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    A4 MC D Xweb

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    - Yum! Brands is the world's largest restaurant company in terms of system restaurants with nearly 38,000 locations across over 110 countries. Its brands - KFC, Pizza Hut and Taco Bell - are leaders in the chicken, pizza and Mexican-style food categories. - In 2010, Yum! generated over $11 billion in revenue. Outside the US, it opened approximately four new restaurants per day. - Yum!'s key strategies are to build leading brands across China, drive international expansion, improve US brand positions and consistency, and deliver long-term shareholder and franchisee value. In 2010, Yum! achieved 17% earnings per share growth, exceeding its 10% target for the

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    A4 MC D Xweb

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    Khor Lee Kean
    225 views29 pages
    - Yum! Brands is the world's largest restaurant company in terms of system restaurants with nearly 38,000 locations across over 110 countries. Its brands - KFC, Pizza Hut and Taco Bell - are leaders in the chicken, pizza and Mexican-style food categories. - In 2010, Yum! generated over $11 billion in revenue. Outside the US, it opened approximately four new restaurants per day. - Yum!'s key strategies are to build leading brands across China, drive international expansion, improve US brand positions and consistency, and deliver long-term shareholder and franchisee value. In 2010, Yum! achieved 17% earnings per share growth, exceeding its 10% target for the

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    - Yum! Brands is the world's largest restaurant company in terms of system restaurants with nearly 38,000 locations across over 110 countries. Its brands - KFC, Pizza Hut and Taco Bell - are leaders in the chicken, pizza and Mexican-style food categories. - In 2010, Yum! generated over $11 billion in revenue. Outside the US, it opened approximately four new restaurants per day. - Yum!'s key strategies are to build leading brands across China, drive international expansion, improve US brand positions and consistency, and deliver long-term shareholder and franchisee value. In 2010, Yum! achieved 17% earnings per share growth, exceeding its 10% target for the

    Copyright:

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    Download as pptx, pdf, or txt
    225 views29 pages

    A4 MC D Xweb

    Uploaded by

    Khor Lee Kean
    - Yum! Brands is the world's largest restaurant company in terms of system restaurants with nearly 38,000 locations across over 110 countries. Its brands - KFC, Pizza Hut and Taco Bell - are leaders in the chicken, pizza and Mexican-style food categories. - In 2010, Yum! generated over $11 billion in revenue. Outside the US, it opened approximately four new restaurants per day. - Yum!'s key strategies are to build leading brands across China, drive international expansion, improve US brand positions and consistency, and deliver long-term shareholder and franchisee value. In 2010, Yum! achieved 17% earnings per share growth, exceeding its 10% target for the

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    of 29

    McDonald’s Corporation

    in the new millennium


    Content
    • Introduction
    • Fast Food Industry
    • Hamburger Segment
    • Non-hamburger Segment
    • McDonald’s Future
    Mc Donald Corporation
    A market leader in fast food industry
    Revenue $14.9 billion in 2001
    Serving more than 58 million customers daily
    No of global restaurants : >32,000
    No of countries : 117
    No of employees : 1.7 million
    No of franchise : > 75%
    Diversification – McCafe

    “Big Mac Attack”


    – earning declines late 1990 ‘til early 2000
    - Market share growth : 2.2 (Burger King 2.7, Wendy 2.5)
    McDonald’s Franchises versus Company-
    Owned Restaurants
    2004 2005 2006 2007 2008 2009

    Total
    30,496 30,766 31,046 31,377 31,967 32,478
    Restaurants

    Franchised
    22,317 22,593 22,880 24,471 25,465 26,216
    Restaurants

    Company-
    8,179 8,173 8,166 6,906 6,502 6,262
    Owned Stores

    % Company-
    26.8% 26.6% 26.3% 22.0% 20.3% 19.3%
    Owned Stores
    Vision & Mission
    • "McDonald's vision is to be the world's best
    quick service restaurant experience. Being
    the best means providing outstanding
    quality, service, cleanliness, and value, so
    that we make every customer in every
    restaurant smile."
    Q1 & Q2
    • How are customer tastes changing in the fast-
    food industry? What impact do these changes
    have on Mc Donald?

    • How well are these changes in customer tastes


    and preferences being reflected in competitive
    strategies in the industry?
    Answer 1&2
    • A1:
    • Needs: Healthy, quick, cheap
    • Impact on McDonald : sales & profit decline

    • A2:
    • To develop new line of products which is more
    healthier
    • Drive throu
    • Value meal
    Fast Food Industry
    • Mature market - slow growth
    • Trend
    – Move to non-hamburger sandwiches (Subway)
    - Recognition of the importance of heavy users(20%
    / 60%) single male >30yr working class job, love
    loud music, don’t like to read, sociable
    - Increase in fast casual segment (deli sandwiches &
    meals), growth 15-20%
    - Quick service sector only growth 2%
    - Change of eating habits (healthconcious & bored
    with fast food)
    Hamburger segment
    • Major competitors : Burger King, Wendy’s,
    Hardees
    • Drive-through – 65% sales, higher growth(3x)
    Burger King Hardees’s Wendy’s
    Market share No. 2 No. 4 No.3
    Product (new/core) Salad, chicken Bacon Burger, chicken
    whopper Cheeseberger, sandwiches, value
    Croissant Sunrise meal, Garden
    sandwiches sensation salad

    Price Valued-priced Reduced price Premium


    Place Drive-through 2784 outlets
    Promotion Bundled sanwiches, Increase advertising
    fries & soft drinks budget 30% in 2002

    Marketing strategy permanent Convert to Star Quality, customer


    Hardees, increase satisfaction,
    breakfast sales, innovation, unit
    own Carl’s junior level sales, focus on
    in-store operation
    Non-Hamburger Segment
    • Main competitors : Pizzahut, KFC, TacoBell
    (all 3 owned by Tricon Global Restaurants)
    • Higher growth than Hamburger segment
    • Fragmented :
    – sandwiches : Subway
    – Pizza : Pizza Hut
    – Fried chicken : KFC
    Pizza Hut KFC Taco Bell
    Market share 22% of all pizza
    restaurant
    Product P’zone (new) Kids Lap Top Pack Grilled Stuff Burito,
    (new), 18 different Chicken Quesadilla
    food combinations;
    Blazin’ Crispy Strips,
    BBT sandwiches
    Price premium
    Place 11,000 outlets
    Promotion 1 for$5.99, 2 for
    $10.99
    Marketing Strategy Differentiated, Brand building Shift to higher price
    value oriented products
    Latest Development
    • A McDonald's restaurant is operated by either a franchisee, an
    affiliate, or the corporation itself. The corporation's revenues
    come from the rent, royalties and fees paid by the franchisees,
    as well as sales in company-operated restaurants. McDonald's
    revenues grew 27% over the three years ending in 2007 to $22.8
    billion, and 9% growth in operating income to $3.9 billion.[7]
    • McDonald's primarily sells hamburgers, cheeseburgers, chicken
    products, french fries, breakfast items, soft drinks, shakes, and
    desserts. In response to obesity trends in Western nations and in
    the face of criticism over the healthiness of its products, the
    company has modified its menu to include alternatives
    considered healthier such as salads, wraps and fruit.
    McDonald Product Development
    • New products : Fried Chicken sandwiches,
    Grilled chicken sandwiches, Brownie, etc
    • Advertising message: tasty & nutritious,
    friendly & fun
    • Fitness Fun with Ronald McD for
    kindergardens & primary schools
    • Charity : Ronald McDonld House
    Introduction
    • McCafe (Diversification)
    – Originated in Australia 1993
    – >300 outlets in 17 countries
    – Cappuccino, lattes, tea, fruit smoothies, cake,
    muffins, tarts
    Q3 & Q4
    • What are McDonald’s strengths and
    weaknesses and what conclusions do you
    draw about its future?

    • Should McDonald’s develop a separate


    strategy for the heavy user segment of the fast
    food industry?
    A3 : Strengths

    • Industry leader : influence the eating of Americans


    • Strong financial background
    • Efficient production line to ensure consistent product quality &
    taste.
    • A consistent restaurant/dining experience
    • A best supply chains in fast –food industry
    • Gain highest respect from its vendors
    • Conveniences restaurant worldwide
    • Strong brand recognition
    • Economy of scale
    A3 : Weaknesses
    • Lack of products innovation
    • Slow in developing new product for healthier
    food
    A3: Conclusion
    A4 : Heavy User Market
    • Yes! Because they are the mainstream of
    company revenue
    • Demographic : Single Male, < 30 years,
    working
    • Behavior : love loud music, sociable, don’t like
    to read
    • Marketing Strategy & Marketing-Mix
    Approach
    A4 : Heavy User Market
    • Positioning : An Economy & Happy Place for
    social gathering
    • Product : Value meal (10 sets free 1, free add on)
    • Place : convenience for working people with hip
    hop music (entertainment / pub)
    • Price : economy (more choice for value meal)
    • Promotion : TV, Radio, internet(facebook)
    • People : internal training on upsell to heavy user
    Q5
    • What should Jack Greenberg do to grow sales,
    profits, and market share at McDonald’s?
    Ansoff’s Product-Market Expansion

    Market Penetration (short term) Product Development (long term)


    -Increase drive thru & 24 hrs to more - Expand to Non-Hamburger segment
    outlets - Fast casual & healthy meal
    -- coverage expansion of delivery service
    -target on heavy user segment

    Market Development (short term) Diversification (long term)


    -Expand to other emerging market like -McCafe - expand to more countries
    Africa, Middle East Countries -Backward : acquired food manufacturer
        Inc., based
                                                                     

                                 
    Yum! Brands, Inc., based in Louisville, Ky., is the world's
    Yum! Brands,largest in Louisville,
    restaurant company Ky.,inisterms
    the world's
    of system restaurants
    with nearly 38,000 restaurants in over 110 countries and
    territories and more than 1 million associates. Yum! is ranked
    #216 on the Fortune 500 List and generated more than $11
    billion in revenue in 2010. The Company's brands - KFC,
    Pizza Hut and Taco Bell – are the global leaders of the
    chicken, pizza and Mexican-style food categories.
    The Yum! system includes three operating segments: U.S.,
    International (Yum! Restaurants International) and China
    Division. Outside the United States in 2010, the Yum! system
    opened approximately four new restaurants each day of the
    year, making it a leader in international retail development.
    At Yum! we're building a vibrant global business by focusing
    on four key business strategies:
    •Build leading brands across China in every significant category
    •Drive aggressive international expansion and build strong brands everywhere
    •Dramatically improve U.S. brand positions, consistency and returns
    •Drive industry-leading, long-term shareholder and franchisee value

    Results for 2010 once again affirmed our consistent record of


    success with 17% Earnings Per Share (EPS) growth, which
    marks the ninth straight year we delivered at least 13%
    growth and exceeded our 10% EPS growth target. For the full
    year 2010, we opened nearly 1,400 new restaurants outside
    the U.S. Importantly, we maintained our Return on Investment
    Capital (ROIC) of 20%+ and continued to be an industry
    Wendy’s International

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