PROJECT REPORT ON FRANCISING OF MCDONALDS

INDEX
1

SL. NO.

TITLE

PAGE NO.

MCDONALDS
an Introduction

3-4

History of Mcdonalds & Key Landmarks McDonalds India Journey

5-9

Goals and Objectives, Mission Statement & Awards

4
Corporate Social Responsibility
5
6
7
8

9
10

McDonalds International & Business model

10-11

12
13-14

Marketing Mix

15-17

SWOT Analysis

18-19

McDonalds Role in the Indian Economic Growth &

Consolidated Balance Sheet of McDonalds

20-24

People McDonalds # 1 Resource in India & The

McDonalds Promise

25-27

McDonalds India Culturally Sensitive &

McDonalds Cold Chain in India

28-30

11

Questionnaire & Survey Analysis

12

The Top Five Reasons Why McDonalds is so

Popular

33

Findings

34

13
14

Conclusion

15

Bibliography

31-32

35
36

MCDONALDS
AN INTRODUCTION
McDonald's Corporation (NYSE: MCD) is the world's largest chain of hamburger fast food
restaurants, serving around 68 million customers daily in 119 countries.

Headquartered in the United States, the company began in 1940 as a barbecue restaurant
operated by Richard and Maurice McDonald ; in 1948 they reorganized their business as
a hamburger stand using production line principles. Businessman Ray Kroc joined the
company as a franchise agent in 1955. Ray Kroc subsequently purchased the chain from the
McDonald brothers and oversaw its worldwide growth.
A McDonald's restaurant is operated either by a franchisee, or an affiliate, or the
corporation itself. The corporation's revenues come from the rent, royalties and fees paid by
the franchisees, as well as sales in company-operated restaurants.
McDonald's revenues grew 27 percent over the three years ending in 2007 to $22.8 billion,
and 9 percent growth in operating income to $3.9 billion.
McDonald's primarily sells hamburgers, cheese burgers , chicken, French
fries, breakfast items, soft drinks, milkshakes and desserts . In response to changing
consumer tastes, the company has expanded its menu to include salads, wraps,
smoothes and fruits.

An exterior view of the world's largest McDonald's restaurant built on 2012 London
Olympics site

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 alltime high of $27 billion, and that 2400 restaurants would be updated and 1300 new ones
opened worldwide.

History of McDonald's
The McDonald's restaurant concept was introduced in San Bernardino, California by Dick
and Mac McDonald of Manchester, New Hampshire. It was modified and expanded by their
business partner, Ray Kroc, of Oak Park, Illinois, who later bought out the business interests
of the McDonald brothers in the concept and went on to found McDonald's Corporation.
McDonald's is the leading global foodservice retailer with more than 32,000 local restaurants
serving more than 58 million people in around 130 countries each day. 70 percent of our
4

restaurants worldwide are owned and operated by independent, local businessmen and
businesswomen.
In India, the brand is managed by two business entities...

Connaught Plaza Restaurants Private Limited, led by Mr. Vikram Bakshi, JV Partner
and Managing Director, North & East India

Hardcastle Restaurants Private Limited, led by Ms. Smita Jatia, Managing Director,
South & West India
McDonald's philosophy of QSCV (Quality, Service, Cleanliness and Value) is the guiding
force behind its service to the customers in India. Following its philosophy of being sensitive
to local food and cultural preferences, India was the first country in the McDonald's system
where it served non-beef and non-pork products. More than 70 percent of the menu in India
has been locally developed with complete segregation of vegetarian and non-vegetarian
products right from the food processing plants to the point of serving the customers.
McDonald's commitment to its Indian customers is evident even in development of special
sauces that use local spices and chillies. The mayonnaise and all other sauces are egg-less.
McDonald's also pioneered the establishment of Cold Chain across India which helps
maintain freshness and nutrition in every product.
McDonald's regular scrumptious menu includes wide range of products like McAloo Tikki,
Filet-O-Fish, Spicy Range, Chicken McGrill, McVeggie, Veg Pizza McPuff, Chicken
Mcnuggets, Fries, Wraps, an assortment of Sundaes, Soft Serve and refreshing beverages
such as Ice Tea & Cold Coffee with outstanding service in a vibrant and lively ambience, for
which McDonald's is known worldwide.
McDonald's had further reinforced the branded affordability mantra via the introduction of
the Happy Price Menu which starts at Rs 25 only.
McAloo Tikki, Veg Surprise and Pizza McPuff developed in India are now being exported to
the countries in the Middle East
McDonalds introduced Cokes Georgia Gold range of hot beverages which was developed
especially for the Indian market in 2002
As a leader in QSR segment (Quick Service Restaurant) McDonalds has pioneered various
industry benchmark practices over the past decade of serving Indian customers, including
new concepts such as

Oil Alliances in India by inking with petroleum giants BPCL and HPCL. The two
such alliances with BPCL outlets are in Mathura (2000) (UP) and Doraha (2002)
(Punjab)
Novel menu formats such as an Express Model with a limited menu and Kiosks with a
variety of dessert offerings

Home Delivery (McDelivery): Providing even more convenience to our customers.

In Oct 2006, McDelivery on bicycle at Chandni Chowk was launched and in March
07 an all India single delivery number (66 000 666) was introduced
First Drive Thru Restaurant at NOIDA (UP) in 1997
First Restaurant with operational Kitchen at Delhi Domestic.

Keeping pace with the customer evolving needs McDonald's also functions on models that
drive convenience and create unique differentiation like McDelivery, Drive thru, Breakfast
Menu, high ways and extended hours. (Currently, available in select cities).
At present, there are 300 McDonald's restaurants in India.
The strong foundation that Ray Kroc built... continues today with McDonald's vision and
commitment for its internal as well as external customers. Since then, it has evolved into a
value driven brand, and recognizes that affordability of its products is an attractive
proposition for its customers along with taste. McDonald's continues to strengthen it business
model and progress with customers evolving needs.

Key Landmarks - McDonalds India Journey

1996 the first McDonalds restaurant opened on Oct. 13, at Basant Lok, Vasant Vihar, New
Delhi. It was also the first McDonalds restaurant in the world not serving beef on its menu
1997
the first Drive Thru restaurant at Noida (UP)
the first disabled friendly store at Noida (UP)
1999the first Mall location restaurant at Ansal Plaza (New Delhi)
2000the first highway restaurant at Mathura (UP)
2001the first thematic restaurant at Connaught Place (New Delhi)
2002
The first restaurant in a food court at 3Cs, Lajpat Nagar (New Delhi)
The first restaurant at the Delhi Metro Station at Inter State Bus Terminus
The first fundraiser in association with ORBIS and Dr. Shroffs Charity Eye hospital.
(Delhi)
2003... The first Dessert Kiosk Faridabad (Haryana)
2004 McDonalds Delivery Service (McDelivery) introduced in New Delhi
6

2003-04 Indigenous products like McAloo Tikki, McVeggie and Pizza McPuff exported to
Middle East countries
2006

2007

McDelivery on Bicycles flagged off at Chandni Chowk (Delhi)- another first initiative
by McDonalds India
100th McDonalds Restaurant in India
10th Year Anniversary

The first McDonalds open in Eastern Region at Park Street, Kolkata

The first restaurant opened at Airport (Domestic Airport, New Delhi)
The first MFY restaurant opened at Greater Noida, Uttar Pradesh

2008
The First restaurant to start extended hours procedure at Cyber Greens, Gurgaon and
Saket, New Delhi
The first restaurant to start Breakfast Menu at Janpath, New Delhi
2009The first McDonalds Restaurant opens at Old Delhi Railway Station
2010The first reimaged new look restaurant opened at Ambiance mall, Vasant Kunj 6
2011
McDonalds introduces premium products in it is menu McSpicy range of products
McDonalds introduces Mcflurry (premium desserts) in Oreo and chocolate crispy
flavors
McDonalds introduces Wi-Fi across Delhi/NCR region
McDonalds currently has 235 restaurants in India
The Northern Region has 110 restaurants
Delhi 40
Haryana - 15
Faridabad 3, Manesar 2 (Highway and Drive - Thru), Gurgaon 7, Karnal 1
(Highway and Drive - Thru), Panipat -1, Ambala -1
Rajasthan -6:
Jaipur 3, Jodhpur 1, Kota -1, Udaipur - 1
Uttaranchal -1:
Dehradun 1
Uttar Pradesh 29:
7

Noida 5, Greater Noida 1, Ghaziabad 7, Mathura 1 (Highway and Drive Thru), Kanpur 2, Meerut 2, Lucknow 5, Agra 1, Allahabad 1, Varanasi -2,
Gajraula 1 (Highway & Drive Thru), Khatauli - 1(Highway and Drive thru)
Punjab 13
Chandigarh 2, Ludhiana 2, Doraha 1 (Highway and Drive - Thru), Jalandhar 2,
Patarsi 1 (Highway and Drive - Thru). Dasuya (Highway and Drive Thru) 1,
Amritsar -1, Patiala -1, Zirakpur-2
West Bengal-3:
Kolkata- 3
Himachal Pradesh -1:
Jabli-1
Madhya Pradesh -2
Gwalior 1, Bhopal -1
---------------------------------------------The Western Region has 125 restaurants across the following states and cities
Maharashtra - Mumbai, Pune, Nasik, Kolhapur
Gujarat - Ahmedabad, Vododara, Surat, Indore, Vapi
Madhya Pradesh Indore
Andhra Pradesh - Hyderabad
Karnataka - Bangalore
Tamil Nadu - Chennai

GOALS AND OBJECTIVES

1. McDonalds vision is to be the worlds best quick service restaurants experience.
8

2. McDonalds is committed to maintaining and developing the

best food products in the quick service restaurant market.
3. In order to deliver this, the company has made a number of
commitments to food safety and nutrition.
4. Lead the Quick Service Restaurant market by a program of site
development and profitable restaurant openings, and by attracting
new customers. Increasing sales through promotions will enable them to continue their
program of expansion.
5. McDonalds have an objective to continual enhance and improve their menu. This will
better satisfy their customers and give customers more reason to visit. Many ideas for new
items on the menu come from the franchisees responding to customer demand. Consumer
tastes change over time and McDonalds has to respond to these changes.

MISSION STATEMENT
"McDonald's vision is to be the world's 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."

AWARDS
McDonalds India has received many prestigious awards for its service and performance
including:

The Most Respected Company for four consecutive years (2003-2006) in the Food
Services sector, by Businessworld
The Most Preferred Fast Food Outlet 2006 & 2007 by Awaaz Consumer Award
hosted by CNBC
Star Retailer the Consumer Way, Food Services Retailer of the Year 2006 &
2007, 2008 by Franchise India
Retailer of the Year Award for catering services (2004-2006) at the Images Retail
Awards
The Amity Corporate Excellence Award in 2007 & 2008
9

The Most Wanted Brand of the Year Award 2003 & 2004 by Franchising Holdings
India Ltd.
The Most Admired F & B Retailer of the Year: QSRs Foreign Origin The
Golden Spoon Awards by Images Retail
The Company with the Best Corporate Conscience 2008 by Business &
Economy
Value for Money brand 2010 by Pitch Magazine
The most trusted family restaurant brand in the country award in 2010 by
Readers Digest

Corporate Social Responsibility

Being responsible is at the core of everything that we do at McDonald's. It is a deep-rooted
value and a tradition that dates back to our founder Ray Kroc. It is also one of our top
business priorities.
We believe that our continuing success depends on our stakeholders trust in each and every
aspect of our business, be it the quality and safety of the food we serve; in the way we do our
business; the way we connect and make the difference in the communities we operate; being
sensitive to environment and being sustainable.
1 We are committed to doing what is right

2 We are committed to be a good neighbour and partner in the community

10

We are committed to conducting our business ethically and with complete

transparency

We are committed to treating our entire internal and external stakeholders with
respect and dignity

McDonalds International

McDonalds has over 32,000 local restaurants in more than 100 countries

70 percent of our restaurants worldwide are owned and operated by independent, local
businessmen and businesswomen

McDonalds serves nearly 50 million customers each day

McDonalds first franchised restaurant opened at Des Plaines, Illinois in 1955 by the
founder Ray Kroc

McDonalds has its own Hamburger University in Illinois, and the first batch
graduated in 1961

12 classes offered at Hamburger University are college accredited

In 1963, McDonalds sold its one billionth hamburger

McDonalds is listed on the New York, Frankfurt, Munich, Paris and Tokyo stock
exchanges

McDonalds aired its first network TV advertisement McDonalds - Where Quality

Starts Fresh Everyday, in 1965

The first McDonalds Drive-Thru opened in Sierra Vista, Arizona in 1975

11

Happy Meals were added to McDonalds menu in 1979

McDonalds launched the new worldwide Balanced Active Lifestyles public

awareness campaign in 2005

McDonalds celebrated its 50th Anniversary on April 15, 2005

Business model
McDonald's Corporation earns revenue as an investor in properties, a
franchiser of restaurants, and an operator of restaurants. Approximately 15%
of McDonald's restaurants are owned and operated by McDonald's
Corporation directly. The remainder are operated by others through a variety
of franchise agreements and joint ventures.
The McDonald's Corporation's business model is slightly different from that
of most other fast-food chains. In addition to ordinary franchise fees and
marketing fees, which are calculated as a percentage of sales, McDonald's
may also collect rent, which may also be calculated on the basis of sales.
As a condition of many franchise agreements, which vary by contract, age,
country, and location, the Corporation may own or lease the properties on
which McDonald's franchises are located. In most, if not all cases, the
franchisee does not own the location of its restaurants.
The United Kingdom and Ireland business model is different than the U.S, in
that fewer than 30% of restaurants are franchised, with the majority under the
ownership of the company. McDonald's trains its franchisees and others
at Hamburger University in Oak Brook, Illinois.
In other countries, McDonald's restaurants are operated by joint ventures of
McDonald's Corporation and other, local entities or governments.
As a matter of policy, McDonald's does not make direct sales of food or
materials to franchisees, instead organizing the supply of food and materials
to restaurants through approved third party logistics operators.
According to Fast Food Nation by Eric Schlosser , nearly one in eight workers
in the U.S. have at some time been employed by McDonald's. It also states
that McDonald's is the largest private operator of playgrounds in the U.S., as
well as the single largest purchaser of beef, pork, potatoes , and apples. The
selection of meats McDonald's uses varies with the culture of the host
country.

12

MARKETING MIX
The marketing mix of a company consists of the various elements as follows which form the
core of a companys marketing system and hence helps to achieve marketing objectives. The
marketing mix of McDonalds is as follows:The McDonald plains its marketing by simple keeping 4Ps in mind
Product
Price
Promotion
Place
Product : - McDonalds places considerable emphasis on developing a menu which
customers want. Market research establishes exactly what this is. However, customers
requirements change over time. In order to meet these changes, McDonalds has introduced
new products and phased out old ones, and will continue to do so. Care is taken not to
adversely affect the sales of one choice by introducing a new choice, which will cannibalise
sales from the existing one (trade off). McDonalds knows that items on its menu will vary in
popularity. Their ability to generate profits will vary at different points in their cycle. In India
McDonalds has a diversified product range focussing more on the vegetarian products as
most consumers in India are primarily vegetarian. The happy meal for the children is a great
seller among others.
Price:-The customers perception of value is an important determinant of the price charged.
Customers draw their own mental picture of what a product is worth. A product is more than
a physical item; it also has psychological connotations for the customer. The danger of using
low price as a marketing tool is that the customer may feel that quality is being compromised.
It is important when deciding on price to be fully aware of the brand and its integrity.
In India McDonalds classifies its products into 2 categories namely the branded affordability
(BA) and branded core value products (BCV). The BCV products mainly include the
McVeggie and McChicken burgers that cost Rs 50-60 and the BA products include McAloo
tikki and Chicken McGrill burgers which cost Rs20-30. This has been done to satisfy
consumers which different price perceptions.
Promotion :- The promotions aspect of the marketing mix covers all types of marketing
communications .One of the methods employed is advertising, Advertising is conducted on
TV, radio, in cinema, online, using poster sites and in the press for example in newspapers
and magazines. Other promotional methods include sales promotions, point of sale display,
merchandising, direct mail, loyalty schemes, door drops, etc. The skill in marketing
communications is to develop a campaign which uses several of these methods in a way that
provides the most effective results. For example, TV advertising makes people aware of a
food item and press advertising provides more detail. This may be supported by in-store
promotions to get people to try the product and a collectable promotional device to encourage
them to keep on buying the item.
At McDonalds the prime focus is on targeting children. In happy meals too which are
targeted at children small toys are given along with the meal. Apart from this, various
schemes for winning prices by way of lucky draws and also scratch cards are given when an
order is placed on the various mean combos.
13

Place :- Place, as an element of the marketing mix, is not just about the physical location or
distribution points for products. It encompasses the management of a range of processes
involved in bringing products to the end consumer. McDonalds outlets are very evenly
spread throughout the cities making them very accessible. Drive in and drive through options
make McDonalds products further convenient to the consumers.

Other than the main four elements mentioned above there are a few other elements too
in the marketing mix, which are as follows:-

People :-The employees in McDonalds have a standard uniform and McDonalds specially
focuses on friendly and prompt service to its customers from their employees.
Process :-The food manufacturing process at McDonalds is completely transparent i.e. the
whole process is visible to the customers. In fact, the fast food joint allows its customers to
view and judge the hygienic standards at McDonalds by allowing them to enter the area
where the process takes place. The customers are invited to check the ingredients used in
food.
Physical evidence : - McDonalds focuses on clean and hygienic interiors of is outlets and
at the same time the interiors are attractive and the fast food joint maintains a proper decorum
at its joints.

14

SWOT ANALYSIS
Strengths

McDonalds holds a very strong brand name worldwide.

They have large partnerships with other companies that provide them with their
desired products; this increases the goodwill of the company.

McDonalds is one of the most reputed firms who are socially responsible.

Loyal employees & management & customer are their biggest strength.

McDonalds makes sure that cultural & regional barriers are kept in mind while
providing food to different countries.
15

Clean environment and play areas for children where they can enjoy their time.

Weakness

The weakness that hits the list of employee turnover rate. Every year many of their
employees are fired out of the restaurant.

McDonalds mostly advertises products and food items that targets children.

Health conscious people often complain that they do not provide us with the organic
and healthy food. This becomes their weakness when they get in the complaints.

They also face quality issue at times. This affects the business as they are running the
outlet worldwide, if one franchise gets affected others also get a bad name.

Opportunities

It can open up online services for their customers so that they can easily order their
desired meals sitting at home.

Discounts given on every food item may help them gain more customers.

They can go for a joint venture with the retailers they work with.

They can introduce healthy hamburgers and healthy drinks for the people who are
health conscious.

In order to be environment friendly, they can use packing material which can be
recycled later or material that does not create pollution.

Threats

Emerging competition of similar outlets is becoming a problem for McDonalds.

Health issue also becomes a problem when it comes to food.

As it is a multinational food outlet, fluctuations in the currency of other countries

becomes a problem for such companies.

Recession in any country would definitely affect the whole outlet worldwide.
16

People facing heart problems and obesity accuse McDonalds for not providing them
with the healthy food.

They have a threat of local food outlets in different countries.

McDonalds is operating in a fully fledged economy where competition is increasing

day by day therefore they should work effectively to overcome their drawbacks
because of the recession.

McDonalds Role in the Indian Economic Growth

In 1990, six years before the opening of the first McDonald's restaurant in India, McDonalds
and its international supplier partners worked together with local Indian companies to
develop products that meet McDonald's vigorous quality standards. These standards also
strictly adhere to Indian Government regulations on food, health and hygiene. Part of this
development has involved the transfer of state-of-the-art food processing technology, which
has enabled Indian businesses to grow by improving their ability to compete in today's
international markets.
Prior to McDonalds arrival in India, the concept of a Cold Chain for the distribution of food
and dairy products from the farm to the end supplier in predetermined and stringently
enforced climactic and hygienic conditions was at a very nascent stage of development. For
five years prior to opening the first restaurant, McDonalds pioneered the effort to develop
this aforementioned Cold Chain so that trademarked high standards would be assured. This
concept has today been adopted by various Indian and International players to deliver quality
produce to consumers.
For instance, Cremica Industries worked with another McDonald's supplier from Europe to
develop technology and expertise, which allowed Cremica to expand its business from baking
to also providing breading and batters to McDonald's India and other companies. Another
benefit is expertise in the areas of agriculture, which allowed McDonalds, and its suppliers to
work with farmers in Ooty, Pune, Dehradun and other regions to cultivate high quality
Iceberg lettuce. This includes sharing advanced agricultural technology and expertise like
utilization of drip irrigation systems, which reduce overall water consumption, better seeds &
agricultural management practices, which result in greater yields.
In some cases, these Indian suppliers had the technology - but no market for the products they
produced. For example, Dynamix Dairies - through its relationship with McDonald's - was
introduced to a large customer of milk casein and other milk derivatives. McDonald's local
supply networks through Radhakrishna Foodland, to get products from the various suppliers
to restaurants across India.
McDonalds North India alone contributes Rs.30.7crore (USD 7.76 million)/annum
approximately as sales tax to different State Governments where we have our operations.
17

KEY FIGURES (Latest Twelve Months

- LTM)
Yesterday's Close
87.06
$
PE Ratio - LTM
16.4
Market Capitalisation
87,526.7 mil COMPANYS FINANCIAL INFORMATION
Latest
Shares
OutstandingMcDonald's
1,004.0Corporation
mil
Company
Name:
Earnings
pS (EPS)
Ticker Symbol:
MCD 5.27 $
Dividend
pS (DPS)
2.53
Web Address:
www.mcdonalds.com
Dividend
3.5Thompson
%
CEO: Yield
Mr. Donald
Dividend
No. of Employees:
Payout Ratio 420,000 48 %
Commonper
Issue
Type: CS 64,300 $
Revenue
Employee
Business
Description:
McDonald's
franchises and operates McDonald's
Effective Tax Rate
31.3Corporation
%
restaurants
inmil
the food service industry. The Company and its
Float
1,015.3
franchisees purchase food, packaging, equipment and other goods
Float as % of Shares
from numerous
99.9 %independent suppliers.
Outstanding
Foreign Sales
18,478 mil
Domestic Sales
8,528 mil
IndustryGeneral
Information:
LEISURE - Restaurants
Selling,
& Adm/tive
9.10 %
(SG&A) as % of Revenue
Price Research & Devlopment
Day Change
Bid Ask Open High Low Volume
0.00 %
87.18 (R&D) as % of Revenue
-0.02
87.43 87.43 86.76
3658828
44.7
%
MarketGross
Cap Profit
(mil) Margin
Shares Outstanding
(mil)
Beta EPS DPS
P/E
Yield 52-Wks-Range
EBITDA Margin
87,526.7
1,004.0 35.6 %
0.39 5.27 2.53
16.4
3.5
102.22 - 83.31
Pre-Tax Profit Margin
29.1 %
Assets Turnover
0.8 %
Return on Assets (ROA)
16.1 %
Balance Sheet (at a glance) in Millions
Return on Equity (ROE)
39.2 %
Return on Capital Invested
20.4 %
(ROCI)
Current Ratio
1.0
Leverage Ratio
2.4
(Assets/Equity)
Interest Cover
16.6
Total Debt/Equity (Gearing
0.96
Ratio)
LT Debt/Total Capital
48.0 %
Working Capital pS
0.06 $
Cash pS
2.17 $ DIVIDEND INFO
Book-Value pS
13.83 $ Dividend Declared Date
09/20/2012
Share price performance
previous 3 years
Tangible Book-Value pS
11.10 $ Dividend Ex-Date
11/28/2012
Cash Flow pS
6.89 $ Dividend Record Date
12/02/2012
Free Cash Flow pS
1.25 $ Dividend Pay Date
12/16/2012
Dividend Amount
770
KEY FIGURES (LTM): Price info
Type of Payment
Cash Payment
Price/Book Ratio
6.30
Dividend Rate
3.08
Price/Tangible Book Ratio
7.85
Current Dividend Yield
3.5
Price/Cash Flow
12.6
5-Y
18Average Dividend
3.1
Price/Free Cash Flow
69.9
Yield
P/E as % of Industry Group
42.0 % Payout Ratio
48.0
P/E as % of Sector Segment
77.0 % 5-Y Average Payout Ratio
53.0

Share price performance intraday

PRICE/VO
LUME
1 Week
4 Weeks
13 Weeks
26 Weeks
52 Weeks
YTD
Moving Average

High
87.43
94.16
94.16
102.22
102.22

Low

83.31
83.31
83.31
83.31
83.31
105-Days
Days
86.61 86.31

% Price
Chg

Close
84.74
91.02
87.75
98.03
10Weeks
88.25

GROWTH
5-Year R of 5-Year
RATES
Growh
Growth
Revenue
3.81
77.6
Income
20.17
81.1
Dividend
15.36
94.7
Capital
6.97
NA
Spending
R&D
0.00
NA
Normalized Inc. 11.58
NA

0.0
2.7
-4.4
-0.8
-11.2
-13.2

% Price
Chg vs.
Mkt.
101
101
98
93
79
77

30-Weeks

200-Days

89.31

91.74

Avg. Daily
Vol
54,041
57,129
61,288
59,419
59,272
59,774
Beta (60Mnth)
0.39

Total Vol
66,217
856,929
3,554,700
7,189,758
14,521,666
13,807,695
Beta (36Mnth)
0.31

3-Year
Growth
6.66
YTD vs. Curr Qtr vs. Annual vs.
9.78 CHANGES
Last YTD Qtr 1-Yr ago Last Annual
10.16
Revenue %
2.1
-0.2
12.2
10.52
19
Earnings %
-1.4
-3.5
11.3
EPS %
1.0
-1.4
15.1
0.00
EPS $
0.04
-0.02
0.69
9.79

SOLVENCY RATIOS
SHORT-TERM SOLVENCY RATIOS
(LIQUIDITY)
Net Working Capital Ratio
2.71
Current Ratio
1.3
Quick Ratio (Acid Test)
1.0
Liquidity Ratio (Cash)
0.67
Receivables Turnover
21.5
Average Collection Period
17
Working Capital/Equity
6.2
Working Capital pS
0.88
Cash-Flow pS
6.77
Free Cash-Flow pS
FINANCIAL STRUCTURE RATIOS
Altman's Z-Score Ratio
Financial Leverage Ratio
(Assets/Equity)
Debt Ratio
Total Debt/Equity (Gearing Ratio)
LT Debt/Equity
LT Debt/Capital Invested
LT Debt/Total Liabilities
Interest Cover
Interest/Capital Invested

2.09
4.85
2.3
56.4
0.87
0.84
56.9
65.2
17.3
1.67

20

People McDonalds # 1 Resource in India

McDonald's India is an employer of opportunity, providing quality employment and longterm careers to the Indian people. A McDonald's restaurant employs around 50 people on an
average, performing 25 different job responsibilities - from the counter crew to the restaurant
manager. Starting with 50 employees in 1996, McDonalds world-class training inputs to its
21

employees can today be seen in close to 10.000+ employees currently employed directly with
McDonald's restaurants across India. Additional indirect employment contributes to over
2000 people (Suppliers /service agents etc.)
The training centers at Delhi & Mumbai provide world-class training to every employee. It is
ensured that each employee who has undergone an extensive training program is judged at
the end of every course involving assessment at regular intervals. Some of the courses are the
Basic Shift Management Course (BSM), Advance Shift Management Course (ASM),
Effective Management Practices Course (EMP) and candidates who were till now attending
the Restaurant Leadership Practices Course (RLP) in Australia can now do the same, here in
India with the support of McDonalds Hamburger University.

The McDonalds Promise

QUALITY, SERVICE, CLEANLINESS & VALUE
When asked to explain McDonald's success, founder Ray Kroc used to say, "We take the
hamburger business more seriously than anyone else."
Kroc was a perfectionist. From the day he opened his first restaurant, he vowed to give his
customers high quality products, served quickly --and with a smile, in a clean and pleasant
environment, and all at a fair price. Quality, Service, Cleanliness and Value (QSC&V)
became the philosophy that drove McDonald's business.
22

QUALITY
McDonald's India serves only the highest quality products. The attention to food quality
started long before the first restaurant opened. McDonald's India has established close
relationships with local suppliers who provide McDonald's with the highest quality, freshest
ingredients to make its products.
All suppliers adhere to Indian government regulations on food, health and hygiene while
continuously maintaining McDonald's own recognized standards. McDonald's has established
an extensive "cold chain" distribution system in India to ensure that the products, which
arrive at the restaurant from suppliers all over India, are absolutely fresh. In the restaurants,
products and supplies are used on a "first-in, first-out" basis to ensure freshness. All
McDonald's products are prepared using modern, state-of-the-art cooking equipment to
ensure quality and safety.
SERVICE
McDonald's India provides fast, friendly service -- the hallmark of McDonalds, which sets
its restaurants apart from others. At McDonald's, the customer always comes first. Every
employee strives to provide 100 percent customer satisfaction -- for every customer -- every
visit. This includes friendly and attentive service, accuracy in order taking, and anticipation
of customer's needs -- such as napkins or straws. The McDonalds promise is With a sense
of fun and youthful spirit, we will proudly serve an exceptional McDonalds eating
experience that makes all people feel special and makes them smile every customer,
every time.

CLEANLINESS
McDonald's restaurants provide a clean, comfortable environment especially suited for
families. McDonald's stringent cleaning standards ensure that all tables, seating, highchairs
and trays are sanitized several times each hour. The attention to cleanliness extends from the
lobby to the kitchen to the sidewalk and immediate areas outside the restaurant.
In addition to urging customers to dispose of their litter properly and offering a number of
trash bins (both inside and outside the restaurants) for their convenience, McDonald's "Litter
Patrols" walk around the restaurants several times each day picking up litter -- even if it isn't
from McDonald's.
Restaurant managers walk through the dining areas each hour, to ensure that it is clean and
well stocked. All restaurants provide a variety of comfortable seating arrangements to
accommodate anyone -- from a single individual to a large family. The environment is warm,
inviting, and well lit.
VALUE

23

McDonald's menu is priced at a value that the largest segment of Indian consumers can
afford. McDonald's does not sacrifice quality for value -- rather McDonald's leverages
economies of scale to minimize costs while maximizing value to customers.
McDonald's definition of value is broader than most restaurants of its kind -- it is more than
price. Value at McDonald's is the sum of the total McDonald's experience: quality food;
fast, friendly service; a clean and pleasant environment, and products priced at very
affordable prices for the largest segment of Indian consumers possible. That is value at
McDonald's.

24

McDonalds India Culturally Sensitive

Indianisation of Menu
With the opening of the first McDonalds restaurants in India- there is much that is consistent
with other McDonalds restaurants around the world, such as the quality of the food and the
attention to service.
The dedication to local cultures is not new for McDonalds. For the past 50 years,
McDonalds has opened restaurants in more than 120 distinctly different countries and
cultures. With guidance from its local partners, McDonalds is able to adapt- where
necessary-its menu and restaurant operations to complement existing eating-out options.
McDonalds local owners understand what their customers want perhaps more importantly,
what is acceptable within local customs and values.
There is much, too, that is very different- such as the first beef-less and pork-less menu in
the world and special product formulations to cater to Indian culture and palate. Vikram
Bakshi, the joint venture partner for McDonalds India, says We know the Indian culture,
because we were born in it, inherited its richness, and respect it greatly. It is the respect
for this culture and the sentiments of many of our customers, that we do not serve any
beef and pork items in our restaurants.
McDonalds commitment to its Indian customers is evident even in development of special
sauces that use local spices and chillies. The mayonnaise and all other sauces are egg-less.
In India, vegetarianism is in many cases more than a lifestyle choice. Many people are
vegetarians due to religious reasons, and in some cases even the vegetarian product that has
come into contact with a non-vegetarian product is unacceptable. Hence, McDonalds India
has also changed its operations to address the special requirements of our vegetarian
customers by having processes that ensure that a physical separation of veg and non-veg
products is maintained right from farm to the customer. Vegetable products are prepared
separately, using dedicated equipment and utensils. Also in India, McDonalds uses only
vegetable oil as a medium for cooking.

McDonalds Cold Chain in India

McDonald's India is characterized by a unique sense of dedication and commitment to be
driven by the leadership of local owners. This commitment has translated into enduring
benefits to the businesses at the grass root level, in the areas of introduction of new crops,
new agricultural practices and food processing methods and procedures.
McDonald's unique 'cold chain', on which the QSR major has spent more than six years
setting up in India, has brought about a veritable revolution, immensely benefiting the
farmers at one end and enabling customers at retail counters get the highest quality food
products, absolutely fresh and at great value.
25

Setting up this extensive cold chain distribution system has involved the transfer of state-ofthe-art food processing technology by McDonald's and its international suppliers to
pioneering Indian enterprises, which are today an integral part of the McDonalds cold chain.
From Field to -2C in 90 Minutes
Trikaya Agriculture, a major supplier of iceberg lettuce to McDonald's India, is one such
enterprise that is an intrinsic part of the cold chain. Initially lettuce could only be grown
during the winter months but with McDonald's expertise in the area of agriculture they are
now able to grow this crop through the year.
Post harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room to
remove field heat, a large cold room and a refrigerated van for transportation where the
temperature and the relative humidity of the crop is maintained between 1 C and 4 C and 95
per cent respectively. Vegetables are moved into the pre-cooling room within half an hour of
harvesting. The pre-cooling room ensures rapid vacuum cooling to 2 C within 90 minutes.
The pack house, pre-cooling and cold room are located at the farms itself, ensuring no delay
between harvesting, pre-cooling, packaging and cold storage.
Trikaya is not associated with us any longer and iceberg lettuce is now locally sourced from
our partners Vista Processed Foods Pvt. Ltd
Flavour and Freshness locked in at - 35C
Vista Processed Foods Pvt. Ltd., McDonald's suppliers for the chicken and vegetable range of
products, is another important player in this cold chain. This includes hi-tech refrigeration
plants for manufacture of frozen food at temperatures as low as - 35 C. This is vital to ensure
that the frozen food retains it freshness for a long time and the 'cold chain' is maintained. The
frozen product is immediately moved to cold storage rooms.

26

Our Backbone: Cold Chain & Suppliers

27

McDonalds Cold Chain In India

From Farm to Bulk Cooler in less than 90 Minutes
McDonald's suppliers of cheese, Dynamix Dairy, too, recognizing the need for quality milk to
make quality cheese, has set up a dedicated quality program for milk procurement. They have
made significant investments in setting up bulk coolers at all milk collection centres in the
Baramati area, where they are based. On receipt, the milk is immediately stored in the bulk
coolers at the collection centres, to prevent growth of bacteria in the milk and preserve its
freshness - thus, maintaining the 'cold chain'.
All leading to the Consumer
McDonald's local supply networks through Radhakrishna Foodland, which operates
distribution centres (DCs) for McDonald's restaurants across India. The DCs have focused all
their resources to meet McDonald's expectation of 'Cold, Clean, and On-Time Delivery' and
plays a vital role in maintaining the integrity of the products throughout the entire 'cold
chain'.
Ranging from liquid products coming from Punjab to lettuce from Pune, the DC receives
items from different parts of the country. These items are stored in rooms with different
temperature zones and are finally dispatched to the McDonald's restaurants on the basis of
their requirements. The company has both cold and dry storage facilities with capability to
store products up to -22 C as well as delivery trucks to transport products at temperatures
ranging from room temperature to frozen state.
All these suppliers share McDonald's commitment and dedication to satisfying customers by
supplying them the highest quality products. They are working cohesively to ensure that the
final product reaches the customer consistently each time and every time. At their level, every
care is taken to guard against any interruptions in the cold chain, which can break the link and
have a detrimental effect on the quality of the product. And more products reaching the
market fresher and quicker not only benefit the economy but also help the farmer earn more.

28

QUESTIONNAIRE
1. How often do you visit fast food restaurants?
Everyday
Alternate days
Weekends
Once every three months
2. Which of the following fast food chain do you visit the most?
Subway
McDonalds
KFC
Burger King

Once in a month

Pizza Hut

3. Are you satisfied with the services provided by them

Yes
Sometimes
Not at all satisfied
4. How often do you eat at McDonalds?
Everyday
Alternate days
month
Once every three months

Weekends

Once in a

5. Which among the following is your favourite product at McDonalds?

Big Mac Burger
Mac Veggie
Big Mac Chicken Burger
Mac
Mac Fileto Fish

Maharaja

6. Is the product line of McDonalds adequate?

Yes
No
Havent Thought About That
7. What time of the day do you prefer to eat at McDonalds?
Morning
Noon
Evening
Night
8. What is the main problem you faced at McDonalds?
Long queues
Wrong orders
Hygienic problems
Other problems
No problems
9. What are the unique selling prepositions of McDonalds?
Product variety
Hygiene
Ambience
Location
Other

Quick service

10. Do you think McDonalds will be triumphant over all its competitors?
Yes
Maybe
Havent Thought About That

SURVEY RESPONSE ANALYSIS

29

Never
Thank You!!

Frequency of visits made to fast food centers Fast food chain visited the most
Everyday
Alternate
days

Subway
MacDonald's

Weekends

KFC

Once in a
month

Pizza Hut
Burger King

Once every
three months

Favourite product at Macdonalds Time of the day prefered to eat at Macdonalds

Big Mac Burger

Mac Veggie

Morning
Big Mac Chicken Burger

Noon

Maharaj Mac

Evening
Night

Mac Fileto Fish

30

Main problem faced at McDonalds The unique selling prepositions of MacDonalds

Long queues
Wrong orders

Product
variety

Hygienic
problems

Hygiene

Ambience Quick service

Other
problems

Location

Other

No problems

THE TOP FIVE REASONS WHY MCDONALDS IS SO POPULAR

1. The System
This is the first thing that makes McDonald's so successful, by having an
effective and efficient system in place, which exploits the minimum wage
labour available, in the form of young teenagers who are just looking to make
some cash or pick up fundamental job skills.
2. Convenience
The second reason why McDonald's is so popular is because it's everywhere.
There a McDonald's at every corner of the map, at every major shopping
centre, district, highway, freeway, every place which attracts even, remotely
more than 10 people, will have a McDonald's restaurant not too far from
them. McDonald's is having the best Real Estate locations around the world
which makes it so popular around the globe.
3. Likability and Familiarity
The Golden Arches, the Big M. Ronald McDonald, happiness and fun; all
these are the associations with McDonalds which makes it so familiar by
being so familiar to all age groups and to everybody.
4. The Menu
McDonald's has one of the most diverse menus, targeting all ages from little
kids to old pensioners, and everyone else in between. There's Big Macs for
the big kids and junior burgers for the little. The menu's versatility is
accentuated when they introduced the "healthy tick" concept, which target
those people who wants to watch what they eat (even though it doesn't make
sense to go to a fast food restaurant to eat healthy).
5. Consistency
The last reason is, McDonald's is so successful because of its consistency.
The expectations that we have about everything surrounding the store are
fulfilled in almost every store nationwide, worldwide. So everybody knows

31

what they're getting into before they come to McDonald's, and by being so
consistent, it has a solid reputation to uphold.

Findings

At McDonalds, the corporate culture and management system are strictly imposed,
detailed operating manuals followed to the letter and an extensive field organization
checks on each store to enforce standards.

The organizational development focused upon generating revenues from the existing
operations.

They give different trainings to their employees/ managers to work in more

productive way, and to achieve the goals of the organisation.

The domestic growth has slowed as a result of market saturation but McDonalds
global foodservice business delivered good results, and was possible only due to
expansion and positive comparable sales.

McDonald's develop a deep connection between McDonalds and the local

communities in which it operates.

McDonald's believes that the success of the restaurants and the company is achieved
through the people it employs.

The company aims to recruit the best people, to retain them by offering ongoing
training relevant to their position and to promote them when they are ready.

CONCLUSION

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What started as a simple food stand on Huntington drive, California in 1937, through the ages
have become a billion Dollar corporation and the worlds second largest fast-food chain.
When analysed, one would understand that McDonalds had a stable growth in the past years.
The credits of building it into one of worlds largest fast food operation can be given to Ray
Kroc who took over McDonalds from its establishers, modernised and expanded it to suit the
contemporary trend. Today McDonalds has a net worth of $15.15 billion.
Through this project report and market survey we saw the how McDonalds was formed, its
history and the present position. We also its list of various products offered and the corporate
profile.
Through the marketing mix, we saw how they make use of their product, price, place,
promotion mixes. SWOT analysis showed us the strengths and weakness of McDonalds as
well as the opportunities and threats they have got.
The consolidated financial statement showed us the financial position of the corporation as of
2011. The questionnaire survey provided us with a clear picture of the needs, want and
expectations of the consumers of the fast food market in general and McDonalds in
particular. The respondents also rated the services provided by the corporation. At last we
also saw the top five reasons that make McDonalds so popular.
I gladly hope that this project has met its aim.
Let me conclude by quoting this quote by Ray Kroc
"Perfection is very difficult to achieve, and perfection was what I wanted in McDonald's.
Everything else was secondary for me."

BIBLIOGRAPHY

www.google.com

www.wikipedia.org

www.macdonalds.com

www.marketing91.com

www.aboutmacdonalds.com

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