COUNTRY RISK OF MCDONALDS IN QUETTA.

PRESENTED BY:

GHULAM MUHAMMAD

MCDONALD'S VISION AND MISSION.

• McDonald's Brand vision is "To be the 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.

• “McDonald's brand mission is to be our customers' favorite place and way to eat and drink. Our worldwide operations are aligned around a global strategy called the Plan to Win, which center on an exceptional customer experience – People, Products, Place, Price and Promotion.

HISTORY OF MCDONALD'S.

• The business began in 1940, with a restaurant opened by brothers Richard and Maurice McDonald in San Bernardino, California. ...

• In October 1948, after the McDonald brothers realized that most of their profits came from selling hamburgers, and establish a streamlined system with a simple menu which consisted of only hamburgers, cheeseburgers, potato chips, coffee, soft drinks, and apple pie

• In 1952, the brothers decided they needed an entirely new building in order to achieve two goals:

• further efficiency improvements, and a more eye-catching appearance.

•1954 Ray Kroc became the first franchisee appointed by Mac and Dick McDonald in San Bernardino, California

•1955 Ray Kroc opened his first restaurant in Des Plaines, Illinois (near Chicago), and the McDonald's Corporation was created.

•1957 Quality, Service, Cleanliness and Value (Q.S.C. & V.) became the company motto.

•IN 1961 Ray Kroc bought all rights to the McDonald from the McDonalds's brother for $2.7 billion.

•In 1964 Filet-o-Fish sandwich introduced.

•In 1966 McDonald's listed on the New York stock exchange on the 7th May.

•In 1967 first restaurant opened outside USA opened in Canada and Puerto Rico.

•McDonald's restaurants are found in 118 countries and territories around the world and serve 68 million customers each day.•McDonald's operates 36,615 restaurants worldwide.••Employing more than 420,000 people.

McDonald products.

• Breakfast

• Burgers

• Chicken & Spaghetti

• Desserts

• Fries

• Drinks

• McSaver Meals

• McCafe

• McShare Box

• Happy Meal

COUNTRY RISKCountry risk refers to the economic, political and financial risks that are unique to a specific country, and that might result in unexpected investment losses.Country risk is a collection of risks associated with investing in a foreign country.

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POLITICAL RISK/GEOPOLITICAL RISK,• Political risk is the risk an investment's returns could suffer as a result of political changes or instability in a country. Instability

affecting investment returns could stem from a change in government, legislative bodies, other foreign policy makers or military control.

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ATTITUTE OF CONSUMER

• Quetta masses never satisfied foreign company`s product because They are traditional people and prefer traditional food, Like Saji, Roast. Etc

• Quetta people are religious They don`t trust foreign company, hilal,and way of slaughting.

• They don`t have well information about McDonald.

• Buying power of Consumer in Quetta is less according to big cities of Pakistan like Lahore Karachi and Islamabad majority ofpopulation is belongs to Pashtun’s and Baloch which are very traditional and conservative mind and majority didn't allow theirkids and adults to visit such kinds of high crowed places

• Due to Traditional foods people of Quetta are not much interested in that type of food chain

• Lack of awareness Regarding McDonald product is another hurdle.

• Heavy advertisement need to aware population like interview campaign mass media advertisement broachers mealbroachers.

• Traffic rules are not well stable and McDonald delivery strategy will effect by this issue which makes consumer irritate

terrorism threats is also an issue.

• Competitive rivalries is less in Quetta market so they can avail this advantage if they will succeed to develop their strategies inmarket.

TERRORISM.

Quetta is at always at read alert.

Terrorism is at peak.

Threat of more terrorism because of Refuges and CPEC.

Current situation of our beloved city Quetta is not less then war we are facing many problems which directly or indirectly

affect our markets since long time like:

• Shia Sunni controversy

• Terrorism

• Target killing

• kidnaping

• Unstable political conditions

• Traffic problem

• Overcrowding

POLITICAL RISK, CONTINUE……………..Bureaucracy.

• A system of government in which most of the important decisions are taken by state officials rather than by elected representatives.

• Lack of public development sectors

Example Mr. Kabir said that Federal bureaucracy deliberately

sabotages the development projects in Baluchistan.

Not supportive .

• Resist Foreign company`s because of threat of foreign agents. E.g,(Kl bhoshang singh).

• Encourage local business.

Corruption.

• Quetta is always seen corrupt city.

Last finance Sectary corruption scandal.

No proper check and balance.

Weak government.

ECONOMIC RISK

• Generally speaking, can be described as the likelihood that an investment will be affected by macroeconomic conditions such as government regulation, exchange rates, or political stability, most commonly one in a foreign country.

• Economic risk is the chance that macroeconomic conditions like exchange rates, government regulation, or political stability will affect an investment, usually one in a foreign country.

FINANCIAL RISK

CREDIT RISK.

• When lenders offer borrowers mortgages, credit cards or other types of loans, there is always an element of risk that the borrower may not repay the loan. Similarly, if a company offers credit to its client, there is a risk that its clients may not pay their invoices. Credit risk also describes the risk that a bond issuer may fail to make payment when requested or that an insurance company won't be able to make a claim.

• Not recovery of loans, As Banks do not provide mortgage loan in Qta, Because people repay loan, ( McDonald may sell its product on credit sale.

FOREIGN INVESTMENT RISK.

• (Unsystematic risk), all businesses in the same industry have similar types of business risk. Delivery threat, etc)

• Food industry need some reform in Pakistan to meet standers .

• McDonald need investor from local markets but there are not much number of investor in Quetta market to invest in McDonald due to lacked of interest and lac of education.

COMMODITY PRICE RISK.

• Commodity price risk is the threat that a change in the price of a production input will adversely impact a producer who uses that input. Commodity production inputs include raw materials . Factors that can affect commodity prices include political and regulatory changes, seasonal variations, weather, technology and market conditions. Commodity price risk is often hedged by major consumers.

• Unexpected changes in commodity prices can reduce a producer's profit margin, and make budgeting difficult. Fortunately, producers can protect themselves from fluctuations in commodity prices by implementing financial strategies that will guarantee a commodity's price (to minimize uncertainty) or lock in a worst-case-scenario price (to minimize potential losses). Futures and options are two financial instruments commonly used to hedge against commodity price risk.

• ( McDonald competitors are local they offer its substitute with less price).

• Political and regulatory changes, seasonal variations, weather, technology and market conditions all are challenges for a newly opened McDonald.

OPERATIONAL RISK.

• It is the risk remaining after determining financing and systematic risk, and includes risks resulting from breakdowns in internal procedures, people and systems.

• Operational risk can be summarized as human risk; it is the risk of business operations failing due to human error. It changes from industry to industry, and is an important consideration to make when looking at potential investment decisions. Industries with lower human interaction are likely to have lower operational risk.

• ( Technical staff is not available in Quetta).

COMPETITOR

• BURGER KING

• KFC

• hot spicy pics

• Hot n chili

• Prince burger

• Others

WEAKNESS

• Lack of innovative advertisement.

• Negative publicity

• Unhealthy food menu

• Low differentiation

• Legal action

• Lacking breakfast menu

• Social trend

• High setup cost.

• Offers processed and inorganic food line.

• Extensive and costly training program.

THREATS

• Economical instability.

• Health conscious customers.

• Healthy issue

• Law issue

• Saturated in fast-food industry

• Economic recession

• Bird flu & Mad cow

• Poor performance in one out- let effect all other

• Rising new matters price

STRENGTHS• Brand Name.

• Research and Development.

• Loyal Customers.

• Diversified Culture.

• The most recognized brand

• Strong global presence

• McDonald’s Plan to Win

• Strong financial performance and position

• Operating in many diverse cultures

• Offering many popular brands

• Success in target very young children

• Low-cost leader

• Good socially responsible and community oriented

• Convenient

OPPORTUNITIES• Innovative advertisements.

• Offer organic food line.

• Expand menu to cater all individuals.

• Gain attention by sponsoring adult or children programs.

• Introduce outlets to different locations.

• Increasing demand for healthier food

• Growth of the fast food industry

• Globalization

• Low cost menu is preferred by larger number of customers

• Appearance of freebies and discounts

• Diverse tastes and needs of customers

OVER COME TO CONTROL EVERY THING

• Customer relationship management

• Customer service management

• Demand management

• Order fulfillment

• Manufacturing flow management

• Supplier relation ship management

• Product development and commercialization

• Returns management

• Procurement

• Physical distribution

• Out sourcing

• Performance measurement

HEDGED OVER ALL COMPETITOR

• Striving to be cost leaders: prices cannot be matched by competitors.

• The speedy delivery of the food.

• Strong global presence and largest market share in fast-food industry.

• Net competitive advantage

• Low-cost strategy to compete with competitors

• Cutting cost

• Operating more outlets

• Focusing on Plan to Win

• Quality ,clines, Product value,

• Provides professional training for all employees

• easily adapt to various cultures

CONTINUED . . .

• Samsung Corby Crave Hit McDonald’s: Samsung Electronics Company Limited, as a joint promotion with McDonalds Pakistan, has introduced the latest Samsung Corby Series mobile phones at McDonald’s outlets across Pakistan. McDonald’s customers are provided with a chance to win this fabulous cellular product through participation.The youth oriented series is focused on interactivity and is laced with exciting features such as video, images, sound, music and data sharing. The joint promotion aims to generate excitement among the youth and providing them a feel of the touch phones and boosting their comprehension.

• Other than this McDonalds have license on Airports, Railways etc.

Thank you