ByAMRITA GUPTA ROLL NO.

06 MBA-IB(1st semester)

Mcdonalds History
U.S based company.
Head quartered at Oak Brook, Illinois, U.S. It started as a drive in restaurant in the late 1940s. In 1966 was listed on New York stock exchange. Entered India in October 1996,in a joint venture.

Company profile
Worlds largest chain of fast food hamburger

restaurant.
Offers hamburgers,cheeseburgers,chicken

frenchfries,soft drinks,coffee,shakes and desserts.

Now serving more than 68 million customers in more

than 119 countries.

1.8 million system employees.

Objectives of the channel

To serve good food in a friendly and fun environment

to be a socially responsible company

To provide good returns to its shareholders To provide its customers with food of a high standard,

quick service and value for money

Strengths
Strong brand recognition

Weakness
Considered as junk food.

Strong international presence

Product innovation Strong distribution network Good relations with franchise

Health related issues

SWOT
Opportunities
Acquisition of other restaurants. Increasing number of working youth Affinity of Indians towards junk food. Expanding in tier 2 and tier 3 cities.

Threats
Competitive pricing Threat of labor strikes

How does it operate?

McDonalds

McDonalds

(company owned outlets)

Franchisee

Customers

Customers

Distribution channel defined-:

Distribution channels are sets of interdependent Organizations involved in the process of making a product or service available for use or consumption. -STERN & ANSARY

Companys strategy
McDonalds follows a zero level distribution

channel.
It practices pull strategy for its enhancement of sales. Follows Hybrid channel marketing.

Channel format
(is decided by who drives the channel system.)
Producer driven

(effort of manufacturer to reach the product to his consumers.)

Seller driven

(use of existing channels to reach the largest number of end users)

Service driven

(people who provide or facilitate distribution)

McDonalds System
McDonald's follows a producer driven channel

format. (Franchise system 80%) (self owned outlets 20 %)

World market leader in (Quick Service Restaurants)

area.
Corporate strategy :-

* QSC & V -: Quality, service, cleanliness & value * Plan to win -: Successful business revitalization

McDonalds in India:
McDonalds does not offer direct franchise.

Talking about India, it has been into a joint venture ship with

two entrepreneurs :

Amit Jatia, Vice Chairman, Hardcastle Restaurants Pvt. Ltd.

(awarded a development licensee status for west and south India)

Vikram Bakshi's Connaught Plaza Restaurants Private Limited . (awarded a development licensee status for north and east India)

McDonalds suppliers
Trikaya Agriculture

Supplier of Iceberg Lettuce

Vista Processed Foods Pvt. Ltd.

Supplier of Chicken and Vegetable

Dynamix Diary

Supplier of Cheese.
Amrit Food

Supplier of long life UHT Milk and Milk Products for Frozen desserts.

Channel member
Channel members are the people through which goods

and services go through before they reach the consumer.

The members include franchisees, joint ventures and

licensees, wholesalers and industrial distributors.

Others include brokers and agents, insurance

companies and transport industries.

Channel members in McDonalds

FRANCHISOR

The franchisor owns the brand and the operating system that they license to their franchisees.
FRANCHISEE

The franchisee invests in the right to use the franchisor's expertise, brand name, operating methods, and initial and ongoing support.

Channel Member
Responsibilities of Channel Members

The producer and intermediaries must agree on price policies, discounts, territories, and services to be performed by each party. E.g. McDonalds provides franchisees with promotional support, training, management assistance, in turn, franchisees must meet company standards for physical facilities, buy specific food products... etc.

STPD Analysis
Segmentation based on lifestyle and habits of urban

families.
Targeting kids, office goers,youth. Positioning with statements such as I am loving it,

aap ke zamaane me baap ke zamaane ke daam .

Differentiation - taste and packaging.

Brand building process

Identify your customer

Clarify what is important to them

Narrow to the highest four or highest three priority of outcomes to your customers.

Evaluation of corporate strategy

McDonalds
Focusing on drive in strategy. McDonalds initial franchisee fees is $45,000. Be the best quick service restaurants by providing quality service,cleanliness and value that makes every customer in every restaurant smile.

Dominos
Focusing on take away strategy. Dominos initial franchisee fees is $25,000. Exceptional people on a mission to be the best pizza delivery company in the world.

Evaluation of Channel Format

McDonalds follows a producer driven format system.
i.e. a franchisee system, but along with that also it

carries its self owned outlets..so it remains to an advantageous position.

Unlike Dominos (a company working on the very

similar structure) In which it runs wholesole on the basis of franchisee system only.

Evaluation of Channel Performance

McDonalds Since it follows zero level distribution channelit ensures more fresh and safe ingredients. Practices hybrid channel marketing and thus has a back up of its own outlets. It is more cost effective as no third party is involved in it. The chain goes likeDominos Since it follows one level distribution channel it lags a bit behind in ensuring ultimate fresh ingredients. Practices single channel marketing i.e. through its franchisees only. Comparatively less cost effective as prominent retailers are also involved. The chain goes like-

COMPANY
FRANCHISEE CUSTOMERS

COMPANY
RETAILERS FRANCHISEE CUSTOMERS

Channel Member Performance

McDonalds Dominos McDonald's do not pay overtime Dominos in contrast to this pays rates even when employees work very incentives to the employee on long hours. accomplishment of certain fixed goals Pressure to keep profits high and wage costs low results in understaffing, so staff have to work harder and faster. As a consequence, accidents (particularly burns) are common. Not surprisingly staff turnover at McDonald's is high, making it virtually impossible for employees to carry on for a longer duration. Its strength lies in retaining its employees. Also it practices reward power tool.

This results in low employee turnover and an assurance of success.

Suggestions-:
Increasing seating capacity. Aggressive expansion plans throughout the country. More drive in.

Independent franchisee model.

McDelivery on cycles.