mcdonald's o2 case study

McDonald's Corporation: The World's Leading Fast Food Chain [Case Study]

Devashish Shrivastava , Anik Banerjee

McDonald's Corporation is an American fast-food organization established in 1940 as a café by Richard and Maurice McDonald, in San Bernardino, California, United States. They rechristened their business as a burger stand and later transformed the organization into an establishment; the Golden Arches logo being presented in 1953 at an area in Phoenix, Arizona.

Ray Kroc, a businessperson, joined the organization as an established operator in 1955 and continued to buy the chain from the McDonald's siblings. McDonald's had its base camp in Oak Brook, Illinois, and moved its worldwide base camp to Chicago in mid-2018.

McDonald's is worth $185+ bn today. It is the world's biggest eatery network by revenue. It was last registered to be serving 69+ million customers each day in more than 120 countries across over 39,000 outlets.

Although McDonald's is best known for its burgers, cheeseburgers, and french fries, its menu also includes chicken items, breakfast things, sodas, milkshakes, wraps, and sweets. In light of changing buyer tastes and a negative backfire on account of the wretchedness of its food, the organization has added mixed greens, fish, smoothies, and natural products to its offerings.

McDonald's Corporation's income originates from leases and charges paid by the franchisees. According to two reports distributed in 2018, McDonald's is the world's second-biggest private manager with 1.7 million representatives (behind Walmart with 2.3 million workers).

Here's bringing you the McDonald's company profile that will present to you McDonald's company overview, when was McDonald's founded, McDonald's growth over the years, about McDonald's, McDonald's owner name, founder of McDonald's corporation, McDonald's history and background, McDonald's case study marketing, and more.

McDonald's - Company Highlights

McDonald's - Startup Story and History McDonald's - Mascot/Logo McDonald's - Business Model And Market Strategy McDonald's - Target And Mission McDonald's - Growth McDonald's - Restaurants And Services McDonald's - Future

McDonald's - Startup Story and History

Richard and Maurice McDonald in 1940, opened the primary McDonald's at 1398 North E Street at West fourteenth Street in San Bernardino, California; however, it was not the McDonald's you know today. Ray Kroc made changes to the siblings' business and modernized it.

The siblings presented the "Speedee Service System" in 1948 by extending the standards of cutting-edge drive-thru eatery that their antecedent White Castle had tried over two decades earlier. McDonald's emerged with a delivery model where it made its food on a supply belt and delivered it within 2 minutes.

It looked like a fantastic and impossible eatery that had:

• Only burgers, fries, and shakes on the menu • No plates or waiters to serve the customers

However, when Ray Kroc came, he was astonished by the never-ending waiting lines that were there waiting for their orders from McDonald's.

Kroc was then 50 already and was selling milkshake mixers door to door. Ray Kroc had earlier tried his hand in many things but never had attained success in his whole life. He already worked as a musical director, pianist, and had also worked as a real estate guy, in the paper cup industry, and as a seller of kitchen appliances, but he couldn't hold on to one thing among them all. Thus, Kroc was a person who lived from paycheck to paycheck.

Kroc came to McDonald's to deliver an absurd order of 8 milkshake mixers for just one area. He wondered "why would someone want to make 40 milkshakes at a time?" This is why he drove to California, at McDonald's to see the place himself.

Seeing the huge demand for McDonald's burgers, fries, and shakes, Kroc sensed a huge opportunity. He soon pushed the founders of the store to embrace a franchise model. The McDonald's brothers who owned the business, were living a comfortable life then, getting rich by the day, and buying Cadillacs as they filled their pockets. They didn't have vision nor they were eager to expand. However, Ray convinced them and rushed to work, as soon as he did that.

He assumed the role by taking 2 major steps back to back:

• Mortgaging his house when he was already 52
• Opening 18 new outlets in the very first year

This has helped the company scale big time, and McDonald's now boasts of:

• Serving 2.3+ billion burgers a year
• Serving 39,000+ restaurants across more than 120 countries
• Being the 4th largest employer in the world
• Being the largest toy distributor in the world

Though it was Ray's idea and the expansion was promising, the McDonald's brothers made an unfair deal with him. Kroc was allowed only 2% of the profits. McDonald's being to scale aggressively but the founders of McDonald's wasn't really happy with Ray and his scaling. This is why Ray borrowed and bought them out for $2.7 mn, thereby becoming the 100% owner of McDonald's.

The organization attributes its success to Ray Kroc. Kroc later bought the McDonald siblings' value in the organization and was responsible for McDonald's overall reach. He was seen as a forceful colleague, driving the McDonald siblings out of the business. Kroc and the McDonald's siblings battled for control of the business, as recorded in Kroc's life account.

The San Bernardino eatery was torn down (1971, as indicated by Juan Pollo) and the site was offered to the Juan Pollo chain in 1976. This zone currently fills in as central command for the Juan Pollo chain, and a McDonald's and Route 66 museum.

With the development of McDonald's into numerous universal markets, the organization has turned into an image of globalization and the American lifestyle. Its unmistakable quality has additionally made it a regular point of open discussions about heftiness, corporate morals , and shopper obligation.

McDonald's - Mascot/Logo

The first mascot of McDonald's was a cooking cap over a burger who was alluded to as "Speedee" . In 1962, the Golden Arches supplanted Speedee as the all-inclusive mascot. The image of jokester Ronald McDonald was presented in 1965. Ronald McDonald showed up to promote amongst children.

On May 4, 1961, McDonald's initially petitioned for a U.S. trademark on the name "McDonald's" with the portrayal "Drive-In Restaurant Services". By September 13, McDonald's, under the direction of Ray Kroc, petitioned for a trademark on another logo—a covering, twofold curved "M" image.

Before the twofold curves, McDonald's used a solitary curve for the design of its structures. Even though the "Brilliant Arches" logo showed up in different structures , the present form was not utilized until November 18, 1968, when the organization was given a U.S. trademark.

McDonald's - Business Model And Market Strategy

The business and revenue model of McDonald's includes almost 37000 outlets which spread to more than 120 nations. Today, McDonald's is the biggest eatery network on the planet in terms of income.

Initially launched as a Drive-In Hamburger Bar, the idea was advanced in 1940 by The McDonald Brothers, Richard James (Dick), and Maurice James (Mac) McDonald. It was after the presentation of the Speedee Service System with shakes, fries, and burgers costing as low as 15 pennies that the McDonald Brothers started the establishment of McDonald's Hamburgers.

In 1954, Ray Kroc turned into the establishment operator of the McDonald Brothers. The main McDonald's eatery was opened by Kroc in 1955 in Des Plaines, Illinois, USA. It was in the year 1961 that the rights to the eating joint of the kin were obtained by McDonald's for a powerful total of $2.7 million.

You may likewise be astonished to realize that when the first McDonald's eatery opened, the extremely well-known McD french fries were eaten with no ketchup! The revenue model of McDonald's, the world's quickest developing food chain, is an interesting one.

McDonald's - Target And Mission

McDonald's endeavours hard to be its clients' "most loved spot and approach to eating". McDonald's plan of action is fixated on the ground-breaking strategy "Plan To Win", which is placed into requests around the world.

With the mission of "Quality, Service, Cleanliness, and Value", McDonald's has clung to each of these characteristics. Client experience is improved by the selection of five fundamentals: people, products, place, price, and promotion.

Additionally, McDonald's plans to give high-review nourishment, at effectively reasonable costs to individuals over the globe. The deals at McDonald's are furrowed through an efficient deals channel which guarantees remarkable consumer loyalty on all occasions.

Astounding Vision

When Ray Kroc opened the Original McDonald's in Illinois, he had a dream of expanding the franchise across the globe with more than 1000 outlets in the States itself. Remaining consistent with its guarantee, McDonald's widened its worldwide handle by opening joints outside the US as early as 1967.

The first international outlets were opened in Canada and Peurto Rico. By January 2018, McDonald's was situated in 120 nations and had about 37200 cafés with 1.9 million workers. It was serving more than 69 million individuals every day. At one point in time, McDonald's was opening a new outlet every 14.5 hours!

Significant Growth Strategy

McDonald's has clutched a promising development technique to serve customers and spread its wings. The presentation of the "Speed Growth Plan" in March 2017 enhanced the development of the business.

McDonald's development system depends on retaining, regaining, and converting. McDonald's strives to hold on to its old clients, recapture the lost trust, and convert easygoing clients into ordinary ones.

What's more, it has additionally embraced three quickening agents: digital, food delivery, and experience of things to control its monstrous development. It keeps on reshaping cooperation with clients and raising the level of consumer loyalty and experience through innovation and human endeavours.

Decent Variety

Monetarily, McDonald's has affected the world more significant manner than some other organizations. McDonald's adheres to the conviction "Decent variety is Inclusion" and doesn't leave a solitary opportunity to make each person from every network feel regarded. Its suggestion of "Decent variety is Inclusion" has affirmed its situation at the top position.

The McDonald's way of life revolves around the following: customer-obsessed, better together, and committed to lead. These coupled with its conviction has caused the fast-food chain to exceed expectations in the field of business enterprise and showcasing.

McDonaldization

McDonald's can appropriately be named as one of the best organizations to be involved in the worldwide system. The worldwide broadening of the McDonald's is regularly alluded to as "McDonaldization." Its accomplishment in more than 120 nations can be credited to its hierarchical structure.

The hierarchical structure of McDonald's mulls over expanding localization, and in this way, the entire plan of action of McDonald's is normally redone thinking about the mass intrigue in different nations.

Fruitful Acquisitions

The McDonald's Corporation Mergers and Acquisitions (M&A) have, since its inception, entertained itself with cautious acquisitions. Donato's Pizza which is a Midwestern chain of 143 eateries was obtained by McDonald's on 6 May 1999. Aside from securing Donato's, it acquired the Boston Market on 18 May 2000. Boston Market is a drive-through eatery chain that essentially focuses on home-style sustenance.

Supporting Employees

McDonald's doesn't, in any capacity, hamper the development of its workers. It bolsters its representatives in every possible way and empowers them to set up business systems.

At McDonald's, the work environment is brimming with positivity, connections are advanced, professional openings are supported, and business development is sustained.

Coaches, good examples, and backers are accessible at all times to direct the employees on successful initiatives, professional procedures, and prosperous business.

Engagement Of Community And Education

Aside from being one of the best good-quality fast food options, McDonald's investigates every possibility to endeavour for the network it serves. It effectively takes part in network administration and continues to have a critical effect on assorted networks.

The Global Diversity, Inclusion, and Community Engagement Team alongside its key accomplices have fabricated cherished relations with different network-based associations. McDonald's Hamburger University readies its workforce to maintain the multi-billion dollar business and worldwide initiative improvement programs.

McDonald's - Growth

McDonald's eateries are found in 120 nations and serve 69 million customers each day. McDonald's operates 39,000 restaurants/cafés around the world, utilizing more than 210,000 individuals as part of the arrangement. They help operate 2,770 organization possessed areas and 35,085 diversified areas, which incorporates 21,685 areas diversified to regular franchisees, 7,225 areas authorized to formative licensees, and 6,175 areas authorized to remote affiliates.

Concentrating on its centre image, McDonald's started stripping itself of different chains it had gained during the 1990s. The organization possessed a large stake in Chipotle Mexican Grill until October 2006 when McDonald's was completely stripped from Chipotle through a stock exchange .

Until December 2003, it likewise claimed Donatos Pizza, and it claimed a little portion of Aroma Café from 1999 to 2001. On August 27, 2007, McDonald's sold Boston Market to Sun Capital Partners.

Outstandingly, McDonald's has expanded investor profits for 25 back-to-back years, making it one of the S&P 500 Dividend Aristocrats. The organization is positioned 131st on the Fortune 500 of the biggest United States companies by revenue.

In October 2012, its month-to-month deals fell without precedent for nine years. In 2014, its quarterly deals fell without precedent for a long time, when its deals last dropped for the whole of 1997.

In the United States, McDonald's accounts for 70% of sales in drive-throughs. McDonald's shut down 184 eateries in the United States in 2015, which was 59 more than what they wanted to open.

Starting in 2017, the income was roughly $22.82 billion. The brand estimation of McDonald's is more than $88 billion; outperforming Starbucks with a brand estimation of $43 billion. The total compensation of the organization in 2017 was $5.2 billion; this worth saw an ascent of about 11% from the previous year.

McDonald's is, without a doubt, the quickest developing drive-thru eatery chain on the planet. In 2018, McDonald's developed as the most profitable inexpensive food chain with a brand worth nearing $126.04 billion. Also, the all-out resources of McDonald's were almost $33.8 billion.

The world's quickest developing cheap fast food chain partitions its market into four unique areas: U.S., International Lead Markets, High Growth Markets, and Foundational Markets and Corporate.

According to the report set forth by the organization in the year 2017, the market in the U.S. created the biggest measure of income at $8 billion. The International Leads Markets which includes Australia, Canada, France, Germany, and the U.K. created an income of $7.3 billion.

The High Growth Markets which incorporate China, Italy, Korea, Poland, Russia, Spain, Switzerland, the Netherlands, and comparative brought in about $5.5 billion in revenue.

The Foundational Markets and Corporate incorporate the rest of the business sectors. Furthermore, it additionally incorporates a wide range of corporate exercises. The income created by this section of the market represented roughly $1.9 billion.

McDonald's - Restaurants And Services

In certain nations, "McDrive" areas close to roadways offer no counter administration or seating. interestingly, areas in high-thickness city neighbourhoods frequently preclude pass-through service. There are likewise a couple of areas, found for the most part in the downtown locale, that offer a "Walk-Thru" administration instead of a Drive-Thru.

McCafé is a bistro-style backup to McDonald's cafés and is an idea conceived by McDonald's Australia (likewise known, and promoted, as "Macca's" in Australia), beginning with Melbourne in 1993. As of 2016, most McDonald's outlets in Australia have McCafés situated inside the current McDonald's eatery.

In Tasmania, there are McCafés in each eatery, with the rest of the states rapidly following suit. After moving up to the new McCafé look and feel, some Australian eateries have seen up to a 60% expansion in deals. There were more than 600 McCafés around the world some time back.

Create Your Taste

From 2015–2016, McDonald's attempted another gourmet burger administration and eatery idea dependent on other gourmet cafés, for example, Shake Shack and Grill'd. It was taken off without precedent for Australia in early 2015 and extended to China, Hong Kong, Singapore, Saudi Arabia, and New Zealand with progressing preliminaries in the US showcase.

In committed "Make Your Taste" (CYT) booths, clients could pick all fixings including a kind of bun and meat alongside discretionary additional items. In late 2015, the Australian CYT administration presented CYT servings of mixed greens.

After an individual had requested, McDonald's prompted that hold up times were between 10–15 minutes. At the point when the nourishment was prepared, the prepared group ('has') carried the sustenance to the client's table.

Rather than McDonald's typical cardboard and plastic bundling, CYT nourishment was exhibited on wooden sheets, fries in wire bushels, and servings of mixed greens in china bowls with metal cutlery. A more expensive rate connected. In November 2016, Create Your Taste was supplanted by a "Mark Crafted Recipes" program intended to be increasingly proficient and less expensive.

McDonald's Happy Day

McHappy Day is a yearly occasion at McDonald's during which a portion of the day's deals goes to philanthropy. The collections on this day go to Ronald McDonald House Charities.

In 2007, it was celebrated in 17 nations: Argentina, Australia, Austria, Brazil, Canada, England, Finland, France, Guatemala, Hungary, Ireland, New Zealand, Norway, Sweden, Switzerland, the United States, and Uruguay. As indicated by the Australian McHappy Day site, McHappy Day brought $20.4 million up in 2009. The objective for 2010 was $20.8 million.

McDonald's Monopoly Donation

In 1995, St. Jude Children's Research Hospital got a mysterious letter stamped in Dallas, Texas, containing a $1 million winnings McDonald's Monopoly game piece. McDonald's authorities went to the medical clinic, joined by a delegate from the bookkeeping firm Arthur Andersen, inspected the card under a diamond setter's eyepiece, took care of it with plastic gloves, and checked it as a winner.

Although game guidelines disallowed the exchange of prizes, McDonald's deferred the standard and made the yearly $50,000 annuity instalments for the full 20-year time frame through 2014, even in the wake of discovering that the piece was sent by an individual associated with a theft plan meant to cheat McDonald's.

McRefugees are destitute individuals in Hong Kong, Japan, and China who utilize McDonald's 24-hour cafés as transitory lodging. One out of five of Hong Kong's populace lives underneath the destitution line. The ascent of McRefugees was first archived by picture taker Suraj Katra in 2013.

McDonald's - Future

The reported objective is to source all visitor bundling from inexhaustible, reused, or ensured sources, reuse visitor bundling in 100% of eateries, and overcome framework challenges by 2025.

McDonald's turned into the principal eatery organization on the planet to set an endorsed Science-Based Target to lessen ozone-depleting substance emanations. It also joined the "We Are Still In Leader's Circle", driving activity to relieve environmental change.

McDonald's USA completed five years as the sole worldwide café organization to serve MSC-ensured fish in each U.S. area. It united with Closed Loop Partners to build up a worldwide recyclable and additionally compostable cup arrangement through the NextGen Cup Challenge and Consortium. Official pioneers called for atmosphere activity and offered arrangements at the primary Global Climate Action Summit (GCAS).

McDonald's co-facilitated the "Way to Greenbuild" occasion with Illinois Green Alliance at its new worldwide home office. The structure, a collaboration among Sterling Bay, McDonald's, and Gensler Chicago, got USGBC LEED Platinum accreditation.

McDonald's is establishing the tone for other inexpensive food organizations to pursue. Given the present want by numerous buyers to spend cash on organizations that are doing great on the planet, where McDonald's leads, others will pursue.

Who is the founder of McDonald's?

McDonald's was founded by Richard McDonald and Maurice McDonald on 15 April 1955 in California, United States.

Who is the CEO of Mcdonald's?

Chris Kempczinski is the CEO of Mcdonald's since Nov 2019.

Who is the owner of McDonald's in India?

In India, McDonald's is a joint-venture company managed by two Indians- Amit Jatia (M.D. Hardcastle Restaurants Private Ltd) and Vikram Bakshi ( Connaught Plaza Restaurants Private Ltd).

When was the fast-food chain McDonald's founded?

Mcdonald's was founded in 1940 in San Bernardino, California.

How much does a Mcdonald's franchise owner make?

An average Mcdonald's franchise generates $150,000 annually.

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Fast and Pluribus: Impacts of a Globalizing McDonald’s

The expansion of McDonald’s in the twentieth century brought the fast food chain to more than 100 countries. But how well did it integrate into its new home(s)?

The connection between globalization and McDonald’s is a tale of scholarly metonymy. There’s no textual shortage of evidence that references the now-global fast food chain’s success in other countries , often linking it to themes of self-sufficiency, post-industrial stability, and democracy-formed capitalism.

Among these chunks of research is a more endogenous angle that examines the impact McDonald’s has had within offshore cultures; namely, how the American fast food model has been diffused across different countries. Such case studies, which look at individual cultural phenomena and their direct applications to globalization activity, refines not only the framework of McDonald’s in theories, but overall globalization processes and strategies as well.

Japan’s stylish renditions of fast food practices, for one, existed long before McDonald’s came to the country. Given the existing popularity of convenient and on-the-go meals—including conveyor belt sushi and street vendor meals—American fast food chains were bound to succeed. Scholars John W. Traphagan and L. Keith Brown investigate this supposition by employing an ethnographic model of research, building the argument that Japan not only assimilated—but basically swallowed whole—the McDonald’s dining model , to the point that younger people especially believe McDonald’s is a Japanese company.

Traphagan and Brown emphasize that, rather than “styles of preparation or ingredients,” fast food is defined by “a style of selling food.” Essentially, McDonald’s brought no real paradigm shifts to Japan—but rather constructed a space in which already-formed Japanese cultural practices could continue.

Their case study contrasts with that of geographers Ray Oldakowski and John McEwen, who similarly investigate McDonald’s and its cultural assimilation—but in Ecuador. Their evidence shows that the integration of American fast food dining followed a different path , and McDonald’s remains an obviously foreign establishment in the cityscape. McDonald’s didn’t attempt to adapt to Japanese or Ecuadorian culture (for McDonald’s, “the strategy has been one of consistency, i.e. McDonald’s prefers not to change its way of doing business to adapt to foreign cultures, rather, it changes local cultures to meet its own needs,” they note), but Ecuadorians clearly viewed the fast food chain as a deviation from local tastes, unlike Japanese consumers.

“[A] comparison of exterior designs revealed that the McDonald’s in Guayaquil [Ecuador] were very similar to the typical McDonald’s restaurants in the United States,” write the authors. Moreover, the menus were also similar. Only 2 percent of those polled considered the food served at McDonald’s similar to Ecuadorian food. In contrast, very few interviewees considered Kentucky Fried Chicken—another American fast food establishment—different from Ecuadorian food. Eighty-four percent reported that KFC was the most similar to Ecuadorian food, and 68 percent said it was actually where they dined regularly.

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“Those results suggest that McDonald’s might gain new customers, and more visits from existing customers, if they also offered menu items more typical of Ecuadorian food,” conclude the authors.

In neither Japan nor Ecuador did McDonald’s actively work to adapt itself to the tastes of the host countries, but the depth of integration into local dining customs differed between the two nations. Such observations could prompt additional nation-specific analyses and possibly reveal additional adaptations to the “strategy of consistency” associated with McDonald’s. However, the study of the globalization of fast food from a micro-cultural angle requires challenging assumptive attitudes around American businesses and classical theories, with one of the most popular—and infamously controvertible—examples being the Golden Arches Theory of Conflict Prevention , built on tropes of democratic peace through development. Globalization and its effects could also be examined in light of McDonald’s cultural impacts on its origin country of America, opening a conversation on socio-economics and class .

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McDonald's Corporation

By: Frank T. Rothaermel, John Kim

The case is written from the perspective of McDonald's CEO Steve Easterbrook. Easterbrook assumed office in March 2015, and the case highlights the company's recent and dramatic decline in…

• Length: 23 page(s)
• Publication Date: Sep 28, 2017
• Discipline: Strategy
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The case is written from the perspective of McDonald's CEO Steve Easterbrook. Easterbrook assumed office in March 2015, and the case highlights the company's recent and dramatic decline in performance amidst increasing competition. In addition, the case details Easterbrook's strategic initiatives in an attempted turnaround of McDonald's' fortunes. With some $25 billion in sales (in 2017) and some 45,000 restaurants globally (thereof 27,000 in the U.S.), McDonald's remains the largest quick-service restaurant (QSR) chain. At the same time, McDonald's has been struggling on several fronts in recent years. Attempting to be "everything for everybody," McDonald's fell victim to being "stuck-in-middle," without a clear strategic position. With such a large global installed base of restaurants and franchisees, any changes coming from the McDonald's headquarters require significant leadership, investment, and potential risk.

Learning Objectives

Vision, mission, and values; Core competency; Business model; Business unit and corporate strategy; Industry and competitor analysis.

Sep 28, 2017

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Geographies:

United States

Industries:

Restaurants and food service industry

McGraw-Hill Education

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Jun 7, 2023

McDonald’s: Through the Golden Arches to Global Dominance

• Customer Experience (CX)
• Digital Management and Leadership

Written by Conor Ward

In marketing theory and analysis, we often stress that a brand is much more than just a logo. There are many factors involved when it comes to developing one that’s instantly recognizable (product offering, mission, tone, messaging and customer experience ). 

But, McDonald’s is a brand that’s inextricably linked to one particular brand element: its Golden arches logo. It’s a powerful and meaningful image, built up over decades that evokes familiarity and a sense of fun for many customers.

Let’s look at how McDonalds used marketing and innovation to become a leading brand in a competitive market. We’ll also look at some of the challenges faced and consider  how the company continues to modernize and adapt to embrace the changing digital landscape including artificial intelligence .

The Origins of Empire

Brothers Richard and Maurice McDonald  opened the first McDonald’s restaurant in San Bernardino, California in 1940. The restaurant’s early years’ success led the brothers to franchise their concept to further locations, and the Golden Arches logo was first introduced in 1953 in Phoenix, Arizona.

Ray Kroc, a Chicago native and distributor of a milkshake mixing machine, visited the McDonald brothers in 1954, which led to him becoming their franchise agent. Kroc  ended up buying the rights to expand McDonald’s throughout the US.

How McDonald’s Built a Global Brand

Kroc’s ambition was to bring the company to a larger scale which he did largely through clever and creative marketing. 

Kroc - subject of the 2017 film The Founder - established a partnership with Coca-Cola in 1955 to be the McDonald’s beverage supplier, a key alliance which has endured to this day and helped drive both companies to global expansion.

One standout piece of marketing to drive this growth was the “Look for the Golden Arches!” campaign, introduced in 1960. With the logo gaining increased prominence and traction, this message was genius in its simplicity.

Ronald McDonald was introduced in 1965, and the character began appearing in advertising to target their audience of children, adding that all-important element of fun: albeit one that hasn’t continued so well into this century, despite going through a 2012 makeover.

The company ramped up its advertising campaigns during these years, involving major spending on media – TV, radio and newspapers – with billboards and outdoor signage also playing a role in building brand awareness. The emergence of McDonald’s as a major brand coincided with the golden era in TV advertising, and the company leveraged the medium to its advantage.

Another arena for brand exposure is McDonald’s ongoing sponsorship of sporting events, such as the FIFA World Cup, although their 41-year partnership with the Olympic Games ended in 2017 due to heightened competition, the need to fund menu changes and tech improvements along with bad press for selling ‘junk food’.

McDonald’s Braves Stormy Waters

The company has often been the focus of controversy over the years. As its power and prominence have grown, its business practices, environmental record, working conditions, and health issues have come under the microscope.

In 1990, activists from a small group known as London Greenpeace distributed leaflets entitled ‘What’s wrong with McDonald’s?’, criticizing its environmental, health, and labor record. The company sued them for libel and the case turned out to be the longest running legal action of all time in the UK, referred to as the ‘McLibel’ case .

Morgan Spurlock’s 2004 documentary ‘Super Size Me’ claimed that McDonald’s food was contributing to the increase of obesity in society, and the company was failing to provide nutritional information to its customers. Just weeks after the film premiered, McDonald’s announced that it was eliminating the super-size option from its menu, and creating the adult Happy Meal. Aside from nutritional and health issues, McDonald’s has been a key target of the “Fight for $15” movement which started in the U.S in 2012 as a ground-level push from fast-food workers who started to walk off the job in an effort to raise the minimum wage. Their efforts have had some effect, with 22 million workers seeing raises, and the issue is expanding  into other sectors, like the “gig economy” and ride-share workers.

Modernization and Improving Image

Coming into the 21st Century, the company worked on addressing its deficiencies, improving its image and keeping up to speed with technologies. McDonald’s published its first ever Social Responsibility Report in 2002.

The tagline “I’m lovin’ it”, launched in 2003, has been a success, enduring in marketing campaigns ever since. Menu items continue to change according to health and environmental trends. The brand’s charity work is well known, like the ‘McHappy Day’ annual event and the Ronald McDonald House Charities. The corporate website highlights many areas of the company’s corporate and social responsibility , like climate action, beef sustainability, packaging, diversity, recycling and more.

Most recently—under the leadership of current CEO Chris Kempczinski—the brand rolled out its pivotal “Plan For Change”: an engaging and informative piece of content that outlines key objectives surrounding its revamped net zero emissions, sustainable food sourcing, efficiency, and inclusion and diversity initiatives.

Digital Transformation and Investment

“How do you transition from mass marketing to mass personalization? To do that, you’ve really got to unlock the data within that ecosystem in a way that’s useful to a customer.” McDonald’s CEO Steve Easterbrook

McDonald’s is in the midst of a digital transformation , adapting to new trends and leveraging technology to its advantage.

Pioneering AI decision technology

In 2019, McDonald’s purchased big data start-up Dynamic Yield Ltd, becoming one of the first global restaurant brands to integrate decision technology into its restaurants. 

By leveraging its AI technology, McDonald’s enabled personalization in its drive thru menu and in-store kiosk displays by showing relevant items based on factors such as the weather, time of day or regional preferences. While Dynamic Yield was sold to Mastercard in 2022, McDonald’s will continue to scale and integrate the technology to further enhance customer experience. 

However, some customers were not fans of this new software, Ren Adams (@resinsbiren) made a drive thru order only to have the passenger’s order who pulled up beside her also included! Other users have reported mishaps with the AI technology adding multiple orders or misinterpreting requests. 

Customer Loyalty

Its ‘My Rewards’ app is so successful that in 2021 alone it earned 100% more downloads than its main loyalty competitor, Starbucks.

By developing a cohesive eco-system based on automated technologies, the brand plans to drive extra loyalty from its existing customers while creating a far more bespoke experience by tracking key insights from digital menus, food collection points, and mobile app interaction.

Speaking on the initiatives, McDonald’s President and CEO Chris Kempczinski, explained:

“Digital changes everything. So today, with 90% of the customers coming into my restaurant, I don’t know who they are. I don’t know their prior purchase. I don’t know what their buying pattern is. As I get better and better visibility into that customer, I can actually track and identify their preferences over time.”

The idea here is not only to drive an immense level of personalization , but to also improve operational efficiency in a way that improves output as well as speed of service.

Driving centralization

McDonald’s has centralized its digital strategy for its social media accounts, simplifying their entire social operation, and allowing them to respond to customers in a personalized manner. 

The launch of McDonald’s global brand hubs , a series of offices around the world, employs a ‘follow the sun’ model of engagement to track and interact with customers in real-time, on a constant basis. With thousands of brand mentions a day to deal with, this forms a key part of the digital strategy.

Inspiring communications and campaigns

Recent advertising campaigns have focused on advances in customer experience and digital innovations, highlighting how the brand is making life easier for customers. 

The brand’s most recent forward-thinking campaigns include its artistic ‘McDelivery Pins’ print billboards, its star-studded influencer-led ‘Wanna Go To McDonald’s?’ initiative, and its quirky ‘Raise Your Arches’ campaign.

Spearheaded by British filmmaker, Edgar Wright, this stand-out video ad likens raised eyebrows to the famous Golden Arches.

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Amplified by the hashtag #raiseyoureyebrows, the campaign has earned droves of engagement from various channels.

By partnering up with trending celebrities for its Famous Orders collaborations - including its Travis Scott Meal and J Balvin Meal - McDonald’s has tapped deep into the consciousness of Gen Zers while boosting in-app loyalty exponentially in recent years. In fact, the app installs skyrocketed by 23% during the initial week of its big BTS Meal promotion. No small feat in such a saturated industry.

However, McDonald’s has reprioritized its advertising budget in a bid to get more value and efficiency from its spending. A reduction in overall ad spend (a drop from $98.7 million in 2014 to $63.8 million in 2022) as well as more focused campaigns has proved to be a winning approach.

Tapping into community

The lion’s share of McDonalds’ traffic comes from organic search, direct engagement, and paid advertising—but what’s particularly interesting is the fact that community platform Reddit is one of the brand’s most engaged social channels.

It appears that the colossal impact of its various marketing initiatives, irresistible consumer deals, and commitment to making change has resulted in an ever-growing online community where fans share thoughts, opinions, and insider McD’s hacks. 

This Subreddit provides the brand with access to no end of consumer insight for future marketing initiatives while offering an opportunity to connect with its audience on a personal level.

This video ad showcases McDonald’s ability to tap into memorable everyday moments to position the brand as a fast food purveyor for the people. With a wealth of content, from the funny and inspirational to the enlightening and educational, McDonald’s also earns healthy levels of engagement from its YouTube channel .

McDonald’s: Analysis and Final Thoughts

The digital revolution represents a major challenge for McDonald’s, a brave new world where it needs to adapt to remain strong and profitable. The company is showing that it’s up for that challenge, however, making some smart moves in order to stay ahead of the chasing pack. 

“Long-term vision and commitment to staying the course goes a long way. Too many digital transformation projects are launched with the flawed expectation of jam tomorrow. McDonald’s is chasing the digital secret sauce over a far more pragmatic time frame,” according to digital commentator Stuart Lauchlan.

Millions of people continue to engage with, and buy from, the company daily. It’s an incredible success story, and it will be interesting to see how this powerful brand will continue to evolve.

Published 2019, updated 2023

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Conor is a content producer and writer, and former Membership Content Executive at the Digital Marketing Institute. In that position he played a key role in building and managing an extensive library of specialist digital marketing content for the Membership platform. He is an experienced writer and editor, both for print publications and digital platforms, with a passion for content marketing, major brands and career topics. He can be found on LinkedIn here . 

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How McDonald's Became The Benchmark For Fast Food

Table of contents.

The McDonald brothers developed a system to make it all happen. Yet we know them for Ray Kroc, who created one of the world's largest chains of restaurants, real estate and toy retailers, while 'outmaneuvering' the founders. 

Although McDonald's has not been the largest fast-food chain in the world since 2011, it is still the best-known brand. Even in Israel's Negev Desert, 100 kilometers from the nearest city, there is a restaurant, because franchising has given the company such a huge boost worldwide. 

A few key facts about McDonald’s:

• The Kellogg Company was founded in 1940. 
• McDonald’s and its franchise partners employ more than 200,000 people globally.
• McDonald’s reported $8.1 billion in sales by corporate-owned restaurants and $10.7 billion by franchise partners .
• The gross profit in 2020 was $4.7 billion .
• Global comparable sales decreased 7.7% in 2020 , mainly due to the COVID-19 pandemic.
• McDonald’s spent over $100 million on the international markets to boost marketing in hope of recovery. 
• McDonald's operates more than 39,198 restaurants in more than 100 countries around the world .

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You Don’t Sell Burgers! It’s A Real-Estate Business! 

The first burgers.

Richard (Dick) and Maurice (Mac) McDonald opened their first diner together, a hot dog stands in Monrovia, California, in 1937. Later, in 1940, they moved to nearby San Bernardino and opened McDonald's Bar-B-Que. Over time, the eatery became more popular and profitable, but the brothers realized they could cut a lot of costs if they rethought their concept. They developed a series of revolutionary ideas and strategic measures that proved to be closely linked: reducing the range of products, preparing ingredients properly, keeping potatoes warm with an infrared lamp, and building a kitchen where food could be prepared more quickly. They also encourage people to take their orders and target families rather than young people.

In 1948, the McDonald brothers closed a well-established restaurant and reopened it a few months later with a slimmed-down menu - and by then under the McDonald's name. They realized that most of their income came from selling burgers, so they reduced the selection to almost nothing. (To give you the full picture, the fries and milkshakes were replaced with French fries and patties for a short time.)

Effectiveness above all

Kitchen work was sped up by having only two things to bake. Washing up was also kept to a minimum, as the food was served in disposable packaging. In 1952, the restaurant was closed again for several months to remodel the kitchen so that food could be served more quickly and efficiently than before. The new kitchen and associated system allowed all orders to be filled in as little as half a minute. Since the operation was supported by the "fast system," it's not hard to guess where the term "fast food" came from.

McDonald's goal at the time was to get people to store there, but not to eat there, but to take something there. This was achieved not only by the packaging of the products but also by the fact that there was no built-in canteen in the first restaurant; if you did not want to take what you bought home with you, you could either eat your lunch in your car or sit on a bench nearby. For a while, they also experimented with serving drinks in cone-shaped cups that customers could not put down, which encouraged them to eat faster.

Thanks to this incredibly efficient and fast operation, they were able to sell burgers for 15 cents - about half the price of other places. The fast service, consistent quality, and low price amply compensated customers for the inconvenience. Soon, the McDonald brothers wanted to open more restaurants, but they were not nearly as successful as their first location. The reason was simple: they could not be everywhere; they could only be personally responsible for quality assurance at the first restaurant. At the same time, the oldest McDonald's still in operation today opened in Downey, California.

The arrival of Ray Kroc

The brothers realized that they did not necessarily have to open new locations themselves to expand, but that others would do it for them. So in 1948, they began to reform their business model and set up a franchise system. By 1954, they had sold the royalties from 21 franchises. 

1954 marked a turning point in the McDonald brothers' lives. To further speed up service, they ordered a new type of mixer that could ensure the preparation of multiple servings at once. The order put them in contact with Ray Kroc, a travel agent. Kroc was amazed at how efficiently the restaurant operated. He wanted to get into the business and eventually convinced the brothers to make him their franchise representative. From then on, he was in charge of who and where they could open new restaurants.

The new buildings were now built the way the McDonald brothers envisioned their dream restaurant. A clean, red and white exterior with a neon yellow golden arch on either side of the building attracts potential clients (aka bypassers) to the restaurant. The juxtaposition of these two golden arches became the familiar Meki logo, which also forms an "M," a reference to the initials of their name. It took on a similar look to today's image after Ray Kroc became the owner, or rather founder, of the company.

In 1955, Kroc founded the forerunner of today's McDonald's Corporation (McDonald's System, Inc.) and opened its first new restaurant. The first was followed by the second, the third, and within a year, the 18th. Kroc was entitled to 1.9% of gross sales for each of these restaurants, but under his agreement with the brothers, they were entitled to 0.5%. He could barely cover his expenses with the remaining amount. Then he met Harry Sonnenborn, who gave him a new perspective: McDonald's was in fact a huge real estate business.

Turn of events

Sonnenborn encouraged Kroc to buy the land on which he wanted to build restaurants and then lease it to operators. Kroc listened to him and took the biggest step toward owning the entire chain. This way, he received a steady stream of income and did not have to give any of it to the McDonald brothers. The latter, of course, was not happy about this situation. Everything in the restaurants had to continue to be done the way the brothers wanted, although Kroc tried to introduce several innovations. Finally, in 1961, Kroc bought out the brothers for $2.7 million. To raise this sum, he had to take out loans, 14 million of which he was later able to repay.

Years of rapid expansion

As part of the agreement, the brothers would continue to own the restaurant in San Bernardino, but they had to change the name because Kroc already owned the naming rights to McDonald's. So they continued to run the restaurant under the name "The Big M," but Kroc was upset that he could not have it. Soon after, he opened a Meki just around the corner from the M, which allowed the McDonald brothers to close the location in a few years. They probably regretted the deal for life, because, with their 0.5% share at the time, it would have guaranteed them $15 million a year until the late 1970s, while their heirs would have received $305 million in 2012. And Kroc probably got a good deal on that loan.

By 1965, the company was operating more than 700 restaurants. That year, they went public. McDonald's stock started at $22 a share, but within a week the price had risen to $49. By the end of the decade, they had 1,500 restaurants worldwide and has started at Sonnenborn's suggestion, they continued to own the land on which the Meccas operated. Now they are looking for new land with fairly high standards: it should be about 4,600 m2, with the possibility of building on 370 m2, and located on the corner of at least one, but preferably two, busy roads.

Also in 1965, the then very limited offer was expanded: the Filet-O-Fish sandwich was added to the national menu. The fish burger was invented to give Catholic customers a choice during Lent. In 1968, the Big Mac, the iconic double-decker burger, was introduced. The Egg Muffin was introduced in 1975, the Happy Meal in 1979, and Chicken McNuggets in 1983. Of these, the Happy Meal is perhaps the most interesting, as it has made McDonald's one of the largest toy sellers in the world: 1.5 billion toys are sold each year thanks to the Happy Meal.

Ray Kroc never stopped working for McDonald's until he died on January 14, 1984. To this day, McDonald's provides its customers with great-tasting, affordable food, franchisees and crew members with job opportunities, and suppliers with reliable ingredients and products.

Key takeaways

Successful market penetration does not always require a complete upheaval of the rules of the sector. The McDonald brothers did not invent any truly new dishes, but they did let awareness guide the design of their restaurants. So the number-one success factor for McDonald's is professional design and process management.

The second success factor is sales behavior. While other restaurants were slower to offer their products, the excellent policies encouraged employees to sell customers as many extras as possible. Even today, "go big" accounts for a significant portion of restaurant profits (industry rumors say 40%). 

The third approach is the real estate-based approach. The franchising system that Ray Kroc perfected is still used today, and we know from the annual report that the company makes more revenue from franchisees than it can generate itself.

The McDonald’s Products

Core products.

McDonald's core products include burgers, which typically consist of a slice of beef, cheese, and sauce sandwiched between two halves of a bun - in all combinations and sizes. The smallest product is the standard burger, while the largest is the Big Mac. The sandwiches are available with chicken and fish, as well as localized versions in many countries around the world.

Core products include French fries, which also come in a variety of sizes. In addition, the Happy Meal menu specifically for children, as well as shakes and soft drinks, continue to be an integral part of fast food restaurant menus in almost all countries. According to market research , an average McDonald’s menu includes around 145 items. 

Seasonal products

National holidays, Halloween, Christmas, or even Easter - whatever the occasion, McDonald's introduces new seasonal products every month in every country around the world. Some are country- or region-specific (for example, the foie gras sandwiches are made specifically for the European audience), but most products are available in other countries after a limited local testing period. 

Typically, a traditional product, such as a standard burger, is enhanced with additional ingredients (e.g., spices, additional meat, or a special design) to reflect the seasonal event.

Localized products

McDonald’s has achieved this global success through maximizing localization techniques and appealing to local audiences. The company manages the menus to fit culturally and socially accepted norms; tailoring their traditional Big Mac meals to suit a local audience with specific requirements.

• Argentina: McFiesta burgers are available at McDonald's restaurants in Argentina, which are quarter pounders with mayo instead of ketchup. There are typical US sides here like French fries and Coca-Cola. Consider getting ice cream in an Oreo cone for dessert.
• France: Typically, you'd find the McBaguette combo at Mcdonald's in France - a sandwich that is topped with two hash browns and includes breaded chicken, ham, and cheese. The 'Le McWrap' and the 'Le Menu Happy Meal' are also available. Try their apricot and lime macarons for dessert, or their cherry tomatoes as a side dish.
• Hungary: In Hungary, specialized seasonal menus are very common, both in terms of ingredients and appearance. This is also facilitated by the fact that, since 2019, Hungarian McDonald's restaurants have been managed by a centralized, Hungarian-owned company, while the American McDonald's company provides only the brand and franchise rights. Foie gras is a regular item on Hungarian menus, as is "Dotted McFlurry" (a cottage cheese-based ice cream) made in cooperation with a very popular local dairy supplier. ‍
• India: McDonald's has created the Maharaja Mac by substituting chicken patties for the traditional beef patties in its Big Macs. In India, cows are regarded as sacred animals, thus the reasoning behind this change. Indians also enjoy the Vegetable Pizza McPuff, a unique side dish. However, fries and Coca-Cola are just as popular here as they are everywhere else.

• Middle East: Specifically for Middle East dining, Mcdonald's has created the McArabia Pita, which is served with beef or chicken patties (pork is not allowed in the predominantly Muslim diet), onions, and tahini sauce. 
• New Zealand: Despite being removed from the permanent McDonald's menu in New Zealand, the 'Georgie Pie' is still available in some restaurants. With fries and frozen Coke, a square pie topped with steak and cheese is served.
• Sweden: Scandinavian countries tend to favor healthy diets, especially vegetarian food. McDonald's capitalizes on localization with its vegetarian McBean Patty. Served in a bun with lettuce, tomato, and sauce, it has cannellini and kidney beans, onions, green peppers, and carrots.
• Thailand: There is a Samurai Pork Burger on Thailand's national McDonald's menu, which is a pork patty dipped in teriyaki sauce with lettuce, onions, tomato, and mayonnaise. Besides the usual apple pie, you'll also find corn and pineapple pies that aren't available anywhere else.

Partnerships with other companies

• Coca-Cola: The story of McDonald's and Coca-Cola began in 1955 when the fast-food restaurant was looking for a soft drink supplier. The partnership has continued ever since, with Coca-Cola selling not only soda but also other products to the restaurant chain.
• Oreo: Oreo is a worldwide popular dessert brand that mainly produces biscuits. The filled biscuits have become so popular that McDonald's has become a major supplier of Oreo to Mondelez International. In most countries, the biscuit pieces are served with ice cream, but in 2019, McDonald's China team tested the market with a burger with spam and Oreo biscuits . (It was not a global hit.)
• Beyond Meat: The trend toward vegetarian diets is spreading like wildfire around the world, and McDonald's is no stranger to it. According to the BBC , the McPlant burger will be available in British and Irish outlets as early as next year. The beef patty, made with pea protein, is available in 10 restaurants in Coventry, England, in the first round since the end of September, and then throughout the United Kingdom next year. The product's main ingredient is made for McDonald's by Beyond Meat, a publicly-traded startup.
• Local suppliers: Whether we're talking about the US or any other country in the world, one of McDonald's main and most forward-thinking efforts is to source its ingredients from local suppliers. To ensure that the fish, meat, or burger bun is always made to the same standard, McDonald's applies incredibly strict and centralized guidelines. 

Healthy or not healthy?

The restaurant chain has made great strides in the area of healthy eating in recent years: think supply chain with only local suppliers or the introduction of gluten-free, lactose-free, and vegetarian options. The calorie content of a hamburger today is much lower than that of a burger from 1980. In addition, the McDonald's team places great emphasis on healthy living - and they are trying to recruit new colleagues who will promote this corporate image. But that's just one side of the big picture.

A very interesting post came to light in 2008 when Karen Hanrahan revealed a shocking picture. Out of curiosity, she had set aside a McDonald's burger she bought in 1996 to see how quickly it would disintegrate (since there were theories about "plastic" foods in the past). After 12 years, the burger looked exactly like the one she had just bought, except it had shrunk a bit.

Although this is not part of the company's strategy, the following sources have been criticized the company:

• Jamie Oliver and his legal battle against the company
• Super Size Me , a movie in which the protagonist eats only McDonald’s products 
• In 1986, Greenpeace distributed flyers against obesity, naming McDonald’s among the ones responsible.
• There are also a lot of myths (most of them already busted) around the company’s procedures and products.

The product portfolio is the company's strength, so it's no wonder McDonald's is constantly improving and perfecting its recipes. Although the company has yet to build its healthy food image, its fast service and delicious, robust flavors win over millions of customers every month. 

The range includes flagship products available in all restaurants (except were banned for religious or legal reasons). These include traditional burgers, fries, and cola.

The company also diversifies its menu with seasonal and localized items. In the latter category, offerings vary from country to country and region to region, usually in partnership with local businesses and brands.

Franchise System

What is a franchise system.

Franchising has spread throughout the world not as a separate form of business, but as a special kind of business.

Franchising is a form of business based on close cooperation in which the franchisor or the owner of the system sells a complex system that has been carefully designed professionally and commercially in every respect and successfully tested in a market environment. The system is handed over to the franchisee with full training, branding, and ongoing support and supervision. Franchisors operate the franchise system to the specifications of the transferor, in the agreed territory, for a fee, for a fixed period.

McDonald’s Franchise Costs & Requirements

When purchasing an existing restaurant or a new restaurant, an initial down payment of 40% is required. Down payments must be made from non-borrowed personal resources, such as:

• cash on hand
• vested profit sharing
• business or real estate equity

The down payment amount will vary depending on the total cost of the restaurant. McDonald's generally requires $500,000 of non-borrowed personal resources before considering a new franchise partner. With less cash available, most opportunities to participate in the program are limited and depending on the transaction's specifics, financial requirements may be much higher. Additional or multi-restaurant opportunities may be more available to those with additional funds.

Franchise financing

To purchase a McDonald's restaurant, the buyer must pay a down payment of at least 25% cash. It is possible to finance the remainder of the purchase price for a period of up to seven years. Although McDonald's does not offer funding the project, McDonald's Owners/Operators benefit from established relationships with many national lenders.

Franchise - Ongoing Fees

• Service fee: Currently, a service fee of 4.0% of monthly sales is based on the restaurant's sales performance. 
• Rent: Rent that is based on a percentage of sales monthly.

Other costs of setting up a new franchise

Costs usually range from $1,2 million to $2,2 million. Most of the costs are related to the construction of the restaurant, such as building and interior design, but the franchisee also pays for equipment, furniture, and kitchen appliances.

General franchising strategy in 2021

McDonald's restaurants provide quality food and beverages in 119 countries, which are franchised and operated by the company. At year-end 2020, McDonald's will have 39,198 restaurants, of which 36,521 are franchised, or 93 percent.

McDonald's franchise restaurants fall into one of the following categories: conventional franchises, development licenses, and affiliates. Optimal ownership structures for restaurants, trading areas, and markets (countries) depend on a variety of factors, including financial resources and entrepreneurial abilities, as well as legal and regulatory frameworks in key areas such as property ownership and franchising. McDonald's business relationship with independent franchisees is governed by standards and policies, which are of fundamental importance to the company's performance as well as its brand protection.

McDonald's franchise partners are not financial investors, but committed partners who not only put up the capital to open a restaurant, but are also willing to participate in the day-to-day operations and running of the restaurant. They know all the ins and outs of the business, but they also reinforce the McDonald's brand through their involvement in the local community.

The potential partner does not have to have a suitable location, as the location of the restaurants is always determined by the company and handed over to the franchisee.

The Company’s Old/New Strategies

Accelerating the Arches is the Company's new growth strategy for 2020. As the leading global omnichannel restaurant brand, McDonald's Strategy encompasses all aspects of the company's business as well as updated values and new growth pillars that leverage the company's competitive advantage.

Growth Pillars

• Marketing: Investing in new, culturally relevant marketing approaches to effectively communicate the brand's story, food, and purpose. Customers will be provided with more personal services through enhanced digital capabilities. 
• Products: Focusing on serving delicious burgers, chicken, and coffee. Chicken and beef will be the company's primary focus as they represent the largest growth opportunities. McCafe’s brand, experience, value, and quality will be leveraged by the markets to drive long-term growth for McDonald's.
• Digital, Delivery, and Drive-Thru: McDonald's plans to accelerate technology innovation to meet the needs of customers as they interact with the company.
• Digital Experience: Known as "MyMcDonald's", the new digital experience platform will transform the company's digital offerings across drive-thru, takeaway, delivery, curbside pickup, and dine-in options. Through the digital tools available on the platform, customers will receive tailored offers, will be able to enroll in a new loyalty program, and will have the option to order and receive McDonald's food using their preferred channel. 
• Delivery expansion: McDonald's has expanded its delivery service to nearly 30,000 restaurants in the last three years and plans to expand further.
• The increasing importance of Drive-Thru: More than 25,000 restaurants globally have drive-thrus, including nearly 95% of the over 13,000 in the U.S. This channel has gained in importance since the COVID-19 outbreak, and leadership expects that it will play an even greater role as customers demand more flexibility and choice. In the U.S. and International Operated Markets, the vast majority of new restaurants will have a drive-thru. In addition to automated order taking, the Company plans to test a drive-thru express pick-up lane for customers with digital orders and a restaurant concept that offers drive-thru, delivery, and takeaway only for customers to enjoy a faster and more convenient experience.

For decades, McDonald's sales efforts focused on the cash register and drive-thru. One of the strongest elements of this was the introduction of the "Go Large" theme. By sizing and pricing the products, even those who had no real need chose the largest product, believing it to be the best and most appropriate offering. 

Today, in addition to physical sales, digital sales have become a priority. An app developed by the company not only speeds up the ordering process but also offers additional discounts that can further increase the cart value per customer.

With the introduction of home delivery, McDonald's has begun working with several partners including UberEats, FoodPanda, and Wolt. For a long time, these online marketplaces did not offer fast food products like McDonald's, but they have now become serious players in the market. The company's offering is particularly strong when it comes to speed: on average, food is delivered in 15-20 minutes, compared to 50-80 minutes for a traditional restaurant.

There are several cornerstones of the company's marketing strategy that have contributed greatly to McDonald's success:

• The Ronald McDonald figure: An owner of a McDonald's franchise introduced Ronald McDonald in 1967. To appeal to children, franchise partners decided to use a clown icon as an advertising tool. 96% of American children knew the name Ronald McDonald by 1973. Ronald McDonald is the second most recognizable fictional character among US schoolchildren, behind Santa Claus.

• The McDonald’s logo: There's no doubt that McDonald's golden arches are one of the most recognizable logos in the world. It was created in 1940. During the '60s, McDonald's decided to simplify their logo and focus on branding the company. A brilliant move was choosing the golden arches as the logo for the fast-food restaurant. The McDonald's logo looks very much like two golden-brown French fries bent into a letter M, and this is one of the most effective design features of the logo. McDonald’s is advertising one of its most popular menu items without viewers even noticing it.

• “Para PaPa Paaaa… I’m lovin’ it”: McDonald's has been using this jingle for a very long time. McDonald's jingle highlights a positive dining experience. The musical theme makes the diners feel at home during their meals there, as well as conveys how friendly and helpful the staff is.
• Promotion campaigns: Television advertising has become a favorite field for all fast-food restaurants with the proliferation of TVs. To this day, McDonald's is a loyal advertiser on channels aimed at children and their parents. Its campaigns focus on delicious food, fun, natural ingredients, and health. 

The company is one of the biggest innovators in the food industry and is credited with inventing or perfecting the following:

• McDonald's put in place order-taking kiosks in 2015, making it one of the first fast-food chains to do so. A touchscreen machine located near the front of restaurants lets customers place their orders without the need for a cashier.
• The introduction of specialty coffee at McDonald's changed McDonald's from a fast-food restaurant to something more. McDonald's introduced its specialty coffee line in mid-2007.
• The company separated a part of larger restaurants and re-branded it as McCaffes, a place where customers can buy coffee and desserts. Now it competes with Starbucks for coffee-lovers.
• McDonald's was one of the first fast-food chains to organize even the smallest details of its operations in a manual. This manual is still being improved today.

The 2020 growth plan contained nothing new compared to the path taken a year earlier. The key elements were digital customer access, which was a key driver of the company's continued growth during the COVID epidemic.

Sales and marketing go hand in hand at McDonald's: over the past 80-plus years, the techniques used have been perfected, all aimed at getting customers to buy. Advertising builds on this image of cheap and healthy food.

Final Thoughts And Key Takeaways

Growth by the numbers.

McDonald's has seen steady growth since its founding. Because of the relative cheapness of its products, it is a truly crisis-proof company, which even COVID could not bring to its knees - unlike millions of small catering businesses.

The company has emerged from the crisis as a winner, thanks in particular to digital developments, drive-thru, and the spread of home delivery.

Key takeaways from the McDonald’s story:

• Real estate business: The McDonald's business model has evolved from a restaurant to a complex system in a relatively short period, with some revenue coming from franchise fees, some from land leases, and some from food sales. 
• Thoughtful processes: While other restaurants are constantly experimenting with food, McDonald's has focused on improving its production technologies from the beginning. In addition to innovative machinery, internal processes have also been organized to ensure that products reach customers as quickly and consistently as possible.
• Franchise system: Behind the amazingly dynamic growth of McDonald's has been a well-constructed franchise system, the foundations of which were laid by the McDonald brothers, but perfected by Ray Kroc. 
• Core, seasonal and localized products: The main feature of the company's product range is that it is extremely consistent, as we can also get fries and cola in the farthest corners of the world. At the same time, local companies, at their discretion, can launch the menu with seasonal and localized products, enabling them to engage their customers even more.
• Strong marketing: Mcdonald’s has consciously built up the dining experience - regardless of whether we’re eating a hamburger in the car, in a restaurant, or at home. The logo, the iconic clown figure, the company’s theme song, the packaging, the internal design, and many other elements add up to become an unforgettable experience.
• Home delivery: Delivery was the largest innovational step from McDonald’s for decades, and partnering with food delivery startups, like UberEats or Wolt helped the company not only to survive the pandemic but get in shape for rapid growth.

Consumer opinion on McDonald's is certainly divided: some say it's plastic, others say it has grown up to meet consumer expectations. As a publicly-traded company, the owner of the golden arch has no choice but to march forward, pioneering innovation as it has throughout its history. What does the future hold for the company? An even broader product range, a stronger home, and digital experience - and, investors expect, continued revenue growth.

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McDonald's Corporation

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Joshua D. Margolis

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McDonald's Corporation (Abridged)

• McDonald's Corporation (Abridged)  

MacDonald Change Management Case Study

McDonald’s, one of the most recognizable fast-food chains in the world, has undergone significant changes in recent years to adapt to changing market trends and consumer preferences. 

These changes required a comprehensive change management strategy to ensure a smooth transition and successful implementation. 

In this case study, we will examine external and internal factors that forced McDonald’s to initiate changes, key steps taken to implement those change, and the results of the change management.

Let’s start with overview and background of MacDonald.

Overview of MacDonald History 

McDonald’s is a global fast-food chain that was founded in 1940 by Richard and Maurice McDonald in San Bernardino, California. 

The original concept was a small drive-in restaurant that served burgers, fries, and milkshakes. 

In the 1950s, Ray Kroc, a milkshake machine salesman, became involved in the business and helped to transform it into a franchise model, which rapidly expanded across the United States and eventually the world. 

Today, McDonald’s operates over 38,000 locations in more than 100 countries and serves approximately 69 million customers daily. 

Over the years, McDonald’s has faced many challenges and has adapted to changes in the market and consumer preferences, which has required the company to implement significant changes in its business model and operations

External factors that caused change 

There were several external factors that contributed to the need for change at McDonald’s. Here are a few examples:

• Changing consumer preferences: Consumers are becoming more health-conscious and are demanding healthier food options. As a result, McDonald’s had to adapt its menu to include more salads, fruits, and vegetables to appeal to these consumers.
• Increased competition: There is intense competition in the fast-food industry, and McDonald’s faces competition from both traditional fast-food chains and newer, more innovative brands. To stay competitive, McDonald’s had to find ways to differentiate itself and offer unique value propositions to customers.
• Economic factors: Economic downturns and changes in consumer spending habits can have a significant impact on fast-food sales. McDonald’s had to adapt to changing economic conditions and find ways to maintain sales growth during challenging times.
• Technological advancements: Advancements in technology have transformed the way that consumers order food and interact with restaurants. McDonald’s had to embrace new technologies such as mobile ordering and delivery services to meet the changing needs of its customers.

Internal factors that caused change 

There were several internal factors that contributed to the need for change at McDonald’s. Here are a few examples:

• Declining sales: McDonald’s experienced declining sales in certain markets, which prompted the company to re-evaluate its business model and operations.
• Operational inefficiencies: McDonald’s had become too reliant on its traditional business model and was struggling to keep up with changes in the industry. The company had to find ways to streamline its operations and make them more efficient to remain competitive.
• Cultural resistance to change: McDonald’s had a culture that valued consistency and uniformity, which made it challenging to implement significant changes. The company had to overcome this cultural resistance and find ways to foster a culture that supported innovation and change.
• Employee engagement: McDonald’s recognized that its employees play a vital role in the success of the company and had to find ways to engage and motivate them during the change management process. The company had to communicate effectively with its employees and provide them with the tools and resources needed to embrace the changes.

What were 03 biggest changes that Macdonald successfuly implemented

There were several significant changes that McDonald’s successfully implemented as part of its change management process. Here are three of the most significant changes:

• Menu diversification: McDonald’s recognized the need to adapt its menu to changing consumer preferences and introduced a range of healthier menu items such as salads, fruit, and grilled chicken sandwiches. The company also expanded its breakfast menu to include all-day breakfast and introduced new menu items such as the McWrap to appeal to a wider range of customers.
• Digital transformation: McDonald’s recognized the importance of embracing new technologies and embarked on a digital transformation strategy. The company introduced self-service kiosks in its restaurants, mobile ordering, and delivery services. McDonald’s also launched its own mobile app, which allows customers to order and pay for their food from their mobile devices.
• Restaurant redesign: McDonald’s recognized the need to create a more modern and appealing restaurant experience to attract younger customers. The company invested in a redesign of its restaurants, which included a more contemporary design, comfortable seating, and interactive features such as touchscreen ordering. The company also introduced table service in select locations to improve the customer experience.

These changes were significant and helped McDonald’s to remain competitive and appeal to changing consumer preferences. The successful implementation of these changes required a comprehensive change management strategy that involved collaboration with employees, effective communication, and a commitment to innovation and continuous improvement.

MacDonald’s leadership role in implementing change initiatives

McDonald’s leadership played a crucial role in the successful implementation of change initiatives. The company’s leadership recognized the need to adapt to changing consumer preferences and competitive pressures and committed to a comprehensive change management strategy to drive growth and improve performance.

One of the key leadership roles was played by Steve Easterbrook, who served as the CEO of McDonald’s from 2015 to 2019. Under Easterbrook’s leadership, McDonald’s implemented several changes, including menu diversification, digital transformation, and restaurant redesign.

Easterbrook was instrumental in driving the company’s innovation agenda and creating a culture of continuous improvement. He encouraged employee engagement and empowerment, which helped to drive innovation and ensure that employees were invested in the changes.

Easterbrook also prioritized effective communication, ensuring that employees and customers were informed about the changes and that feedback was solicited and acted upon.

In addition to Easterbrook, McDonald’s leadership team was also instrumental in the successful implementation of change initiatives. The company’s leadership team provided the vision, strategic direction, and resources necessary to implement the changes effectively. They also provided the support and guidance necessary to overcome resistance to change and ensure that the changes were embraced by employees and customers.

Results of the successful change management implemented by MacDonald

One of the biggest outcomes of the changes implemented by McDonald’s was an improvement in its financial performance. The changes helped the company to increase sales, improve profitability, and strengthen its competitive position in the fast-food industry.

For example, McDonald’s menu diversification strategy helped to attract new customers and retain existing customers who were looking for healthier food options. The introduction of digital ordering and delivery services also made it easier for customers to order from McDonald’s and increased the convenience factor, which helped to drive sales growth.

In addition, the restaurant redesign helped to create a more modern and appealing restaurant experience, which helped to attract younger customers and improve customer satisfaction. The successful implementation of these changes helped McDonald’s to achieve its financial goals and improve its overall performance.

Another significant outcome of the changes was the improvement in McDonald’s brand perception. The company’s menu diversification and focus on healthier food options helped to improve its reputation and attract customers who may have previously avoided McDonald’s due to concerns about the nutritional value of its food.

The introduction of digital ordering and delivery services also helped to improve the customer experience and create a more positive perception of the brand. Overall, the changes implemented by McDonald’s helped to strengthen the company’s brand and improve its reputation in the market.

Final Words 

McDonald’s change management process provides an excellent case study for other companies looking to implement significant changes to remain competitive and adapt to changing consumer preferences. By following a comprehensive change management strategy that involves employee engagement, effective communication, and a commitment to innovation and continuous improvement, companies can successfully implement changes that drive growth, improve profitability, and strengthen their competitive position in the market.

About The Author

Tahir Abbas

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McDonald's Corporation's 2020 AWARD FINALIST CASE STUDY : Best Achievement in Operational Excellence to deliver Digital Transformation

Read this article about McDonald's Corporation, Finalist in the Best Achievement in Operational Excellence to deliver Digital Transformation , selected by the   independent judging panel , for the 2020 Business Transformation & Operational Excellence Industry Awards program.

During the March 2017 Velocity Growth Investor Event everyone in the industry took notice when McDonald’s publicly committed to our investors that it would deploy Mobile Order and Pay to over 20,000 restaurants by the end of year. Suddenly, McDonald’s was changing the narrative, with headlines highlighting our customer focus, ambition and strategic moves outlined in our Velocity Growth Plan. To support accomplishing this strategic initiative, McDonald’s established the Global Technology PMO (GTPMO). Reporting to Daniel Henry, Executive Vice President and Global Technology Chief Information Officer, the team quickly operationalized and immediately set out establishing PMO processes, standards and a governance framework to prioritize and operationally manage this massive global effort.

The primary purpose of the GTPMO is to ensure operational excellence and drive growth for McDonald’s through technology. Our short-term strategy, led by Amy Martin, Senior Director, Global Technology PMO and Office of the CIO, was to establish key c-suite partnerships, providing a strategic and highly visible platform for the PMO to operate, and to manage the global deployment of McDonald’s Mobile Order and Pay solution. This initiative, representing the largest undertaken by McDonald’s, was successfully delivered under budget and ahead of schedule. Success with our short-term strategy, positioned the GTPMO to focus on the long-term strategy of leading an agile transformation while expanding our scope to manage the global deployment of key strategic business priorities outlined in our Velocity Growth Plan including:

• McDonald’s Delivery solution in partnership with UberEats + other third party vendor providers (e.g. GrubHub, DoorDash)
• Kiosk technologies to enable the Experience of the Future in our restaurants worldwide
• Customer Relationship Management and Loyalty capabilities built on the foundation of our digital platform
• Technologies to support new menu strategies and restaurant innovations

As of the end of 2019, the Global Technology PMO has successfully expanded the deployment of Mobile Order & Pay to over 24,000 restaurants globally, Self-Order Kiosks in over 20,000 restaurants and expanded Delivery to over 60% of the global McDonald's system. A combination of these efforts are having a direct and positive impact to McDonald’s growth strategy as demonstrated with our Q4 2019 results. “2019 marked a year of significant milestones for McDonald’s – including surpassing $100 billion in Systemwide sales and achieving our highest global comparable sales growth in over a decade,” said McDonald’s President and Chief Executive Officer Chris Kempczinski. “Through the execution of our Velocity Growth Plan, we once again served more customers the food they crave, marking three consecutive years of global comparable guest count growth.” Our CEO, Chris Kempczinski, sums it up best: “Digital is transforming global retail, and it will transform McDonald’s.”

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Marketing Cases from Emerging Markets pp 99–112 Cite as

Case Study 11: Marketing of Services: The McDonald’s Way

• Rik Paul 4 &
• Sanjit Kumar Roy 5  
• First Online: 01 January 2013

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2 Citations

For a lot of people, the name of McDonald’s instantly brings a smile. It is known for its crispy burgers and its wide network of outlets. The company started its business operations in India in 1996 as a 50:50 joint venture partnership between the two businessmen Amit Jatia (Jatia) and Vikram Bakshi (Bakshi). India was a challenging market, given local dietary preferences for vegetarian dishes. Tim Fenton pointed out that India’s eat out market was about $128 billion a year compared with $132 billion in China, but was growing faster than that of China.

If you work just for money, you’ll never make it, but if you love what you’re doing and you always put the customer first, success will be yours. —Ray Kroc, Founder, McDonald’s Corporation.

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Amit Jatia, the MD of Hardcastle Restaurants, joined the McDonald’s family as the youngest JV Partner in 1995. He took hands on training for a year at McDonald’s in Jakarta (Indonesia) as well as a degree in Hamburgerology from the Hamburger University, Oak Brook (Illinois, USA). He was also nominated for “The Economic Times Awards for Corporate Excellence” as “Entrepreneur of the Year” in 2004 and 2005.

Vikram Bakshi became the MD, McDonald’s India (North and East) on September 28, 2006. He was also nominated as the President of the National restaurant Association of India.

Tim Fenton was the president of Asia, Pacific, Middle East and Africa and was accountable for the 38 countries and more than 8,200 McDonald’s restaurants in this region. He served as president, East Division, for McDonald’s USA. He was responsible for more than 5,200 restaurants in the eastern United States, covering eight geographical regions in 21 states.

It is a vegetable burger, which includes a patty made out of potatoes, peas, and spices. It also includes tomato slices, onions, and vegetarian mayonnaise.

It starts with a rectangular shaped crust, but instead of a creamy sauce, it is flavoured with a tomato-based sauce and then is topped with carrots, beans, bell peppers, onions, peas and mozzarella cheese.

It looks similar to McAloo Tikki Burger, but starts with the sesame seed bun. In between the bread, there is a vegetarian patty made from peas, carrots, green beans, red bell pepper, potatoes, onions, rice, and seasoning. It is garnished with lettuce, and has mayonnaise spread thickly on the bread.

A samosa is a stuffed pastry and a popular snack in South and Southeast Asia. It generally consists of a fried or baked triangular, semi-lunar or tetrahedral pastry shell with a savory filling, which may include spiced potatoes, onions, peas, coriander, and lentils, or ground beef or chicken.

Kababs are a wide variety of meat dishes originating in Persia and later on adopted by the Middle East andTurkey, and now found worldwide.

Chole bhatura is a combination of spicy chick peas and fried bread called bhatura made of flour.

Pakoda is a fried snack (fritter) found across South Asia. It is created by taking one or two ingredients such as onion, eggplant, potato, spinach, plantain, cauliflower, tomato, chilli, or occasionally bread or chicken and dipping them in a batter of gram flour and then deep-frying them.

A paratha is an Indian flat-bread that originated in the Indian subcontinent. Parathas are usually stuffed with vegetables such as boiled potatoes, leaf vegetables, radishes or cauliflower and/or paneer (South Asian cheese). Aloo-paratha is the variety that is stuffed with boiled potato and spices.

The bhaaji is a vegetarian dish made from a vegetable. A typical north Indian lunch or dinner usually starts with Poori (flat bread), accompanied by one or more bhaaji(s).

Dosa is a fermented crepe or pancake made from rice batter and black lentils. It is indigenous and is a staple dish in the southern Indian states of Andhra Pradesh, Karnataka, Kerala, and Tamil Nadu.

Vada can vary in shape and size, but are usually either doughnut or disc shaped and are about between 5 and 8 cm across. They are made from dal, lentil, gram flour or potato. Vadas are preferably eaten freshly fried, while still hot and crunchy and is served with a variety of dip called sambar.

Rs = Indian Rupee (s), Re. 1 = 100 paisa, In February 2011, US$1 = Rs. 45 (approximately).

V S Rama Rao, “Fast Food Retailing in India,” www.citeman.com , September 17, 2010.

In India, highways are dotted with local restaurants popularly known as dhabas (singular: dhaba ). They generally serve local cuisine. They are most commonly found next to petrol stations, and are generally open 24 h a day.

“The Burger Story” www.tonicpanel.com .

Leo Burnett Worldwide is an American advertising company, created in 1935 by Leo Burnett. The company was opened in Chicago in 1935. In 1950 the company started its two first major advertising projects, for Kellogg’s and P&G.

Bollywood is the informal term popularly used for the Hindi-language film industry based in Mumbai, Maharashtra, India. The term is often incorrectly used to refer to the whole of Indian cinema; it is only a part of the total Indian film industry, which includes several regional film industries sorted by language.

The Indian Premier League (IPL) is a professional league for Twenty20 cricket competition in India. It was initiated by the Board of Control for Cricket in India (BCCI) headquartered in Mumbai, India.

The Associated Chambers of Commerce and Industry of India (ASSOCHAM) is the umbrella body of chambers of commerce in India. The organisation represents the interests of trade and commerce in India, and interacting with the Government of India on policy issues, and liaisoning with their international counterparts to promote trade between India and other nations.

India’s first Food Franchising Report by Franchise India and CIFTI-FICCI. The primary objective of the report is to provide a snapshot of current trends in Food Franchising vis-a-vis expert analysis of various elements having implications on it.

Established in 1991 by Arvind Singhal, Technopak Advisors is a Management Consulting firm in India, offering strategic advice, start up assistance, performance enhancement impetus, consumer insights and capital advisory to Indian and International companies.

Sagar Ratna is a well known brand of restaurant chain in northern India serving vegetarian cuisine with a speciality in south Indian delicacies.

Yo! China is India’s first and largest chain offering Indian Chinese cuisine in almost all corners of the country. It offers a trendy casual dining atmosphere and has 43 points of presence in trendy locations across India.

Haldiram’s is one of India's largest sweets and snacks manufacturers, based in Delhi, India.

Bikanervala is a chain of traditional restaurant in India which specializes in ethnic Indian food specially sweets and snacks.

Nirula’s is India’s oldest fast food restaurant chain, based in North India and most popular in NCR Delhi. It specialized in “Desi (local) version” of western fast food as well as offered Indian cuisine and casual dining.

Mavalli Tiffin Room (commonly known as MTR) is the brand name of a food related enterprise located in India. It is famous for the MTR restaurant located on the Lal Bagh Road in Bangalore and also for the pre-packed food articles which are sold in packets having the MTR brand. MTR also claims to be the inventor of the popular South-Indian breakfast item, Rava idli.

Murugan idli shop is considered among the best to taste South Indian dishes. Idly, Dosai and Meals are enjoying the prominent positions among the menu of a south Indian.

Denny’s Corp is a full-service coffee shop/family restaurant chain. It operates over 1,500 restaurants in the United States. Denny’s is known for always being open, serving breakfast, lunch, dinner, and dessert around the clock. .

Pollo Tropical is a fast food restaurant chain specializing in the Floribbean cuisine of South Florida (a fusion of Florida cuisine and Caribbean food). Pollo Tropical is owned and operated by Carrols Corporation. The chain has its headquarters in Kendall, unincorporated Miami-Dade County, Florida.

Johnny Rockets is an American restaurant franchise whose concept is to create a classic American restaurant atmosphere. The theme is the diner-style restaurant that had become a common sight by the 1950s.

Wendy’s Old Fashioned Hamburgers is an international fast food chain restaurant founded by Dave Thomas. As of March 2010, Wendy’s was the world’s third largest hamburger fast food chain with approximately 6,650 locations.

Arby’s is a fast food restaurant chain in the United States and Canada that is a wholly owned subsidiary of Wendy’s/Arby’s Group. It is primarily known for selling roast beef sandwiches and curly fries. The company's target market attempts to be more adult-oriented than other fast food restaurants.

CKE Restaurants, Inc. is the parent company of the Carl’s Jr., Hardee’s, Green Burrito, and Red Burrito restaurant chains.

Schlotzsky’s is a privately held franchise chain of restaurants, specializing in sandwiches, headquartered in Downtown Austin, Texas. As of November 20, 2006, Schlotzsky’s has nearly 380 franchised and company-owned locations in 36 states in the United States and in six other countries around the world, generating $210 million in systemwide revenue.

BannaStrow’s is a franchise concept that focuses on a menu of Crepes and Waffles, cooked to order in front of its customers for a wonderful show.

Moe’s Southwest Grill is an American chain of fast casual style Tex-Mex restaurants headquartered in Atlanta, Georgia.

Carvel is an ice cream franchise owned by Focus Brands. Carvel is best known for its ice cream cakes, which feature a layer of distinctive ‘crunchies’. It also sells a variety of novelty ice cream bars, ice cream sandwiches and soft serve ice cream.

Dunkin’ Donuts is an international doughnut and coffee retailer founded in 1950 in Quincy, Massachusetts by William Rosenberg.

Popeyes Chicken & Biscuits (sometimes named Popeyes Louisiana Kitchen or Popeyes Chicken & Seafood; often referred to as just Popeyes) is a chain of fried chicken fast food restaurants, owned since 1993 by the Sandy Springs, Georgia-based AFC Enterprises.

The Pizza Company is a restaurant chain and international franchise based in Bangkok, Thailand.

Swensen’s is a global chain of ice cream restaurants that started in San Francisco, California.

Burger King, often abbreviated as BK, is a global chain of hamburger fast food restaurants headquartered in unincorporated Miami-Dade County, Florida, United States.

Ipsos Indica Research is an independent company which ranks fifth among global research companies.

http://indiafranchiseblog.blogspot.com .

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Department of Marketing and Advertising, Coventry Business School, Coventry University, Priory Street, Coventry, CV1 5FB, UK

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Paul, R., Roy, S.K. (2014). Case Study 11: Marketing of Services: The McDonald’s Way. In: Mutum, D., Roy, S., Kipnis, E. (eds) Marketing Cases from Emerging Markets. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-36861-5_15

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Table of Contents

Mcdonald's consumer profile, mcdonald's advertising strategy , promotion for broadcast, billboard ads, outdoor ambient marketing, mcdonald's digital marketing strategy, become a digital marketer in 2022, mcdonald's marketing strategy - a case study.

In 1940, California was where the first McDonald's opened. It became well-known quickly for its tasty hamburgers and friendly service. Eight years later, it was one of the first places to switch from traditional table service to fast food. It added new kinds of burgers and milkshakes to its menu. The success of the development led the company to sign its first franchise agreement in 1952, which led to rapid growth worldwide. The company runs about 40,031 restaurants worldwide, and sales in other countries brought in about $21.076 billion in 2019.

McDonald's marketing strategy has helped the company achieve the success it commands today. From the start of its growth, the company wanted to build strong brand recognition and market penetration to help promote its growing franchise business. As the company's number of customers grew, they did more research on demographics to help them target easily. McDonald's marketing strategy includes investing in online and offline marketing methods that spread its clear, brand-centered messages to a large audience and using other channels like its dedicated mobile app to reach and keep loyal customers.

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McDonald's has a wide range of customers because it uses mass marketing and has low prices at fast-food restaurants. Most of the chain's customers are between 35 and 54. Buyers, both men and women, often have low to average incomes. They are known as brand-loyal casual diners who spend an average of $7.79 each time they eat.

Many of these customers are parents of young children who like that the brand's atmosphere and food are good for families. This market group was first targeted in 1979 when Happy Meal, a set of children's meals with a free-themed toy, was introduced. 

McDonald's website wants to create a "pleasant, entertaining environment for everyone to enjoy." This shows how many different kinds of people it wants to attract. The brand does primary market research to determine how to market itself and make sure it fits the demographics of the people it wants to reach. McDonald's uses surveys and questionnaires in stores, on social media, and through its mobile app to find out how happy customers are with the food, service, delivery, and other things. McDonald's Community and other digital channels are always being watched to keep track of what customers say and do.

McDonald's spends a lot of money on billboards and TV ads. In 2018, the company spent nearly $1.5 billion on advertising in the US alone. Outdoor, TV, and radio ads aren't likely to reach many people, so digital marketing strategies are used to send consistent information to people who aren't likely to see or hear the ads.

McDonald's marketing strategy uses TV and radio to get the word out about its brand and promote new menu items, meal discounts, and charitable work. Its broadcast channels and times are chosen so that most people will watch or listen. In November 2018, when the NFL season was at its peak popularity, McDonald's is expected to have spent $52.9 million on TV ads in the United States. This shows the importance of the fast-food chain getting the most prominent broadcast ad positions.

McDonald's has a lot of traditional billboard ads, which have the same marketing goals and content as its TV ads. With billboards that range from static to digitally interactive and are placed in high-visibility, high-traffic areas, the company tries to keep its target demographic and other connected consumer groups thinking positively about its brand.

This is a great example of how multiple ways to promote the same goals can make the campaign more successful compared to campaigns that only use one method.

McDonald's also does creative and interesting outdoor ambient marketing. Ambient advertising is when promotional materials are put in places or on things that are very unusual or unexpected or that aren't usually used for advertising. McDonald's is using this type of guerrilla marketing to make more of an impact on customers. McDonald's campaign shows this for its "Massive McMuffin Breakfast." During the whole year of 2010, the company put up big paper takeout bags with the name of its new breakfast item on major streets in New Zealand. The unexpected and hard-to-miss image got a lot of attention from people walking by, as shown by the many photos of the scene people took and shared on social media. This helped promote the McMuffin breakfast.

The brand's street markings at pedestrian road crossings are another example. They are meant to look like fries sticking out of a McDonald's-branded package of fries.

Online advertising helps the brand reach its goals of building brand awareness and creating demand. The information used online is similar to what you might see in a McDonald's TV ad or on a billboard. However, both the language and the graphics are made to work best on the social media platforms used, such as Twitter, Facebook, and Instagram. By asking customers to post pictures of their meals online, McDonald's takes advantage of the growing food photography trend. In fact, between September 2018 and February 2019, 4,9 million logos of McDonald's were posted on Twitter around the world. This made McDonald's the second most pictured brand.

The company also works on search engine optimization (SEO), but its "organic" SEO method does better than "sponsored" promotion. As of December 2019, 90.7% of the search traffic to mcdonalds.com came from natural search results, while 9.3% came from sponsored keywords.

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McDonald's marketing strategy in the digital medium includes customer interactions through social media like Facebook and Instagram. The customers interact with the brand and with each other on social media. Also, the company offers various discounts and coupons through their social media pages and the company app. McDonald's was one of the few companies that performed well during the 2000s recession. The reason for the success was that the company communicated its strategy to the consumers.

McDonald's digital marketing strategy allowed the company to fight back rumours circulating on social media in 2018. The company got  a Long Term Excellence Award from the Marketing Society. The company responded directly to the allegations that it faced and was able to get its message out in the open. 

McDonald's marketing strategy across the various offline and online methods has allowed the company to maintain its leadership position in the fast-food business. The target audience is families that allow most of the population to feel comfortable at the restaurant. McDonald's marketing strategy across the digital channels helps the company communicate clearly and directly.

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McDonald’s Business Studies Case Study

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Resource Description

role of operations management ● strategic role of operations management – cost leadership, good/service differentiation

Operations → business processes that involve transformation/production – Production = conversion of inputs into outputs

Customer focus → minimising waste, fair value for labour, low cost, reflect changes in consumerism Profit centres → aspects of the business that derive revenue and profits Cost centres → areas which cost is attributed

Cost Leadership → aiming to have the lowest cost & be most price-competitive

CASE STUDY: McDonald’s → Mcdonald’s invested in a global training program (Hamburger University) to ensure efficiency and reduce overall costs

goods and/or services in different industries

Goods/Services Differentiation

Standardisation → making products that are all the same

Product Differentiation → distinguishing products

Differentiating Goods Differentiating Services

– Product features – Product quality – Augmented features (add-ons or benefits) – Time spent on a service – Level of expertise – Qualifications and expertise of the service provider – Quality of the materials/technology used in service delivery

Goods Differentiation Perishable goods → short lead times, distributed fast

Non-perishable goods → operations similar in all industries, more durable goods

Self-service → encouraging customers to take initiative

● interdependence with other key business functions

Interdependence → mutual dependency on one another

Interdependence with… Marketing → producing goods based on market needs, marketing based on cost, product design affects transformation

Finance → cost of production, labour costs

Human Resources → staff needed for production, technology changing operations, outsourcing specialists influences

● globalisation, technology, quality expectations, cost-based competition, government policies, legal regulation, environmental sustainability

Globalisation → removal of trade barriers between nations, operating on an international scale & develop international influence

CASE STUDY: McDonald’s → McDonalds has 37,000 restaurants in 120 countries → in 2018, McDonald’s ranked 11th on Forbes list of most valuable brands → 2017 report showed US$91billion in sales, showing success in maintaining competitive advantage by adapting to global conditions

Supply chain management → managing the flows of goods and services, including transformation. – Businesses need a reliable supply chain that is responsive to changes

Technology → the design, construction and application of innovation devices, methods and machinery in the operations process.

– Administrative level → organisation, planning, decision making – Processing level → manufacturing, logistics, quality management, inventory management

CASE STUDY: McDonald’s → digital menu boards, automatic drink dispensers, online ordering apps

Quality → how well designed, made and functionable goods are. – Expectations that people have of business determines the way products are designed, created and delivered.

CASE STUDY: McDonald’s → after complaints of coffee quality, McDonalds made a promise in 2011 that coffee would be barista made. → in 2018, Mcdonalds started using fresh (not frozen) beef patties, despite taking longer to cook, quality was improved

Cost-based Competition → derived from the breakeven point Fixed costs = costs that do not change regardless of business activity Variable costs = costs that vary in relation to business activity/level of production

CASE STUDY: McDonald’s → in 2015, Mcdonalds dominated western Europe, other businesses attempted to compete by lowering their prices → close focus on cost, helps them to maximise profits Government policies & Legal Regulation → Work Health and Safety Act 2011, Fair Work Act 2009, Superannuation Guarantee Act 1992, Racial Discrimination Act 1975, Taxation Act 1953 → influence business operations

CASE STUDY: McDonald’s → McDonalds is bound by obligations in relation to marketing, advertising, product safety and quality guarantees (Australian Consumer Law 2010) → they must ensure conscionable conduct at a local, state and federal level Environmental Sustainability → business operations shaped around sustainable practices

CASE STUDY: McDonald’s → in 2012, McDonalds opened the Australia’s first Green star accredited restaurant in VIC

● corporate social responsibility CSR → doing more than just complying with the law, but having higher respect for people, community and environment Triple Bottom Line → financial profitability, social impact and environmental impact of a business.

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