McDonald's Strategic Marketing Plan

The assignment focuses on developing a comprehensive strategic marketing plan for McDonald's. It requires an in-depth analysis of the company's current market position, including target audience, competitors, and SWOT (Strengths, Weaknesses, Opportunities, and Threats). Students must also propose effective marketing strategies to achieve specific objectives, such as increasing brand loyalty, expanding into new markets, or enhancing product offerings. The plan should incorporate elements like marketing mix (product, price, place, promotion), digital marketing strategies, and a focus on sustainability.

Running Head: BUSINESS PLAN 1
Business Plan: McDonalds

BUSINESS PLAN 2
Executive Summary
McDonald’s is a leading fast food organization in the world. Established in 1967, the company
expanded its business operations in the countries outside the United States. It is continuously
establishing its franchises in different locations. Currently, it is serving over 65 million
customers daily in more than 100 nations across around 36,900 outlets. The company is going to
introduce its new franchise in UAE. This report includes the business plan for this franchise of
McDonalds. After completing feasibility analysis in first assessment, it is the continuation of that
with the business plan. The major objective of this report is to look at different aspects, which
need to be considered, when a company introduce new business or add something new in its
existing business. McDonalds is developing this business plan, which includes various aspects,
such as; its industry and business analysis, market strategy, value proposition, operations,
resources, financial projections and risk and strategic options. At the end, report describes some
key milestones, which are established by McDonalds in order to get success in competitive
business environment. This report will assist in understanding many concepts, which a company
needs to include in its business plan that is an important document of an organization.

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Table of Contents
Executive Summary.........................................................................................................................2
Business Details...............................................................................................................................4
Industry and Market Analysis..........................................................................................................4
Customers and Value Proposition...................................................................................................5
Marketing Strategy..........................................................................................................................5
Product.........................................................................................................................................5
Price.............................................................................................................................................6
Place.............................................................................................................................................6
Promotion.....................................................................................................................................6
Operations Plan................................................................................................................................6
Product Designing........................................................................................................................7
Quality Management....................................................................................................................7
Location Decision........................................................................................................................7
Human Resources........................................................................................................................7
Supply chain and inventory Management....................................................................................7
Management Team and Company Structure...................................................................................8
Resources.......................................................................................................................................10
Physical Resources.....................................................................................................................10
Human Resources......................................................................................................................10
Organizational Resources..........................................................................................................10
Financing.......................................................................................................................................11
Financial Projections.....................................................................................................................11
Start-up Funds............................................................................................................................11
Break Even Analysis..................................................................................................................12
Projected Profit & Loss..............................................................................................................13
Risks and Strategic Options...........................................................................................................14
Key Milestones..............................................................................................................................15
Conclusion.....................................................................................................................................16
References......................................................................................................................................17

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Business Details
McDonalds is the famous destination for a huge customer base every day and making it one of
the biggest fast food chain all over the world. Now, the company is considered as a leading fast
food organization in terms of restaurants and revenues and profits. Currently, it has 36900 stores
in more than 100 nations and provided employment to 385000 employees all over the world. It is
headquartered in Oak Brook, Illinois, but it has its operations span from USA to Europe to
Middle East and then to Pacific Region (McDonalds, 2012). The stores of McDonalds serve with
a standardized menu with the food products such as; burgers, soft drinks, milkshakes, salads,
cookies, cheeseburgers, French fries, shakes, coffee, flavored tea, chicken etc. In addition to this,
the company offers breakfast items especially in United States and other global markets.
Breakfast offerings include biscuits, muffins, hotcakes, bagel sandwiches etc. There are some
brands, under which this company is marketing its products, like; McFlurry, Big Mac, Big
N’Tasty, McNuggets, McMuffin etc.
Industry and Market Analysis
Industry and market analysis is a method for evaluating the company’s current position in
prospective industry and market. It assists in understanding the competition and about the major
competitors in the market. Competitors are the major component, which are accountable for
growth or failure of business. According to previous report, international fast food industry has
reached to a value of $103 billion that has grown by 5%. There are various players including
McDonalds, which are performing very well in the industry (Armstrong, et al, 2015). In the fast
food industry, McDonalds is facing intense competition from some other leading players, like;
KFC, Burger King, etc. However, McDonalds is listed as leading fast food chain, but still these
competitors are affecting its business with innovative ideas. Burger King is one of the major
competitors, which are offering the products, like; burger, salads, shakes etc. Tough the company
is still a market leader with the potential of competitors growing the competition looks very
much intense. These competitors in the fast food industry are making efforts to increase their
revenues and sales by focusing on health concerns, as people are becoming more health
conscious. To compete with the players, the company is using franchise model, which offers the
scope for the expansion and development for this business entity (McDonalds, 2010).

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Customers and Value Proposition
Customer value proposition is the statement, which is prepared by an organization, when it
introduces its new products and services. It states that why the customers should prefer to buy
the products of this particular company. Primarily, it targets the customers rather than employees
and other stakeholders. McDonalds is very famous for its customer value proposition. Under its
business, the company is targeting the people, who love to eat outside their home (Baker, 2014).
Under this expansion, the value proposition of McDonalds will include most convenient
locations, efficient and fast service, comfortable seats and in-store amenities, a variety of fast
food products, effective value offering and pricing etc. In addition to this, the company is making
focus on offering the food products with the constant quality, which is served very fast and
consistently all over the world. It is preparing the food by targeting the people of all age groups.
This value proposition of company will entice a number of diverse target markets. Thus, by this
value proposition, this company has various advantages over its major rivals, such as; facilities,
locations, fast services and diverse product range (Bauer, 2012).
Marketing Strategy
When a company introduces a new business or new franchise, it needs to formulate new
marketing strategies, so that it can reach to its potential customers. These marketing strategies
can be developed under marketing mix tool, which includes 4 P’s of marketing. McDonalds will
also use this tool to develop its strategies (Bhasin, 2016). The marketing mix for McDonalds is
stated below;
Product
Predominantly, McDonalds sells hamburgers and soft-drinks, which forms its standardized menu
all over the world. In addition, the company offers different types of chicken products and other
products, like; French fries, breakfast items and desserts. It provides diverse range of products
within limited promotional durations. This element of marketing mix shows that McDonalds
continuously tries to innovate its products to appeal more customers.

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Price
The pricing strategy of McDonalds includes the price bundling united with the emotional pricing.
Under this process, the organization provides the meals and other product combos for discount.
Under this pricing strategy, McDonalds offers prices, which appear to be critically more
affordable. This component of McDonalds marketing mix includes the significance of price
bundling to boost the customers to purchase the products of McDonalds (David, David, & David,
2016).
Place
The restaurants of McDonalds are the most noticeable places, where the products and services of
the company are distributed. This component of marketing mix tool demonstrates the locations
and venues, where the company can offer its fast food products. There primary places of
McDonalds for distribution of products are, such as; kiosks, restaurants, mobile app of the
company and website of other food delivery firms. People can order their desired products
through its McDonald’s website, Postmates website and application.
Promotion
This company is engaged in promotion and advertising process for attracting more customers.
The component of the marketing mix describes the methods, which are used to interact with the
customers. There are different strategies, which are used by McDonalds for promoting its
products, like; advertising, sales promotion, and public relations and direct selling of the
products. It is primarily engaged in the direct selling to events, like; local government events,
corporate clientele, community events and parties (Hill, Jones, & Schilling, 2014).
Thus, these marketing strategies of the company are assisting it in attracting the customers and
increasing its all over customer base. It will help the organization in generating more revenues
under competitive scenario.
Operations Plan
In order to expand its business operations, McDonalds will create an operations plan under its
business plan. This operation plan will includes all the operations strategies and processes, which
will support its overall objectives. The operations management of this company will assist its

BUSINESS PLAN 7
position as one of the largest fast food chain in the world. There are some areas, which need to
be considered in formulating its operation plan. These operation practices are stated below;
Product Designing
The major goal of McDonalds in this area is to offer affordable products. The prices and serving
size of products are done on the basis of needs and expectations of customers. However, some of
the products of this company are reduced in the size to make more affordable for all the people
(Kenawy, 2015).
Quality Management
McDonalds aims to enhance the quality of products with components, like; price limits and costs.
It implements a production line approach for maintaining the consistent quality of products.
Quality consistency fulfills the expectations of customers about this company and its brand under
quality management.
Location Decision
Under this aspect of operations management, the major objective of the company is to choose a
strategic location, so maximum people can reach to its products and services. The above-
mentioned marketing mix of the company includes kiosks, outlets and websites as venues. Via
these strategic locations, the company reaches to its customers in modernized and traditional
ways (Kotlar & Armstrong, 2012).
Human Resources
Human Resource Management of McDonalds is also an important part of operations
management. The company will use effective HR strategies, which will include the training and
development program for improving the skills and abilities needed for production in kitchens and
restaurants. Under this area of operation plan, organizational and individual learning are focused
to aid the organizational culture of McDonalds (Lam, and Harker, 2015).
Supply chain and inventory Management
The supply chain of firm aids its different locations all over the globe. This organization will
implement a strategy of diversifying the supply chain for operation management. This type of
strategy includes availing more suppliers from different areas to decrease the risks associated
with supply chain at McDonalds.

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Under inventory management, the company has the goal to reduce the inventory costs with
aiding the operations in restaurants. It does not sell the ingredients and products directly to the
restaurants. In its place, regional and local distributors communicate with the outlet managers of
McDonalds to maintain the inventory and stock (New, 2015).
Management Team and Company Structure
For introducing this new franchise, the company can reform its organizational structure as per its
operations and departments. The management team and organizational structure of McDonalds
facilitates managing the target markets on the basis of performance levels (Lee, Hallak and
Sardeshmukh, 2016). The company is following a hierarchy structure, which includes all the
concerned departments that play an important role in McDonalds’ operations. The diagram,
given on next page indicates all the levels of management team at McDonalds and its company
structure. There are different levels of management, like top level, middle level and lower level
of management. All the levels have their separate roles and responsibilities in the organization.
The top level management is liable for the goal setting, decision making, operation management
etc. Other departments, like; marketing, finances, sales departments have their own duties and
responsibilities for supporting the attainment of final objectives of McDonalds (McKeever,
2016).

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BUSINESS PLAN 10
By looking at the above diagram, it can be understood that company has a big management team,
which support the organization in delivering effective food services to its potential customers.
Resources
The resources and capabilities of a company can be considered as its major business strategy.
McDonalds possesses various resources, which leads the organization towards growth and
success. The resources of the company are stated below;
Physical Resources
This company possesses a wide range of physical resources, which are used in offering its
services to the customers effectively. Its physical resources include the food outlet location that
will be in a strategic location, like; mall or any other popular building in the city. It will have the
sitting capacity of more than 50 persons. These fast food outlets are equipped with modern and
latest storing and cooking utensils and equipment. There is the facility of playing room for the
children and other fun activities also (Paul & Roy, 2014).
Human Resources
In the food service organization, human resources play an important role. The major strength of
food organization is not the machines, tools or cash flow; rather the employees are the major
resources, which make the company more competitive and great. This organization understands
that employee satisfaction is very important in attaining the overall objective of organization. It
offers an effective training to the employees for their development. Under the hiring process, it
selects the employees by considering their motivation level, integrity and educational
qualifications (Popov and Roosenboom, 2013).
Organizational Resources
The leading player in Fast food industry, McDonalds serves as a training and development
center, where it makes more focus on day-to-day training between and interaction between
managers of all the levels. This training and development program starts with the lower level,
like; first the person learns to cook the French fries. This resource of the company offers a
foundation for enhancing the discipline, responsibility and organizational and interpersonal
skills. They can learn to work in the team (Scarborough, 2015).

BUSINESS PLAN 11
Financing
When an organization introduces its new business operations, then it thinks about raising the
funds from different options. Acquiring the franchise of McDonalds can be major investment for
the investors. For its business, the company is availing funds from different sources and options.
It is working majorly with two banks, i.e. MayBank and CIMB. Both the banks are handling the
financing activities for this company inside and outside the nation and offer the short term loans
to McDonalds (Untaru & Ispas, 2013). In addition, the company is taking funds from U.S. bank,
which is giving it various advantages, like; long term loans, i.e. 7 year term, business and
financial solutions, fixed and adjustable rates etc. Thus, the company has a well-grown and
established business, so there are so many bank and financial institutions, which are ready to
invest their funds in the franchise of McDonalds.
Financial Projections
The major objective of McDonalds is to expand its business operations to international markets.
The company is expanding its business by offering variety of fast food products to customers.
The financial projections for the company are given below;
Start-up Funds
For establishing this new franchise, McDonalds will have various start-up costs. These costs
include kitchen and fixtures, interior and furniture, legal fees and rent. In addition, it will include
the salaries, which will be given to the staff and restaurant employees in the future (West, Ford,
& Ibrahim, 2015). The below given table includes all the start-up costs, which can be incurred in
establishing this new franchise.
Start-up Requirements
Expenses Amount
Fixtures and Kitchen
Interior and furniture
Legal expenses
Rent
Contingencies
Total Start-up Expenses
$35000
$25000
$5000
$15000
$6000
$86000

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Start-up Assets
Cash
Long-term Assets
Current Assets
$55000
$0
$0
Total Start-up Requirements $1,41,000
Personnel Plans
Personnel 1st Year 2nd Year
Managers
Cook
Cashiers
Waiters
$0
$25000
$40000
$20000
$50000
$50000
$55000
$35000
Total Payroll $85000 $1,80,000
Break Even Analysis
After evaluating other businesses, McDonalds has supposed that break even analysis indicates
that it will require unit sales over 9700 per month to reach to break-even point. The below-
plotted graph shows the break-even analysis for this organization.

BUSINESS PLAN 13
Projected Profit & Loss
For introducing this new franchise, McDonalds has made an effective financial plan, which will
help the business in attaining its goals and objectives.
McDonalds
Profit & Loss Statement
Amount ($)
Year 1 Year 2 Year 3
A. Sales $289,397 $312,314 $556,226
Direct Cost of Sales $59,519 $113,694 $196,868
B. Total Cost of
Sales $59,519 $113,694 $136,868
Gross Profit (A-B) $229,878 $198,620 $359,358
C. Operating
Expenses
Salary $157,000 $174,000 $190,000
Rent $8,400 $8,400 $8,400
Insurance $2,000 $2,000 $2,000
Utilities $2,200 $2,200 $2,200
Depreciation $636 $636 $636
Payroll taxes $23,550 $26,100 $28,500

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Sales and Marketing and Other
Expenses $12,800 $10,200 $9,200
D. Total Operating
Expenses $208,586 $225,536 $242,936
Profit Before Interest and Taxes $21,292 ($26,916) $116,422
EBITDA $21,928 ($26,280) $117,058
Taxes $20,095 $0 $24,397
Net Profit $1,833 ($26,280) $92,661
Net Profit/Sales 0.63% -8.41% 16.66%
Risks and Strategic Options
Under this new implementation, McDonalds may face some risks, which may impact the
business and growth of the company in fast food industry. There may be different type of risks,
like; operational risks, currency risks, brand image risks and legal risks. Operation risk may
occur, when there will be labor strikes and protests against the company. The company will need
to make changes in its operations, as the people are becoming very much concerned about their
health and they prefer to eat healthy and dietary food (Percy, 2014). It may affect the business of
company. In addition, the company may face the currency risks, which need to be mitigated by
the organization. When the company expands its business operations in international market, it
needs to comply with the laws and regulations in that country. It is one of the major challenges
for the organization.
To deal with the above-mentioned risks, the company will go with some strategic options. These
strategic options will assist the organization in eliminating these risks and challenges. To handle
the operation risks, the company should diversify its products and introduce a new segment with
healthy and dietary food products. For mitigating the currency and financial risks, it can use

BUSINESS PLAN 15
hedging instruments. Before opening a new franchise, the company should make a market
research in the target country market. It will assist the organization in understanding the imposed
laws and regulations in new market. Introduction of healthier menu will assist McDonalds in
fulfilling the demands and expectations of people of healthy food products (Yu, et al, 2016).
Key Milestones
During the setup of this new franchise of McDonalds, the management team will conduct the
planning and execution in building its outlets. The implementation of this business plan will
include different key milestones. It will take some months along with the refinement and revision
process, which will take a period before establishing this franchise (Percy, 2014). The key
milestones for the organization are given in the below table;
Activity Starting date End Date Manager Concerned
Department
Business plan
formation
1/1/2018 1/4/2018 Marketing
Manager
Marketing
Department
Office set up 1/4/2018 1/7/2018 - Owners
Website
Creation
1/7/2018 1/10/2018 Managers Information
Technology
department
Hiring of the
people
1/10/2018 1/12/2018 Personnel
manager
Personnel
Department
Marketing
Communication
Program
1/1/2019 1/3/2019 Marketing
Manager
Marketing
Department
Grand Opening
Materials
1/3/2019 1/4/2019 Owners Material
planning
department
Training the
staff
1/5/2019 1/6/2019 Human
Resource
executives
Human
Resource
Department

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Conclusion
From the above analysis, it can be concluded that McDonalds can use this business plan for
establishing its new franchise in the country. The report describes all the related aspects, which
are needed to introduce new business and new business operations under existing organization.
The company needs to include various marketing strategies, which can be used for attracting the
customers towards its products and services. It is a fast food organization, so it needs various
resources, which can assist the organization in implementing its operations. The company should
go ahead with this business plan to deal with all the risks and challenges in the future. It can
implement different strategic options to mitigate the associated risks and challenges.

BUSINESS PLAN 17
References
Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2015. Marketing: an introduction.
Pearson Education.
Baker, M.J., 2014. Marketing strategy and management. Palgrave Macmillan.
Bhasin, H., 2016, Marketing Mix of McDonalds, retrieved from
http://www.marketing91.com/marketing-mix-mcdonalds/
Bauer, C., 2012, An integrated decision model for strategic evaluation of the viability of new
technologies, GRIN Verlag.
David, M.E., David, F.R. & David, F.R., 2016, The quantitative strategic planning matrix: a new
marketing tool, Journal of Strategic Marketing.
Hill, C. W., Jones, G. R., & Schilling, M. A, 2014, Strategic management: theory: an integrated
approach. Cengage Learning.
Kenawy, E.M., 2015. The economic importance of franchise Industry in Egypt. European
Journal of Academic Essays, 1(9), pp.23-33.
Kotlar, P. & Armstrong, G, 2012, Principles of Marketing (14 edition), Pearson Education, Inc.
Lam, W. and Harker, M.J., 2015. Marketing and entrepreneurship: An integrated view from the
entrepreneur’s perspective. International Small Business Journal, 33(3), pp.321-348.
Lee, C., Hallak, R. and Sardeshmukh, S.R., 2016. Innovation, entrepreneurship, and restaurant
performance: a higher-order structural model. Tourism Management, 53, pp.215-228.
McDonalds., 2012, McDonalds Corporate Social Responsibility and Sustainability Report.
Retrieved from
https://mcdonalds.com.au/sites/mcdonalds.com.au/files/MCD_CRS_Complete.pdf.
McDonalds, 2010, About McDonalds. Retrieved from http://www.aboutmcdonalds.com/mcd.
McKeever, M., 2016. How to write a business plan. Nolo Publications.

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New, S., 2015, McDonald’s and the challenges of a modern supply chain. Harvard Business
Review.
Paul, R., & Roy, S. K., 2014, Case Study 11: Marketing of Services: The McDonald’s Way.
In Marketing Cases from Emerging Markets (pp. 99-112). Springer Berlin Heidelberg.
Percy, L, 2014, Strategic Integrated Marketing Communications. Routledge Publications.
Popov, A. and Roosenboom, P., 2013. Venture capital and new business creation. Journal of
banking & finance, 37(12), pp.4695-4710.
Scarborough, N.M., 2015. Entrepreneurship and effective small business management. Pearson
Higher Ed.
Untaru, E., & Ispas, A., 2013, Why do young people prefer fast-food restaurants? An exploratory
study: Journal of Tourism, (15), 27-34.
West, D. C., Ford, J., & Ibrahim, E, 2015, Strategic marketing: creating competitive advantage.
Oxford University Press, USA.
Yu, Y., Wang, X., Zhong, R.Y. and Huang, G.Q., 2016. E-commerce logistics in supply chain
management: Practice perspective. Procedia CIRP, 52, pp.179-185.

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Appendices:
Company logo:
Projected Cash Flow:
Total McDonalds Restaurants:

BUSINESS PLAN 20
Accountability Structure: