McDonalds

Isabel Soboszek Meghan Dilawari Matt Salisbury Farhan Latif Tammy Huynh

Company Background
The first McDonalds was built in 1940. Ray Kroc was the first franchisee appointed by the original

McDonald brothers, Dick and Mac.

He opened his first restaurant in Des Plaines, Illinois. The company motto became Quality, Service, Cleanliness and

Value (Q.S.C.& V)

History of the company

infancy stage growth stage maturity stage

Significant challenges faced in the companys history

$250,000 donation from

McDonalds became subject for investigation during Watergate scandal

Law suits faced

Current status of McDonalds

Sales and revenues; share of market Current company locations Number of employees Customers

Competitors
Companys use of IT and IS

Current Status Of Company

McDonald's is the world's #1 fast-food company by sales

Serving burgers and fries, it operates more than 30,000 flagship

restaurants
It serves in more than 119 countries on six continents

On a day-to-day basis, more than 47 million customers world-

wide are served

Employs more than 1.5 million people The Boston Market and Chipotle Mexican Grill fast-casual chains

are also owned by McDonald's

The most recent promotion was the Monopoly Best Chance

Game 2004 which lasted from October 12 to November 15

Competitors
A competitor for McDonalds can be anywhere from

an upscale restaurant to a measly hot dog stand at a football game.

McDonalds major competitors:

Burger King ,Subway, Yum, Wendys, In & Out, Taco Bell, Sonic Jack in the Box, Carls Jr, Togos, Quiznos, KFC, Popeyes, Pizza Hut, Round Table Pizza, Dominos, Wenerschnitzel

Of those, Burger King, Subway, and Yum are listed

as the top three competitors [McDonalds Corporation Fact

sheet]

Suppliers
McDonalds believes the only way to serve a wide, diverse

group of customers is through a wide, diverse group of suppliers. Therefore, McDonalds greatly relies on its suppliers.
McDonald's suppliers in the U.S. operate over 40 distribution

centers, strategically located to be accessible to more than 12,000 restaurants in the country. They provide a diverse range of products and services for our restaurants. It is crucial that the suppliers reflect the diversity of our customers around the world.

Companys Financial/ Profitability Past Performance

McDonald's Corporation (NYSE: MCD)

McDonald's Plaza, Oak Brook, IL 60523 (Map) Phone: 630-623-3000 Fax: 630-623-5004

Key Numbers:

Company Type: Fiscal Year-End: 2003 Sales: 1-Year Sales Growth: 2003 Net Income: 1-Year Net Income Growth: 2003 Employees:

Public December $17,140.5M 11.3% $1,471.4M 64.7% 418,000

Executives:

Chairman: President, CEO, & Director : SEVP & CFO:

Andrew J. McKenna, Sr. Charles H. (Charlie) Bell Matthew H. (Matt) Paul

Porters Five Competitive Forces (1)

Rivalry within industry:

Burger King, Wendys, In & Out etc. Brands - Big Mac, Filet o Fish, Ronald McDonald House Innovation - McGriddle, celebrity endorsements, monopoly Online presence - company info, links to charity works

Threat of new entrants:

McDonalds has market dominance (over 30,000 restaurants world-wide) constant growth -Franchising

Threat of substitutes:

Any other food industry high-class restaurants to hot dog stands Healthier alternatives (Newmans Own), unique products

Porters Five Competitive Forces (2)

Bargaining power of buyers:

Pay attention to customer demands and trends Offer specialty products for certain segments First mover- removal of super size option, salads, cooking oil

Bargaining power of suppliers:

McDonalds relies on strong supplier and distributor relationships Help suppliers lower costs Develop new supplier base to reflect customer diversity Suppliers include: Coca-Cola, Heinz, Newmans Own

Companys Competitive Strategy

Differentiation strategy - Gold Standard Signature Favorites - Big Mac and McNuggets Cost Leadership Strategy - Items are very competitively priced

Strengths & Weaknesses

Strengths:

Company can offer a meal with low prices Ronald McDonald Charity Program

Weaknesses:

Low Market Share in Chicken Products

Challenges/Opportunities
Challenges From Competitors:

The company has to compete with other restaurant and food industry since there are so many selections and choices to choose from.
Union:

The company regard union as third parties and they refuse the legitimacy of a union as an expression of the interests of the employees that theyre dealing with.

IT/IS Systems
The company uses IT and IS in a number of ways. In fact,

without the technology, McDonalds would not be able to operate as it does today.

From taking orders to completing the orders, everything involves

a computer. A network system is used to take an order which is then sent to the back through the system in order for the food to be cooked.

The following are a few systems used by McDonalds: POS (Point of sale) allows orders to be placed, check the amount of inventory on hand, see the number of transactions that have occurred in the last few days or even years, see the labor percentage, total cost of waste, check the drive thru time [TTL].

KVS (Kitchen valiance system) allows the orders taken up front and in the drive thru to be displayed and transferred to the monitors in the grill area.

Conclusion
Thank you for your time. Does anyone have any questions?