Презентація на тему «McDonald’s Corporation»

content: McDonald's CorporationA Strategic Management Case Studywww.mcdonalds.com/Matthew O'MalleySpenser OuelletteKristi PlourdeRobert Roy

content: O'Malley, Ouellette, Plourde, & Roy 2009OverviewCompany OverviewA Brief history of McDonald'sExisting Mission and VisionExisting Objectives and StrategiesCurrent IssuesNew Mission and VisionExternal AssessmentIndustry analysisOpportunities and threatsEFE MatrixCPM MatrixInternal AssessmentStrengths and weaknessesFinancial ConditionIFE MatrixStrategy FormulationSWOT MatrixSpace MatrixIE MatrixGrand Strategy MatrixMatrix AnalysisQSPM MatrixStrategic Plan for the FutureObjectivesStrategiesImplementation IssuesEPS/EBITEvaluationMcDonald's 2008 Update2

content: O'Malley, Ouellette, Plourde, & Roy 2009Who We AreHeadquartered in Oak Brook, Illinois.World's largest foodservice retailing chain.Known for its burgers and fries.Offers a standard menu at all locations, though some locations may have some variation based on geographic variations in taste preference.Operates over 31,370 fast food restaurants in over 118 countries, employing 390,000 people.A majority of the restaurants are operated by franchisees.McDonald's owns the land used for each of the franchises, then builds and secures a long-term lease for the restaurant site.Franchisees then provide a portion of capital by investing in the equipment, signs, seating and décor of their restaurant business.The company also operates restaurants under the brand name 'The Boston Market‘, acquired in May of 2000.3

content: O'Malley, Ouellette, Plourde, & Roy 2009What We Sell4

content: O'Malley, Ouellette, Plourde, & Roy 20095Where We Are

content: O'Malley, Ouellette, Plourde, & Roy 20096HistoryDec 1948: The first McDonald's restaurant is opened in San Bernardino, California by brothers Richard and Maurice McDonald. Offers burgers, fries, milk shakes, soft drinks, and apple pie.1954: Ray Kroc, a milkshake machine salesman, suggests nationwide franchising and acts as a franchising agent for the brothers.1955: The first restaurant run by Ray Kroc opens in Des Plaines, Illinois. Several problems arise in adapting the system used by Richard and Maurice to the new restaurant. First logo, Speedee, is introduced.1956: Kroc has to repurchase the franchise rights for the Cook County restaurant. They had been previously sold to the Frejlack Ice Cream Co. Fred Turner is hired to oversee operations.1957: Year-end sales for close to 40 restaurants- almost $4.5 million.1958: The 100 millionth hamburger is sold. Sales top $11 million. There are 34 restaurants in existence.

content: O'Malley, Ouellette, Plourde, & Roy 20097History (cont.)1959: Kroc opens 67 new restaurants, bringing the total to 100 franchises. They begin advertising on billboards.1960: Look for the Golden Arches becomes the new slogan. Fifth anniversary of the company is celebrated, and the 200th restaurant is opened. Sales reach $38 million.1961: Kroc buys out the McDonald brothers for $2.7 million and opens his first Hamburger University, for the training of franchisees1962: The Speedee logo is replaced by the Golden Arches as the company logo. Advertises nationally, for the first time, in Life magazine.1963: The 500th McDonald's is opened. The fish filet sandwich is added to the menu. Ronald McDonald is introduced.

content: O'Malley, Ouellette, Plourde, & Roy 20098History (cont.)1965: Stock goes public in celebration of the 10th anniversary of the company. Ads start showing on network television.1966: The first public shareholders meeting is held. Sales hit $200 million.1967: The first restaurants outside the US open in Canada and Puerto Rico.1968: The Big Mac is added to the menu. The 1,000th store is opened in Des Plaines.1969: International division of the company is formed. McDonald's is listed on the Midwest and Pacific stock exchanges.

content: O'Malley, Ouellette, Plourde, & Roy 20099History (cont.)1970: The 1,500th restaurant is opened in New Hampshire. New advertising slogan becomes, You deserve a break today, so get up and get away to McDonald's.1971: Company headquarters are moved from Chicago to Oak Brook, Illinois. Restaurants are opened for the first time in Australia, Germany, Guam, Holland, and Japan.1972: McDonald's is a $1 billion corporation. Surpasses the Army as the nation's biggest dispenser of meals.1973: The Egg McMuffin is added to the menu as a breakfast item.1974: The first Ronald McDonald House is opened. Sales approach $2 billion. Fred Turner is named President and CEO.

content: O'Malley, Ouellette, Plourde, & Roy 200910History (cont.)1976: Sales exceed $3 billion, and the 4,000th store is opened. Directors declare the first cash dividend.1977: A variety of breakfast foods are added to the menu.1979: Happy Meals are added to the menu. Half of all stores have a drive-thru window.1980: The 6,000th restaurant is opened. 25th anniversary is celebrated. Mike Quinlan becomes president and CEO of McDonald's USA, which is a new position.1981: The first restaurants are opened in Denmark, the Philippines, and Spain.1982: Dividends per share rise by 32%. Mike Quinlan becomes president and COO as well as keeping his position with McDonald's USA.

content: O'Malley, Ouellette, Plourde, & Roy 2009111983: Chicken McNuggets are introduced on the menu.1984: Ray Kroc, founder and senior chairman of the board of directors, dies.1984: Year end sales pass $10 billion. Ed Rensi becomes president of McDonald's USA. Open restaurants in Andorra, Finland, Taiwan and Wales, and the 8,000th restaurant is opened.1985: The McDLT is introduced, a hamburger sold with lettuce and tomato in a separate compartment to keep them cool.1986: McDonald's offers comprehensive listings of ingredients in all its foods to the public. Mike Quinlan is elected CEO, and restaurants open in Argentina, Cuba, and Turkey.History (cont.)

content: O'Malley, Ouellette, Plourde, & Roy 200912History (cont.)1987:Tossed salads are added to the menu, to satisfy the public's desire for lighter, more nutritious fast-foods.1988: An agreement is signed to build the first McDonald's in Moscow. Sales exceed $16 billion. Restaurants are opened in Hungary, Korea, and Yugoslavia.1990: The world's biggest McDonald's, with seating for 700, is opened in Moscow.1991: The McLean Deluxe sandwich is introduced and added to the menu after years of research. The company diversifies for the first time, introducing indoor playgrounds, with the first in Chicago.1994: Stella Liebeck from Albuquerque, New Mexico sues McDonald's for almost $2.9 million for burns from spilling a hot McDonald's coffee on her lap. She receives $640,000 from the suit.1996: The first airborne McDonald's, the McPlane, takes off from Switzerland.1996:The Arch Deluxe hamburger is introduced.

content: O'Malley, Ouellette, Plourde, & Roy 200913History (cont.)1996: Net profits over the last five years have grown at a compound annual rate of 12%. Cut cost of opening a new franchise by 30% through standardization and reliance on drive-thrus.1997: Develop plans to lower prices in order to protect market share from further encroachment, mostly by Burger King. New promotion, the Teenie Beanie Babies, is the most effective marketing plan in McDonald's history.1998: The company diversifies outside of hamburger sales with its purchase of a minority stake in a Denver based chain of casual Mexican restaurants, Chipotle Mexican Grill.1999: Continues diversification with the purchase of Donatos Pizza Inc. This was later bought back by the original owner in 2003.2000: In its largest acquisition ever, McDonald's purchases Boston Market, Inc. for $173.5 million. Restaurant is opened in French Guiana.

content: O'Malley, Ouellette, Plourde, & Roy 200914History (cont.)2001: Faced with a class-action lawsuit for advertising its fries and hash browns as vegetarian, even though they include beef flavoring.2001: About 50 new stores are opened in Mexico. McDonald's announces its intent to invest $67 million in the Philippines by 2005.2002: McDonald's apologizes for not listing beef flavoring as an ingredient in its hash browns and fries and offers to donate $10 million to vegetarian groups.2003: Post their first quarterly loss in over 40 years. Slash spending by 33%, and new store openings are reduced from 1,000 the previous year to 360.

content: O'Malley, Ouellette, Plourde, & Roy 200915History (cont.)2004: Introduces the “Go Active! Happy Meal,” consisting of a salad, water, stepometer, and an exercise booklet.2005: Net income increases 14% to $2.6 billion, with record annual sales of $20.46 billion.2005: Chipotle Mexican Grill Inc., in which McDonald's has a 92 percent ownership stake, files an initial public offering with the Securities and Exchange Commission.2006: Plans are established to open 125 restaurants per year in China, bringing the total locations there to 1,000 by 2008.

content: O'Malley, Ouellette, Plourde, & Roy 200916Mission StatementMcDonald's brand mission is to "be our customers' favorite place and way to eat." Our worldwide operations have been aligned around a global strategy called the Plan to Win centering on the five basics of an exceptional customer experience – People, Products, Place, Price and Promotion. We are committed to improving our operations and enhancing our customers' experience.

content: O'Malley, Ouellette, Plourde, & Roy 200917Vision StatementWe aspire to end hunger one meal at a time by providing low cost- high quality nutritional food globally.Corporate Responsibility StatementMcDonald's 2008 Corporate Responsibility ReportIt all comes down to the food. That's what McDonald's is all about. The food we serve…how and where we serve it…the welfare of our employees and our suppliers' employees…where the food comes from…and so much more. Running restaurants is a multi-faceted endeavor, but ultimately, it all comes back to the food.

content: O'Malley, Ouellette, Plourde, & Roy 200918Brand Strategy2003-2008 “I'm Lovin' it” is an international branding campaign by McDonald's Corp. It was created by Heye & Partner, a longtime McDonald's agency based in Unterhaching, Germany. It was the company's first global advertising campaign.Target Market is Children/ Elderly PeopleHappy Meals and Coffee.http://www.youtube.com/watch?v=5fbrnj2Ki4s

content: O'Malley, Ouellette, Plourde, & Roy 200919Menuhttp://www.mcdonalds.com/usa/eat/mcdonalds_menu.htmlNutrition Informationhttp://nutrition.mcdonalds.com/nutritionexchange/nutritionexchange.do

content: O'Malley, Ouellette, Plourde, & Roy 200920Nutrition Information1st restaurant to place its information in an easy-to-read graphic format on their packaging

content: O'Malley, Ouellette, Plourde, & Roy 200921ValuesWe place the customer experience at the core of all we doOur customers are the reason for our existence. We demonstrate our appreciation by providing them with high quality food and superior service, in a clean, welcoming environment, at a great value. We are committed to our peopleWe provide opportunity, nurture talent, develop leaders and reward achievement. We believe that a team of well-trained individuals with diverse backgrounds and experiences, working together in an environment that fosters respect and drives high levels of engagement, is essential to our continued success.We believe in the McDonald's SystemMcDonald's business model, depicted by the “three-legged stool” of owner/operators, suppliers, and company employees, is our foundation, and the balance of interests among the three groups is key.We operate our business ethicallySound ethics is good business. At McDonald's, we hold ourselves and conduct our business to high standards of fairness, honesty, and integrity. We are individually accountable and collectively responsible.http://www.crmcdonalds.com/publish/csr/home/about/values.html

content: O'Malley, Ouellette, Plourde, & Roy 200922Values ContinuedWe strive continually to improveWe are a learning organization that aims to anticipate and respond to changing customer, employee and system needs through constant evolution and innovation.We grow our business profitablyMcDonald's is a publicly traded company. As such, we work to provide sustained profitable growth for our shareholders. This requires a continuing focus on our customers and the health of our system.We give back to our communitiesWe take seriously the responsibilities that come with being a leader. We help our customers build better communities, support Ronald McDonald House Charities, and leverage our size, scope and resources to help make the world a better place.http://www.crmcdonalds.com/publish/csr/home/about/values.html

content: O'Malley, Ouellette, Plourde, & Roy 200923McCafé1993: First McCafé launched in Melbourne, Australia. These reflect a consumer trend towards espresso coffees.Turned out to generate 15% more revenue than regular McDonald's.Largest coffee shop brand in Australia and New Zealand by 2003.First US location was in Chicago, opened in 2001, after 300 locations had opened worldwide.By 2002, had spread to 13 countries.

content: O'Malley, Ouellette, Plourde, & Roy 200924McCafeFeatures a relaxed adult atmosphere. Offers customers a variety of specialty coffee drinks along with muffins, pastries and sandwiches.

content: O'Malley, Ouellette, Plourde, & Roy 200925McDonald's FranchiseMost Owner/Operators enter the System by purchasing an existing restaurant, either from McDonald's or from a McDonald's Owner/Operator.Financial Requirements/Down PaymentInitial down payment is required when purchasing a new restaurant (40% of the total cost) or an existing restaurant (25% of the total cost).The down payment must come from non-borrowed personal resources, which includes cash on hand, securities, bonds.Generally require a minimum of $300,000 of non-borrowed personal resources to consider you for a franchise.Remaining balance of purchase price must be paid off with in 7 years. McDonald's does not offer financing but they work with many national lending institutions.McDonald's owns all buildings and properties.

content: O'Malley, Ouellette, Plourde, & Roy 200926Ray Kroc Formula for Success:QualityServiceCleanlinessValue

content: O'Malley, Ouellette, Plourde, & Roy 200927Ray Kroc- Business ModelRay Kroc- Developed a business model known as “The Three Legged Stool.” Owner/Operator, Suppliers and EmployeesJust as all three legs of a stool need to be equal to support the weight, all three elements of the McDonald's system are equally important partners in McDonald's success.

content: O'Malley, Ouellette, Plourde, & Roy 200928Hamburger University FacilityIn 1993, McDonald's invested $40 million in Hamburger University, a 130,000- square foot facility on an 80-acre campus located at McDonald's Corporate in Oak Brook, IL.13 teaching room300 seat auditorium12 interactive education team rooms3 kitchen labsState of the art service training labs

content: O'Malley, Ouellette, Plourde, & Roy 200929Hamburger UniversityHamburger University has become the company's global center of excellence for McDonald's operations training and leadership development.McDonald's training mission is to be the best talent developer of people with the most committed individuals to Quality, Service, Cleanliness and Value in the world.First company to develop a global training center

content: O'Malley, Ouellette, Plourde, & Roy 200930Hamburger University cont.Hamburger University students can earn credit toward a college degree through their course work.Ray Kroc once said, “If we are going to go anywhere, we've got to have talent. And, I'm going to put my money in talent.”McDonald's spends $1 Billion on training and development every year.

content: O'Malley, Ouellette, Plourde, & Roy 200931Ronald McDonald House CharitiesThe mission of Ronald McDonald Charities is to create, find and support programs that directly improve the health and well being of children.Ronald McDonald Houses are located all around the world and provide families a way to stick together in times of need when their children are ill.Service Provided:Home-cooked mealsPrivate bedroomsPlayrooms for childrenSpecial suites for children with suppressed immune systemsAccredited education programsRecreational activitiesNon-clinical support servicesSibling support services

content: O'Malley, Ouellette, Plourde, & Roy 200932World Children DayMcDonalds restaurants around the world celebrate world children's day with fundraising activities. In 2006, McDonalds raised more than $25 million worldwide to benefit Ronald McDonald House Charities and other local children's charities.

content: O'Malley, Ouellette, Plourde, & Roy 200933Mom Knows Best“Loved by kids, approved by mom” is one of McDonalds important goals. McDonalds created a global moms advisory panel of 10 mothers from 7 countries to provide input and guidance on a broad range of topics, including their food to help better serve the needs of moms and families around the world.

content: O'Malley, Ouellette, Plourde, & Roy 200934Responsible Suppliers“Only purchase from suppliers who meet our stringent food safety standards, but who also share our commitment to social responsibility and sustainability.”-animal welfare-rain forest and antibiotics policies-supplier social accountability program

content: O'Malley, Ouellette, Plourde, & Roy 200935Going GreenMcDonald's has taken the initiative to incorporate used cooking oil into their operations.In several countries across the McDonald's System, restaurants are recycling their used cooking oil to sell to companies that specialize in refining the product into clean burning diesel for consumer use.In 2006, McDonalds in the U.S has began developing green restaurants.Floor Tiles with a high recycled contentEfficient Lighting Products, Skylights and Daylight controlsHigh efficient rooftopsWater conserving toilets

content: O'Malley, Ouellette, Plourde, & Roy 200936Popular PromotionsToys with Happy MealsCarsPirates of the CaribbeanGames- Monopoly/ Uno –Win various prizes and tripsCollectibles- Coca Cola Glasses, Beanie BabiesOlympic Games- Global partner of the Olympic games- reflects our commitment of the importance of sports and physical activities.World Champions- 1,400 children from 51 countries had the opportunity to meet the world's best soccer players at the 2006 FIFA World Cup.

content: O'Malley, Ouellette, Plourde, & Roy 200937Supersize Me ScandalIt all started with a lawsuit against the burger giant by a group of obese teenagers, the case alleged that McDonald's had created a national epidemic of obese children by misleading people into thinking their food was nutritious. 2004Morgan Spurlock used this lawsuit as his inspiration for his hit film Supersize Me which proved to be scandalous for McDonalds. It was a 30 day documentary that focused on the increase in obesity in America due to McDonalds fast food.http://www.youtube.com/watch?v=I1Lkyb6SU5U

content: O'Malley, Ouellette, Plourde, & Roy 200938Other Important Facts53% Household income is spent outside of the home2006 National Restaurant Association Quick Service Restaurant Sales increased 5%The Global “Informal Eating Out” market is expected to Grow $50 Billion in 2007 and over200 Billion the next 4 yearsBreakfast Food Industry $77.6 BillionEnd of 2006- McDonalds had 31,000 locations word-wide and opened 744 restaurants.

content: O'Malley, Ouellette, Plourde, & Roy 2009392006 ObjectivesGrow Market ShareCreate long-terms profitable growth for share holders.Maintain current debt-to capital levels to 35-40%Reduce the percentage of company owned units.Decrease selling, general and administration expenses.

content: O'Malley, Ouellette, Plourde, & Roy 200940External Assessment

content: O'Malley, Ouellette, Plourde, & Roy 200941Global Industry Growth

content: O'Malley, Ouellette, Plourde, & Roy 200942U.S Industry Growth

content: O'Malley, Ouellette, Plourde, & Roy 200943Global Segmentation by Type

content: O'Malley, Ouellette, Plourde, & Roy 200944U.S Segmentation by Type

content: O'Malley, Ouellette, Plourde, & Roy 200945CompetitorsTrademarks are property of respective brands

content: O'Malley, Ouellette, Plourde, & Roy 200946External Audit- OpportunitiesNew Products & ServicesBeverage MarketGrowth of Franchise RestaurantsDemand for Organic ProductsInternational ExpansionConservation (going green)

content: O'Malley, Ouellette, Plourde, & Roy 200947External Audit-ThreatsChange in Commodity PricesFood Safety and Food Borne Illness ConcernsEconomic SlowdownGrowing Health ConsciousnessIntense Competition (dine-in restaurants, Burger King)Legal Challenges (McDonald's faces many lawsuits)

content: O'Malley, Ouellette, Plourde, & Roy 200948McDonaldsBurger KingWendy'sCritical Success factorsWeightsRatingWeighted ScoreRatingWeighted ScoreRatingWeighted Score 0.0 to 1.01 to 4 1 to 4 1 to 4 Market Share0.1840.7230.5420.36Financial Position0.1240.4830.3630.36Global Expansion0.0940.3630.2720.18Customer Service0.0920.1820.1820.18Advertising0.0740.2830.2120.14Price Competitiveness0.0740.2830.2120.14Product Innovation0.1120.2230.3330.33Product Quality0.110.120.240.4Customer Satisfaction0.0830.2430.2440.32Management0.0940.3630.2730.27Totals1 3.22 2.81 2.68McDonalds Competitive Profile Matrix

content: O'Malley, Ouellette, Plourde, & Roy 200949Key External FactorsWeightsRatingWeighted Score 0.0 to 1.01 to 4 Opportunities   New Products & Services0.130.3Beverage Market (frosties)0.0820.16Growth of Franchise Restaurants0.0930.27Demand for Organic Products0.0610.06International Expansion0.140.4Conservation (going green)0.0710.07            Threats  Change in Commodity Prices0.0730.21Food Safety and Food Borne Illness Concerns0.0740.28Economic Slowdown0.140.4Growing Health Consciousness0.0820.16Intense Competition (din-in restaurants, Wendy's)0.0940.36Legal Challenges (McDonalds faces many lawsuits)0.0930.27                  Totals1 2.94External Factor Evaluation MatrixMcDonalds

content: O'Malley, Ouellette, Plourde, & Roy 200950Internal Assessment

content: O'Malley, Ouellette, Plourde, & Roy 200951McDonald's Performance Chart 2006http://moneycentral.msn.com/investor/charts/chartdl.aspx?iax=1&Symbol=MCD

content: O'Malley, Ouellette, Plourde, & Roy 200952Financial HighlightsEarnings per share from continuing operations have increased 13% in 2006.Cash from operations has averaged more than $4 billion per year for the last three years.McDonald's is focusing on the Brand McDonalds. They disposed of Chipotle Mexican Grill in 2006, received $300 million in cash and 18 million shares of McDonald's stock.

content: O'Malley, Ouellette, Plourde, & Roy 200953Financial Highlights (Cont.)Revenue Grew 9% to a record 21.6 Billion2006t21.6B2005t19.8B2004t18.6BThree Year Compound Annual Return to ShareholdersMCDt24%S&Pt10%DJIAt8%McDonalds more than doubled its annual return to shareholders than the S&P 500 and the Dow Jones Industrial Average.

content: O'Malley, Ouellette, Plourde, & Roy 200954Financial Highlights (Cont.)Dividends have increased every year since McDonalds first paid in 1976, nearly doubled since 2004.2006t$1.002005t$0.672004t$0.55Cash returned to shareholders:2006t4.9B2005t2.1B2004t1.3B2003t0.9BTotaled more than $9B between 2003-2006

content: O'Malley, Ouellette, Plourde, & Roy 200955Income Statement

content: O'Malley, Ouellette, Plourde, & Roy 200956Balance Statementhttp://finance.yahoo.com/q/bs?s=MCD&annual

content: O'Malley, Ouellette, Plourde, & Roy 200957Liquidity RatiosCurrent Ratio1.76Quick Ratio1.72Leverage RatiosDebt-to-Total Assets Ratio0.29Debt-to-equity Ratio0.54Long-term debt-to-equity Ratio0.54Times-Interest-earned Ratio11.36Activity RatiosInventory Turns185.90Fixed Assets Turnover0.70Total Assets Turnover0.72Accounts Receivable Turnover25.90Average Collection Period14.10Profitability RatiosGross Profit margins0.33Operating Profit Margin0.22Net Profit Margin0.17Return on Total Assets0.12Return on Stockholders equity0.23Earning per share2.94Price-earnings Ratio15.06Growth Rations (yearly)Sales9.30%Net Income36.20%Earnings per share16.75%Dividends per share50.00%Ratios

content: O'Malley, Ouellette, Plourde, & Roy 200958Growth Rates %IndustrySP-500Sales (Qtr vs. year ago qtr)7.58.3Net Income (YTD vs. YTD)-9.116Net Income (Qtr vs. year ago qtr)42.56.6Sales (5-Year Annual Avg.)8.8913.34Net Income (5-Year Annual Avg.)13.1620.14Dividends (5-Year Annual Avg.)26.6310Price Ratios  Current P/E Ratio24.821.9P/E Ratio 5-Year High30.425.9P/E Ratio 5-Year Low137.4Price/Sales Ratio2.12.38Price/Book Value3.023.39Price/Cash Flow Ratio5.410.6Profit Margins  Gross Margin3133.8Pre-Tax Margin12.117.5Net Profit Margin8.112.45Yr Gross Margin (5-Year Avg.)30.533.55Yr Pretax Margin (5-Year Avg.)12.316.85Yr Net Profit Margin (5-Year Avg.)8.511.7IndustryRatios

content: O'Malley, Ouellette, Plourde, & Roy 200959Financial Condition  Debt/Equity Ratio0.691.19Current Ratio0.40.9Quick Ratio0.40.7Interest Coverage13.943.3Leverage Ratio1.74Book Value/Share3.5816.25Investment Returns %  Return On Equity15.120.8Return On Assets45.8Return On Capital5.47.7Return On Equity (5-Year Avg.)11.114.5Return On Assets (5-Year Avg.)3.15.1Return On Capital (5-Year Avg.)4.36.8Management Efficiency  Income/Employee3,15037,696Revenue/Employee48,925343,930Receivable Turnover29.99.5Inventory Turnover34.55.6Asset Turnover0.70.6IndustryRatios(Cont.)

content: O'Malley, Ouellette, Plourde, & Roy 200960Net Worth Analysis1. Stockholders' Equity + Good Will = 15458.30 + 2073.6t tttttt t $3,531.902. Net Income X 5 = 3544.20 X 5tt tttttttt $17,721.003. Share Price = 44.33/EPS 2.44 = 18.16 X Net Income 3544.2tttttt tt $64,362.674. Number of Shares Outstanding X Share Price = 1204 X 44.33tttttt tt $53,373.32Method Averagett $34,747.22

content: O'Malley, Ouellette, Plourde, & Roy 200961Internal Audit- StrengthsStrong Global Presence (located in over-100 countries)Strong Real Estate PortfolioBrand RecognitionRevenue Growth 9% (Above Industry Average of 7.5%)The Ronald McDonald House (Children Charity)Systemization and Duplication (Consistency)

content: O'Malley, Ouellette, Plourde, & Roy 200962Internal Audit-WeaknessesPublic Perception (perceived as a contributor to societies obesity problem)Product InnovationAdvertising (targets young children)Customer ServiceMarket Saturation (more difficult to add new stores)Labor Turnover

content: O'Malley, Ouellette, Plourde, & Roy 200963Key Internal FactorsWeightsRatingWeighted Score 0.0 to 1.01, 2, 3 or 4 Internal Strengths 3 or 4 Strong Global Presence (located in over 100 countries)0.0940.36Strong Real Estate Portfolio (franchises, land, buildings)0.0940.36Brand Recognition (Ronald McDonald is as famous as Mickey Mouse)0.1140.44Revenue Growth 9% (Above Industry Average of 7.5%)0.1140.44The Ronald McDonald House (Children Charity)0.0640.24Systemization and Duplication Process (consistency)0.0940.36            Internal Weaknesses 1 or 2 Public Perception (perceived as a contributor to societies obesity problem)0.0910.09Product Innovation0.0820.16Advertising- targets young children (many countries ban unhealthy advertisements)0.0720.14Customer Service0.0820.16Market Saturation (more difficult to add new stores)0.0720.14Labor Turnover0.0610.06               Totals1 2.95Internal Factor Evaluation MatrixMcDonald's

content: O'Malley, Ouellette, Plourde, & Roy 200964Strategic Formulation

content: O'Malley, Ouellette, Plourde, & Roy 200965SWOT MatrixSO StrategiesWO StrategiesST StrategiesWT Strategies1. Develop New Products & Services For Global Markets. (S1, O1)1. Advertise Organic Products to Older Demographic. (W3, O4, O6)1. Launch Marketing Campaign for Ronald McDonald House to increase Brand Recognition and Customer Loyalty. (S5, S3, T3, T5)1. Research and Develop products that quell Growing Health Concerns. (W1, T2, T4)2. Develop Green Packaging for all Stores. (S6, O6)2. Spend more money on Research and Development to create new products and services. (W2, O1)2. Develop alternatives to existing menu that can be easily implemented and don't rely on more expensive commodities. (S6, T1)2. Increase spending on Customer Service efforts to decrease legal challenges. (W4, T6)3. Integrate into new territories. (S1, S4, O5)3. Create an organic menu. (W2, O1)

content: O'Malley, Ouellette, Plourde, & Roy 200966McDonald's SPACE MatrixFS+6+1+5+4+3+2-6-5-4-3-2-1-6-5-4-3-2-1+1+2+3+4+5+6ESCAISConservativeAggressiveDefensiveCompetitive

content: O'Malley, Ouellette, Plourde, & Roy 200967Grand Strategy Matrix

content: O'Malley, Ouellette, Plourde, & Roy 200968BCG MatrixMcDonalds stores compete in the same market whether they are corporate owned or franchised.No Value in producing a BCG MatrixMcDonalds would be considered a Star.

content: O'Malley, Ouellette, Plourde, & Roy 200969IE MatrixIFE ScoresHold And MaintainStrongAverageWeak3-42-2.991-1.99High 3-4IIIIIIEFE ScoresMedium 2-2.99IVVVILow 1-1.99VIIVIIIIX

content: O'Malley, Ouellette, Plourde, & Roy 200970Matrix AnalysisAlternative StrategiesIESPACEGRANDCOUNTForward Integration X 1Backwards Integration X 1Horizontal Integration X 1Market PenetrationXX 2Market Development X 1Product DevelopmentXX 2Concentric Diversification XX2Conglomerate Diversification XX2Horizontal Diversification XX2Joint Venture  X2Retrenchment   Divestiture   Liquidation

content: O'Malley, Ouellette, Plourde, & Roy 200971Possible StrategiesCreate an Organic Menu.A. Market PenetrationB. Product development & related diversificationSpend more money on research and development to create new products and services and increase the efficiency of operation.A. Product development & related diversification

content: O'Malley, Ouellette, Plourde, & Roy 200972     Option 1Option2     Create an OrganicSpend more money on R&D to create new products  menu. and services and increase the efficiency of operationsKey External Factors WeightASTASASTASOpportunities   1 to 4 1 to 4 New Products and Services 0.140.440.4Beverage Market (frosties) 0.0830.2420.16Growth of Franchise Restaurants 0.09  Demand for Organic Products 0.0640.2420.12International Expansion 0.1  Conservation (Going Green) 0.0740.2830.21Threats        Change in Commodity Prices 0.0720.1420.14Food Safety and Food Borne Illness Concerns0.07  Economic Slowdown 0.120.230.3Growing Health Consciousness 0.0840.3230.24Intense Competition (Dine-In Restaurants, Wendy's)0.0940.3630.27Legal Challenges (8.8million lawsuits) 0.09    total should be 1.01    Quantitative Strategic Planning Matrix-QSPM

content: O'Malley, Ouellette, Plourde, & Roy 200973Key Internal Factors    OrganicMenu  Increase $ onResearch & DevelopmentStrengths   1 to 4 1 to 4 Strong Global Presence (located in over 100 countries)0.0940.3640.36Strong Real Estate Portfolio (land, buildings)0.09  Brand Recognition (Ronald McDonald is as famous as Mickey Mouse)0.1140.4440.44Revenue Growth 9% (Above industry average 7.5%0.11  The Ronald McDonald House (Children Charity)0.06  Systemization & Duplication Process (consistency)0.09  Weaknesses       Public Perception (perceived as a contributor to societies obesity problem)0.09430.27Product Innovation 0.0840.3240.32Advertising (targets young children) 0.07  Customer Service 0.08  Market Saturation (more difficult to add new stores)0.07  Labor Turnover 0.06    total should be 1.0 1          3.3 3.23QSPM (Cont.)

content: O'Malley, Ouellette, Plourde, & Roy 200974Future Plans

content: O'Malley, Ouellette, Plourde, & Roy 200975ObjectivesObjectives for 2007 and the next three years are:Better restaurant operationsBranded affordabilityMenu variety and beverage choiceGrow market shareMaintain debt-to-capital levels to 35-40%Create long-term profitable growth for shareholders

content: O'Malley, Ouellette, Plourde, & Roy 200976RecommendationsCreate an organic menu to satisfy the growing hunger for healthier foods. This will increase McDonald's sales andbe a positive effective on its public image. tttttt$15,000,000Spend more money on Research & Development to create new products and services and increase the efficiency of operations.$10,000,000Advertise organic products to the older demographic. tttt$10,000,000Increase spending on customer service efforts to decrease legal challenges.$5,000,000Develop green packaging for all stores. This will decrease McDonald's operations expenses and create a better atmosphere in the long run.$25,000,000Total Costs= $65,000,000

content: O'Malley, Ouellette, Plourde, & Roy 200977Going OrganicOrganic Food sales are anticipated to increase an average of 18 percent each year from 2007 to 2010.Organic food represents approximately 2.8% of overall food and beverage sales in 2006. The organic sector grew 20.9% in 2006.Total US organic sales, including food and non-food products, were $17.7 billion in 2006 up 21% from 2005.

content: O'Malley, Ouellette, Plourde, & Roy 200978O'Naturals Organic Fast FoodMcDonalds “competition” in the organic segment.Privately owned company.Locations: 2 in Maine, 1 in Massachusetts, 1 in Arizona, 1 in Kansas.Serves only organic food and beverages.Easy acquisition for McDonalds if they pursue the organic segment of the fast food industry.

content: O'Malley, Ouellette, Plourde, & Roy 200979Implementation

content: O'Malley, Ouellette, Plourde, & Roy 200980EPS/EBIT AnalysisAmount of money needed: $65,000,000Stock Price as of 12/31/06: $41.61Tax Rate: 35%Interest Rate: 7%# Shares Outstanding: 1,204,000,000# Shares needed: 1,562,124

content: O'Malley, Ouellette, Plourde, & Roy 200981EBS/EBIT Analysis (Cont.) Common Stock FinancingDebt Financing  RecessionNormalBoomRecessionNormalBoom  EBIT65,000,000250,000,000600,000,00065,000,000250,000,000600,000,000  Interest4,550,0004,550,0004,550,000  EBT65,000,000250,000,000600,000,00060,450,000245,450,000595,450,000  Taxes22,750,00087,500,000210,000,00021,157,50085,907,500208,407,500  EAT42,250,000162,500,000390,000,00039,292,500159,542,500387,042,500  #Shares1,205,562,1241,205,562,1241,205,562,1241,205,562,1241,205,562,1241,205,562,124  EPS0.0350458920.1347918920.3235005420.032592680.132338680.321047329      70 Percent Stock- 30 Percent Debt70 Percent Debt- 30 Percent Stock  RecessionNormalBoomRecessionNormalBoom  EBIT65,000,000250,000,000600,000,00065,000,000250,000,000600,000,000  Interest4,550,0004,550,0004,550,0003,185,0003,185,0003,185,000  EBT60,450,000245,450,000595,450,00061,815,000246,815,000596,815,000  Taxes21,157,50085,907,500208,407,50021,635,25086,385,250208,885,250  EAT39,292,500159,542,500387,042,50040,179,750160,429,750387,929,750  #Shares1,205,093,4871,205,093,4871,205,093,4871,204,468,6371,204,468,6371,204,468,637  EPS0.0326053540.1323901440.321172178 0.0333589010.1331954570.322075427

content: O'Malley, Ouellette, Plourde, & Roy 200982Other IssuesLabor TurnoverEmployee RetentionCultural differences in international countriesLaws and regulations in international countriesCurrencyPublic Relation

content: O'Malley, Ouellette, Plourde, & Roy 200983Evaluation

content: O'Malley, Ouellette, Plourde, & Roy 200984Update-Current Strategy and Objectives 2007-2008Our Plan to Win, with its strategic focus on "being better, not just bigger," has delivered even better restaurant experiences to customers and superior value to shareholders.We have the world's best owner/operators, suppliers, and employees united in our commitment to customers.We are leveraging greater consumer insight to deliver sustainable business results for the long-term benefit of our shareholders.

content: O'Malley, Ouellette, Plourde, & Roy 200985McDonald's Performance Chart 2006-2009http://moneycentral.msn.com/investor/charts/chartdl.aspx?iax=1&Symbol=MCD

content: O'Malley, Ouellette, Plourde, & Roy 200986McDonald's TriviaMcDonald's sell more than 1/3 of all the French fries sold in restaurants in the U.S.McDonald's restaurant will buy 54,000,000 pounds of fresh apples this year.Nearly one in eight workers in the US has at some time been employed by McDonald's.More than 50,000 students from all over the world have graduated with “Bachelor of Hamburgerlogy” degrees from McDonald's from Hamburger University.Since its founding in 1955, McDonald's has sold well over 100 billion hamburgers.There is about 178 sesame seeds on a Big Mac bun.

content: O'Malley, Ouellette, Plourde, & Roy 200987

content: O'Malley, Ouellette, Plourde, & Roy 200988BibliographyMcDonald's Corporation-2007 Case Notes by Vijaya Narapareddy of University of DenverMcDonald's Online www.mcdonalds.com/2006 Annual ReportGraphicsDatamonitorGlobal Fast Food Industry Profile 2008US Fast Food Industry Profile 2008Tony GauvinWendy's 2007- Strategic Management Case StudyAnalyst ReportsYahoofinance.commoneycentral.msn.comOrganic Trade Association http://www.ota.comO'Naturalswww.onaturals.com/Business & Company Resource CenterMcDonald's Corp. Notable Corporate Chronologies. Online Edition. Thomson Gale, 2007. Reproduced in Business and Company Resource Center. Farmington Hills, Mich.: Gale Group. 2009 http://galenet.galegroup.com/servlet/BCRC