McDonald’s into
their communities with a menu similar to
their neighbors to the south.
• Both will equate to success for both
the franchisees and to the bottom line
of McDonald’s success.