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A STRATEGIC MANAGEMENT PAPER
(STRAMA)
On
McDonald’s Philippines
A Subsidiary of
Alliance Global Group Inc
Submitted by: Hiroshi A. Torobu
Executive Summary
I. Introduction
McDonald’s is the world’s largest chain of fast food restaurant serving more than 58 million customers daily. The firm has an excess of 30,000 restaurants worldwide employing 1.5 million people. The business began in 1940 with a restaurant opened by two brothers namely Richard and Maurice McDonald in San Bernardino, California and then was bought by Ray Kroc who is now the founder of the McDonald’s corporation. A McDonald's restaurant is operated by a franchisee,
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Consumer foodservice players are seen to be keen in moving towards these cities thereby making them less reliant on the Metro Manila area. So, outlet and value sales growth in the forecast period is expected to be positive.
• Consumer foodservice decelerates due to dismal economic conditions
Social, Cultural, Environmental and Demographic Trends and Lifestyle Changes • There is a decline in the number of people eating out while fast food restaurants are still growing. According to Margot B. Torres, vice-president for marketing and communications of McDonald’s Philippines.
Consumers prefer more affordable offerings by consuming alternative foods which are cheap in price. Some would rather go to the streets stalls or kiosks to eat out.
Consumer foodservice in retail locations continues to increase. These vibrant openings have provided more growth opportunities for consumer foodservice. Retail location value sales offers better value sales growth compared to overall consumer foodservice value sales growth.
Other External Factors that may be more directly relevant • There is an ongoing domestic competition from the leading local fast-food provider Jollibee and common international rival KFC have created an environment in which McDonald’s must
1.1 Financial Resources & Capabilities During the period from 2007 to 2009 total sales went up 8.13% which is a strong performance. Most contribution is driving from domestic sales (i.e. German operations). 2007 Turnover (€m) Total turnover growth (%) Grocery Sales Density (euro/sqm/wk) Number of Stores Sales Area (‘000 sqm) 41,818 +3.9 2008 45,183 +8.0 2009 45,221 +0.1
McDonald’s Corporation operates in the food service industry. The company has its restaurants in more than 100 countries of the world. McDonald’s, the world’s largest food chain is headquartered in U.S. having an employee population of 390000 (About McDonald's..., 2008).
Kids nowadays know the way to a fast food restaurant. Low income earners prefer to go to fast food restaurants to eat than to prepare foods themselves. This might cost a lot but people just eat it because it is fast.
Since Richard and Maurice McDonald founded in 1948, McDonald's has grown from a small restaurant in California into one of the most recognized brands in the world with a chain of outlets that spans the globe. For over 50 years, McDonald's defined the fast food industry while indelibly etching its golden arches logo on the face of both American and global culture through such icons as character Ronald McDonald and the Big Mac sandwich. Millions of people started their very first jobs at McDonalds while even more began to have their eating habits redefined by the chain. Concepts like the drive-thru window were introduced along with the Happy Meal for children in order to provide a fast, affordable, and enjoyable dining. Ray Kroc, saleman
From a study completed by Chicago-based Research International USA completed a study called “Fast Food Nation 2008. The panel consisted of 1,000 respondents of ages 16-65 who provided their inputs with an online survey which was conducted between March 13 through 2008. Which was based on results on fast food restaurants like McDonald’s, Burger King, and Wendy’s are gaining popularity even through the economic hardship and recession. Marketing strategy has become more of influence on kids and young American’s. As population grows and the demand increases of fast food restaurants are expanding their stores to capturing more consumers. Fast food chains are also willing to change their menus to continue to gain and retain repeating customers.
In conclusion, the food and grocery industry is attractive since more companies are going towards natural and organic food. With right marketing techniques , good customer service and quality products, it would be good investment in this industry.
•They are the most famous and one of the few outlets available in area and footfalls are generally heavy due to these•The places are usually visited very frequently by local people, students, etcPromotion•The joints rely on word of mouth publicity•There is no promotion done through ads for these joints. The promotion at maximum is limited to local newspaperSUGGESTIONS•McDonalds could increase the number of items served on its menu. Currently there are only 6 vegetarian and 6 non-vegetarian items served on the menu. It is also evident from the survey that many people feel that the variety of menu available is average and could be improved. Some of the customers prefer something new every time they visit. These potential customers could be targeted by increasing the number of items in the menu.
5. Offering fresh and prepared food. Prepared food and fresh offerings have become increasingly demanded within the marketplace, and providing them can be highly profitable for firms, considering that sales for these products are growing at three times that of center store categories. Furthermore, the perishables department and prepared foods offer significantly higher profit margins than standard center-aisle offerings and also lead to improved consumer perception of the store in general.
The purpose of this paper is to summarize the considerations that Target Corporation must take into account to determine the market feasibility of opening gourmet restaurants inside its stores. A brief history of the corporation will provide the reader with some general information about the company’s early years. A situation analysis will then address much of what the Marketing Department must consider, including trends, product life cycle stage, opportunities and threats, as well as potential strengths and weaknesses. The paper goes on to discuss Target’s customer profile, and how that will be a determining
This is because, when the condition of the current market is not doing well, some strategy in considering the increase in the foods price, introducing a new dish should be limited due to the less or limited spending of the customers. The best option to secure and have a constant business growth during these time is to have more promotions and value set meal to attract the customers.
In order to analyze an industry, it is important to determine where it is in the industry lifecycle. During the 1970’s and 1980’s the retail grocery industry was expanding at a phenomenal rate. Throughout this boom period, the number of large grocery stores was rising and forcing the existing” Mom and Pop” grocery stores out of the industry.
McDonald's is the world’s leading food service retailer with more than 30,000 local restaurants in 121 countries serving 45 million customers each day.
If we look at the fast food industry today there is room for success. Based on RNCOS’ new US Fast Food Market Outlook 2010, fast food industry growth rate is strong. Especially, hamburger sales growth is reported at the healthy rate of 4.6% in 2008. The market is expected to grow to cross the $170 billion marks by 2010.It is believed that due to the economic meltdown, fast food industry is benefiting from people being more prices conscious. People who were enjoying nice means at fancier restaurants are now turning their choice of means to more economical ways.
McDonald’s Corporation is the world’s largest chain of hamburger fast food restaurants. There are over 31,000 McDonald’s locations worldwide primarily selling hamburgers, cheeseburgers, chicken products, french fries, breakfast items, soft drinks, and desserts.
The main problem from McDonald's case, McDonald's Polishing the Golden Arches, is how to classify McDonald's strategy through Plan to Win into one of the five generic competitive strategies. Before we solve this main problem, we should determine the chief economic and business characteristics, the five forces analysis, and also the driving forces of the fast-food industry. After that we identify the strengths, weaknesses, opportunities, and threats by using SWOT analysis. Finally, we classify McDonald's strategy into one of the five generic competitive strategies.