2015

McDonalds
Supply Chain
Management

How does the worlds premier fast food restaurant do it?

Submitted to: Prof. D.N.Chakraborti

Prepared by:
Ruben Nag
Roll: LSM/14/18
Year: 2014-15

St. Xaviers college (autonomous), Kolkata

Under
University of Calcutta

DECLARATION

I hereby declare that the project report titled McDonalds Supply Chain
Management. is a bonafide record done by me during the period April-May 2015 as
part of my Logistics and supply chain management PGDM program at St. Xaviers
college (autonomous), Kolkata under the University of Calcutta. This study has
been undertaken in partial fulfillment of the requirement for the award of PGDM in
logistics and supply chain management by St. Xaviers college (autonomous),
Kolkata under the University of Calcutta.
I also declare that this report has not been submitted in full or part thereof, to any
University or institutions for the award of any degree or diploma.

----------------------------Place: Kolkata
Ruben Nag
Date: 15/05/2015
(LSCM) (2014-2015)

PGDM
St.

Xaviers college, Kolkata

ACKNOWLEDGEMENT
I have searched for the definition of success, in the context of leading
a successful life. It turns out that there are as many definitions as there
are seekers and that success lies as much in the attempt as in the
achievement. - Robert Frost

Feeling gratitude and not expressing it is like wrapping a present and

not giving it.
- William Arthur Ward

I have immense pleasure to express my sincere gratitude to my mentor guide

Prof. D. N. Chakraborti senior visiting professor of St. Xaviers college,
Kolkata for his continuous guidance, advice and moral support on every stage of
the project. His sincere advice and suggestions has been a source of inspiration
for me in completing the project work.
I would also express my sincere gratitude to our Head of the Department of
career oriented programme Prof. Ashis Mitra, St. Xaviers college, Kolkata.
I would like to sincerely thank all those people who gave their constructive input
in the completion of this project and to all those who untiringly guided me. I am
indebted to all those people who have contributed time, encouragement,
information and assistance or in some manner enabled me to learn, to grow in
experience to develop a better understanding.
I am also gratefully acknowledge St. Xaviers college, Kolkata and the
respected faculty members.
Last but not the least I would like to thank my parents for their words of
encouragement and guidance all throughout the way.

Date: 15/05/2015
------------------------------- Place: Kolkata
Ruben Nag

PGDM LSCM
St. Xaviers college, Kolkata

CERTIFICAT FROM THE GUIDE

This is to certify that the project work

titledMcDonalds Supply Chain Management
is a bonafide work carried out by Ruben
Nag Roll No LSM/14/18 a candidate for the
Post graduate diploma in Logistics and
Supply Chain Management of St. Xaviers
college, Kolkata under my direction.

DATE: 15/05/2015
PLACE: KOLKATA

-------------------------------------SIGNATURE OF THE GUIDE

Prof.D.N.Chakraborti

Visiting Professor
St. Xaviers College, Kolkata

TABLE OF CONTENTS

S.No.

CONTENTS

Page
No.

1.

Company Description

2.

History of McDonalds

3.

Goals and Objectives

10

4.

Mission statement

10

5.

McDonalds India-A Profile

11

6.

Evolution of McDonalds marketing in India

13

7.

McDonalds Strategic Marketing Mix

16

8.

Importance of PLC in McDonalds

22

9.

McDonalds SWOT Analysis

28

10.

Competitors Analysis

31

11.

Research Methodology

32

12.

Data Analysis and Interpretation

34

13.

Recommendations and Conclusion

41

14.

Appendices

44

15.

Bibliography

48

COMPANY DESCRIPTION:

Established in California during the 1940s by two brothers, the McDonalds

restaurant became a popular teen hangout in the first flush of post-war affluence. To feed these youthful bodies,
the brothers reduced the menu to the perennial favourite hamburgers, applied assembly line techniques to food
production and expanded to four restaurants by 1953. Taking note of the brothers success, in 1955,
Entrepreneur Ray Kroc bought the right to franchise the McDonalds System. Renamed the McDonalds
Corporation in 1960, Kroc focused his marketing effort on the family meal and children, spending heavily on
television advertising which promoted the smiling clown face of its child-friendly brand mascot, Ronald
McDonald. Today, the McDonalds franchise exceeds 30,000 restaurants globally and serves over 50 million
people in more than 121 countries each day.
The business began in 1940, Their introduction of the "Speedee Service System" in 1948
established the principles of the modern fast-food restaurant. The original mascot of McDonald's was a man
with a chef's hat on top of a hamburger shaped head whose name was "Speedee." Speedee was eventually
replaced with Ronald McDonald in 1963. Believing that the McDonald formula was a ticket to success, Kroc
suggested that they franchise their restaurants throughout the country. When they hesitated to take on this
additional burden, Kroc volunteered to do it for them. He returned to his home outside of Chicago with rights to
set up McDonald's restaurants throughout the country, except in a handful of territories in California and
Arizona already licensed by the McDonald brothers. Kroc's first McDonald's restaurant opened in Des Plaines,
Illinois, near Chicago, on April 15, 1955--the same year that Kroc incorporated his company as McDonald's
Corporation. As with any new venture, Kroc encountered a number of hurdles. The first was adapting the
McDonald's building design to a northern climate. A basement had to be installed to house a furnace, and
adequate ventilation was difficult, as exhaust fans sucked out warm air in the winter and cool air in the summer.
Most frustrating of all, however, was Kroc's initial failure to reproduce the McDonalds' delicious french fries.
Once the Des Plaines restaurant was operational, Kroc sought franchisees for his McDonald's chain. The first
snag came quickly. In 1956 he discovered that the McDonald brothers had licensed the franchise rights for Cook
County, Illinois (home of Chicago and many of its suburbs) to the Frejlack Ice Cream Company. Kroc was
incensed that the McDonalds had not informed him of this arrangement. He purchased the rights back for
$25,000--five times what the Frejlacks had originally paid--and pressed forward. Kroc decided early on that it
was best to first establish the restaurants and then to franchise them out, so that he could control the uniformity
of the stores. Early McDonald's restaurants were situated in the suburbs. Corner lots were usually in greater
demand because gas stations and shops competed for them, but Kroc preferred lots in the middle of blocks to
accommodate his U-shaped parking lots. Since these lots were cheaper, Kroc could give franchisees a price
break. McDonald's grew slowly for its first three years; by 1958 there were 34 restaurants. In 1959, however,
Kroc opened 67 new restaurants, bringing the total to more than 100.

Kroc had decided at the outset that McDonald's would not be a supplier to its franchisees--his background in
sales warned him that such an arrangement could lead to lower quality for the sake of higher profits. He also
had determined that the company should at no time own more than 30 percent of all McDonald's restaurants. He
knew, however, that his success depended upon his franchisees' success, and he was determined to help them in
any way that he could. In 1960 the McDonald's advertising campaign "Look for the Golden Arches" gave sales
a big boost. Kroc believed that advertising was an investment that would in the end come back many times over,
and advertising has always played a key role in the development of the McDonald's Corporation--indeed,
McDonald's ads have been some of the most identifiable over the years. In 1962 McDonald's replaced its
"Speedee" the hamburger man symbol with its now world-famous Golden Arches logo. A year later, the
company sold its billionth hamburger and introduced Ronald McDonald, a red-haired clown with particular
appeal to children. The present corporation dates its founding to the opening of a franchised restaurant by Ray
Kroc, in Des Plaines, Illinois on April 15, 1955 , the ninth McDonald's restaurant overall. Kroc later purchased
the McDonald brothers' equity in the company and led its worldwide expansion and the company became listed
on the public stock markets in 1965. Kroc was also noted for aggressive business practices, compelling the
McDonald's brothers to leave the fast food industry. The McDonald's brothers and Kroc feuded over control of
the business, as documented in both Kroc's autobiography and in the McDonald brothers' autobiography. The
site of the McDonald brothers' original restaurant is now a monument. The menu was simple: hamburgers,
cheeseburgers, French fries, shakes, soft drinks, and apple pie. The carhops were eliminated to make
McDonald's a self-serve operation, and there were no tables to sit at, no jukebox, and no telephone. As a result,
McDonald's attracted families rather than teenagers. Perhaps the most impressive aspect of the restaurant was
the efficiency with which the McDonald's workers did their jobs. Mac and Dick McDonald had taken great care
in setting up their kitchen. Each worker's steps had been carefully choreographed, like an assembly line, to
ensure maximum efficiency. The savings in preparation time, and the resulting increase in volume, allowed the
McDonalds to lower the price of a hamburger from 30 cents to 15 cents. With the expansion of McDonald's into
many international markets, the company has become a symbol of globalization and the spread of the American
way of life. Its prominence has also made it a frequent topic of public debates about obesity, corporate ethics
and consumer responsibility.

Redesign :
In 2006, McDonald's introduced its "Forever Young" brand by redesigning all of their restaurants, the first
major redesign since the 1970s. The new design will include the traditional McDonald's yellow and red colors,
but the red will be muted to terra cotta, the yellow will turn golden for a more "sunny" look, and olive and sage
green will be added. To warm up their look, the restaurants will have less plastic and more brick and wood, with
modern hanging lights to produce a softer glow. Contemporary art or framed photographs will hang on the
walls.The exterior will have golden awnings and a "swish brow" instead of the traditional double-slanted roof.
The new restaurants will feature areas:
The "linger" zone will offer armchairs, sofas, and Wi-Fi connections.
The "grab and go" zone will feature tall counters with bar stools for customers who eat alone; Plasma TVs will
offer them news and weather reports.
The "flexible" zone will be targeted toward families and will have booths featuring fabric cushions with
colorful patterns and flexible seating.
Different music targeted to each zone.
Business model:

McDonald's Corporation earns revenue as an investor in properties, a franchiser of restaurants, and an operator
of restaurants. Approximately 15% of McDonald's
restaurants are owned and operated by McDonald's Corporation directly. The remainder are operated by others
through a variety of franchise agreements and joint ventures. The McDonald's Corporation's business model is
slightly different from that of most other fastfood chains. In addition to ordinary franchise fees and marketing
fees, which are calculated as a percentage of sales, McDonald's may also collect rent, which may also be
calculated on the basis of sales. As a condition of many franchise agreements, which vary by contract, age,
country, and location, the Corporation may own or lease the properties on which McDonald's franchises are
located. In most, if not all cases, the franchisee does not own the location of its restaurants. The UK business
model is different, in that fewer than 30% of restaurants are franchised, with the majority under the ownership
of the company. McDonald's trains its franchisees and others at Hamburger University in Oak Brook, Illinois.
In other countries, McDonald's restaurants are operated by joint ventures of McDonald's Corporation and other,
local entities or governments. As a matter of policy, McDonald's does not make direct sales of food or materials
to franchisees, instead organizing the supply of food and materials to restaurants through approved third party
logistics operators. According to Fast Food Nation by Eric Schlosser (2001), nearly one in eight workers in the
U.S. have at some time been employed by McDonald's.

McDonalds History

Raymond Albert Kroc

The birth of McDonald's began with Raymond Albert Kroc
Ray Kroc was the exclusive distributor of a milk shake maker called the Multimixer. Meanwhile, two brothers,
Richard and Maurice McDonald owned and ran a hamburger restaurant in San Bernadino, California, in the
1950s. Ray Kroc heard how well the McDonald brothers were doing using his Multimixers to serve their
customers. He met up with them and acquired the franchising right from them to run McDonald's restaurants. A
great success story was in the making. In 1955, Ray Kroc founded the McDonald's Corporation and opened the
first restaurant in Des Plaines, Illinois. In 1961, he bought out the McDonald brothers
And the rest, as they say, is history. McDonald's grew into the largest restaurant organization in the world.
Today, there are more than 34,000 McDonald's restaurants serving 69 million customers each day in over 119
countries. Ray Kroc died in 1984 but his legacy is very much alive. His success story continues with
McDonald's families of employees, franchisees and suppliers. His commitment, dedication and achievements
continue to live on at McDonald's restaurants across the world.
1955

Ray Kroc opens his first restaurant in Des Plaines, Illinois and the McDonald's Corporation is
created.

1957

Quality, Service, Cleanliness and Value (QSC& V) becomes the company motto.

1959

The 100th McDonald's opens in Chicago.

1961

Hamburger University opens in Elk Grove, near Chicago.

1963

One billion hamburgers sold.

Ronald McDonald makes his debut.

1964

Filet-O-Fish sandwich is introduced.

1965

McDonald's Corporation goes public.

1967

The first restaurants outside of the USA open in Canada and Puerto Rico.

1968

The Big Mac is introduced.

The 1,000th restaurant opens in Des Plaines, Illinois.

1972

A new McDonald's restaurant opens every day.

The Quarter Pounder is introduced.

1973

Egg McMuffin is introduced.

1974

The first Ronald McDonald House opens in Philadelphia.

The Happy Meal is launched.

1983

1984

Chicken McNuggets is introduced.

New Hamburger University campus opens in Oak Brook, Illinois. Set in 80 wooded acres.
Training is provided for every level of McDonald's management worldwide.
50 billionth hamburger sold.
Ronald McDonald Children's Charities is founded in Ray Krocs memory to raise funds in
support of child welfare.

1989

McDonald's is listed on the Frankfurt, Munich, Paris and Tokyo stock exchanges.

1990

McDonald's opens in Pushkin Square and Gorky Street, Moscow.

1993

The first McDonald's at sea opens aboard the Silja Europa, the world's largest ferry sailing
between Stockholm and Helsinki.

1994

Restaurants open in Bahrain, Bulgaria, Egypt, Kuwait, Latvia, Oman, New Caledonia, Trinidad
and United Arab Emirates, bringing the total to over 15,000 in 79 countries on 6 continents.

1996

McDonald's opens in India the 95th country.

McDonalds Statement
Vision Statement
To be the best and leading fast food provider around the globe.

Mission Statement
McDonald's mission is to be our customers' favorite place and way to eat with inspired people who delight each
customer with unmatched quality, service, cleanliness and value every time. We invite you to be the part of this
winning team and give yourself an opportunity to grow with the family of people striving to create smiles on the
faces of millions of people every day.
McDonalds Values
Being a responsible corporate citizen, McDonalds firmly believes in giving back to the communities it operates
in. We love to provide support and encouragement to the people who need it the most. All our restaurants
contribute to their local community and every year we help set up and support numerous educational, sporting
and charity programs designed to help a wide range of people.
McDonald's has a proactive approach to charities and sponsorships. We believe these help inspire and support
the people of Pakistan, especially the underprivileged ones, to live a better life. We are dedicated to delivering
great experiences through our ongoing community support programs.

We place the customer experience at the core of all we do. Our customers are the reason for our
existence. We demonstrate our appreciation by providing them with high quality food and superior service
in a clean, welcoming environment, at a great value. Our goal is quality, service, cleanliness and value
(QSC&V) for each and every customer, each and every time.

We are committed to our people. We provide opportunity, nurture talent, develop leaders and reward
achievement. We believe that a team of well-trained individuals with diverse backgrounds and
experiences, working together in an environment that fosters respect and drives high levels of
engagement, is essential to our continued success.

We believe in the McDonalds System. McDonalds business model, depicted by our three-legged
stool of owner/operators, suppliers, and company employees, is our foundation, and balancing the
interests of all three groups is a key.

We operate our business ethically. Sound ethics is good business. At McDonalds, we hold ourselves
and conduct our business to high standards of fairness, honesty, and integrity. We are individually
accountable and collectively responsible.

We give back to our communities. We take seriously the responsibilities that come with being a
leader. We help our customers build better communities, support Ronald McDonald House Charities, and
leverage our size, scope and resources to help make the world a better place.

We grow our business profitably. McDonalds is a publicly traded company. As such, we work to
provide sustained profitable growth for our shareholders. This requires a continuous focus on our
customers and the health of our system.

We strive continually to improve. We are a learning organization that aims to anticipate and respond
to changing customer, employee and system needs through constant evolution and innovation.

McDonalds Products

McDonalds Target Market

McDonalds wants to attract as many customers as it can. But the main targets of the efforts by McDonalds are
following groups:

Parent visit McDonalds to give the children a treat.

Children want to visit McDonalds as it is a fun place to eat.
A business customer visits McDonalds during the day as service is quick, the food tastes great and can be
eaten in the car without affecting a busy work schedule.
Teenagers are attracted by the Saver Menu which is affordable, and the internet access.

McDonalds Logistics & Supply chain management

Supply Chain Management in Fast Food Sector

There are two key components to the fast food industry supply chain;
1. Raw materials are essential to the ultimate product - value added component.
2. Quick, convenient, and quality food.
The most important aspect of the industry supply chain is that it is driven by the consumer.
The consumer has what seems to be an endless amount of fast food chains to choose from every day.
McDonalds' main goal of their marketing is to make the consumer drive that extra two blocks past the
competitor to eat at their chain.

McDonalds Supply Chain Management

Supply chain is extensive and complex.
Efficient, safe and quality food at an affordable price.
Large number of direct suppliers companies that make or deliver final products to their restaurants.
Large number of indirect suppliers companies and farms that grow or process the ingredients that are
eventually delivered to their direct suppliers.

McDonalds E-Procurement
In the process of procuring a product, a typical McDonalds franchise restaurant places an order through
E-MAC digital website.
The order is sent to the suppliers. Suppliers order is processed and managed by the logistics.
The logistics sends the order of the products to the franchise restaurants. It is the responsibility of the EMAC and logistics that the products are sent to the restaurant.
All the above, steps are handled and executed by the E-MAC digital.

McDonalds Suppliers
Following are the McDonalds suppliers of food;

Gavia Gourmet Coffee:Our 25-year relationship with Gavia has delivered countless cups of delicious
coffee.

Lopez Foods: McDonalds 100% pure beef patties are produced to the highest quality standards.

Keystone Foods: Innovation and Chicken McNuggets

100 Circle Farms: The potatoes for our World Famous Fries are grown with efficiency, precision and
heart.

Jiangsu Dingneng Foods Co. Ltd:Dehydrated onions

Following are the McDonalds suppliers of equipment and other items;

Zhengzhou Kerry Machinery Equipment Co., Ltd.

Guanxing (Shanghai) Import & Export Co., Ltd.

Guanxing (Shanghai) Import & Export Co., Ltd.

Guangzhou Maibao Package Co., Ltd.

Zhengzhou Shuliy Machinery Co., Ltd.

Shantou Eastoys Factory

Shantou Kai Dongfan Plastic Toy Factory

Wenzhou Xiangou Foreign Trade Corporation

Shanghai Tianwan Food & Beverage Equipment Co., Ltd.

Shanghai Xinrui Catering Equipment Co., Ltd.

Wuhan Xinhengyue Industry And Trade Co., Ltd.

Suppliers of McDonalds India

SUPPLIERS OPERATION THROUGH E-MAC DIGITAL

McDonalds Logistics
McDonalds Logistics Standards
Distributor Quality Management Process

 Operations and Customer Relations

Quality Control (HACCP/QIP)
Cold Chain Standards
Hygiene Regulations
Product Handling Standards
Emergency and contigency plan

Logistics is the management of flow of resources between their point of origin and their point of destination so
as to meet some requirements
McDonalds - the largest fast food chain in the world selected Venus Pakistan as its logistic partner after careful
and thorough evaluation. We are responsible for the procurement, imports, clearing, warehousing and
distribution of all products to all McDonalds restaurants in Pakistan.
In McDonalds logistic involves 3 phases

Inbound logistic
Operations
Outbound logistic

Inbound logistic
It is the movement of materials from suppliers and vendors in to production processes and storage facilities.
Every McDonalds burger has nine different ingredients, which are sourced, from suppliers across the country
before it reaches the consumer. McDonald's has a global package design for there to-go bags and fountain drink
cups. All the inputs are imported from different countries like Saudi Arabia, South Africa, UAE and Malaysia;
only the buns used in burgers are procured locally from Dawn Bread. Based on the demand forecast by the
Restaurant Manager, the First Assistant orders the Venus Distributors on daily basis. Venus Distributors
(supplier of McDonalds) is independent to acquire the raw material from wherever it desires but it remains
limited only by the strict specifications of materials by McDonald's.Venus Distributors stores all the raw
materials, in its own cold stores and delivers only one-day material to the restaurant. Venus group companies
providing different facilities to McDonalds like:

Providing McDonalds Pakistan the most comprehensive range of Specialized & Customized Services
Warehousing, Storage/Cold Storage, and Sole Distribution
Services starting right from Pick-up at Sea Port to Delivery at all McDonalds Restaurants in Pakistan
everything is handled with maximum efficiency.

Central Inventory Management of Venus Pakistan dedicated to handling every aspect of McDonalds
inventory.
Quality Inspection Process (QIP) Units at Venus Pakistan especially operates to look after McDonalds
Logistics Operations.

With a proven track record of having served the Logistics needs of McDonalds, Venus Pakistan established its
dedicated McDonalds Logistics Operations in 1997. It also received the DQMP (Distribution, Quality, and
Management Process) Certification from McDonalds USA Audit Team after they visited and inspected our
facilities and certified us as such (which makes us the only one to receive any such Certification from
McDonalds USA). Main Boulevard Branch has its own cold storage facility, which is used to store the dailyprocured raw material, so that the raw materials remain fresh and nutritious up till they are delivered in the form
of finished goods (burgers, French fries, ice cream, etc.) to the customers. There are only two products buns and
Cokes, which are sent directly to the restaurants. Buns have a limited shelf life, hence they are sent directly to
the outlets, while Coca Cola is also sent directly to ensure quick dispatch of its products.The buns are packed in
plastic crates to ensure their quality.These crates have to go back to the bakery, thats when return logistics takes
place. Venus Pakistan has full-fledged facilities to pack locally manufactured products in sachets such as sugar,
tomato ketchup, toothpicks, etc., and supply these to Institutions (Restaurants, Cafes, Hotels, 5-Star Hotels,
Hospitals, etc.), through its own Distribution Network and Logistics support.Being responsible for McDonalds
supply chain, the company had to import lettuce from Europe.
The logistics involved in handling the product at the airports late night forced the directors to think of alternate
ways to manage this business. The company with the assistance of advisors from the agricultural university and
experts from china set up a pilot farm in Lahore. After experimenting for one year the group decided to setup an
agriculture division. Today lettuce is farmed in Lahore on 100 acres during the winters and on 3 parcels of 25
acres each in Abbotabad and man sera. Production/yield is approximately 5000 kg (5 tons) per week. The farm
is experimenting with romaine. The farm management has plans to grow exotic vegetables in the future and
tap/develop the export market in Dubai.
The transportation of McDonalds has been completely outsourced and since 80 percent is in refrigerated truck
movement.The products are transported in a dedicated fleet of refrigerated trucks to the companys Distribution
Centres. Multi-temperature and single temperature trucks then transport the fast food swiftly to the McDonalds
restaurants across the country.

Cold Chain logistics

A cold chain is a temperature-controlled supply chain. An unbroken cold chain is an uninterrupted series of
storage and distribution activities which maintain a given temperature range. It is used help extend and ensure
the shelf life of products such as fresh agricultural produce, processed food. McDonalds entire network supplychain consists of movement of goods through a cold chain.Suppliers are also a part of this cold chain.

McDonalds have the largest refrigerated movement of products. An interesting and innovative feature of this
cold chain is that the same truck can carry products at different temperatures ranging from:

Frozen products at -18C to -25C,

Chilled products from 1C-4C

Dry products at ambient temperatures

Outbound logistic
Outbound logistics is the process related to the storage and movement of products from the end of the
production line to the users end. When customers enter the restaurant, they go to the counter, give their order,

which they are served within a single minute. Now customers take away the tray in which the order is served,
and take their seats themselves, in the big hall with a sitting capacity of 200 persons.
McDonalds Operation
The cooking procedure and recipe is documented so that the products become standardized and customers get
the similar taste, quantity and quality to whichever restaurant they go. It is the policy of McDonald's to throw
away any burger if they remain on heated grill for 15 minutes. All the utensils and equipment used in cooking
are washed at the closing of restaurant every night, with anti-microbial fluid. Kitchen, floor, washrooms and all
other restaurant areas are cleaned after every half an hour.

McDonalds Transportation

The distributors receive items from different parts of the country.

The items are stored in rooms with different temperature zones and are finally dispatched to the
McDonalds restaurants on the basis of their requirements.
The company has both cold and dry storage facilities with capability to store products up to -22 C as well
as delivery trucks to transport products at temperatures ranging from room temperature to frozen state.
The specially designed trucks maintained the temperature in the storage chamber throughout the journey.
Matching supplier production with deliveries to meet schedules and restaurant needs.
Centralized distribution centers.
Emphasis on economies of scale High storage volumes.
QIP (Quality Inspection Program).
HACCP (Hazard Analysis Critical Control Point) Food safety standards emphasizing prevention of
faults rather than detection through inspection.
No Knife in restaurants.

McDonalds Distribution systems

McDonald uses three types of Distribution strategy

Franchising
Licensing
Joint venture

4 TYPES OF RESTAURANTS:*Mc Drive

*Special theme restaurants
*Mc Caf
*Mc Express
McDonalds has a successful franchise business model wherein all restaurants are operated either by the
company or by franchisees, including conventional franchisees under franchise arrangements and
developmental licensees and foreign affiliated markets under license agreements. The companys operations are
designed to assure consistency and high quality at every restaurant. When granting franchises or licenses, the
company is selective and generally does not franchise to passive investors.
McDonalds has franchised about 80% of its restaurants, while the remainder is owned and operated by the
company. Each of the companys franchisees usually has a standard 20-year franchise license. A franchise
license is an authorization granted by either a company or a government body to an individual or a group that
enables them to perform specific commercial activities. For McDonalds, the franchise model has led to years of
profitability, growth, and risk mitigation.

ORDER PROCESSING SYSTEM

*Cash & cashless payments
*Online Orders:

Online menu

Delivery fees

Redeeming discounts

Cancellations

*McDonalds Delivery

MCDONALDS INFORMATION SYSTEMS

TRANSACTION PROCESSING SYSTEM (TPS)

POINT OF SALE SYSTEM
DECISION SUPPORT SYSTEM (DSS)
MADE FOR YOU SYSTEM

McDonalds Forecasting system

McDonalds is a well-known worldwide franchise and has been around since the 1950s. Serving customers for
over 50 years successfully entails a strong inventory and operations management system. McDonald's is the
world's #1 fast-food company by sales, with more than 33,500 restaurants serving burgers and fries in 119
countries.
To maintain and continue a successful franchise operation, quality food items, and highly successful sales
continue to increase its efforts to raise the bar and offer items that cater to all types of consumers. Whether it
is McDonalds famous hamburger, chicken nuggets or salad and a latte, McDonalds has it. Striving to continue
to be the #1 franchise, McDonalds obtains its forecasting data from consumers, employees, and the industry
itself. Combining both expert judgment and market research, McDonalds continues to rely on putting the
customer first when it comes to the future and success of McDonalds.

Qualitative Forecasting
Expert Opinion and Market Research McDonalds uses qualitative forecasting methods to help aide in
predicting the future growth of the organization. Developing a strong customer focus, McDonalds relies
heavily upon gathering information from customers, employees, and other experts in the field to assist in the
decision-making process. Within the qualitative approach, McDonalds focuses attention on utilizing expert
judgment. Expert judgment is important because it provides significant insight into different aspects of the
organization. When seeking experts opinions, a technique known as Delphi is used to ensure quality opinions
are formed. The Delphi technique allows McDonalds to gather experts opinions on predictions of future
behavior.

McDonalds Competitors

Subway

Kentucky Fried Chicken (KFC)

Mr. Burger

Burger King

McDonalds Market Share

McDonalds SWOT Analysis

McDonalds is a growing and striving business. It has successfully managed to turn out huge amounts of profits
every year therefore it has ample number of investors. These investors contribute in monetary form and allow
McDonalds to maintain its competitive advantage. McDonalds is a well and high financed company that has the
ability to charge excessively low on its products and turn out a high profit. Other firms that are limited on funds
cannot charge low, as they have to meet their costs.
Strengths
Praised and ranked high in many food magazines for quality of service and food. Therefore, McDonalds
has a reputed name amongst various companies.
The McDonalds logo according to many experts has been termed to be the most recognizes logo in
various countries, amongst children.
McDonalds has established its branches in all important locations including; airports, railways and bus
stops.
McDonald takes cleanliness and food hygiene very seriously; therefore it has one the most awards.
McDonalds was one of the first few restaurants which started to show all nutritional values on their
menus.
McDonalds has the ability to easily adapt to various cultures, hence it has been successful in most of the
countries.
McDonald is engaged in many corporate social activities during the year.
They have an assembly line system which ensures that the cost of production is always kept low.

Provides professional training for all employees, to ensure high and consistent quality to all the customers.

Weakness
McDonalds over the years has attracted negative press due to selling junk food at very low prices. Many
organizations and companies have sued McDonalds on various issues.
McDonalds lacks the ability to create innovative advertisements to attract children.
McDonalds service is no longer the same in all locations due to the ample franchising contracts.
McDonalds has a high set up cost.
McDonalds tends to lose out on sales when the economy fluctuates because people use their disposable
income to purchase fast food. When their disposable income is changed their spending also changes,
hence McDonalds loses out on sales.
McDonalds only offers processed and inorganic food line.
McDonalds has a high employee turnover.
McDonalds has an extensive training program which often lowers the total revenue.
Opportunities
McDonalds can expand or enter into the organic food industry because now people are becoming very
health conscious.
McDonalds could provide more services such as free delivery in various countries, to capture more
market share.
McDonalds could expand its menu to cater to all the individuals.
McDonalds could attract attention by keeping or sponsoring various events for adults and children.
McDonalds could add more services, such as free internet to attract and retain its customers.
McDonalds could engage in various promotions and season discounts to beat the competitors.
Expand more intensively into other countries or launch in new locations to cover the untapped areas.

Threats
In many countries, McDonalds has been known to advertise and incite children in to consuming their
products with toys other events. Many companies and agencies are observing and are considering taking
actions.
McDonalds sales and revenue are very dependent on the economic conditions of a country. Therefore,
countries that do not perform well tend to also have a negative impact on McDonalds sales and revenue.
McDonalds is facing immense competition from the fast food places and organic restaurants.
The negative press could have a significant impact on McDonald if corrective actions are not taken.
The increase in health awareness can also have an impact on McDonalds as people would not want to
consume junk food, once they know its side effects.

McDonalds Quality Assurance

The Homely Touch of the Highest Quality Standards at McDonalds

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.

Meat With 100% Purity

100% purity is the reason why all our beef sandwiches taste so delicious. They are made from 100% halal beef
cuts with no additives or preservatives. Chicken that we serve is carefully deboned breast meat only, with
seasoned batter and a choice of sauce portions, while our Spicy McCrispy Chicken Deluxe uses only muscle
cuts. All relevant authorities monitor our high quality standards of 100% halal chicken.

High Quality Baked Buns

We source our buns from suppliers who use only high quality wheat. All the buns are subject to strict quality
and safety controls all through the production process.

Crunchy Farm-Fresh Vegetables

We select the best of the best vegetables that are continually monitored for freshness, high nutrients and safety,
to maintain top quality standards. We use regional/local suppliers to ensure that the freshness and high quality
are delivered to you in all our products.

No Compromise
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.

Conclusion

McDonalds effectiveness and profitability is obviously well supported by their strong

competitive position and market share in their primary product market. Its international
success is achieved by the companys strategy and tactics, which complement each other and
work in harmony, providing the optimum return bounded by efficiency. The company is
thriving as it is both effective (doing things right) and efficient (doing the right
thing).McDonalds portfolio of products is well managed and ensures the best fit between the
companys strengths and weaknesses and for offsetting the threats found in its competitive
environment. In considering the strong competitive position of the firm in a highly attractive
market.McDonalds business depends entirely upon the timely delivery of fresh and quality
products. The entire model being outsourced they lack control over the process. We suggest
that some control points need to be setup in the supply chain model to monitor the smooth
functioning of the entire process.Hygiene facilities in the Kitchen should be improved Number
of employees involved in the supply chain process need to be increased so that they can
properly handle any contingency arising in the SCM model.

Recommendation for McDonalds

Diversification
Currently McDonald is importing Potatoes from abroad, this makes the product cost so high, so it becomes very
difficult for it to capture the middle-income people. By diversification it is being suggested that McDonald
should go for backward integration . Similarly McDonalds should go for its own cattle farm so it will reduce its
input cost and it will lead to lower market price of its products as compared to its competitors. In this way the
sales of McDonald can be increased by at least 50% of current sales volume By doing this backward integration
McDonalds can avoid the problems like Govt. heavy duties on inputs imported from other countries and
similarly it can avoid the problems of continuous devaluation and exchange rate.
Product Development
McDonalds, it should introduce all the time new products that make it differentiated and it must sustain it so
that no other competitor can copy their products and there should be lesser chances of product imitation. For
this it may altogether change the whole product and can bring a new product or sometimes any major
modification in the existing products. So we recommend that McDonald should apply the Product Development
at all times whenever the need arises.

Improvements in
Customer Service-Focus on team, not individuals-Reward the behavior that you want
Training/Compensation-Training in customer service, speed and accuracy
Increase pay to attract more qualified applicants-Technology
Improvement of order verification system -Continued Growth of International Market

APPENDIX-I
No of McDonalds restaurants across the Globe

APPENDIX-II
McDonalds Global Locations

Argentina

Aruba

Australia

Austria

Azerbaijan

Bahamas

Bahrain

Bangladesh

Barbados

Belgium

Bermuda

Botswana

Brazil

Bulgaria

Canada

Cayman Islands

Chile

People's Republic of China

Hong Kong

Macau

Colombia

Costa Rica

Croatia

Cyprus

Czech Republic

Denmark

Dominica

Dominican
Republic

Ecuador

Egypt

El Salvador

Estonia

Fiji

Finland

France

Georgia

Germany

Greece

Grenada

Guatemala

Guyana

Honduras

Hungary

Iceland

Italy

India

Indonesia

Ireland

Israel

Jamaica

Japan

Jordan

Kuwait

Latvia

Singapore

Lebanon

Slovakia

Lithuania

Slovenia

Malaysia

South Afr

Malta

South Ko

Mauritius

Spain

Mexico

Sri Lanka

Moldova

Sweden

Morocco

Switzerlan

Netherlands

Syria

New Zealand

Taiwan

Nicaragua

Thailand

Oman

Trinidad a

Pakistan

Turkey

Panama

Ukraine

Peru

United Ar

Paraguay

United Ki

Philippines

United St

Poland

Guam

Portugal

Puerto Ri

Qatar

United St

Romania

Uruguay

Russia

Venezuela

Saint Lucia

Yemen

Saudi Arabia

Serbia