ENTREPRENEURSHIP

PROJECT
PROJECT REPORT AND
MARKET SURVEY OF
MCDONALD’S

Name of the school : SHARJAH INDIAN SCHOOL

NAME OF THE STUDENT : DAN K. JOHN
CLASS : XII-E
CBSE ROLL NO. :
ACADEMIC YEAR : 2012-2013
TEACHER IN CHARGE : MR. JAMES THOMAS
 INDEX
SL. TITLE SOURCE OF THE PAGE SIGN OF
NO. PROJECT NO. THE
TEACHER

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1 ACKNOWLEDGEMENT

2 FAST FOOD www.wikipedia.o

RESTAURANT rg
AN INTRODUCTION

3 MCDONALD’S www.wikipedia.o
AN INTRODUCTION rg

4 HISTORY OF www.wikipedia.o
MCDONALD’S rg
www.macdonald
s.com
5 LIST OF PRODUCTS www.wikipedia.o
rg

6 CORPORATE www.wikipedia.o
OVERVIEW rg

7 MARKETING MIX www.marketing9

1.com

8 SWOT ANALYSIS www.slideshare.

net
www.scribd.com
talkfinanceonline
.com
9 CONSOLIDATED www.aboutmacd
BALANCE SHEET OF onalds.com
MCDONALD’S
10 QUESTIONNAIRE www.slideshare.
net
www.scribd.com

-
11 SURVEY RESULT
ANALYSIS

12 THE TOP FIVE www.infobarrel.c

REASONS WHY om
MCDONALD’S IS SO
POPULAR

-
13 CONCLUSION

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14 BIBLIOGRAPHY
 ACKNOWLEDGEMENT
I have taken efforts in this project. However, it would not have
been possible without the kind support and help of many
individuals and organizations. I would like to extend my sincere
thanks to all of them.

I thank my God for providing me with everything that I required

in completing this project.

I am highly indebted to the Teacher in Charge Mr. James

Thomas for his guidance and constant supervision as well as for
providing necessary information regarding the project & also
for his support in completing the project.

I would like to express my gratitude towards my parents for

their kind co-operation and encouragement which helped me in
the completion of this project.

I would like to express my special gratitude and thanks to

industry persons for giving me such attention and time.

My thanks and appreciations also go to my classmates in

developing the project and to the people who have willingly
helped me out with their abilities.

FAST FOOD RESTAURANT

An INTRODUCTION
A fast food restaurant, also known as a quick service restaurant
(QSR) within the industry itself, is a specific type of restaurant
characterized both by its fast food cuisine and by minimal table
service.
Food served in fast food restaurants typically caters to a " meat-
sweet diet" and is offered from a limited menu; is cooked in bulk in
advance and kept hot; is finished and packaged to order; and is
usually available ready to take away, though seating may be
provided.
Fast food restaurants are usually part of a restaurant chain or
franchise operation, which provisions standardized ingredients
and/or partially prepared foods and supplies to each restaurant
through controlled supply channels.
Arguably the first fast food restaurants originated in the United
States with A&W in 1916 and White Castle in 1921. Today,
American-founded fast food chains such as
McDonald's and KFC are multinational corporations with outlets
across the globe.
Variations on the fast food restaurant concept include fast casual
restaurants and catering trucks. Fast casual restaurants have higher
sit-in ratios, and customers can sit and have their orders brought to
them. Catering trucks often park just outside worksites and are
popular with factory workers.
Some trace the modern history of fast food in America to July 7,
1912, with the opening of a fast food restaurant called the Automat
in New York. The Automat was a cafeteria with its prepared foods
behind small glass windows and coin-operated slots. Joseph Horn
and Frank Hardart had already opened the first Horn & Hardart
Automat in Philadelphia in 1902, but their “Automat” at Broadway
and 13th Street, in New York City, created a sensation. Numerous
Automat restaurants were built around the country to deal with the
demand. Automats remained extremely popular throughout the
1920s and 1930s. The company also popularized the notion of “take-
out” food, with their slogan “Less work for Mother”.

Modern commercial fast food is highly processed and prepared on a

large scale from bulk ingredients using standardized cooking and
production methods and equipment. It is usually rapidly served in
cartons or bags or in a plastic wrapping, in a fashion which reduces
operating costs by allowing rapid product identification and
counting, promoting longer holding time, avoiding transfer of
bacteria, and facilitating order fulfilment. In most fast food
operations, menu items are generally made from processed
ingredients prepared at a central supply facilities and then shipped
to individual outlets where they are cooked (usually by grill,
microwave, or deep-frying) or assembled in a short amount of time
either in anticipation of upcoming orders (i.e., "to stock") or in
response to actual orders (i.e., "to order"). Following standard
operating procedures, pre-cooked products are monitored for
freshness and disposed of if holding times become excessive. This
process ensures a consistent level of product quality, and is key to
delivering the order quickly to the customer and avoiding labour
and equipment costs in the individual stores.

To make quick service possible and to ensure accuracy and security,

many fast food restaurants have incorporated hospitality point of
sale systems. This makes it possible for kitchen crew people to view
orders placed at the front counter or drive through in real time.
Wireless systems allow orders placed at drive through speakers to
be taken by cashiers and cooks. Drive through and walk through
configurations will allow orders to be taken at one register and paid
at another. Modern point of sale systems can operate on computer
networks using a variety of software programs. Sales records can be
generated and remote access to computer reports can be given to
corporate offices, managers, trouble-shooters, and other authorized
personnel.

The aim of this project is to conduct a market study on a

thriving fast food restaurant, going deep into its formation,
history and growth; then to analyse the reason that make it so
popular.

In this project we will be conducting a market study on the global

fast food giant McDonald’s.

MCDONALD’S 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, smoothies and
fruits.
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 all-time 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.

Early history
In 1937, Patrick McDonald opened "The Airdrome", an octagonal
food stand, on Huntington Drive in Monrovia, California. In 1940,
his two sons, Maurice and Richard ("Mac" and " Dick"), moved the
entire building to 1398 North E Streets in San Bernardino,
California. The restaurant was renamed "McDonald's Famous
Barbeque" and served over forty barbequed items.
In 1953, the McDonald brothers began to franchise their successful
restaurant, starting in Phoenix, Arizona and Downey and California.
The McDonald brothers created Speedee to symbolize the quick and
efficient service system that they had devised. Downey's Speedee is
one of only a few remaining and Downey’s restaurant is the oldest
operating McDonald's in the world.
Recognizing the historic and nostalgic value of the intact 1953
structure, the McDonald's Corporation acquired the store in 1990
and rehabilitated it to a modern but nearly original condition.
In 1954, Ray Kroc, suggested that they franchise their restaurants
throughout the country. He got the rights to set up McDonald's
restaurants throughout the country, except in a handful of territories
in California and Arizona already licensed by the McDonald
brothers.
Kroc's first McDonald's restaurant opened in Des Plaines, Illinois,
near Chicago, on April 15, 1955, the same day that Kroc
incorporated his company as McDonald's Systems, Inc. (which he
would later rename McDonald's Corporation).
By 1958, there were 34 restaurants. In 1959, however, Kroc opened
68 new restaurants, bringing the total to 102 locations.

Phenomenal growth in the 1960s and 1970s

In 1960, the McDonald's advertising campaign "Look for the Golden
Arches" gave sales a big boost In 1962, McDonald's introduced its
now world-famous Golden Arches logo. A year later, the company
sold its billionth hamburger and introduced Ronald McDonald, a
red-haired clown with particular appeal to children.
In the early 1960s, McDonald's really began to take off. In 1961
Kroc bought out the McDonald brothers for $2.7 million, aiming at
making McDonald's the number one fast-food chain in the country.
In 1965, McDonald's Corporation went public. In 1985, McDonald's
Corporation became one of the 30 companies that make up the Dow
Jones Industrial Average .
McDonald's success in the 1960s was in large part due to the
company's skilful marketing and flexible response to customer
demand. In 1968 the now legendary Big Mac made its debut, and in
1969 McDonald's sold its five billionth hamburger. Two years later,
McDonald's restaurants had reached all 50 states.
In 1968, McDonald's opened its 1,000th restaurant; Kroc became
chairman and remained CEO until 1973.
By the late 1960s, many of the candy-striped Golden Arches stores
had been modified with enclosed walk-up order areas and limited
indoor seating. By June 1969, " mansard roof" building design
featuring indoor seating became the standard for McDonald's
restaurants.
The company pioneered breakfast fast food with the introduction of
the Egg McMuffin in 1972 and five years later McDonald's added a
full breakfast line to the menu.
In 1975, McDonald's opened its first drive-thru window in Sierra
Vista, Arizona. This service gave Americans a fast, convenient way
to procure a quick meal. Drive-thru sales eventually accounted for
more than half of McDonald's systemwide sales.
Surviving the 1980s "Burger Wars"
In the late 1970s, competition from other hamburger chains such
as Burger King and Wendy's began to intensify. A period of
aggressive advertising campaigns and price slashing in the early
1980s became known as the "burger wars." Burger King suggested
to customers: "have it your way"; Wendy's offered itself as the
"fresh alternative". But McDonald's sales and market share
continued to grow.
During the 1980s, McDonald's further diversified its menu to suit
changing consumer tastes. The company introduced
the McChicken in 1980. It proved to be a sales disappointment and
was replaced with series of different chicken sandwiches a year
later. Chicken McNuggets were invented in 1979. By the end of
1983, McDonald's was the second largest retailer of chicken in the
world. In 1985, ready-to-eat salads were introduced to lure more
health-conscious consumers. The 1980s were the fastest-paced
decade yet. Efficiency, combined with an expanded menu, continued
to draw customers. McDonald's, already entrenched in the suburbs,
began to focus on urban centres and introduced new architectural
styles.
Despite experts' claims that the fast-food industry was saturated,
McDonald's continued to expand. The first generation raised on
restaurant food had grown up. Eating out had become a habit rather
than a break in the routine, and McDonald's relentless marketing
continued to improve sales.
McDonald's growth in the United States was mirrored by its
stunning growth abroad. By 1991, 37 percent of system wide sales
came from restaurants outside the United States. McDonald's
opened its first foreign restaurant in British Columbia, Canada, in
1967. By the early 1990s the company had established itself in 58
foreign countries and operated more than 3,600 restaurants outside
the United States, through wholly owned subsidiaries, joint
ventures, and franchise agreements. Its strongest foreign markets
were Japan, Canada, Germany, Great Britain, Australia, and France.
Braille menus were introduced in 1979, and picture menus in 1988.
Experiments were conducted to find new technology and to research
new markets to keep McDonald's in front of its competition. New
locations such as hospitals and military bases were tapped as sites
for new restaurants.
1990s: Growing pains
The 10,000th unit was opened in April 1988.It took McDonald's 33
years to open its first 10,000 restaurants. Incredibly, the company
reached the 20,000-restaurant mark in only eight more years, in
mid-1996. By the end of 1997 the total had surpassed 23,000, and
by that time McDonald's was opening 2,000 new restaurants each
year, an average of one every five hours.
In 1993, a new region was added to the empire when the first
McDonald's in the Middle opened in Tel Aviv, Israel.
As the company entered new markets, it showed increasing
flexibility with respect to local food preferences and customs. In
Israel, for example, the first kosher McDonald's opened in a
Jerusalem suburb in 1995. In Arab countries, the restaurant chain
used "Halal" menus.
McDonald's entered India for the first time in 1996, where it
offered a Big Mac made with lamb called the Maharaja Mac.
Overall, the company derived increasing percentages of its revenue
and income from outside the United States. In 1992 about two-thirds
of systemwide sales came from U.S. McDonald's, but by 1997 that
figure was down to about 51 percent. Similarly, the operating
income numbers showed a reduction from about 60 percent derived
from the United States in 1992 to 42.5 percent in 1997.
The company made several notable blunders in the United States in
the 1990s.
A seemingly weakened McDonald's was the object of a Burger King
offensive when the rival fast-food maker launched the Big
King sandwich, a Big Mac clone. Meanwhile, internal taste tests
revealed that customers preferred the fare at Wendy's and Burger
King.
In response to these difficulties, McDonald's drastically cut back on
its U.S. expansion. Plans to open hundreds of smaller restaurants
in Wal-Mart and gasoline stations were abandoned because test sites
did not meet targeted goals.

Failed turnaround: late 1990s

Following the difficulties of the early and mid-1990s, several moves
in 1998 seemed to indicate a reinvigorated McDonald's.
Announcements were made that McDonald's would improve the
taste of several sandwiches and introduce several new menu items.
McDonald's also said that it would overhaul its food preparation
system in every U.S. restaurant. The new just-in-time system,
dubbed "Made for You," was in development for a number of years
and aimed to deliver to customers "fresher, hotter food"; enable
patrons to receive special-order sandwiches (a perk long offered by
rivals Burger King and Wendy's); and allow new menu items to be
more easily introduced thanks to the system's enhanced flexibility.
Refurbishing and creating a healthier
image: Early 2000s
McDonald's was sued in 2001 after it was revealed that for flavoring
purposes a small amount of beef extract was being added to the
vegetable oil used to cook the french fries.
McDonald's soon apologized for any "confusion" that had been
caused by its use of the beef flavouring, and in mid-2002 it reached
a settlement in the litigation, agreeing to donate $10 million
to Hindus, vegetarians, and other affected groups.
McDonald's also had to increasingly battle its public image as a
purveyor of fatty, unhealthy food. McDonald's responded by
introducing low-calorie menu items and switching to a more
healthful cooking oil for its French fries.
McDonald's continued to curtail store openings in 2004 and to
concentrate on building business at existing restaurants. McDonald's
also aimed to pay down debt by $400 million to $700 million and to
return approximately $1 billion to shareholders through dividends
and share repurchases
With the new "Forever Young" design (adopted in 2006), the first
major redesign since 1969, McDonald's turned a new page for itself.
Most of new and remodelled restaurants feature dining zones with
three sections or zones. Free wifi access points were also granted.
Also, harsh colours and hard plastics have been replaced with
custom earth tones and flexible padded fabric. The McDonald's
menu has been tweaked to offer a larger variety of what the
corporation refers to as more healthy food.

2010s
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 all-time high of $27 billion, and that 2400 restaurants
would be updated and 1300 new ones opened worldwide.
 LIST OF PRODUCTS
Burgers
All beef patties are seasoned, consisting primarily of salt and black
pepper.

Big Mac : Along with the Quarter Pounder with cheese, this is one
of the two McDonald's signature menu items, introduced in 1967 as
a response to the flagship burger at Big Boy restaurants. Two 1.6-
ounce ground beef patties, special Big Mac sauce, shredded iceberg
lettuce, cheese, two gherkin slices, and re-hydrated onions on a
toasted sesame seed bun, with an additional middle bun separating
both beef patties.

Big N' Tasty : The Big N' Tasty consists of a seasoned quarter-
pound beef patty with ketchup, mayonnaise, slivered onions, two
dill pickle slices, leaf lettuce, and one tomato slice on a sesame
seed bun.

Quarter Pounder : Along with the Big Mac, this is one of the two
McDonald's signature menu items. 4-ounce of ground beef patty
with ketchup, mustard, slivered onions, two gherkin slices, and two
slices of cheese.

Hamburger and cheeseburger : A 45 g ground beef patty, with

ketchup, mustard, a single dill pickle, re-hydrated onions, on a
toasted bun. Also sold as a double or triple, adding an extra pickle
slice for each beef patty added

Double Cheeseburger: It has two 45 g ground beef patties, with

ketchup, mustard, two slices of dill pickle, re-hydrated onions, and
two pieces of cheese on a toasted bun.

McDouble: It similar to a Double Cheeseburger, but with just one

slice of cheese. It was reintroduced as a permanent dollar-menu
item in December 2008.

Daily Double: Similar to the double cheeseburger, however the

toppings are different. The Daily Double is made with lettuce,
tomato, slivered onions, and mayonnaise. It also has only one slice
of cheese, rather than the two slices that are on the double
cheeseburger.
The Big N' Tasty : It was introduced in 1997 and has beef patty
with ketchup, cheese, mayonnaise with a grill flavouring, diced
onions, two pickles, leaf lettuce, kebab meat and a tomato slice, on
a toasted bun. It was devised to resemble Burger
King's Whopper sandwich.

McFeast: A hamburger with lettuce, tomato, and mayonnaise, the

McFeast contains a quarter pounder patty, lettuce, and modified
mayonnaise with lemon juice, ketchup, onion and tomato.

Chicken, Fish, Pork

McChicken : It is a mildly spicy chicken sandwich. Made from
ground white meat chicken, mayonnaise, and shredded lettuce, on a
toasted bun. It still remains one of the biggest sellers, just behind
the Big Mac.

Premium chicken sandwiches : The Classic is a rebranding of the

Crispy Chicken and Chicken McGrill sandwiches, with mayonnaise,
leaf lettuce, and a tomato slice. All are served on a whole-grain
roll, with either a grilled or crispy chicken breast.

Southern Style Chicken Sandwich : A southern-style fried chicken

breast filet, on a steamed bun, dressed with butter and two pickles.

Snack Wrap : McDonald's version of a wrap made with white

meat chicken breast, lettuce, shredded Cheddar
cheese and Monterey Jack cheese, and a sauce, wrapped in a soft
flour tortilla. There is also a Mac Snack Wrap which features the
fixings of the Big Mac, but without the bun and wrapped in a
tortilla shell, and uses one half of a piece of quarter meat.

Chicken Fajita : Chicken, cheese, red and green bell peppers, and
diced onions in a flour tortilla. Comes with Picante sauce packets
on request, which is available in mild and spicy.

Chicken McNuggets : Introduced in 1980 as a replacement for the

McChicken, these are small chicken chunks served with dipping
sauces of Barbecue, Sweet n' Sour, Honey, and Hot Mustard. In
2011, 4 new dipping sauces were introduced and added to the
lineup: Sweet Chili, Honey Mustard, Spicy Buffalo, and Creamy
Ranch.
Chicken Selects : McDonald's version of chicken strips. They
include choices of spicy buffalo, creamy ranch, Honey Mustard,
and Chipotle barbecue dipping sauces; sauce selections in the UK
are Smokey barbecue, sour cream and sweet chilli sauce.

Filet-O-Fish : It is a whitefish fillet with tartar sauce and a half

slice of cheese, on a steamed bun.

McRib : It is a sandwich featuring boneless pork with barbecue

sauce, slivered onions, and pickles.

McArabia : There are two versions of the McArabia: Grilled

chicken and grilled kofta (beef with spices). Both are served with
lettuce, tomatoes, onions, and garlic mayonnaise in addition to two
small patties of grilled chicken or kofta, all wrapped in an Arabic
style pita bread. The McArabia has been very well received
throughout the Middle East.

Chicken McBites : They are Popcorn chicken breast with "home-

style seasoning”. Dipping sauces include ranch, Sweet n' Sour,
Tangy BBQ, Chipotle BBQ, and Honey Mustard.

Fish McBites: Similar to the Chicken McBites, these are small

pieces of flaky whitefish dipped in batter and fried until golden
brown, and served with tartar sauce for dipping.

Salads and side orders

McDonald's first introduced salads to its menu in 1985. The
Premium Salads all are a mixture of iceberg lettuce and a special
lettuce assortment, with cherry tomatoes and different toppings to
differentiate them; additionally all salads can be topped with warm
grilled or crispy chicken. All of its salads are part of McDonald's
move towards creating a healthier image.

McDonald's sells French fries as its primary side order. They also
sell potato wedges, a type of French fry that is thick cut and wedge
shaped, fried onion pieces and onion rings.
 CORPORATE OVERVIEW
Facts and figures
McDonald's restaurants are found in 119 countries and territories
around the world and serve 58 million customers each day.
McDonald’s operates over 31,000 restaurants worldwide, employing
more than 1.5 million people. The companies also operate other
restaurant brands, such as Piles Café.
Focusing on its core brand, McDonald's began divesting itself of
other chains it had acquired during the 1990s. The company owned
a majority stake in Chipotle Mexican Grill until October 2006, when
McDonald's fully divested from Chipotle through a stock
exchange. Until December 2003, it also owned Donatos Pizza. On
August 27, 2007, McDonald's sold Boston Market to Sun Capital
Partners. Notably, McDonald's has increased shareholder dividends
for 25 consecutive years, making it one of the S&P 500 Dividend
Aristocrats.

Types of restaurants
Most standalone McDonald's restaurants offer both counter service
and drive-through service, with indoor and sometimes outdoor
seating. Drive-Thru, Auto-Mac, Pay and Drive, or "McDrive" as it
is known in many countries, often has separate stations for placing,
paying for, and picking up orders, though the latter two steps are
frequently combined; it was first introduced in Arizona in 1975,
following the lead of other fast-food chains. The first such
restaurant in Britain opened at Fallowfield, Manchester in 1986.
In some countries, "McDrive" locations near highways offer no
counter service or seating. In contrast, locations in high-density city
neighbourhoods often omit drive-through service. There are also a
few locations, located mostly in downtown districts that offer Walk-
Thru service in place of Drive-Thru.
To accommodate the current trend for high quality coffee and the
popularity of coffee shops in general, McDonald's
introduced McCafé, a café-style accompaniment to McDonald's
restaurants in the style of Starbucks. McCafé is a concept created by
McDonald's Australia, starting with Melbourne in 1993. Today,
most McDonald's in Australia have McCafés located within the
existing McDonald's restaurant. In Tasmania, there are McCafés in
every store, with the rest of the states quickly following suit. After
upgrading to the new McCafé look and feel, some Australian stores
have noticed up to a 60% increase in sales. As of the end of 2003
there were over 600 McCafés worldwide.
Some locations are connected to gas stations/convenience
stores, while others called McExpress have limited seating and/or
menu or may be located in a shopping mall. Other McDonald's are
located in Wal-Mart stores. McStop is a location targeted at truckers
and travellers which may have services found at truck stops.
Since 1997, the only Kosher McDonald's in the world that is not
in Israel is located in the "Abasto de Buenos Aires", Argentina.

Global operations
McDonald's has become emblematic of globalization, sometimes
referred to as the "McDonaldization" of society.
The Economist newspaper uses the "Big Mac Index": the comparison
of a Big Mac's cost in various world currencies can be used to
informally judge these currencies' purchasing power parity . Norway
has the most expensive Big Mac in the world as of July 2011, while
the country with the least expensive Big Mac is India .
Some observers have suggested that the company should be given
credit for increasing the standard of service in markets that it
enters. A group of anthropologists in a study entitled Golden Arches
East looked at the impact McDonald's had on East Asia, and Hong
Kong in particular.
When it opened in Hong Kong in 1975, McDonald's was the first
restaurant to consistently offer clean restrooms, driving customers
to demand the same of other restaurants and institutions.
McDonald's has taken to partnering up with Sinopec, the second
largest oil company in the People's Republic of China, as it takes
advantage of the country's growing use of personal vehicles by
opening numerous drive-thru restaurants.
McDonald's has opened a McDonald's restaurant and McCafé on the
underground premises of the French fine arts museum, the Louvre.
The company stated it will open vegetarian-only restaurants in India
by mid-2013.
Redesign
In 2006, McDonald's introduced its "Forever Young" brand by
redesigning all of its restaurants, the first major redesign since the
1970s. McDonald's has invested $1 billion to redesign nearly all of
the 14,000 restaurants by 2015.
The goal of the redesign is to be more like a coffee shop, similar to
Starbucks. The design includes wooden tables, faux-leather chairs,
and muted colours; the red is muted to terra cotta, the yellow was
turned golden for a more "sunny" look, and olive and sage green
were also added.
To warm up its look, the restaurants have less plastic and more
brick and wood, with modern hanging lights to produce a softer
glow.
Many restaurants now feature free Wi-Fi and flat screen TVs. Other
upgrades include double drive-thrus, flat roofs instead of the angled
red roofs, and replacing fibre glass with wood. Also, instead of the
familiar golden arches, the restaurants now feature "semi-swooshes"
(half of a golden arch), similar to the Nike swoosh.

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.

MARKETING MIX
The marketing mix of a company consists of the various elements as
follows which form the core of a company’s marketing system and
hence helps to achieve marketing objectives. The marketing mix of
McDonald’s is as follows:-

Product: - McDonald’s 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, McDonald’s 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).
McDonald’s 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 customer’s 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.

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. McDonald’s outlets are very
evenly spread throughout the cities making them very accessible.
Drive in and drive through options make McDonald’s 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 McDonald’s have a standard uniform and

McDonald’s specially focuses on friendly and prompt service to its
customers from their employees.

Process:-The food manufacturing process at McDonald’s 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 McDonald’s 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.

SWOT ANALYSIS
Strengths
 McDonald’s 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.
 McDonald’s is one of the most reputed firms who are socially
responsible.
 Loyal employees & management & customer are their biggest
strength.
 McDonald’s makes sure that cultural & regional barriers are kept
in mind while providing food to different countries.
 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.

 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.

COMPANY’S FINANCIAL INFORMATION

Company Name: McDonald's Corporation
Ticker Symbol: MCD
Web Address: www.mcdonalds.com
 CEO: Mr. Donald Thompson
No. of Employees: 420,000
Common Issue Type: CS
Business Description: McDonald's Corporation franchises and operates McDonald's
restaurants in the food service industry. The Company and its
franchisees purchase food, packaging, equipment and other
goods from numerous independent suppliers.

Industry Information: LEISURE - Restaurants

Day Change Bid Ask Open High Low Volume
-0.02 - - 87.43 87.43 86.76 3658828
Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS P/E Yield 52-Wks-Range
87,526.7 1,004.0 0.39 5.27 2.53 16.4 3.5 102.22 - 83.31
KEY FIGURES (Latest Twelve Months - Balance Sheet (at a glance) in Millions
LTM)
Yesterday's Close 87.06 $
PE Ratio - LTM 16.4

Market Capitalisation 87,526.7 mil

Latest Shares Outstanding 1,004.0 mil

Earnings pS (EPS) 5.27 $

Dividend pS (DPS) 2.53 ¢

Dividend Yield 3.5 %

DIVIDEND INFO
Dividend Payout Ratio 48 %
Dividend Declared Date 09/20/2012
Revenue per Employee 64,300 $ Dividend Ex-Date 11/28/2012
Effective Tax Rate 31.3 % Dividend Record Date 12/02/2012
Dividend Pay Date 12/16/2012
Float 1,015.3 mil
Dividend Amount 770
Float as % of Shares Outstanding 99.9 % Type of Payment Cash Payment
Foreign Sales 18,478 mil Dividend Rate 3.08
Current Dividend Yield 3.5
Domestic Sales 8,528 mil 5-Y Average Dividend Yield 3.1
Selling, General & Adm/tive (SG&A) as % Payout Ratio 48.0
of Revenue
9.10 %
5-Y Average Payout Ratio 53.0
Research & Devlopment (R&D) as % of
Revenue
0.00 %
Share price performance previous 3 years
Gross Profit Margin 44.7 %
EBITDA Margin 35.6 %
Pre-Tax Profit Margin 29.1 %
Assets Turnover 0.8 %
Return on Assets (ROA) 16.1 %
Return on Equity (ROE) 39.2 %
Return on Capital Invested (ROCI) 20.4 %
Current Ratio 1.0

Leverage Ratio (Assets/Equity) 2.4

Interest Cover 16.6

Total Debt/Equity (Gearing Ratio) 0.96 Share price performance intraday

LT Debt/Total Capital 48.0 %

Working Capital pS 0.06 $
Cash pS 2.17 $
Book-Value pS 13.83 $
Tangible Book-Value pS 11.10 $
Cash Flow pS 6.89 $
Free Cash Flow pS 1.25 $

KEY FIGURES (LTM): Price info

Price/Book Ratio 6.30

Price/Tangible Book Ratio 7.85

Price/Cash Flow 12.6

Price/Free Cash Flow 69.9

P/E as % of Industry Group 42.0 %

P/E as % of Sector Segment 77.0 %
PRICE/VOLUME High Low Close % Price Chg % Price Chg vs. Mkt. Avg. Daily Vol
1 Week - - - 0.0 101 54,041
4 Weeks 87.43 83.31 84.74 2.7 101 57,129
13 Weeks 94.16 83.31 91.02 -4.4 98 61,288
26 Weeks 94.16 83.31 87.75 -0.8 93 59,419
52 Weeks 102.22 83.31 98.03 -11.2 79 59,272
YTD 102.22 83.31 - -13.2 77 59,774
Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth)
86.61 86.31 88.25 89.31 91.74 0.39

5-Year YTD vs. Curr Qtr vs. Annual vs.

GROWTH RATES R² of 5-Year Growth CHANGES
Growh Last YTD Qtr 1-Yr ago Last Annual
Revenue 3.81 77.6 Revenue % 2.1 -0.2 12.2
Income 20.17 81.1 Earnings % -1.4 -3.5 11.3
Dividend 15.36 94.7 EPS % 1.0 -1.4 15.1
Capital Spending 6.97 NA EPS $ 0.04 -0.02 0.69
R&D 0.00 NA
Normalized Inc. 11.58 NA

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 2.09

FINANCIAL STRUCTURE RATIOS

Altman's Z-Score Ratio 4.85
Financial Leverage Ratio (Assets/Equity) 2.3
Debt Ratio 56.4
Total Debt/Equity (Gearing Ratio) 0.87
LT Debt/Equity 0.84
LT Debt/Capital Invested 56.9
LT Debt/Total Liabilities 65.2
Interest Cover 17.3
Interest/Capital Invested 1.67

Attn: Replace this page with the 30 t h page (as displayed

on the pdf reader and pg no.27 as displayed in the doc) of
the Consolidated Balance Sheet of McDonald’s, which you
can find on the link below.

http://www.aboutmcdonalds.com/content/dam/AboutMcDonalds/
Investors/investors-2010-annual-report.pdf
 QUESTIONNAIRE (Attn: Attach minimum 5 copies)
Name: ____________________ age: ________

Gender: _________ occupation: _______________

Please spare a few minutes of your valuable time to answer this
simple Questionnaire.

1. How often do you visit fast food restaurants?

Everyday Alternate days Weekends
Once in a month Once every three months

2. Which of the following fast food chain do you visit the most?
 Subway McDonald’s KFC
Pizza Hut Burger King

3. Are you satisfied with the services provided by them

Yes Sometimes Not at all
satisfied

4. How often do you eat at McDonald’s?

Everyday Alternate days Weekends
Once in a month Once every three months

5. Which among the following is your favourite product at McDonald’s?

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

6. Is the product line of McDonald’s adequate?

Yes No Haven’t Thought About
That

7. What time of the day do you prefer to eat at McDonald’s?

Morning Noon Evening
Night

8. What is the main problem you faced at McDonald’s?

Long queues Wrong orders
Hygienic problems Other problems
No problems

9. What are the unique selling prepositions of McDonald’s?

Product variety Hygiene Ambience
Quick service Location Other

10. Do you think McDonald’s will be triumphant over all its competitors?
Yes Maybe Haven’t Thought
About That Never
Thank You!!

SURVEY RESPONSE ANALYSIS

 Frequency of visits
made to fast food cen-
Everyday Alternate
ters days
Weekends Once in a
month
Once every
three months

Fast food chain visited

the most Subway
MacDonald's
KFC
Pizza Hut
Burger King

Favourite product at
Macdonald’s
Big Mac
Burger
Mac
Veggie
Big Mac
Chicken
Burger
Maharaj
Mac
Mac Fileto
Fish
 Time of the day prefered
to eat at Macdonald’s
Morning
Noon
Evening
Night

Main problem faced at

McDonald’s

Long queues Wrong orders

Hygienic prob- Other problems
lems
No problems

The unique selling preposi-

tions of MacDonald’s
Product variety
Hygiene
Ambience
Quick service
Location
Other
 THE TOP FIVE REASONS WHY MCDONALD’S
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 McDonald’s 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 what they're getting into before they
come to McDonald's, and by being so consistent, it has a solid
reputation to uphold.
 CONCLUSION
What started as a simple food stand on Huntington drive, California
in 1937, through the ages have become a billion Dollar corporation
and the world’s second largest fast-food chain. When analysed, one
would understand that McDonald’s had a stable growth in the past
years.

The credits of building it into one of world’s largest fast food

operation can be given to Ray Kroc who took over McDonald’s from
its establishers, modernised and expanded it to suit the
contemporary trend. Today McDonald’s has a net worth of $15.15
billion.

Through this project report and market survey we saw the how
McDonald’s 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 McDonald’s 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 McDonald’s
in particular. The respondents also rated the services provided by
the corporation. At last we also saw the top five reasons that make
McDonald’s 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."

Thank You!!
 BIBLIOGRAPHY
 www.google.com

 www.wikipedia.org

 www.macdonalds.com

 www.slideshare.net

 www.scribd.com

 www.marketing91.com

 www.infobarrel.com

 www.aboutmacdonalds.com

 answers.yahoo.com

 talkfinanceonline.com

~~~~~~~~~~~~
Attn: Pictures on the next page!!

Pictures to be attached
Attn: Attach these pictures on the backside of the page
which is adjacent to the relevant page.
 Logo of McDonald’s

McDonald's world headquarters, Oakbrook, United States

Ray Kroc- The franchiser of McDonald's

The first McDonald’s restaurant opened by Patrick McDonald, in
1937

McDonald’s Speedee mascot

Downey’s restaurant; the oldest operating McDonald's in

the world.
World-famous Golden Arches logo

The legendary Big Mac

The Chicken McNuggets
The Maharaja Mac which is offered in India
An exterior view of the world's largest McDonald's restaurant built
on 2012 London Olympics site
The Big Mac
The Big n Tasty
The premium chicken sandwich

The McDonald's Chicken Fajita

 McArabia

McDonald’s Salads
McDonald’s French fries
A map showing every continent with at least
one McDonald's restaurant
A modern McDonald’s restaurant in London