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Mcdonald's Case Analysis

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I. Objectives

McDonald's mission was to provide customers with quality food at a low price with a focus on the speed, service and cleanliness they received while patroning one of their restaurants. The case focuses on a specific segment of the McDonalds restaurant chain that was opened in 1996, McDonald's India. This segment of the restaurant giant had a more specific mission/philosophy to fulfill and had developed a special menu for these Indian customers to take into account their culture and religion. When it was realized that beef extracts were found being used in producing McDonald's fries, outraged vegetarians and Hindus across the United States and Canda filed a class action lawsuit. Along with this, riots and demonstrations at restaurants in India took place, with mobs calling for the closure of all McDonald's in India.

II. Customer Scenario

By 2001, McDonald's had expanded its operations to 116 countries with a total of over 30,000 restaurants. McDonald's sold to over 15 billion people every year! The company's target market encompassed everyone as they tried to offer menus that accommodated fast food lovers, vegetarians, the health-conscious as well as different religious sects.

III. Nucleus of Control

McDonald's restaurant chain is comprised of company owned restaurants as well as franchised restaurants, which make up over 65% of the operating McDonalds outlets; because of this many of the restaurants are controlled and run separate from one another. The whole segment of McDonald's India has a board of managing directors that oversee McDonald's operations in India. From a management standpoint, McDonalds can be seen to have different varying stances. The company can be viewed as a mature company that was introduced over 65 years ago and now encompasses virtually the entire globe with its operations. However, it seems that McDonald's, large in size already, keeps expanding internationally as well as in the United States. While many of these newly opened restaurants are separately run franchises, it seems that while the McDonald's name and idea may be mature, the company as whole seems to still have a growing, entrepreneurial stance.

IV. Functional Analysis

A. Top Management

The company was started by two brothers, Richard and Maurice McDonald and was later purchased by a current supplier of the company, Ray Kroc. As stated before, many of the restaurants were franchised and managed and were not company operated. In October 1996, when McDonald's opened their first restaurants in India, Managing Directors of McDonald's India were put in place. The two directors were Vikram Bakshi and Amit Jatia. These two directors worked in the restaurant business with Bakshi coming from Connaught Plaza Restaurants and Jatia of Mumbai's Hardcastle Restaurants. These two directors with a background of the industry as well as the region's cultures and religions are suited to complement the management, employees and customers of the 28 McDonald's outlets located in India.

B. Marketing

McDonald's has mass-marketed a low priced meal that is served quickly. The first restaurant was opened in California and has spread to include 121 countries around the globe. Advertising has been one of them most important factors in helping to trigger the corporation's global expansion. This is done effectively through every media from newspaper promotions, to radio and most importantly television. McDonald's ads have always featured celebrity endorsements from athletes to rock stars. In the early 1990's McDonald's marketing research led to many new product introductions and menu changes to accommodate the health conscious. In 1993, McDonald's expanded their operations from stand alone restaurants to joint ventures with restaurants placed in Wal-Mart stores, in Amoco and Chevron gas stations and all throughout Disney's theme parks. In more recent years, McDonald's has tried to market healthier choices on their menus as well as the contents and nutrition of the foods they sell. Some foods were also classified as vegetarian choices: garden salads, french fries...etc.

C. Finance/Accounting

After being purchased for $2.7 million in 1961, McDonald's corporation went public in 1965. By 2001, McDonald's has over 30,000 restaurants and sales of $24 billion. Each year sales and revenues of McDonald's corporation were increasing combined with net income of the company holding steady at around 1.5 billion dollars yearly.

D. Production/Operations

Mass production was the key to success for McDonald's. The business was started as a drive-in restaurant,



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