McDonalds

History• 1948 – McDonald brothers open the first McDonald’s and names Speedee

as their company image.• 1954 – Ray Krock, a multimixer salesman becomes the franchising agent.• 1955- Ray Kroc opens the Des Plaines restaurant. The 1st day’s revenues

- $366.12• 1957 – Ray Kroc hands out free hamburgers to Salvation Army guests• 1958 – Sales grow 151%• 1961 – Ray Kroc buyout the McDonalds brothers for $2.7 million• 1963 – Ronald McDonald is introduced• 1965 - McDonald’s goes public with the company’s first offering on the

stock exchange for $22.50 per share.

• 1966 – McDonald’s stocks split for the first time.• 1967 - Big Mac invented

– McDonald’s in Canada and Puerto Rico open• 1971 - “Makadonaldo” (Japan)• 1973 - Egg McMuffin invented• 1974 - Ronald McDonald House opened• 1979 - Happy Meals introduced• 1979-present - Continued growth

History

Company profile• McDonalds is the words largest fast food

corporation, serving more then 57 million people in 119 countries daily with more then 31,000 restaurants world wide in which 6,899 are owned by company and 20,499 are operated as franchise and 3,960 are operated by affiliates.

• McDonalds employing more then 1.5 million people worldwide, only in UK Company owned restaurant employed 43,492 in 2004 in which hourly paid employers are 2,292. 2,291 restaurant management and office staff nearly 500. and nearly 25,000 people employed in franchises.

Problems• Customer Service

– McDonald’s is currently ranked last amongst its top competitors in the FFHR subsector.

• #1 – Burger King• #2 – Wendy’s• #3 – McDonald’s

– This may not sound bad at first glance, but when you look at the fact that these three competitors hold 73% of the FFHR market, it puts it into perspective.

Problems (cont.)• Health Issues

SWOT Analysis - Strengths• Worldwide Brand Recognition• 41% of all fast-food visits are for hamburgers

– McDonald’s has 44% of US fast-food hamburger business

• Over 70% of the restaurants are independently owned• Ranked number one in Fortune magazine’s 2008 list of

“most admired food service companies.” Overseas market

• Over 31,000 restaurants in over 120 countries.

• Quality measures through supply chain management

• Encourage new ideas from within– Big Mac– Egg McMuffin

• Large available amounts of capital for future restaurants due to holding a limited number of corporate owned restaurants.

• Economies of scale

SWOT Analysis – Strengths (cont)

SWOT Analysis - Weaknesses• Weak product

development• Poor relationships with

franchisees• Fluctuations in profit

(which has been improved in 2008 after the franchising of many corporate owned restaurants)

• International expansion through continued franchise opportunities– Only serving 1% of the world’s population

• Growth in the beverage industry (by 2011 - $71.4 billion in sales with 70.8% being coffee drinks)

• Introduction of local offerings (i.e. Tech Burger with special condiments and toppings)

SWOT Analysis - Opportunities

• Mature industry• Strength of competition• More health-conscious consumers• Changing demographics• Fluctuation of foreign exchange rates• Increasing commodity and fuel prices

SWOT Analysis - Threats

Marketing Techniques• Product “Image”• Customers associate with the brand• Domestic• Global

Marketing Techniques (cont.)

• Original symbol “Speedee”• Golden Arches• Building structure and colors• Local advertising

Slogans• “Your kind of place” (1967)• “You deserve a break today” (1971)• “We do it all for you” (1965)• “Have you had your break today”

(1995)• “I’m lovin it” (2003)

Marketing Mix• Five P’s• Marketing and Communications• Responsibility• McSpirit Nights• Commercials• Atmosphere

Global Marketing• National Marketing Campaign• Marketing-

– North America– Hong Kong– France– Australia– Catering to local needs across sea’s

Management In McDonald’s

Ray Kroc• “The quality of a leader is reflected in the

standards they set for themselves”• “We take the hamburger business more

seriously than anyone else”• “You're only as good as the people you

hire”• “If there is time to lean there is time to

clean”

Hamburger University“McDonald’s Center of Training Excellence”

• Created by Fred Turner and Ray Kroc in 1961

• All levels of managers in the McDonald’s family go through training at this facility.

“At McDonald’s, our training mission is to be the best talent developer of people with the most committed individuals to Quality, Service, Cleanliness and Value (QSC&V) in the world. Our strong commitment to the training and development of our people has resulted in many “firsts” and honors.”

How Does This Affect McDonald’s?

• McDonald’s has been consistently increasing its dividends for the past thirty years– From 1998, up until 2007, this dividend growth stock

has delivered an annual average total return of 11% to its shareholders

– Over the past ten years, the annual dividend payments have increased by an average of almost 25% annually, which is much higher than the before mentioned growth in EPS

• This 25% growth in dividends translates into McDonald’s dividend payment doubling nearly every three years

“Get the kids…and the parents will follow.”

Past Strategies• Product Development

– Hits: Fries, Happy Meal, Big Mac, Egg McMuffin, Salads, Apple Slices, Yogurt Parfaits, & Promotions

– Misses: McPizza, Fajita, Carrot Sticks, McLean, and the Arch Deluxe

Past Strategies (cont.)• Market Development

– Hit: International growth– Miss: Over-expansion in US

• Alternative locations • Forward Integration

– Distribution through franchisees with control over store presentation, menu items

New StrategiesProduct Development: Focus on core

business– Quality and taste issues

• Food delivery methods– Family Value Meal

• Thursday’s $1.59 Happy Meal

New Strategies (cont.)• Redevelop Franchisee Relationships• Market Penetration and

Development– Continue International expansion

• Cost Reductions– Home office cost reductions– Franchising corporate owned

restaurants

Questionary

McDonald’s Strategic commitment to training has contributed to its position as a leading global foodservice

retailer

• Human resource management plays an important role in the success of a company. Most of the companies are very keen to pay attention towards their employees. Mainly HRM (Human Resource Management) is all about managing people at work. The most important part of human resource management is Training and Development. It plays a key role in every organisation though few people disagree about the importance of training and development in the success of organisation. Appointing the right person at right time at right place needs more care and attention on the part of personal manager. A clear set of goals and well defined path should be needed for good training. Training changes attitudes, knowledge and skills of employees and also the way they work. It is reflection of the fact that companies are keen about training and development to gain competitive advantages.

Examine Ray Kroc’s training philosophy & How has McDonald’s gained from training philosophy

• If I had a brick for every time I’ve repeated the phrase Quality, Service, Cleanliness and Value, I think I’d probably be able to bridge the Atlantic Ocean with them.” —Ray Kroc

• Rewarding InnovationRay Kroc believed in the entrepreneurial spirit, and rewarded his franchisees for individual creativity. Many of McDonald’s most famous menu items—like the Big Mac, Filet-O-Fish and the Egg McMuffin— were created by franchisees. At the same time, the McDonald’s operating system insisted franchisees follow the core McDonald’s principles of quality, service, cleanliness and value.

orientation training at McDonald’s

• McDonald’s, we’ve got a great reputation for the quality of our training and development courses. In fact, a lot of our most successful Managers started their careers as Crew members. You can do it too, and the best part is you get to earn while you learn!

• So what kind of training are we talking about…• Communication: interacting with colleagues, the management

team and our customers.• Practical skills: delivering exceptional customer service, handling

money, using equipment and product quality control to name just a few.

• Time management skills: organising yourself so you’re always prepared for the rush and of course the importance of always being punctual

• Team skills: learning to work along other Crew Members and contributing to the team.

Evaluate training effectiveness at McDonald’s

• There are three key objectives of the report: first, to identify models, frameworks, methodologies, and approaches as well as their uses and feasibility in evaluating training programs; second, to summarize how the quality and effectiveness of these evaluations are assessed in theory and in reality, and mainly, what cutting-edge methods and approaches other organisations use to maintain the quality and effectiveness of their evaluations; and, third, to outline some common practices of corporate evaluation units.

Recommendations• 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

Conclusion• You can change without improving, but you cannot improve

without changing!’• In today’s fast growing and highly competitive environment

everyone wants to stay ahead and always remain connected to the whole world. The last two decades have seen many inventions that are really path breaking and changed our lifestyles in more than one or another way. This is possible only because of the changes and innovation in the organization.

• Change management has become one of the major components which helps in managing the work, strategy, organization, people and culture of the organization. Change is important so as to keep an organization more competitive to face the changing demographics and technological trends and increasing globalization

Thank you