I.

Viewpoint
McDonald's is the world's leading global foodservice retailer with over 35,000 locations serving
approximately 70 million customers in over 100 countries each day.  More than 80% of McDonald's
restaurants worldwide are owned and operated by independent local business men and women.Our goal is
to become customers' favorite place and way to eat and drink by serving core favorites such as our World
Famous Fries, Big Mac, Quarter Pounder and Chicken McNuggets.

“We’re not in the food industry; we’re in people’s industry. We just happen to sell hamburgers.”
-Ray Kroc, McDonalds founder

Food and moments aren’t just what make McDonald’s part of the lives of billions of people all over the world.
It is also known for providing career opportunities to its employees.

In the Philippines, McDonald’s employs more than 27,000 Filipinos from all over the country – with each
treated as our most valuable resource.

Qualified candidates get to experience, how we work together to be the favorite place for customers to enjoy
quality products, excellent services, and a welcoming restaurant environment every day.

McDonald’s commitment to our employees can be summed-up in one statement: We value you, your
growth, and your contributions. With this, you will enjoy competitive incentives, support, training, and
opportunities to help you deliver the best possible results and advance your career. Learn valuable lifelong
skills such as teamwork, communications, problem solving, responsibility, and customer service in a fun and
exciting environment.

The McDonald’s Family consists of the restaurant staff with the solid support of the management team,
operations group, site development experts, marketing and human capital group. Its unique global
infrastructure opens doors for both local and global opportunities. This and more provide an exceptional
working environment that makes everyone feel appreciated and valued.

II. Time Context

In July 2011, McDonald's announced that their largest restaurant in the world will be built on the 2012
London Olympics site. The restaurant will contain over 1,500 seats and is half the length of an American
Football field. Over 470 staff will be employed serving on average (during the 2012 Olympics) 100,000
portions of fries, 50,000 Big Macs and 30,000 Milkshakes. This restaurant will overshadow the current
largest McDonald's in the world in Moscow, Russia.

In January 2012, the company announced revenue for 2011 reached an all-time high of $27 billion, and that
2400 restaurants would be updated and 1300 new ones opened worldwide.

III. Background

1955: The Founder

Ray Kroc started it all when he bought the franchise of a small burger joint owned by brothers Dick and Mac
McDonald. He opened his first restaurant in Des Plaines, Illinois and five years later, he bought the exclusive
rights of the name, McDonald’s.

68 Million People Served Worldwide

 McDonald’s continues to serve close to 68 million in over 119 countries every day, making it the number one
quick-service restaurant in the world.

33,000 Restaurants Worldwide & Counting

Today, McDonald’s has grown to have more than 33,000 restaurants all over the world.

Philippine’s History

1981: First Golden Arches in the Philippines

George T. Yang opened the first McDonald's restaurant in the Philippines in 1981. In 2005, McDonald’s
Philippines became a 100% Filipino-owned company.

375 Restaurants Nationwide & Counting

Today, McDonald’s has grown to become one of the country’s leading fast food chains with more than 365
restaurants nationwide. With Kenneth S. Yang now at the helm as President and Chief Executive Officer,
McDonald’s is now a multi-billion peso company that continues to grow serving Filipinos all over the country.
BUSINESS NATURE

Fast-food chain

MISSION AND VISION

To serve the Filipino community by providing great-tasting food and the most relevant customer delight
experience.

VISION: UnasapamilyangPinoy:

First to respond to the fast changing needs of the Filipino family.

First choice when it comes to food and dining experience.

First mention as the ideal employer and socially responsible company.

First to respond to the changing lifestyle of the Filipino family.

IV. Statement of the Problem

How can McDonalds prepare an international strategy which focus on big cities along with high populated
areas?

V. Area Of Consideration/SWOT Analysis

1. Strengths:
- Strong brand name, image and reputation

McDonalds has built up huge brand equity. It is the no 1 fast food company by sales, with more than 31,000
restaurants serving burgers and fries in almost 120 countries. The image of McDonalds is recognized
 everywhere. This brand is in top ten of the most powerful brand names in the world with Coca-Cola, Nokia or
GM.

- Large market share

McDonalds is considered as the largest player in size and global reach. When Wendy’s or Burgers King are
losing market share in 2006, McDonalds still increases its market share. Market share of McDonalds in the
recent time is about 19% while Yum!Brands is 9% and both Wendy’s and Burger King is 2%.

- Specialized training for managers

McDonalds is very serious on training managers. This company has its own program to train managers the most
professionally, which is called Hamburger University. As a result, McDonalds has many good managers who
can help company development well.

- McDonalds Plan to Win

McDonalds customer – focused Plan to Win provide a common framework for its global business yet allows for
local adaptation. Through the execution of initiatives surrounding the five elements of its Plan to Win – People,
Products, Place, Price and Promotion – McDonalds has enhanced the restaurant experience for customers
worldwide and grown comparable sales and customer visits in each of the last eight years. This Plan, combined
with financial discipline, has delivered strong results for company’s shareholders.

- Introduction of new production

McDonalds is considered the first one enter to fast food industry. It initiates to other brand to enter this industry.
As a result, when think about fast food, customers always remember McDonalds first. In fact, in some big
countries, especially in US, McDonalds is the first choice of a large number of customers.

- Technology Innovative:

McDonald’s is keeping at the forefront of technology around the globe. For example, In Brazil McDonald’s is
currently studying the installation of Internet access terminals in some outlets as well as enabling customers to
order online. This will create a more efficient process that will reduce the amount of lag time between a
customer’s orders and pick up of the order

- Good marketing strategies:

No matter the continent, children and adults know the face of Ronald McDonald is synonymous with the
colossus restaurant chain. This results in wonderful marketing strategies among management which conducts a
very thorough market analysis, resulting in much success around the globe.

2. Weaknesses:
- Unhealthy food image

McDonald's has been impacted by negative press like the documentary "Supersize Me" by Morgan Spurlock in
which he contributed our society’s obesity to McDonald's and other fast food chains. In fact, each McDonalds dishes
provides large amount of calories but not too much nutrition.

- Customer loses due to fierce competition

McDonalds has to compete with many strong brand name in fast food industry such as Wendy’s, Burger King or
Yum!Brands. This fierce competition makes McDonalds loose a large number of customers who prefer favor of other
brands.

- Problem related to health issue

McDonalds use Trans - fat and beef oil in their food. Although it is not illegal, it affects badly on customer’s health
because Trans – fat is causes of some kind of cancer. Consequently, a number of customers who care about their
health stop eating at McDonalds restaurants. It makes revenue of company decrease.

- Legal action:

McDonald’s has been involved in a number of lawsuits and other legal cases in the course. For example, there are
many cases which involved with trademark issue. McDonald’s force many others restaurant, company of just a
coffee shop to change their brand name because of keeping “Mc” letters.

- Unbalance meals:

Although McDonalds tries to update its menu by healthy criteria, McDonald’s meals are still unbalance. For
example, there are many dishes with chicken (both grilled and fried), bacon, beef, rib or egg. Besides, just several
dishes are salad with vegetable and fruit. Moreover, amount of fruit or vegetable is not much.

- High employee turnover rate

Although McDonalds has many good managers as well as skillful employees, the turnover rate is still high. Every
year many of their employees are fired out of the restaurants. Moreover, many others quit their jobs, especially part
time employees because of low salary as well as too high working pressure.

- Action related to environmental issue

McDonalds uses HCFC – 22 to make polystyrene that is contributing to ozone depletion. The company has to repair
this weakness if doesn’t want to be criticized.

- Dissatisfied Franchisees:

Franchisees are beginning to become very dissatisfied with the fees that McDonald’s are forcing them to pay. As the
company continues to expand, they are also increasing the amount of fees franchisees have to pay for the use of
the notorious fast-food brand. Many people are not very happy about this and as a result many franchisees are
selling their businesses.

3. Opportunities:
- Growth of the fast food industry

Fast food industry now is developing significantly. The change of lifestyle leads to the change in people eating habit.
In the past, if just workers, drivers or someone who had to work busily and didn’t have enough time for a home meal
choose fast food; nowadays, almost people eat fast food and a major of them like fast food very much. It is a huge
chance for fast food brand to increase their revenues, especially McDonalds.

- Conservation:
McDonald should research green energies and green packaging solutions and incorporate these finding as a part of
their marketing strategies and advertisements.

- Globalization, expansion in other countries

McDonalds has more than 31,000 restaurants serving in almost 120 countries. Of the 31,000 restaurants, at least
14,000 are in US. However, now, because the care of McDonalds about favors and cultures in each countries it
enters, McDonalds can open more restaurant in new areas such as China or India – the countries which culture
influences on people lifestyle deeply. They are very potential markets. The expansion of these areas is big
opportunities For McDonalds.

- Low cost menu is preferred by large number of customers

With low cost menu, McDonalds can attract customers who just have low income. This segment makes up a fairly
remarkable part, especially in the recent time, when global economic is struggling. It is not difficult for McDonalds to
apply low cost menu on all restaurants.

- Appearance of freebies and discounts

Discounts given on every food item may help them gain more customers. Moreover, a new trend is rising among
customers that they like freebies and discounts, even when they don’t need it or don’t use these freebies after.

- Diverse tastes and needs of customers

Customer’s tastes now become more diverse. As a result, they require new format of service in order to satisfy
them. McDonalds, with new format of business such as McCafe, it can attract new segment of customer; for
instance civil service, who prefer coffee as well as want to use Wi-Fi to work when drink coffee.

- Growing health trend among the customers:

Although people concern about how McDonalds influence badly on their health, it is also a chance for McDonalds.
This company can develop new products, specifically fresh burger or healthy dessert.

4. Threats:
- Intensity competitors

Along with the development of fast food industry, there are many new fast food brand enter to the market. It is
nothing to say if there is no strong brand which can compete with McDonalds. However, in fact, there are some and
they are stronger gradually, for example Yum!Brands, Wendy’s or Burger King. Although market share of these
brand are lower than McDonalds, they try to gain more customers from McDonalds. Moreover, more casual dining
restaurants increase their burger offering and decrease the price. If we are not really hurry, we may choose this kind
of restaurant instead of fast food restaurants. They also become the competitors of McDonalds.

- Public health crisis

With a growing number of obesity cases among Americans, fast food chains like McDonalds will continued to be
overshadowed by their previous products offerings, for example Supersized Meal, no fruit or yogurt, slim salad
selection. Besides, people nowadays are facing heart problem more seriously. As a result, they require nutritious
and healthy food as well as lifestyle.

- Economic recession
The company's revenue streams are diversified, but depending on the length of this "recession", they will inevitably
be negatively impacted by the trickledown effect. Recession or down turn in economy may affect the retailer sales,
as household budgets tighten reducing spend and number of visitors.

- Serious environmental issue:

Environment is one of the hottest topics all over the world. Any action which influence on the earth and human life is
criticized strongly. Consequently, if McDonalds keep using HCFC -22, it may lose customers, especially who really
care about the earth.

VI. Alternative Courses of Action:

1.  Company should prepare an international strategy which focus on big cities along with high populated
areas, especially in Asia. There are not many McDonald restaurants in this potential market. Japan is the
only Asian country which has a lot of McDonald’s fast food restaurants. In contrast, China is considered as
one of the biggest market in the world because of this country’s population. Nevertheless, according to the
recent figures, China is just in ninth position among the countries which have McDonald’s restaurants with
about 1000 restaurant while this number in US is about 14000. If McDonalds can develop more and more in
Asia, it is a huge advantage for company to gain market share.
2.  Name recognition. Everywhere, millions of people are familiar with the Golden Arches that are on top of
every McDonalds restaurants. McDonalds should use this advantage to gain more attraction from
customers. It does not mean that this company should become involved into many areas of the food
industry. In fact, soft drink and fast food bring large profit for McDonalds. However, if keep involving in other
areas, it would increase the potential for liability to the company because of many intensity competitors.
3. Customers are not pleased at the idea of waiting in long lines and insufficient employees to handle the
volume of customers. Just the minority, but sometimes the employees are rude forcing the customers to go
to a competitor’s restaurant next time.

V. Recommendation:

  Customer service. Managers of McDonalds are trained professionally. As a result, they can train employees
well. McDonald’s employees are evaluated high by customers because of their behaviors as well as attitude.
However, customers are not pleased at the idea of waiting in long lines and insufficient employees to handle the
volume of customers. Just the minority, but sometimes the employees are rude forcing the customers to go to a
competitor’s restaurant next time. At the market which has high market share and very huge number of customers
such as USA, Canada or United Kingdom, this issue occurs more frequently. McDonalds should find a way to solve
it. For example, the company has to rent more employees and increase their salary in order to keep them working
for a long time. This time is just enough for them to get skills to service customers well. Besides, it is necessary to
increase the number of employees at the weekend or in the lunch time. More employees means that pressures are
shared and avoid the bad attitudes.

Conclusion:

McDonalds has undergone several changes since its inception in San Bernardino, California. The fast food chain
has conquered the US and it now focusing on the rest of the world. McDonalds, along with this trend, continues to
strive toward customer satisfaction while still enhancing its international market position. The company is doing very
well and keeps trying in Africa, China, and the Middle East, which will be continued source of revenue for many
coming years. If McDonalds can overcome all of its challenges, makes use of advantages and has right strategies, it
will win the market again and hold fast to first position in fast food industry.