Company Background And Market Analysis Of Mcdonalds

company Background And Market Analysis Of McdonaldsMcDonalds is the leading global feedservice retailer and the worlds largest grasp of beefburgers unfaltering regimen restaurant. It is founded in division 1955 by Ray Kroc. McDonalds serves much than60 million pot with more than 32,000 local restaurants in 117 countries each day. It employs more than 1.5 million hoi polloi. More than 75% of McDonalds restaurants worldwide argon owned and operated by fencesitter local men and women. reservoirFrom the set back above, since form 2004 until division 2008, even until now, McDonalds is still the military issue filling of customers when come to speedy victuals follow by Burger fairy and Wendys. In social class 2008, Subway took over Wendys place and ranked at number triad. also that, The Star Online stated that McDonalds is ranked in the unclutter 10 or so valuable disfigurements in 2010 and it is placed at number six.Top 10 most Valuable Brands in 2010RankBrandVal ue ($bn)1Coca-cola70.452IBM64.733Microsoft60.904Google43.565GE42.816McDonalds33.587Intel32.028Nokia29.59Disney28.7310HP26.87SourceCompany officeMission StatementMcDonalds vision is to be the worlds outperform quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we progress to every customer in every restaurant smile. setWe place the customer experience at the core of all we do.We be committed to our people.We believe in the McDonalds system.We operate out avocation ethically.We give back to our communities.We grow our business profitably.We strive continually to change. instruction OverviewMcDonalds management is very successful as it exports its brands throughout the globe. The company operates McDonalds restaurants as well as enfranchisements. in that location argon 32,478 restaurants in 117 countries at year-end 2009, and there atomic number 18 26,216 were operated by franchisees and 6,262 were operated by the Company. Under franchise arrangement, a portion of the capital have to be provided by franchisees to invest in their restaurant businesses for the equipment, signs, lay and decorations, reinvesting in the business is needed from cartridge holder to time.Financial SituationRevenues by geographic SegmentMcDonalds largest geographical market is Europe, accounted for 41% of the total taxations in the year 2009 which is mainly driven by France, Germany and the join forcedom. Revenues are generated through other geographic segments United States (US),Asia Pacific, Middle East and Africa (APMEA) and other countries and corporate are 35%, 19% and 5% respectively.From McDonalds 2009 annual report, we can see that its total revenues from the US reached $7,944 millions in year 2009, a decrease of 1.7% over year 2008. Revenues from Europe were $9,274 million in year 2009, a decrease of 6.5% compared to year 2008. While revenues from APMEA reached $4,337 million in year 200 8, an growing of 2.4% compared with year 2008. Revenues from other countries and corporate reached $1,190 millions in year 2009, a decrease of 7.8% over year 2008.The total in operation(p) income and assets in US shows favourable results where the figures concord change magnitude since year 2007 to year 2009. Total capital expenses in US show improvement as well where the expenditure is lesser in year 2009 compared to year 2008.Market ShareAccording to Jim Muehlhausen, McDonalds had engaged 19% of the total market parcel out in the fast food industry. While its closest competitors Burger King and Wendys accounted 2% individually. Pie Chart below shows the market dole out of the major players in the fast food industry.SourceMarket SituationSector TrendsThe land size of United Statess is at 3.79 million square miles, fit to U.S. Bureau of Census, with the total population of 307,006,500 in July 2009, it is the third largest both by land area and population. The table on the le ft shows the population in United States in July 2009 according to states.SegmentationThe market is section by demographic, geographic, psychographic and behavioural.Tar stick toingMcDonalds tar worry market is people who love fast food. The demand of fast food is increasing nowadays as everyone is practicing faster paced lifestyles. Macdonalds target market is children, students, working adults and families who are from five to seventy eld old. Students tend to spend their time to socialize with their friends in fast food restaurants compare to other restaurants as it offers affordable prices and trendy ambiences. Besides that, due to the hectic schedule, fast food restaurant is always the number one choice for working adults to have their meals as it offers quick services. Kids simply love fast food, hence, the parents go forth bring their children to fast food restaurants to have family meals.PositioningMcDonalds outlets are located mostly in higher(prenominal)(prenominal) po pulation states such as Florida, refreshed York, Texas, Illinois and Ohio. They were built near office buildings, schools, in shopping malls, etcetera, which are high visibility, dealings volume and ease of access areas.StateJuly 2009 populationAlabama4,708,708Alaska698,473Arizona6,595,778 atomic number 182,889,450California36,961,664Colorado5,024,748Connecticut3,518,288Delaware885,122DC599,657Florida18,537,969Georgia9,829,211Hawaii1,295,178Idaho1,545,801Illinois12,910,409Indiana6,423,113Iowa3,007,856Kansas2,818,747Kentucky4,314,113Louisiana4,492,076Maine1,318,301Maryland5,699,478 mom6,593,587Michigan9,969,727Minnesota5,266,214Mississippi2,951,996Missouri5,987,580Montana974,989Nebraska1,796,619Nevada2,643,085New Hampshire1,324,575New Jersey8,707,739New Mexico2,009,671New York19,541,453North Carolina9,380,884North Dakota646,844Ohio11,542,645Oklahoma3,687,050Oregon3,825,657Pennsylvania12,604,767Rhode Island1,053,209South Carolina4,561,242South Dakota812,383Tennessee6,296,254Texas24, 782,302Utah2,784,572Vermont621,760Virginia7,882,590 uppercase6,664,195West Virginia1,819,777Wisconsin5,654,774Wyoming544,270Total307,006,550McDonalds target market and its market segmentationChildrenYouthAdultsElderlyDemographic come along5 to 1213 to 2526-5455-70OccupationStudentsStudents/Part-timersPart-timer/Full-timer/Self-employedRetiredIncome1000 to 25002500Pensions and savingsGeographic indoors United StatesPsychographicInterestsEntertainmentEntertainment, leisureEntertainment, leisureEnjoymentLifestyleDependentAggressiveAggressive decelerate and steadyBehaviouralOccasionsBirthday partyBirthday party, gatheringGathering, anniversaryAnniversaryMcDonalds bone analysisStrengthsStrong global presence with its nearest domestic competitor being only half(prenominal) of its size.The market leader in both domestic and international markets.Strong brand recognition stratified number one in Fortune Magazines 2008 list of most admired food service companiesHaving more than 32,000 loca l restaurants in 117 countries.First to come out with nutrition facts information on its carrefours.WeaknessesLack of intersection point innovation.High cost for employee training due to high employee turnover.OpportunitiesIts outlets are located in high visibility, traffic volume and ease of access areas.International marketAdvances in engine roomThr run downsSaturated food industries. set competition between competitors.More health conscious customers and fast food is categorized as ulcerous food.PESTLE implicationsPoliticalAccording McDonalds 2009 annual report, foreign currency translation had a negative bear upon on McDonalds consolidated operating results in year 2009 which is driven by the Euro, Russian Ruble, British Pound, Canadian Dollar and Australian Dollar. While in year 2008 and 2007, the foreign translation had positive impact on its consolidated operating results. The table below shows how the foreign currency translation affect McDonalds consolidated operating results.EconomicalWith its franchises in US, McDonalds provide a lot of job opportunities to the US people to reduce the unemployment take aim in that country. McDonalds is hiring up to 600 part-timers to work in its outlets throughout the Las Vegas area which is with 14.2% of unemployment level.SocialFast foods lead to obesity problems in America as they are high in fats, calories, sugar and salt. Rates of obesity in America are keep increasing obesity leave leads to other diseases like heart diseases, diabetes, etc. The Coronary Artery Risk Development in Young Adults (CARDIA) said that a person will gain an average weight of 10 pounds if he or she ate fast food 2 or more times in a week. Pew Research Centre reported that approximately 20% of Americans eat fast food at least twice a week after(prenominal) the survey is conducted. As the health concern is increased among the Americans, they tend not take less fast food as it have been seen as cytomegalic food.To conquer the p roblems, McDonalds comes out with nutrition facts charts on selected box and menu information for customers to have guidelines for the food intake and meet their nutrition desires. Sample nutrition facts are shown in the pictures below.TechnologyWith the technology, McDonalds serves burgers and fries to the customers in minutes time, McDonalds was the first to have touch-screen computers at the front restitution and drive-thru to serve customers faster and easier when they ordering food. There are also touch screen self-ordering kiosks for customers to order food by themselves. Besides that, McDonalds uses Wayport for high revivify connectivity to the internet.LegalMcDonalds has been involved in legal cases which most of them are trademark disputes where many food businesses are using Mc or Mac because of McDonalds strong brand recognition.EnvironmentalTo reduce the impacts on environment, McDonalds uses 3Rs approaches reduce, reuse and recycle. There is 82% of McDonald packaging are made from renewable materials at the moment. Besides that, cooking oil is recycled to be reused in variety harvests such as environmentally gracious biodiesel.Competitors situation and SWOTMcDonalds closest competitors are Burger King Corporation and Wendys International Incorporation.Burger KingBurger King is founded in year 1954 by McLamore and Edgerton. It has more than 12,200 outlets in 73 countries, however, 66% of its outlets are located in United States and 90% of them are privately owned and operated. It is having more than 38,800 employees serving about 11.4 million customers in daily basis.StrengthsSecond largest fast food hamburger restaurantStrong brand equityWeaknesses hard concentrated in US marketRelies heavily on its franchisesOpportunitiesInternational marketAdvances in technologyThreatsChanging consumer habits towards healthier food choicesIntense competition with the competitorsIncreasing labour costsWendysWendys is founded in year 1969 by Dave Thomas. It i s an international fast food chain restaurant which ranked as the worlds third largest hamburger fast food chain. In year 2009, there are 6,541 restaurants worldwide where 1,391 are company restaurant and 5,150 are franchise restaurants, majority of them 77 are located at North America. Wendys employs 46,000 people worldwide.Strengths triplet largest hamburger fast food chain restaurantGlobal brandStrong supply chainWeaknessesConcentrated in North America marketHaving management problemsRelies on franchisesOpportunitiesInternational marketAdvances in technologyThreatsStrong competitorsIncrease in beef pricesFast food have been seen as unhealthy foodObjectives and AssumptionsAssumptionsDuring the preparation of a selling plan, there are few assumptions being made upon it where there will be no large fluctuation situationly on Foreign Exchange variance. Besides that, it is crucial to take variances such as economy crisis, natural disasters that will have impacts on McDonalds busines s into consideration during the preparation of a marketing plan.ObjectivesThese marketing objectives are what McDonalds is trying to achieve on the trio following years of its operations by using SMART criteria which are specific, measurable, achievable, realistic and timely merchandiseSpecificTo increase market share.To increase new product awareness. mensuralTo increase the market share by 5%.To have an increase of 18% on new product awareness.AchievableAdvertisements on the new product to grab customers attention.More franchisees to open new franchises.RealisticFast-paced lifestyle leads to higher demand as more customers prefer fast food nowadays.TimelyTo increase market share by 5% yearly start from 2010.To have an increase in product awareness by 18% start from 2010.FinancialSpecificTo increase overall gross sales revenue.To reduce cost of sales.MeasurableIncrease sales revenue by 8%.Reduce the cost of sales by 5%.AchievableHigher demand for fast food.RealisticMcDonalds orde r raw materials in bulk to get cheaper prices and reduce cost.Advertising stimulate customers appetite and increase sales.TimelySales revenue increases by 8% annually start from year 2010.Cost of sales reduces by 5% yearly start from 2010.societalSpecificProvide healthier fast food.To make product more environmental friendly.Reduce voltaic and water ingestion and wastage.MeasurableRD at 8% of sales on healthier food formula in year 2010.Reduce energy inlet and wastage by 3%.AchievableReduce in fats, calories, sugar and salt in the products.Electric and water consumption is reduced by using them wiselyRealistic82% of McDonald packaging are made from renewable materialsTimelyElectric and water consumption and wastage is to be reduced by 3% monthly start from January 2010.Strategy trade Mix merchandise mix is all about putting the discipline product in the right place, at the right price and at the right time to boost sales and hence generate higher profit. proceedsMcDonalds prima rily sells hamburgers, chicken products, cheeseburgers, breakfast items, dejeuner items, french fries, soft drinks, shakes and also desserts. McDonalds should innovates its products continuously as people tend to change their preference and tastes from time to time. Without product innovations, customer will get bored to eat the same food over and over again. With its strong brand recognition, McDonalds serves its customers within minutes from ordering until they get their food with world class food quality by using fresh ingredients and excellent product features. Its staffs are trained to provide fast and excellent services to the customers. McDonalds product packaging is environmental friendly and 100% recyclable to reduce the negative impacts on the environment. Questionnaires have to be prepared from time to time to get feedbacks from the customers so that McDonalds have an idea to improve on its products and environments by following customers preferences.As people starts to practice healthy lifestyles, McDonalds includes salads, wraps and fruit into its menu. Besides that, McDonalds comes out with nutrition facts table and charts for people to have guidelines for their food intake and to meet their nutrition desires. The sample nutrition facts table for McDonalds USA is shown below.SourcePriceMcDonalds uses value-based price and psychological pricing on its products. One example for psychological pricing is $3.59 instead of $3.60 and $4.99 instead of $5. In customers perception of saving, they look at the items with prices ending with 0.95 or 0.99 more favourable as compare to 1.00 as example although there are only 0.05 and 0.01 difference. The prices are set where they are reasonable and affordable by the customers. It uses value pricing strategieson some of its products where they are cheaper to buy in a set compared to ala batting order such as happy meal, combo meal,family meal, breakfast and lunch sets to increase overall sales volumes. Discount s coupons should be given out from time to time to attract new customers and to boost sales in those particular periods.PlaceMcDonalds outlets are located in high visibility, traffic volume and ease of access areas. more or less of its outlets consist of the distribution channels. It is important so that the product is available to the customer all the time. In United States, there are nearly 50% of McDonalds outlets can be reached by driving within iii minutes. McDonalds gives certain level of satisfaction, bid as well as happiness each time they eat at McDonalds as it offers wagerer ambience, hygienic environment and also great services. Free Wi-Fi with high speed connectivity to internet is provided to customers for them to access to internet to do business and entertainment when they are dining. Besides that, children will not easily get bored when they just sit and eat as they can have fun at the playgrounds in the restaurants while their parents have some time to spend to gether. Every McDonalds outlets have Drive-Thru to make customers who want to take away more convenient and fast. Besides that, quick delivery to households is provided with a dwarfish charge.PromotionMcDonalds uses various promotion channels to effectively communicate the product information to the customers as it has work out understanding of the customer value that helps to decide whether the promotion cost is worth spending or not. McDonalds three main advertising objectives are to make people aware of its product, having position perception about it and think back it. It does its advertising promotions through televisions, radios, hoardings and also bus shelters. Printed ads in newspapers and magazines and television programmes are one of its important marketing medium too to stimulate customers appetite.Besides that, McDonalds is doing sales promotion too. Customers can enjoy McDonalds breakfast and lunch sets in cheaper price in a certain period of the day. Besides that, d iscount coupons will be given to customers from time to time for them to enjoy McDonalds foods in cheaper prices. Kids simply love to celebrate their birthday parties in McDonalds. Hence, McDonalds can give special discounts and gifts to the birthday kids so that they will come back next year and tell it to their friends.Forecast and implicationsMcDonalds three years forecasts and budgets (Dollars in millions)2009201020112012Objective commentSales79448580926610007Improve by 8% yearlyCost659626595565Reduce by 5% annuallyProfit7285795486719442Increases by around 8% yearlyIt is forecasted that McDonalds in United States will meet its financial objective where its sales increase steadily by 8% yearly start from year 2010 while its cost reduces by 5% annually. Hence, the profit will be increasing by around 8% yearly start from 2010. metricsMcDonalds is using metric strategy in order to measure whether it can achieve its objectives or not.Marketing metricObjectivesMetricsTo increase marke t shareMeasure by number of new franchises gap yearlyIncrease product awareness among target audiencesCalculated by the sales of the particular product after advertising promotion is doneFinancial metricObjectivesMetricsIncrease sales revenueProduct sales is measured by dollars annuallyReduce cost of salesCost of sales is measured by dollars yearlySocietal metricObjectivesMetricsProvide healthier fast foodMeasure by the percentage of fats, calories, sugar and salt in the productsReduce electrical and water consumption and wastageCalculate by the electric and water bills monthlyMore environmental friendlyMeasure by the percentage of its packaging that using recyclable materialsConclusionAs the conclusion, although McDonalds is number one in fast food industry, it should keep improving its business in term of marketing, financial and social to be better in the future. McDonalds can get feedback from the customers to know what they prefer, how they want McDonalds to change so that McD onalds know what action it should takes to improve itself. With new product innovations and healthier fast food, McDonalds will be more successful.Word Count 2275 quarrel