ASSIGNMENT

NAME

FARAZ ULLAH KHAN

STUDENT ID

BM25560

COURSE

HUMAN RESOURCE MANAGEMENT

INSTRUCTOR

SIR Col. JAFRI

BIZTEK Gulshan Campus

MC DONALDS
1. COMPANY NAME AND ADDRESS McDonald's Corporation is the world's largest chain of hamburger fast food restaurants, Headquarters Oak Brook, Illinois, U.S.. 2. BRIEF HISTORY AND DISCRIPTION OF BUSINESS

a. b. c. d. e. f.

1940 :: First McDonalds Openedin USA 1953 :: McDonalds Began ToFranchise 1964 :: McDonald's issued itsfirst annual report 1975 :: Drive Thru WasIntroduced 1984 :: Ray Kroc Died on 14th January 2005 :: McDonalds Opened Wi-Fi

McDonald's Corporation is the world's largest chain of hamburger fast food restaurants,

3. BRIEF OVERVIEW OF MARKETS AND TRENDS Ray Kroc was the founder of McDonalds. McDonalds operates over 31,000restaurant worldwide ,employing more than 1.5million people. McDonalds operates in 120countries on six continents. McDonalds serves more than 50million customers a dayworldwide, and more than 2.5
4. BRIEF STRATEGY AND KEY TO SUCCESS

McDonalds key success factors are cost efficiency, product development, marketing, and promotions. To ensure McDonalds remained consistent with these factors, they sold Donatos Pizzeria, McDonalds introduced a new revitalization plan aimed to help market itself to todays health conscious consumers and to improve its financial position through discipline. In previous years,11 McDonalds had been attempting to grow primarily by adding new restaurants. With the limited success of this strategy, the McDonalds managers appeared they were more interested in expanding the empire than generating shareholder wealth. With the new campaign, McDonalds has begun to look like the worlds food service industry leader once again. McDonalds has introduced new products like salads and chicken options that have been well received by the more health conscience consumers. McDonalds also streamlined and improved techniques its training and operations systems. This resulted in an even more enjoyable customer experience. 5. CRITICAL RISK AND ASSUMPTION McDonalds was able to sustain a pace of positive and fortuitous growth. Corporate Responsibility of the food industry has prompted much of the menu changes for a more health concise society. In conclusion, in conjunction with our valuations and assumption, we conclude that McDonalds, as it is currently undervalued, would be an attractive company to invest as they are shown to be a company that will have steady large capital growth.

6. VISION AND MISSION STATEMENT MANAGEMENT VISION FOT THE COMPANY

Products McDonalds restaurants offer a substantially uniform menu, although there may be geographic variations. In addition, McDonalds tests new products on an ongoing basis. McDonalds menu includes hamburgers and cheeseburgers, Big Mac, Quarter Pounder with Cheese, Filet-O-Fish, several chicken sandwiches, Chicken McNuggets, Chicken Selects, Snack Wraps, french fries, premium salads, shakes, McFlurry desserts, sundaes, soft serve cones, pies, cookies, soft drinks, coffee, McCaf beverages and other beverages. In addition, the restaurants sell a variety of other products during limited-time promotions. McDonalds restaurants in the U.S. and many international markets offer a full or limited breakfast menu. Breakfast offerings may include Egg McMuffin, Sausage McMuffin with Egg, McGriddles, biscuit and bagel sandwiches, hotcakes and muffins. SERVICES
Independently owned and operated distribution centers, approved by the Company, distribute products and supplies to most McDonalds restaurants. In addition, restaurant personnel are trained in the proper storage, handling and preparation of products and in the delivery of customer service. 8. CUSTOMER BENIFITS We value you, your growth and your contributions. Thats why weve provided the things that matter, plus some great benefits. 9. TECHNOLOGY

McDonald's Corp. has helped revolutionize the way restaurants use technology, dating back to founder Ray Kroc's fascination with serving burgers and fries in a matter of minutes. Throughout the years, their fascination with advancing their company technology wise has become a great obsession for the the IT department.
10. MARKET AND COMPETITATIVE ANALYSIS OVERALL MARKET AND TARGET MARKETS MARKET NEEDS The fundamental secret to McDonalds success is the way it achieves uniformity and allegiance to an operating regimen with proper marketing strategy. McDonalds has to adhere to many rules and regulations laid down by the parent company, and it still has to cater to the customer and his needs.

MARKET SIZE AND TRENDS Sales for the U.S. consumer food-service market totaled approximately $408 billion in 2003. The 10 largest chains in America accounted for about 14 percent of these total sales according to U.S. Systemwide Foodservice Sales. Over the past couple of years there has been a growing trend in the restaurant industry to provide customers with a higher quality product in a short amount of time. These restaurants are typically referred to as fast casual or quality quick service. They aim to provide freshly prepared, made-to-order meals. McDonalds competes with other businesses from these other categories as substitute product competitors but primarily competes in the quick-service sandwich market. Experts projected that the sandwich segment was expected to grow by two percent annually for the years ahead. HISTORICAL AND PROJECTED MARKET GROWTH The business began in 1940, with a restaurant opened by brothers Richard and Maurice . Their introduction of the "Speedee Service System" in 1948 furthered the principles of the modern fast-food restaurant that the White Castle hamburger chain had already put into practice more than two decades earlier. INDUSTRY ANALYSIS SWOT ANALYSIS
Strengths Owns one of the worlds best known brand names Real estate operations bring in large revenues and allow McDonalds to open more stores Countless new innovations- breakfast, playpens, etc. Specialized training for managers- Hamburger University Reinstitute the restaurant review operation (QSC) Large market share Strongest international presence among fast-food chains Strong leader in Jim Cantalupo McDonalds does not need to act as finance corporation to franchises McDonalds Plan to Win- focuses on people, products, place, price and promotion Opportunities Diversification and acquisition of other quickservice restaurants Low-cost menu to attract different customers Initial public offerings in other countries could raise revenues Retail merchandise potentially used to raise revenues Weaknesses Customer service ranking is the lowest among fast-food chains Many stores beginning to look dated Quality becoming inconsistent Order accuracy is low compared to other chains

Threats Increased competition among rival sellers, including price wars, product innovation, and growth Health conscious consumers demanding better quality, healthier menu items All fast-food chains expected to struggle to meet new consumer health expectations Overall weaker economy

MAIN COMPETITORS One of the major issues for McDonalds is it competitors. Burger King is the second largest hamburger fast-food chain in the world Wendys is the third largest fast-food chain with 9,000 stores in 33 countries world wide. Hardees is the fourth largest fast-food chain in the nation. It holds 2,400 locations in 32 states and 11 countries. Jack in the Box, another major competitor in fast-food industry, has of 1,850 restaurants in 17 states.

Sonic yet another major competitor owns 2,700 locations and reported in 2003, 2.4 billion in revenue which is
6.2 percent increase. BUSINESS STRATEGY AND MARKETING PLAN VALUE PROPOSITON: WHY BUY FROM US? At McDonalds we give high importance to the smallest of the detail, from meat to spices, and everything is standardized. That is because we follow our global set quality standards with no compromise, right from the farm to the restaurant till the time it is served to you. HACCP (Hazard Analysis & Critical Control Point) is our applied system to keep food safety absolute from point zero till the point it is served to our customers. This ensures the quality from our regional suppliers production lines down to the kitchens of our restaurants. COMPETITIVE ADVANTAGE The most significant question of weather or not the new changes will sufficiently provide McDonalds with core competencies necessary to build a sustainable competitive advantage in the global fast-food industry. All fast-food hamburger chains, McDonalds included, are forced to respond to the shift in customer preferences from high-calorie burger and fries to healthier items such a deli sandwiches and baked potatoes. MARKET TARGETS AND STRATEGY Due to McDonalds unique business strategy, certain accounting policies are more important than others. Its policies regarding goodwill are very important because goodwill is one of McDonalds largest assets. McDonalds also spends a great deal of resources on advertising and marketing itself. This strategy is targeting in making McDonalds a fun place where you can enjoy both playing and eating. This also helps McDonalds to attract the young urban families who wanted to spend some quality time, while their children can enjoy every movement of McDonalds. To target the teenager and young youth, McDonalds has priced several products PRICING STRATEGY Pricing strategy is most important aspect of Marketing Mix. It includes price list,if any discount facility available or payment facility available.It should also take into consideration the possible reaction from its competitors regarding the pricing. Pricing is very much necessary because it is this part, which decides revenue for the business unit. ADVERTISING AND PROMOTION STRATEGY Generate sales by making their targeted customers aware of current offerings. Advertising Paid non-personal communication. Sales Promotion-Buckle Incentives to buy. Publicity Non-paid-for-communications of info. Personal Selling Face to face communication. MARKETING PROGRAMS McDonalds has needless to say already made a presence in the market and had made itself a household name. It is already the largest hamburger chain in the world. Therefore, it needs to continue onward with its successes while being a head every time with new product innovation, marketing schemes, technology development, customer service, employee training. By improving the standards and raising the bar a little higher for employee expectations will result in success stories from stores world wide.

SALES STRATEGY

Low entry package with very attractive offer. Up sell with "size up" regular to large.

Down sale with some side order items Cross sale with other desert items. Not necessary your front end offer needs to be profitable, very depend on the competitive factors. Facility to break even or running lost on the front end and making money on the back end
PRODUCTION PLAN PRODUCTION PROCESS

QUALITY ASSURANCE At McDonalds its always like coming home. We make sure that the warmth of our homely touch reaches your highest expectations. Be it food, service or the ambiance, we keep elevating our quality standards to new levels. McDonalds has implemented rigorous food safety standards called from farm to restaurants. Here food is not just meant for thought. Food means quality by all means. That is why McDonalds is served to you and your loved ones with all our heart and soul. ORGANIZATIONAL AND MANAGEMENT SUMMARY ORGANIZATIONAL CHART AND STRUCTURE

PERSONAL PLAN Our recommendation is that they decrease expansion in the almost saturated domestic markets, and continue their expansion in foreign countries, such as Asia, and the Pacific. Companies generally expand into foreign markets in an attempt to gain new customers and capitalize on core competencies. McDonalds core competency is that they are able to produce and sell quick and cheap food to a large number of customers. With this concept, they have been able to expand into other countries, and they currently are the largest global fast-food chain in the world. Since they already hold this lucrative position, they should continue expansion in an effort to drive out competition.

FINANCIAL PLAN IMPORTANT ASSUMPTION McDonalds has gone through a large turnaround period in the previous two years. This becomes very apparent when looking at McDonalds net income between the years 1998 and 2003. Net income rose steadily between 1998 and 2000, then there was a drop-off in 2001 of over a$300 million. Then in 2002, net income plummeted over $700 million. This was due mainly to slower growth in total revenues, and large increases in operating costs and expenditures. McDonalds showed a marked improvement in 2003, amassing $1.328 billion in net income, up over $400 million from the previous year. Although this was a large gain, McDonalds is still not over its financial and operating troubles, and needs strong performance in the upcoming years to stay at the top in the fast food industry.

PROJECTED PROFIT AND LOSS

BUSINESS RATIO The asset turnover ratio shows that McDonalds is doing a poor job producing sales from its assets. This would be a cause for concern, but generally McDonalds has always had a lower asset turnover ratio, even when they were operating at the pinnacle of the industry