History of Mcdonalds Essay

Mcdonald is the world ren have fast regimen restaurant. The idea of mcdonalds was introduced by two br another(prenominal)s Mac (Maurice) and Dick (Richard) Mcdonald in California. their father Patrick Mcdonald in 1937 was having a hot dog cottage c exclusivelyed as Airdrome restaurant near the airport. In 1940 the restaurant was renamed as Mcdonalds Famous Barbeque. In 1940 two brothers came to a conclusion that most of their profit comes from snitching hamburger so they make their wag truly(prenominal) simple by selling only Hamberger,cheeseburger,soft drinks cut fries and apple pie. in 1954 a turning point came in mcdonalds brother history.Ray kroc a seller of Multi liquifyer milkshake visited mcdonald and he c be the idea of mcdonald. Mcdonalds corporation was build in those times and as a result kroc started expanding their logical argument by opening franchises for mcdonalds. 1960 mcdonalds advertising campaign realise for the golden arches gave mcdonalds sale a lar ger-than-life boost. 1965 mcdonald corporation went humanity. in 1968 mcdonal open its 1000th restaurant. 1974 mcdonalds started their business in UK and Newzealand. in 1980 mcdonalds was facing very big competition from its rival Burger might and Wendy but mcdonald with its innovation was experiencing boost in its sales.in early and mid ninties mcdonalds was having decline in their sales and as a result they start improving their business. gustatory perception was im evidenced and just about new circuit board items were introduced. Mcdonald introduced first Kosher Mcdonald in Jurusalam and Halal mcdonalds in india(1995 and 1996 respectively). mcdonald start cr eat full-blooded image and invested heavily on refurbishment in 2000s. to sidereal day mcdonalds has to a greater extent than than 33000 outlets and is operating in 125 countries. it is the world leading trade name in fast sustenance. Mcdonald started their business in india in 1996.they start their business in india s capital New delhi. they choose a busy residential vault of heaven Vasant Vihar. Mcdonald India is 50-50 ingredientnership between Mcdonald regular army corporation and Two Indians (Amit Jatia Hardcastle Restaurant ltd Mumbai and Vikram Bakshi Cannaught plaza restaurant Delhi). Mcdonald as of straighta route has 210 stores in india. majority of Indians atomic number 18 hindu and awe atomic number 18 sacred to them. for mcdonalds to sell beef was almost impossible. the second majority existence is muslim and they eat Halal food. It was a big ch in allenge for mcdonalds as there were m all protest against mcdonalds.So Mcdonald changed their menu according to local community for theoretical account they introduce Maharaja Mac instead of Bic Mac. their menu is full of some spicy products as we know that Indians use spice in their dishes in abundance. About 75 % of the menu of mcdonalds has been indianised and specially designed to woo Indians. Mcdonalds passed through with(p redicate) some tough times but eventually managed to survive in that different culture and different religious belief. Mcdonald by now has a big presence in India and atomic number 18 trying to extend this ahead. everyplace all mcdonalds serve more than 47 million nodes every day.MACRO INVIRONEMT PEST analysis Now I am doing PEST analysis of Mcdonalds. PEST analysis get out give us deatails about Political,Economical,Sociocultural and expert analysis and depressions of these analysis on Mcdonalds. I will be comparing both environments in USA and India. POLITICAL INFLUENCES These are some influences a come with doesnt carry any control of. USA politically is wellhead suited for business of Mcdonalds. Mcdonlad is very popular in USA. But political science is trying to control marketing of fast food because of health concern such as cholesterol,cardiovascular and obesity issues.Good relations in enclosures of creating jobs and task revenue for government is a must to succee d in any market. India is very rich country in terms of politics. The world largest democracy is usher in India. But being nationalist country they create some difficulties for foreign entries. Bhatiya Janata party is one of the leading Hindu national party and they are against fast food chains as they want to see only ve captivatearian restaurants in their country. Their party members always protest against fast food using core in their menu.Big risk for Mcdonalds is BJP. faithful news is that trends in India are changing and young slew equal to eat fast food. second good news is that India is changing slowly from nationalistic society to liberal mind set up and Congress party in force play is the main prove of liberal society. Mcdonalds expanded very fast in the last decade. ECONOMICAL INFLUENCE Economical variables such as currency exchange,employment,Interest set,tax ratio and fatality of planetary supply. Most of the organisations depend on foreign supply of raw metaria ls for their products making. Currency exchange also consent a great shock absorber on any organistion.USA has a High tax ratio,Low unemployment developed country,dealing in internatonal currency (Dollars). Business for Mcdonalds in USA is already established and low risked but for india higher(prenominal) unemployment rate,dealing in Rupees as currency and millions of people living below poverty line is a concern for Mcdonalds. but India is having a booming economy,low tax rate and availability of labour in abundance and development of middle class society in India is a ordained sign for Mcdonalds future tense. Sociocultural influences floriculture and society has a big impact on any organisation sales.Mcdonals in USA is serving a liberal society.religion has not much effect on Mcdonalds. culture is very much simple. But in India society is very versatile. though India is heavily populated but still Hindus dont eat meat,Muslim only eat Halal and they dont eat pork. In India r eligion has a very big impact on society. For Mcdonald it is a big concern. But in India life style is changing,earning power is increasing,middle class is getting large in its size and people like to eat outside in restaurants this has a very good impact on society. Technological influence One positive benefit of globalisation was technological advancement.Althogh Mcdonds doesnt use too many complicated machines in their food production but still they need highly agonistic engineering science. technology is needed for example in supply chain wariness,order taking,Inventory control,easy and quick payment procedures . Use of technology can make management more reliable,effective and cost thrift in short term as well as long term. Customers happiness after getting what they are looking for on time and in a deciplinery way make them come over and over again. in USA Mcdonalds use very effective and expensive technology to be in a very competitive position to their rivals.In india a s franchises they use high technology. they use very good till system,good and deciplined order taking and well managed staff who knows the proper use of technologies inside the store. MICRO ENVIRONMENTAl ISSUES Competitive Intensity Competitive intensity of Mcdonalds can be determined with ostiarys quint forces. Porter five forces is business schema formed by Michael E. Porter of Haward business school in 1979. he determined five forces which actually determines attractiveness of the market and competitiveness. these five forces are 1)Threats of new entrants.2)Threats of substitute 3)Bargaining power of guest 4)Bargaining power of supplier 5)Competitive rivalry with in organisation. 1)Threats of New inlet Entry to a restaurant Business is very difficult. It is hard to make a prominent brand name. there is high research and development cost and high cost of entry. Strong brands already in competition make it more difficult such as Mcdonalds,Pizza Hutt,Dominos etc. New entrants hardihood a very high competition in the start of the business. In USA and India both Entrance of new organisation is very difficult as explained above.2)Threats of Substitute The substitutes in this industry are very high. people can choose variety of products they can either choose Burger King,KFC,Indian Cuisine,Indian local shops,Indian Vegetarian restaurants. the same site is faced by Mcdonalds in USA and all over the world. 3)Bargaining power of customers Bargaining power of customes refers to pressure a customer can exert on a business to get good quality of food,good customer service and low price. Bargaining power of customer in this industry is low. As Mcdonalds stomach a standard service,one price strategy and quality of food.Customers have low bargaining power through out the world in food industry. 4)Bargaining power of supplier Bargaining power of buyer in this industry is low. situation can change if the main ingredients are not available. But with Mcdonalds simpl e menu and working with many supplier,they are not facing a big threat. so the bargaining power is relatively low. 5)Rivalry with in the organisation Fast food restaurant industry is very competitive. the competition is so high as all the organisations want to get hold of customer base.Food industy all over the world has the same criteria because there are many small businesses operating in abundance and also top brands. Mcdonalds knows about the customers try out and preferences all over the world. so they started Mccafe (morning breakfast). so Mcdonalds is providing quality food from early morning till late night in order to get competitive edge In the market. Customer Characteristic India is the second most populated country in the world. It has 28 states and almost 4 times the population of USA. India has more than one billion population. Three fourth of indian population lives in Urban areas.though per capita income is very low in india but still people like to spend on costly products and eating out. out of millions of households in India 49% lives on low income,30% turn away Middle income,12% Middle income group, 5% upper Middle income group and 4% high income group. comparing this with USA where middle income group is very high. consumers in India are highly family oriented. Mcdonalds targets high income earner,Middle income earner and lower middle income earner in India. Indian consumer are getting brand awareness through internet,TV,Newpaper,Radio,Megazine etc.Middle income group is getting bigger in size day by day as a result of economic boost in India and that is very good news for mcdonalds. Indian consumers are now getting environmental awareness. They like to use Eco-friendly products and Mcdonalds is very helpful in terms of packaging,and recycling. Family system gives a big chance for Mcdonalds to get their sale rise as Indians are buying food in bulks. Indian consumers are becoming very open minded which is a positive sign for Mcdonalds. For Mcdonalds to succeed as they are now,they should go to expand in urban areas as well as rural areas and target middle and lower income earners and beside this they should introduce certain products which can be afforded by low income earners. customers like spicy foods and Mcdonald has introduced many products which are spicy and tasting according to the preference of Indians. partnership ISSUES Competitive Strategies As we know fast food industry proved to be very competitive industry. Mcdonalds from its day first has always act to have strong competitive advantage over its rival. This is the only way for Mcdonalds to survive in globalised environment.Mcdonalds strong rivals KFC,Dominos,Pizza Hut and Subway are also operating in India as well as USA. In the fast food most important thing for some customers is how quickly you bourgeon order and ready the meal for customer. KFC and Jumbo King are offering very quick service to customers and in this way taking customers from Mc donalds . Mcdonalds has tried very well to overcome this advantage by making and readying its food as quick as possible.Mcdonalds is trying to improve its graph for customer satisfaction and they are investing heavily through out the world including India.mcdonalds uses Wi-Fi and they are trying to emphasise on demographic characteristic of its customers in the area. apiece month mcdonalds add some thing special in its menu.To check Mcdonalds quality and reliability administration has developed a very unique idea of Gapbuster visiting Mcdonalds as mystery customer. They are expertise who comes in the form of a customer and after serving give credit scoring to the store. Mcdonald has introduced McBreakfast from 6 am to 11 am. Mcdonalds in its competitive strategies is emphasising to target customers in the new urban areas.Mcdonalds Indian menu offers very competitive strategy for Mcdonalds. Vegetarian products,Halal and non vegetarian foods for its customer is a unique and successfu l idea in India. Kids like mcdonalds in India as they are giving handsome toys to customers who buy happy meal deals. Mcdonalds has actively invested in Discount vouchers given as a leaflets,newspapers,Magazines certainly is a good business strategy and it has boosted Mcdonalds customer number,Business and sales. Diversification Mcdonalds has diversified product range in India and all over the world.Due to diversified nature of products Mcdonalds is famous among masses. They offer McBreakfast,Lunch and Dinner,Coffee and many more diversified products. Now if Mcdonalds move to fully new business for example Hotel (McHotel) will be a concern. According to protector news moving to totally new business will damage the image of Mcdonalds. If they are really interested they should do a partnership with other company. As Burger King has done it. landor marketing Director said move like this will certainly change the fundamentals of the company. Diversification can be revealed from India n market.75 % menu has been Indianised. Halal food for Muslims has been introduced. Mcdonalds happy price menu in India,the 5ps and flexible operating platform all shows Mcdonalds to be a diversified organisation. Organisational Structure of Mcdonalds Mcdonalds has a centralised organisational structure. Centralised structure means the decision making comes from top management in the hierarchy and people on the floor are not contributing to the decision making. The decision making system is very much Bureucratic. In centralised structure main decisions are made by top level management.Mcdonalds all over the world has the same structure and they have to follow all the decisions from the produces company as they are working as a franchise. Most oof the fast food chains (for example KFC,Burger King etc) have the same centralised structure. Centralised structure has some advantages and disadvantages. Advantages like Common policy all over the world can easily be revealed and practised. other parts of the Business are stopped from being too independent. central control is easy to handle. it has great Economies of scales. specialisation can be used greatly.Disadvantages complicate some time too much bureaucratic organisation leads to extra layers in hierarchy. it can avoid motivation in staff as we go down the hierarchy because of lack of involvement in decision making process. Customers are not benefited some times as there is a need of quick decision making. Standardisation Vs Adaptation Standardisation Mcdonalds has a slogan. Think globally and act locally. Mcdonalds sell standardised product. the taste make up,ingredients,looks,weight etc will be similar In one part of the world to the other part of the world.Cheese Burger in United Kingdom will taste similar to a cheese burger in USA. Think globally and act locally can be proved in India as Mcdonalds in India has changed its menu list. Halal Burger and McVeggie burgers have been introduced looking to the cu stomers believes in India. Similar experience has been exercised in Middle east and Fiji. In Middle east eating of Bacon is banned by government. Halal food is served in Middle east. McVeggie Burger in India will taste the same in comparison to McVeggie burger in Fiji. Mcdonalds sell standardised products.All the products should be looking,tasting,weighing and prepared in the same way across the globe. McVeggie burger was prepared in India after Research and Development was condcucted purely in India. Adaptation Mcdonalds follows strategy of product version. Mcdonalds slogan think globally and act locally is the best example. the best example for mcdonalds adaptation strategy will be India. Mcdonalds cannot use beef Tallow to fry the fries and burger cutlets (Cows are sacred due to religious belief of Hindus).Bacon cannot be used in Middle east as they are Muslim countries and it is against their religious belief to eat pork. products are tailored according to the personal taste of the country people where it operates. Due to adaptation Mcdonalds menu in various countries is different. Motivation for marketplace entry Parent company of Mcdonalds USA was aware of some facts that motivated them to enter Indian market. some of them are given below. The worlds second largest country by population after china. Indias population is 4 times more then USA.India call itself the most democratic nation in the world so it means all the decisions are made by parliament and not one person or dictator who can freeze assets for a company in any kind of adult relations emerging. Brand awareness is improving day by day,literacy rate is improving,middle class is getting larger,econonomy of India is booming (now counted in BRIC s nations which means Brasil,Russia,India and China they are the fastest developing countries and future economic power),Unemployment is reducing,Laws are flexible for foreign businesses. all these facts contributed to motivation of Mcdonalds to enter I ndian fast food Market.Modes of Market entry There are different ways a company can start opening their business in another country. for example Franchising,licencing,Joint Venture,wholly owned subsidiary etc. But Mcdonalds entry to India involved join act and Franchising technique. Franchising is the right a firm acquires from another firm that allows them to do particular business activities, such as service or selling the good , under the name of a specific firm, e. g. McDonalds. in Franchising a company follows strict rules from its parent company. mcdonalds have 210 stores in India.Mcdonalds all over the world has almost 85% of franchises. the benefit of franchising is that in short period a company expands its business. the risk involved for parent company to move into another country and invest heavily can some times be too risky but when local people start doing it by themselves,the risk level is minimised. quality control is difficult with franchising. Although Mcdonalds indian is a 50-50 joint venture company managed by indian. Performance Much of retail is struggling in India but Mcdonalds has been seen unaffected and its training on accelerating its expansion on the Indian subcontinent.Mr Jatia who is managing half of the indian franchises said number of customer is jumping 10% to 15 % each month compared to a year ahead. people of India are now relying on Mcdonalds. Mcdonalds adaptation policy has boosted its sales. Mcdonalds annual sale through out the world is $29 billion annually. Burger king is the second largest fast food organisation in terms of sales and is strong competitive rival. Due to company having a customised menu in India Mcdonalds is getting popular day by day. performance can be measured in terms of outlets opened by Mcdonalds in the past years.in 2010 and 2011 Mcdonalds opened 80 stores in India.In 2010 mcdonalds sale improved by 30%. Vikram Bakshi MD Mcdonalds India said the total sale of $29 billion doller Mcdonalds india j ust accounts for 0. 37% of the whole sale. but the potential is so high and are expecting to get higher in future. Although Mcdonalds is facing certain problems like roads are not in very good condition for transport,power supply shortage etc but still sales rise and customer satisfaction shows that Mcdonalds in India is performing very well. Short,Medium and long term strategies employedStrategy is a planning that is used by an organisation to achieve its goal and objectives. short term strategy starts from a minute to 6 moths,medium account from 6 month to a year and long term mean 5 years or more strategy. In short term Mcdonalds is trying to bring in innovation and make customer get together. day to day issues are planned to satisfy customers. New products are introduced each month. in medium term they are trying to maximise its profit and sales. In long run Mcdonalds is planning to open new branches across india and indian Mcdonalds sale which accounts only 0.37 % of overall s ale of Mcdonald to be taken to 0. 50 percent and more in the coming years. SWOT ANALYSIS SWOT analysis is a strategic planning method used to evaluate strength weaknesses,opertunity and threats involved in a project or in Business. SWOT analysis will give us a quick review of an organisation current status. drudgery analysis for Mcdonalds in India Strength Mcdonalds is a market leader in the fast food industry. Mcdonalds has a very strong brand image. Mcdonald has expanded its business to more than 125 countries with more than 33000 outlets through out the world.mcdonalds has one competitive advantage and that is Strategic location.In India they are located in busy shopping malls,Airports and busy drive through. Weaknesses Mcdonalds has created very successful brand image but the market segment is too focused on Kids. Mcdonalds is often related to unhealthy food and obesity. Employee turn over rate is so high. these all are weaknesses of mcdonalds in the world and India in particul ar. Opportunity Mcdonalds can introduce healthy food consisting of low calories items. they should put more efforts in Reseach and Development.Management should try find ways to reduce food wastage which leads to cost control. new products with different variety should be introduced to capture the market. Threats Mcdonalds is facing major competition from its rivals KFC and Burger King all over the world. In India local curry shops are offering great challenge to mcdonalds. Company rapid growth has made mcdonalds very velnerable to other contries economic slowdown. Press associating Mcdonalds with obesity destroys Mcdonalds image. mcdonalds in the past has been sued for its unhealthy products.mcdonalds should try and solve these problems by investing heavily and effectively in research and development.MARKETING MIX OR 4 Ps Price,Product,Place,Promotion are collectively called as product mix. In order to meet organisational objectives product mix is considered to be very vital. it sh ould be viewed as coordinated and interated package of benefits that shows the characteristics of customers and and related place. Product product is the physical product or service that is offered to a customer. as we know that Mcdonalds is very customer oriented and all their products are customised according to the local community.in order to succeed in market research has suggested that customers are always looking for innovation and new products. Mcdonald is famous for its product innovation.Mcdonalds has introduced new products,removed old products and always looking for the better products so that customers are satisfied. mcdonalds india majority of products are vegetarian products. Price Price is a very important tools which identifies how reliable and qualitative a product is. when a customer is buying some thing He/she first draw in his/her own mind of what the product is worth of.If the price of a product is very low customer think quality is being promised. price should really reflect brand and its integrity. Mcdonalds products are classified in two categories,BA (Branded affordability) and BCV (Branded Core Value products)an example of BA is McAllo tikka and chicken Mcgrill burgers which cost consumer 20-30 rupees. BCV products mainly include McVeggie and McChicken Burgers that cost 50-60 indian rupees. Promotion Promotion is a way by which company tries to communicate with public and make them aware of what the company is offering. One of the method is Advertisement.Advertisement is conducted on TV,Cinema,Internet,magazines,Poster site,press and radio. other ways of promotion includes direct mail,loyalty scheme,door drops and merchandising. Mcdonalds is unique in the way they do promotion. In order to capture the market Mcdonalds india has promoted well to improve its sales. Although advertising is expensive but the return is so high. Mcdonalds spends big part of its budget on promotion. Place Place plays very important role in launching a produc t and making it successful. Mcdonalds has expanded through out in India Urban areas.Mcdonald is currently targeting urban areas as we know that big part of population is living in urban areas. place doesnt only include physical location but it is includes all the processes that eventually leads to product ending in customers hand. Place plays very important role in getting priority over the rivals and place should be selected after research on the local demography,income level and customers preferences. Mcdonalds in india chooses a particular place after long research and checking local areas demographic characteristics,income level etc.this is the reason Mcdonalds is very successful in india. CONCLUSION Mcdonalds is considered to be the King of the fast food.To achieve this greatness Mcdonalds has tried hard for ages to prove itself in the competitive environment of Fast food. The key factors in success of Mcdonalds in my view is innovation,customisation,good management and above a ll best Marketing strategies adopted by Mcdonalds. Mcdonalds in India has a very bright future because of the customers bank,customised approach from Mcdonalds towards its customers and above all the strong brand Image.