Requesting a case analysis on McDonald's corporate strategic management, the content is the Golden Arches of India

Full English name: McDonald's

Company type: Listed company (New York Stock Exchange)

Current slogan: I'm lovin' it!

Founded: 1954

Headquarters: Oakbrook, Illinois, USA

Important figures:

Ray. Ray Kroc, Founder

Andrew J. McKenna, Non-Executive Chairman of the Board

Jim Skinner, Board of Directors Vice Chairman and CEO

Michael Roberts, President and COO

Main Industry: Restaurants

Number of Employees: 418,000

Main products: chain fast food, desserts, children's clothing, etc.

Revenue: US$150 million (2006)

Official website:

[Edited version Paragraph] Introduction to McDonald's Corporation

MCD is the world's largest fast food chain company. It is a chain of fast food restaurants founded by the McDonald brothers and Ray Kroc in the United States in the 1950s, mainly selling hamburgers. Promoted worldwide, McDonald's restaurants are located in more than 100 countries on six continents around the world. McDonald's has become the most valuable brand in the global catering industry. McDonald's represents an American lifestyle in many countries.

McDonald’s Happy Meal gives away free toys, such as Disney movie character dolls, which are quite attractive to minors.

Because the fast food culture it represents has been accused of having an impact on public health, such as high calories leading to obesity and lack of sufficient balanced nutrition, many people have criticized it as "junk food." Many people in France, who are proud of their country's food culture, dislike McDonald's and regard McDonald's as a representative of the invasion of American lifestyle.

[Edit this paragraph] Company Profile

Israel’s “McDonald’s” store McDonald’s, the most well-known McDonald’s brand, has more than 31,000 fast-food restaurants, distributed in 121 countries and regions around the world. . McDonald's around the world adapts it to local tastes. In addition, McDonald's now controls other restaurant brands, such as Aroma Cafe, Boston Market, Chipotle, Donatos Pizza and Pret a Manger.

McDonald's total revenue in 2001 reached US$14.87 billion, with net profit of US$1.64 billion.

Most McDonald's fast food restaurants provide counter and drive-through (English translation of drive-through, which refers to a fast food service that can be accessed from the restaurant without getting out of the car. Customers can drive and order at the door dish, then go around the restaurant and pick up your meal at the exit.) Both service options offer indoor dining and sometimes outdoor seating.

Drive-thru restaurants typically have several separate stations: parking, checkout, and pickup, with the latter two usually combined.

(It is reported that since the minimum wage of employees in North Dakota is significantly lower than that in Oregon and Washington, McDonald's plans to try to set up a call service center in Fargo, North Dakota in early 2005. Accepting drive-thru phone orders from Oregon and Washington to mitigate that phenomenon.

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In some areas, there are McDrives on both sides of the main highways. It is a kind of avenue without counters and seats that is opened to entertain drivers on night tours. This kind of avenue is often used as a bus stop. The simplified style of fast-food restaurants appears in high-density areas such as downtown areas.

Some specialized theme restaurants still remain, such as the Rock 'n' Roll McDonald's 50s-themed restaurant, and there are also carefully selected McDonald's restaurants located in suburban areas and large indoor or outdoor playgrounds in some cities. They're called McDonald's PlayPlace (formerly PlayLand). Restaurants of this type first appeared in the United States in the 1970s and 1980s, and later internationally: in most parts of Canada, for example, they didn't appear until the 1990s. They only began to appear in the mid-1900s.

McDonald’s will use a portion of its sales for charity each year. Upon his death, founder Ray Kroc used his entire fortune to establish the Ronald McDonald House Charitable Foundation.

Because McDonald's regularly sells carbonated drinks provided by Coca-Cola Company, McDonald's has actually formed a strategic alliance with Coca-Cola.

[Edit this paragraph] Food provided by McDonald's

Spicy Beef Foldover (new product)

Grilled Chicken Foldover (new product)

Hamburger

Single Cheeseburger

Double Cheeseburger

Cheeseburger/Double Cheese Burger

General Burger

Big Mac

Zu Baliang

McFragrant Chicken

Grilled Chicken Leg Burger (original/spicy)

Spicy Chicken Wings

Spicy Chicken Wings

Mai-flavored Fish

Fish Fillet Burger

Egg-flavored Beef Burger

Pork fillet burger/wheat-flavored pork fillet and egg burger

Spicy premium grilled chicken leg burger

Wheat-flavored pork fillet and egg waffles

Wheat-flavored pork fillet waffles

Bacon and egg waffles

Hot pancakes

Morning meal

Jumbo Triangle (Carlo Beef/Black Pepper Chicken Thigh)

Fresh Vegetable Beef Burger

Sweet Corn Cup

Wheat Crispy Chicken Roll

French fries

Twisted strips

Chicken McNuggets (chicken nuggets)

Carbonated drinks (Coke/Fanta/Sprite)

Orange juice

Coffee, black tea, hot chocolate

Super smooth coffee (replaced the original coffee after March 28, 2007)

Super smooth milk tea

Milkshake (vanilla, chocolate, strawberry)

Xindi (chocolate, strawberry, pineapple, mocha)

Crispy cone

McFlurry

Pie (Apple Pie/Corn Pie/Taro Pie/Banana Pie/Pineapple Pie/Mung Bean Pie/Red Bean Pie/Garden Pie/Coconut Pie)

Vegetables Salad

(Some of the above foods are regional promotion products, and some are short-term promotion products)

Package type:

Value set: main meal, French fries and drink

Happy Meal: Main meal, side dishes and drinks, free toys

[Edit this paragraph] McDonald’s management methods

Clear business philosophy and standardized management

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McDonald’s golden rule is that customers come first and customers always come first. The highest standards for providing services are Quality, Service, Cleanliness and Value, which are the QSC&V principles. This is an important principle that best reflects the characteristics of McDonald's. Quality refers to the extremely strict standards McDonald's has set to ensure food quality.

For example, beef products must undergo more than 40 quality inspections; after a certain period of time is exceeded (the time limit for hamburgers is 10 minutes, French fries is 7 minutes), they will be discarded and not sold; meat patties are stipulated to be composed of 83% shoulder meat and 17% of premium pork belly blends and more. Strict standards ensure that the McDonald's food customers taste at any time and in any place is of the same quality. Service means providing warm, thoughtful and fast services based on the principles of carefulness, care and love. Cleanliness means that McDonald's has established cleaning standards that must be strictly followed. Value represents value, which is a criterion that was added later (originally only Q, S, and C). The addition of V is to further convey McDonald's concept of "providing customers with more valuable high quality". It can also be said that the QSC&V principles not only reflect McDonald's business philosophy, but also because these principles have detailed and strict quantitative standards, they have become the code of conduct for all McDonald's restaurant employees. This is an important part of McDonald's standardized management.

Strict inspection and supervision system

In order to enable each franchise store to achieve consumer-satisfactory services and standardization, in addition to the above concepts and norms, McDonald's has also established strict Inspection and supervision system. McDonald's system has three inspection systems: one is regular monthly evaluation, the other is inspection at company headquarters, and the third is spot inspection (conducted once a year in selected branches). The forms for unified inspection by the company headquarters mainly include food production inspection form, counter work inspection form, comprehensive operation evaluation form and monthly routine assessment form, etc.; the random inspection data of the company headquarters include branch accounts, bank accounts, monthly statements, cash bank and Important files, etc., may vary in detail. The annual inspection of each branch is generally hosted by the regional supervisor and mainly checks cash, inventory, personnel, etc. Regional supervisors often act as ordinary customers to inspect the freshness, temperature, taste of food, whether floors, ceilings, walls, tables and chairs are clean and hygienic, and the attitude and speed of counter service to customers, etc.

Complete training system

McDonald’s attaches great importance to employee training and has established a relatively complete training system. This provides a reliable guarantee for the licensee to successfully operate McDonald's restaurants and create a unified image of the "McDonald's" brand. McDonald's training system combines on-the-job training and off-the-job training. Off-the-job training is mainly completed by Hamburger University in Chicago. The University of Hamburg is the training ground for branch managers and key staff. Four managers of China's first McDonald's restaurant opened in Beijing in 1992 graduated from Hamburg University. The University of Hamburg provides two courses of training, one is the Basic Operation Course (BOC), which aims to educate students on product production methods, production and quality management, and marketing management. Operation and data management and profit management, etc.; the other is the Advanced Operations Course (AOC), which is mainly used to train senior managers. Its content includes QSC&V research, ways to improve profits, real estate, law, financial analysis and Interpersonal relationships, etc. The current training in Asia is completed at Hamburg University in Australia

Joint Advertising Fund System

The establishment of advertising funds is an important marketing strategy for McDonald's. Since most franchisees only have one or a few stores, it is impossible to afford most of the advertising costs. However, if everyone joins together, they can raise more generous advertising funds. In order to allow McDonald's to do television advertising on a wider scale, McDonald's headquarters decided to establish a joint advertising fund system in 1966 and established the McDonald's National Franchisee Joint Advertising Foundation. The foundation's funds come from franchise stores and McDonald's participating in this plan. For company-operated stores, the quota accounts for approximately 3%-4% of the total annual turnover. In addition to the corporate advertising department, McDonald's also has several advertising funds throughout the United States. In this way, advertising funds for brand promotion will be sufficient. Operators can use this huge amount of money to do strong advertising.

In the process of promoting the "McDonald's" brand, we adhere to the principle of combining unified advertising with regional advertising. That is, different regions and different advertising funds can implement different creative ideas when promoting the same brand.

In other words, each region uses different advertising designs to promote the same hamburger based on its own regional promotion focus, local values, and consumption customs. This is also the unique feature of McDonald's franchise system.

Real estate management strategy focusing on leasing

McDonald's revenue mainly comes from three parts: real estate operating income, service fees collected from franchise stores and surplus from directly operated stores. Since franchisees generally do not have enough funds to pay the land cost of US$30,000 and the construction cost of US$40,000, they are often unable to obtain loans. McDonald's is responsible for finding suitable store addresses on behalf of franchisees, leasing or purchasing land and buildings for a long time, and then leasing the stores to franchise stores to obtain the difference. This is the main source of revenue for McDonald's Corporation. The essence of this is that McDonald's Real Estate Company (a company established to implement the real estate strategy) uses the money of each franchise store to buy real estate, and then leases it to the franchise stores who paid the money. This real estate management strategy actually transfers the rights of the first creditor to McDonald's Real Estate Company so that it can qualify for a loan from the bank. This not only solves the financial difficulties of franchisees to open stores, but also increases the income of McDonald's Corporation. At the same time, by controlling real estate, it is more conducive to McDonald's to strengthen the management of franchisees. Data show that by the mid-1980s, among McDonald's nearly 10,000 restaurants, 60% of the real estate rights belonged to McDonald's headquarters, and the other 40% were leased by the headquarters from local real estate owners. As a result, real estate income has become McDonald's main income. One-third of McDonald's revenue comes from directly-operated stores, and the rest comes from franchised stores. Among them, real estate revenue accounts for 90% of this part of revenue.

A cooperative relationship of mutual restraint and continuous prosperity

McDonald’s is very successful in handling the relationship between headquarters and branches. It mainly has three characteristics:

Firstly, the initial franchise fee and annuity charged by McDonald's are very low, which reduces the burden on branches;

Secondly, the headquarters always adheres to the principle of profit sharing and directly transfers the discounts obtained in procurement to each franchisee. branches;

The third is that McDonald's headquarters does not make huge profits by selling equipment and products to franchisees (many franchise organizations obtain their main profits by force-selling products, which can easily lead to conflicts between the headquarters and branches) conflict).

McDonald’s sincerity has earned the loyalty of franchisees and suppliers. The relationship between McDonald’s and franchisees and suppliers is a cooperative relationship of mutual restriction, survival and prosperity. This kind of sustainable and prosperous cooperative relationship has created conditions for franchisees to show their talents, allowing each franchisee to come up with endless marketing strategies, which has also made great contributions to the improvement of McDonald's brand value. For example, the "Uncle McDonald" that is popular all over the world was created by a successful franchisee and an advertising company, and was launched and promoted by the head office. The "United Advertising Foundation" model was also founded by McDonald's franchisees (in 1996) and was adopted by the head office. adopted by the company. In addition, franchisees' reasonable suggestions to the head office also formed a driving force and promoted the reform of McDonald's Corporation. As a result, the "McDonald's" brand enhanced its market competitiveness and McDonald's Corporation also achieved greater development.

[Edit this paragraph] McDonald's development in China

With the development of China's economy, McDonald's market in mainland China has also expanded rapidly. Today, McDonald's has 670 restaurants located in 108 sub-administrative regions across 25 provinces, cities and municipalities in China. We attach great importance to the Chinese market and will continue to expand our chain restaurants on the basis of maximizing return on investment. Currently, we have more than 50,000 employees, 99.97 of whom are Chinese employees. Our supplier system in China also has more than 15,000 employees and a total investment of US$500 million.

● In 1990, McDonald's opened China's first restaurant in Shenzhen.

● In April 1992, McDonald's restaurant in Wangfujing, Beijing opened, becoming McDonald's largest restaurant in the world.

● McDonald's created a new world when it opened its first restaurant in Guangzhou. The highest sales record in McDonald's history.

● When the Nanjing Confucius Temple restaurant opened, it created the highest average spending per transaction in McDonald’s history.

● In August 2003, McDonald's first launched its franchise business in Tianjin.

Social Responsibility

Giving back to society is an important business principle of McDonald's. Employees are encouraged to use their work time and equipment to contribute to McDonald's charitable causes. Examples of McDonald's social responsibilities include:

● Children's education - World Children's Day supports the education of poor children by donating to charities; Ronald McDonald teaches children English, etc.

● Sports - Promote an active lifestyle and encourage our customers to support charity marathons, Olympic Day runs, school sports donations, Ronald McDonald House off-campus events and more.

Environmental Protection

For the sake of the next generation, McDonald's believes that it has a responsibility to protect the environment. McDonald's environmental protection activities include:

● Community Cleanup Day: We encourage customers and store employees to participate in community cleanup activities

● Tree planting activities

● Used batteries and Newspaper recycling

● Follow animal welfare and avoid damage to forests.

● Suppliers who cooperate with McDonald’s should strive for the lowest scrap rate and the highest energy efficiency ratio.

● 10% of the waste will be made into animal feed and other by-products through local treatment plants.

● Use CFC-free cooling systems, packaging and other restaurant equipment.

Personnel Commitment

McDonald’s China will hire local employees as much as possible. In fact, 99.7% of the 50,000 employees in China are hired locally. We also employ people with disabilities to help them reintegrate into society and contribute to society.

In addition to giving employees reasonable and fair remuneration, McDonald's will also provide comprehensive training so that they can ensure that McDonald's adheres to the business philosophy of "quality, service, cleanliness and value for money". Our employees are dedicated to the McDonald's brand mission: making McDonald's restaurants the favorite place and way to eat.

[Edit this paragraph] Criticism of McDonald's

McDonald's is the world's largest fast food chain and one of the most criticized companies. Criticisms and accusations against McDonald's include: exploiting workers with low wages: In Hong Kong, Legislative Council member Lee Cheuk-yan once demonstrated on the streets with other pressure groups concerned about labor rights, saying that McDonald's hourly wages are the lowest in Hong Kong (HK/US. 9. The hourly wage of some branches is as low as HK$9), and they use them as "slaves" in the name of providing job opportunities for the disabled, elderly and weak. It should be renamed "McDonald's." In Taiwan, it is also It has been criticized by labor movement groups for exploiting work-study students (the hourly wage is less than NT$70, about US$2). In mainland China, it was even reported by the Hong Kong media that the hourly wage of domestic McDonald’s is as low as less than NT$1.5. In Malaysia, McDonald’s The hourly wage is only RM3 (equivalent to USD 0.86), and the hourly wage for work-study students is even less!

Selling unhealthy food: Many McDonald’s fast food items contain high fat or calories, and are not vegetarian. In 2005, an organization in the United States accused McDonald's of french fries that may cause cancer. In addition to lacking the nutrients that ordinary people need and causing obesity, hormones in the meat may also cause these fast food. Making men grow female breasts

Creating packaging waste: Although McDonald's in Hong Kong has switched to using recyclable paper for packaging and using thinner packaging materials where possible, in other parts of the world, This issue has never been taken seriously by local management.

Environmental damage during agricultural production and industrial food processing

Advertising and promotion directed at children, in the UK, Helen Steel and Dave. The two Morriss criticized McDonald's and were sued for defamation.

McDonald's hired professional lawyers and the lawsuit lasted for two and a half years. Although McDonald's won the lawsuit in the end, the lawsuit also damaged McDonald's image. The judge who heard the case also admitted that some of the remarks made by the two defendants criticizing McDonald's were true. of.

Some people have also criticized McDonald's approach to protecting its image and copyright. In Scotland, a small restaurant that has been family-run for a hundred years was accused of infringing on McDonald's trademark. In another case, McDonald's filed to ban the creator of Ronald McDonald from performing any performances in his image.

In another case, McDonald's accused British Chinese of infringing their trademark by opening a Chinese restaurant called "McChina". This case ultimately resulted in McDonald's losing the case. The judge accused McDonald's of trying to monopolize all The right to use slogans starting with "Mc".

In 2003, Morgan Spurlock filmed a documentary about McDonald's. The title of the film is "Super Size Me" (literal translation: Give me the biggest size; translated as "Wheat Fat Report" in Taiwan and "The Mystery of Not Losing Weight" in Hong Kong). In the film, Spurlock hints that McDonald's food is one of the culprits causing Americans to become overweight.

McDonald’s later changed its menu, eliminating extra-large items and replacing them with healthier options. The menu change happened just after the film was released at the film festival and before it was officially released in theaters.

The corporate brand ranked fifth in the 2006 "Top 500 World Brands" list compiled by the World Brand Lab. The company ranked 329th in the 2007 "Fortune" ranking of the world's 500 largest companies.

When the McDonald’s chain opened in Manila in 1981, almost everyone believed that the international fast food giant would soon fill the streets with its golden arches logo, in line with McDonald’s The 11 Jollibee stores that were positioned at that time were definitely not safe. But now more than 20 years have passed, Jollibee has expanded to 420 stores in the Philippines, employs more than 40,000 people, and holds a 65% share of the Philippine fast food market. According to Jollibee executives, providing food that suits Filipino tastes is one of the reasons for its success.

A country with a population of less than 100 million and the birth of the best "Filipino maid" in the world has successfully left the world's largest catering giant behind, and in France, the sales of sandwiches are French fries. , more than ten times that of burgers, so what should we in China rely on to defeat McDonald's? Where are the market opportunities?

Why McDonald’s

What is McDonald’s core product? It’s just burgers, cola, and fries. Do customers really like these foods? Looking for the answer for people under 16 years old, 90% said they like it. However, for people over 16 years old, the love rate gradually decreases with age. Including many people on business trips, fashionistas, friends gatherings, etc., go to McDonald's not because they like it, but because it feels "hygienic and convenient".

The "Children's Paradise" has firmly captured young customers, and "hygiene and convenience" have attracted many casual customers. McDonald's is actually not buying products, but selling environment and experience. From the earliest days, it has been "celebrating children's birthdays" "'s seductive marketing to today's "I just like it", including "McDonald's is not just a restaurant" or "24-hour store", which Chinese fast food company can compete with McDonald's.

First of all, let’s look at Yonghe (although Yonghe Soymilk and Yonghe King are not the same company, for the convenience of research, we call them the Yonghe model), which mainly sells products such as fried dough sticks, soybean milk and steamed buns. The first is the product It gives customers a different feeling. In the United States, fried chicken, Coke, and French fries are all junk products with no sense of value. However, due to the blind worship of foreign companies and products by the Chinese people when they entered China, as well as the price being much higher than that of pancakes and fried dough sticks, they established an image of high-end places in the minds of the people. In many works from the early 1990s, many white-collar workers at that time were proud to go to McDonald's parties.

Although it seems like a joke today, at that time, in an era without Internet interaction, consumption was basically affected by advertising and the environment. McDonald's "fashion and hygiene" were generally recognized by society.

The Yonghe model has also achieved certain success, but it is still far from McDonald's. The first is the selection of products. These products face huge competition, the convenience and price of street stalls, and most products cannot be easily taken away. The case of Red Sorghum challenging McDonald's back then was profound enough: a product "cannot leave the bowl or the store", and the consumption time is relatively long. The huge store costs overwhelmed Red Sorghum in the early stage of the business, and there was a lack of standardized management. It is difficult to gain an advantage in the fierce competition.

Around 2000, seeing the huge business opportunities in China's catering market, a large number of companies similar to "McDonald's and KFC" appeared in China. For example, "McMcChicken", "Maham", "Kelly Chicken", etc., but without exception, they have retreated outside the secondary market, and even become "fried chicken legs" sold at the entrance of the farmer's market for "5 yuan each" , the sad thing is that we have to admit: McDonald's success is still due to the standardization of management, standardization of product quality, and the ability to expand with strong capital advantages.

Who can challenge McDonald’s?

So which companies hope to challenge McDonald's?

First of all, the product must conform to the consumption habits of the public, and it must have a long-term fixed consumer group. For example, "Hao Lun Ge" is already relatively standardized in China. The product advantages of combining Chinese and Western products and the catering structure suitable for children, teenagers and fashion groups all have the foundation to challenge McDonald's.

Unfortunately, the price of Haolunge has no advantage compared with McDonald's. Moreover, due to the self-service catering model, the cost per square meter per day is relatively high, and it is easy for competitors to take advantage of it (such as competitors occupying seats during promotions and taking up time). and dining seats bring inconvenience to enterprises, etc.), resulting in a certain amount of cost waste and making it difficult to expand strongly. Moreover, due to the wide variety of products and low profit margins, product prices are often affected by raw materials, causing a certain psychological price imbalance to customers. Don’t underestimate the price difference of a few dollars. If you see the handouts or printed coupons in the pockets of boys and girls in their teens and twenties, you will know how much they care about those few dollars, not them. If they don't have money, they don't care if they spend tens or hundreds more when buying clothes or mp3, but as long as there is a way to save a few dollars, they will always save it. Companies remember: sometimes they just care about the feeling of saving money, so promotional strategies must also study customer psychology. According to the author's understanding of the catering market, if the price of Haolunge can be reduced to less than 30 yuan, and the average dining time per table is 60 minutes, Haolunge still has a good chance of challenging McDonald's.

China's first McDonald's restaurant

The McDonald's restaurant located in the prosperous East Gate of Shenzhen is the first McDonald's restaurant in mainland China. Opened on October 8, 1990.