Company Profile of McDonalds

This presentation provides a detailed company profile of McDonalds, covering its mission statement, industry and market, corporate objectives, growth history, product line expansion, and competitive industry environment. It also includes a comparison of various business environments and an annotated bibliography of relevant sources.

MGT 2540 – International Business
Environment
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Introduction
Company profile of McDonalds
◂ Mission Statement: To be the customers’ favorite place and way to eat and drink
◂ Industry and market:
o Operating in a restaurant industry , McDonald's Corporation founded in 1940 operates and franchises restaurants.
o Local related menu food and drinks are sold across its market spread in over 100 countries.
o U.S., International Lead Markets, High Growth Markets and Foundational Markets and Corporate are its segments
o Mainly a franchisor, its franchised restaurants are owned and operated as conventional franchise, developmental license or
affiliate.
o Focus of McDonald's is to offer the customers a platform for authentic ingredients customizing their food and drinks.
o Revenue is generated from rent, royalties, franchisees and company-operated restaurants.
o As of 2018, McDonald's with 1.7 million employees is the fourth-largest private employer in the world.
o China, Italy, Korea, Poland, Russia, Spain, Switzerland, Netherlands and related markets are McDonald's high growth
markets.
o The International Lead markets segment comprises of operations in Australia, Canada, France, Germany, the United
Kingdom and related markets.
o Foundational markets and Corporate segment engages into operating restaurants and enhancing customers convenience,
through drive-thru and delivery.
(Reuters 2019)
2

Continued….
◂ Corporate objectives:
o Becoming the customers favourite place to eat
o Serving quality food that customers can love and trust
◂ Size:
o By revenue McDonald’s is the biggest restaurant chain in the world, catering to 69 million
customers daily across its 37,855 outlets.
o Presently McDonalds has a total of 2,770 company-owned locations and 35,085 franchised
locations, including total of 2,770 company-owned locations and 35,085 franchised locations
(Reuters 2019)
3

Growth History
◂ American fast food chain McDonald’s, known for its hamburgers had humble beginnings.
◂ Having operations in more than 100 countries, MCD has grown from a family burger stand to a global fast-food
behemoth
◂ In 1967 McDonald’s opened its first international franchise in British Columbia, followed by another in Costa
Rica.
◂ In 1971 MCD entered in three new continents by launching stores in Japan, Holland and a Sydney suburb.
◂ McDonald's opened in Brazil in 1979;
◂ By opening an outlet in Casablanca, Morocco, MCD reached its sixth continent in 1992.
◂ Announced expansion into Belarus four years later, claiming to open a new restaurant in some corner of the
world every three hours.
◂ The northernmost McDonald's is located in Oulu, Finland; southernmost in Invercargill, New Zealand;
easternmost restaurant is Gisborne, New Zealand and the westernmost is located in Western Samoa.
◂ Outside U.S. the biggest market is Japan, which opened in 1971 in a top shopping district Ginza.
◂ McDonald's oldest structure is located in Shrewsbury, England.
◂ It opened first restaurant in China in 1990 and more than 100 restaurants use the Chinese characters "Mai Dang
Lao,“ phonetically approximating the word "McDonald's."
(Bates and Buckles 2017) 4

Continued…..
◂ In 1971 McDonald's has entered in Europe Zaandam (Amsterdam), Netherlands, followed
by Sydney, Australia; South America Rio di Janeiro, Brazil in 1979; Africa Casablanca,
Morocco December in 1992.
◂ Its first two restaurants in Istanbul , Turkey are built the opposite sides of the Bosphorus
River.
◂ In 1990 first restaurant was opened in Russia; currently having 11 McDonald's restaurants.
◂ MCD is also located in Champs Elysees in Paris, France; on Hong Kong harbor's bustling
Star Ferry landing in Kowloon; on the slopes of Alps in Zermatt, Switzerland.
◂ MCD restaurants feature on European ferries like Stena Line crossing between Helsinki,
southern capital of Finland and Oslo, capital of Norway.
◂ McDonald's has three kosher restaurants in Israel where cheeseburger or other dairy
products are not sold
◂ Its restaurants in India are the only outlets worldwide where beef is not sold.
◂ In 1992, first restaurant was opened in the Czech Republic.
◂ MCD also has outlets in Uruguay and Thailand. (Bates and Buckles 2017)
5

Continued…..
McDonald's product line expansion
◂ McDonald’s with its McCafe has successfully expanded its product line
◂ Menu includes hamburgers and cheeseburgers, the Big Mac, Quarter Pounder with Cheese, and Filet-O-Fish,
chicken sandwiches, Chicken McNuggets, Snack Wraps, French fries, oatmeal, shakes, McFlurry desserts,
sundaes, soft-serve cones, pies, soft drinks, coffee
◂ McRib sandwich is offered on a seasonal basis.
◂ A full or limited breakfast menu is also offered in many national and international markets.
◂ Breakfast offerings include the Egg McMuffin or Sausage McMuffin with Egg, McGriddles, biscuit and bagel
sandwiches, and hotcakes.
(Arslanagic-Kalajdzic, et al., 2017)

Continued…..
◂ Soups are also served in many MCD restaurants in Asia.
◂ In Indonesia and Singapore, menu items include McRice and Ebi (prawn or shrimp).
◂ Higher-margin products like beer are served in Germany and Western Europe.
◂ A local favorite, meat pies are served in New Zealand
◂ MCD recently has also added lower-calorie salads, fruits, and wraps in its menus.
◂ McArabia is common menu item in Saudi Arabia, which is a grilled chicken or kofta in pita bread
(Arslanagic-Kalajdzic, et al., 2017)

. Competitive Industry Environment
• The main competitors of McDonald’s are Yum!, Subway, Burger King, Starbucks, Carl's Jr
and dunkin’Brands
• Because of saturated fast food restaurant market tough competition is faced by McDonald’s.
• Competitive rivalry is based on the presence of higher number of firms, their high
combativeness and lower switching costs.
• To deal with competition MCD looks for enhancing the competitive gap by adding value
through innovation, and improving overall in-house experience.
• By fusing consumer insights, innovation and execution McDonald’s is continually
differentiating from its competitors.
• For attracting more customers late night breakfasts are offered a new Dollar Menu; promoting
vegetarian value priced meals.
• Restaurant interior design has been changed, making it more technological friendly and
contemporary.
(Kuznetsova, et al., 2017)

Continued…
• McDonald’s strives in being the cost leaders by
offering its food products at prices competitors
cannot match.
• Cost leadership is achieved by keeping
operations costs as low as possible.
• Its speedy food delivery also helps MCD to
overcome the competition.
(Kuznetsova, et al., 2017)

Comparison of various business environment
◂ McDonald’s PESTLE analysis
Political Factors
◂ Government rules and the state policies such as include food business norms, employee laws, license,
and tax issues affect McDonald’s operations.
◂ The impact of foreign investment policies and local government can be seen on franchise business
strategy.
Economic Factors
◂ McDonald’s in different countries usually faces diverse types of revenue measurements and taxes.
◂ Facing tough times to deal with economic balance because of fluctuations in the international
currency.
Social Factors
◂ McDonald’s business gets affected by transformations customers living style further transforming
demands.
◂ Highest quality services having contemporary facilities are demanded by customers.
◂ Transformations in customers demands differs from one country to another and one religion to
another. 10

Continued....
Technological Factors
◂ Affect of technology advancements is considered for meeting customers expectations.
◂ Technological facilities provided at McDonald’s include customer retaining equipment, speedy
and modern distribution channels, quick and easy payment options, wireless internet facility.
Legal Factors
◂ By paying taxes, stuff laws, following health and safety rules legal rules and regulations of
different countries are followed by McDonald’s.
Environmental Factors
◂ McDonald’s was criticized for using non-biodegradable substances for its drinks glasses.
◂ It was also targeted by environment activists for using Styrofoam containers for packaging
meals.
(Mathur and Patodiya 2016)
11

Annoted Bibliography
1. Arslanagic-Kalajdzic, M., Balboni, B., Kadic-Maglajlic, S. and Bortoluzzi, G. (2017).
Product innovation capability, export scope and export experience. European
Business Review, 29(6), 680-696. Available: http://dx.doi.org/10.1108/EBR-12-2015-0180
In this authors have explored how McDonald's had expanded its existing product line for meeting the customers demands.
2. Bates, M. O. and Buckles, T. A. (2017). An examination of market entry perspectives
in emerging markets. International Journal of Business and Economic Development
(IJBED), 5(3) Available:
https://search.proquest.com/docview/1970503509?accountid=30552
In this authors have offered an in-depth view of McDonald’s international business expansion across 100 countries.
3. Kuznetsova, N. V., Vasilyeva, A. G., Rahimova, L. M., Orinina, L. V., Kashuba, I. V. and Kiva-
Khamzina, Y. (2017). Methods of assessing the competitive environment of public food
service establishments in the context of providing their sustainable development. Journal
of Environmental Management & Tourism, 8(2), 301-318. Available:
http://dx.doi.org/10.14505/jemt.v8.2(18).03
In this authors have given a detailed description of how fast food industry like McDonald's compete in a highly competitive business
environment.
4. Mathur, S. and Patodiya, P. K. (2016). GLOBAL PERSPECTIVE OF FAST FOOD CONSUMPTION: A
SYSTEMATIC LITERATURE REVIEW. Indian Journal of Management Science, 6(2), 46-52.
Available: https://search.proquest.com/docview/1854226435?accountid=30552
In this authors have given a validated model such as how to analyze the business environment of a company through PESTEL
analysis.
5. Reuters. (2019). McDonald's Corp (MCD). Available :
https://www.reuters.com/finance/stocks/company-profile/MCD 12