Strategic and Change Management

Group Members
Kabiru Ahmed Shahir Eddy Lim Song Chia Wan Adib Akmal Muhammad Hidayatulah Ahmed Abd-aldaem Abu Shaem

Company Background
McDonalds, global fast food giant starting off as a single small restaurant in 1940 by two brothers Richard and Maurice also known as Dick and Mac opened a small driver-in eatery in San Bernardino ,California . The brothers brought a game changer again putting FAST in the word fast food they reinvented their restaurant using their speedy service system in 1948 . In late 70s the 3000th McDonalds restaurant was opened in Woolwich (south east London) in October the first in the UK

Company Background
The company admitted that NOBODY went in and Kroc believed advertising was a worthwhile investment that would ultimately reap dividends later decided to target children with TV ads Today McDonalds has invested the concept of fast-food restaurant and has more than 31,000 franchises in 199 countries and serves almost 47 million customers a day, but this success story like every other started somewhere and by someone

Company Background

Brand Mission - To be our customers' favourite place and way to eat. Brand Promise - To provide Simple Easy Enjoyment to every customer at every visit

Values - McDonald's mission is to be our customers' favourite place and way to eat with inspired people who delight each customer with unmatched quality, service, cleanliness and value every time.

General Environment
General environment broad external conditions that may affect the organization. Political/Legal: federal, state and local government influence what organization can and cannot do Fast food industry giants such as Wendy's, Pizza Hut, and McDonalds are some of the largest consumers of paper products in the US. "Every year millions of pounds of food packaging waste litter our roadways, clog our landfills and spoil our quality of life. The increasing interest in protecting natural resources and preserving ecological balance

Economic: it includes the impact of economic factors such as interest rates, inflation , changes in disposable income and the stage of general business cycle Low set up costs = rapid expansion One of the challenge for fast food industry is that to keep the price is low for the customer. Franchising facilitates set ups McDonalds corporation provides financing assistance and training for new franchise owners to manage cash flow and keep businesses profitable.

Sociocultural: managers must adapt their practices to the changing expectations of the society To ease customers concern about health issues, McDonalds has made changes to the following; McDonalds changed its image vastly by evaluating the current menu and making changes to it from using organic products to revising the whole menu entirely by offering salads and vegetarian burgers. McDonalds serves a range of high-quality foods that can fit into a balanced diet. The accurate and accessible nutrition information help guests make informed menu choices

Technological
is changing the ways the organisations are operating, so business must address this issue and its impact on performance of organization. McDonalds has taken advantage of technology to streamline their processes and improve efficiency. Mobile Application You To Place Order At McDonalds Via mobile The customers can place their order directly from their tables, dubbed as Touch Order. Its the first selfordering system in the world to use McDonalds has also implemented technology to improve supply chain management, and allows customers to access this information to make more informed decisions about what they eat.

Demographical trends in the physical characteristics of population such as gender, age , level of education ,income, geographical location

An off Matrix
Existing Products New Products Moderate Risky Product Development - R&D

Less Risky Market Penetration - Car Sticker for Loyalty Customer - Promotion - Good Quality Control
Moderate Risky Market Development

Existing Markets

Very Risky Diversification - Survey Form

New Markets

- Different Pricing Strategies i.e. Set Lunch or Set Dinner

Business Strategy
o pursuing the generic strategy of differentiation is a strong and established capability in basic research and development. o Provide a high quality Burgers o Unique experience in the convenience of a large volume of locations, which separates them from competition. o Offer lower prices when financial crisis in 2008

Business Strategy- International

Is the way to create possibility by positioning companys product, technology, human skill and other resources to enter into the foreign country.

Determine the goal, resources and policy in order to direct their international activities towards a sustainable international expansion

McDonalds International Strategy

Franchising Strategy is use by McDonalds to entry the Global Markets Two ways to become a McDonald's franchisee 1. Start a new restaurant from scratch 2. Buy an existing McDonald's restaurant.

New Restaurant

The costs for starting is between RM2.0 million to RM4.5 million. The costs also depend on the restaurant size and type, its location, style of decor and landscaping

USD 22,500 - Franchise fee paid upon or prior to the commencement of the franchise RM50,000 - Interest-free security deposit for the faithful performance of the franchise, refundable upon the expiration of the franchise RM200,000 - RM250,000: Pre-opening expenses - Staff training and salaries, stock trading, living expenses while training and other normal start-up costs.

RM1.7 million - RM2.5 million: Approximate cost of kitchen equipment, signage, seating, decor and landscaping paid to individual suppliers.
RM800,000 to RM3 million: depending on store type (Drive Thru, Mall, Oil Alliance or Shop Front). Approximate cost of all civil works, ventilation system and renovations to the premises paid to individual contractors Paid by Golden Arches Restaurants Sdn Bhd. Other Miscellaneous Costs:

Stamp duty (paid to the government) is assessed on necessary documentation and is paid by the franchisee in addition to the working capital required. Legal fees are paid by the franchisee to cover the preparation of the franchise documentation

Existing Restaurant
o For an existing McDonalds restaurant you will usually buy it over based on the restaurant's market value. In addition, the franchise fee and security deposit aforementioned will also be payable. On-going Fees (Monthly) Royalty Fee A Royalty Fee, which is a system fee, is based on a percentage of the restaurant's gross sales, which is currently at 5% Rental Depending on store type, location and performance may vary between 13% to 20%

Marketing Contribution Currently at 5% of the restaurant's gross sales.

Global Strategies
McDonalds has the three winning targets: o LOCAL INGRIDIENTS o LOCAL TASTES o LOCAL SENTIMENTS the basic structure remains the same, the golden arches and the red and white building with slanting roofs. Offering a wider variety of food to attract more segments It's not just snack foods and desserts that it's expanding into there's a whole lot more. McDonald's is trying to get more consumer segments to chomp up its offerings by expanding non-traditional menu items, while keeping its core base of burgers-and-fries eaters.

McDonalds India
Locally focused menu choices (using lamb meats instead of beef meat keeping the religious sentiments of most Indians) McDonalds in India has specific menu items
For the vegetarian market (50% veg items)

McDonalds Europe
McDonalds is straying from its fast food roots. In an effort to compete with coffee shops like Starbucks, McDonalds is turning the restaurant space more upscale and comfortable
McDonalds even further away from its core competency of fast food.

McDonalds China
While offering the basic burger and fries, McDonalds in China also offers: Szechuan-style spicy chicken wings Seafood Soup Rice Oriental Sauces Taro and Red Bean Dessert

McDonalds Malaysia
Applying the Balance active life in Malaysian market The Halal Logo (no pork)

Double Cheeseburger, Spicy Chicken McDeluxe and McChicken.

Recommendations

More Healthy Choices Locally focused menu choices in certain countries

Increase presence in Asian and African countries

 Do you feel that McDonalds food can be consumed every time or is it unhealthy and toxic, or is it more like a treat to be enjoyed on occasion?