Presentation for Strategic Brand Management. (Year 4 Term 1)

3. Destiny Strategy Culture Experiences

4. McDestiny McStrategy McCulture McExperiences

5. McDestiny
}

6. McDonald’s exists to revolutionize the
fast food industry’s practices to
enhance the welfare of society.
- brandFolio

7. McStrategy
}

8. }
Strategic Heritage

9. Specialize Focus on
in burger families &
sales children
} 1948 1963
1953 1974
Ronald
Ray Kroc’s McDonald
franchise Charity
House

10. Intensive
I’m Lovin’ It
global
campaign
expansion
}
1990’s 2003
2002 2006
Balanced
Plan to Win Active
Lifestyle

11. }
Strategic Environment

12. know thy enemy
fast food chains
coffee joints & bakeries
casual fast-dining restaurants

13. the power of context
strong criticism against obesity

14. trend watching
dining experience
hamburger business
breakfast & snacks

15. }
Strategic Growth

16. Plan to Win

17. }
people
products
} places
Plan to Win
prices
promotions

18. McDonald’s Brand Value
2007
2006
2005
2004
0 7,500 15,000 22,500 30,000
Brand Value ($m)
Interbrand

19. }
Strategic Positioning

20. think & act different

21. Breakfast 24/7 24/7
from 4a.m. Drive-thru McDelivery
24/7 Dessert
McCafe
Dining Kiosks

22. GROIP
Global Restaurant Operations Improvement Process

23. Food Improvement Team

24. Quality, Service, Cleanliness & Value

25. McCulture
}

26. How is McDonald’s organized?

27. }
40 Employees
10 Managers
} Local owners
Rigorous Food
Safety Standards
$2m a year business
Community &
charitable causes

28. ? ?
}
the
three-legged
stool
?

29. owners/
operators

30. suppliers

31. employees

33. Evaluate Jim

34. finding the right people
hiring practices
diversity
people principle’s
awards

36. Crew
Trainer Systems Business
Development Management Management
Crew Shift Restaurant
Management Management
Global Training, Learning & Development Path

37. Area Department
}
Supervisor Manager
Program Program
Training Field Leadership
Consultant Service Development
Program Operation Program
Program

38. 1/2
of the executive team came
from a restaurant

40. McJob

41. 79.1%
feel valued

42. 81.6%
would recommend to a friend

43. promise of golden arches

45. Employee has an
ethics or compliance
question or concern.
Employee speaks
Employee calls
If not
with the direct resolved
the Business
supervisor or
Integrity Line.
other appropriate
1-800-261-9827
manager.
Concerns
Questions
Global
Compliance
Global
Office
Compliance
assigns ID# for
Office
confidentiality &
provides
initiates an
guidance.
investigation if
necessary.
Employee makes an
Issue is resolved.
informed decision.

47. McExperience
}

48. brand identity & global impact

49. “...set of brand associations...
which represent what the brand
strands for and imply a promise to
customers...”
- David Aaker, Building Strong Brands

50. $20b
business

51. 120
countries

52. 30,000
restaurants

53. 50m
people

57. McDonaldization

58. product

60. SuperSized

63. Food Studio

64. price

65. product + price = value

66. Branded
Everyday
Affordability

67. promotion

70. Courtesy of Edelman Asia Pac.

72. place

73. }
Enter the Brand

74. “Re-imaging is essential in the
competitive world of retail. We need
to avoid aging faster than our
customers”
- Mr. Hennequin, head of McDonald’s restaurance France

78. financial
analysis
}

79. Old strategy:
Growth through
expansion

80. 54%
Debt - 1997 to 2002

81. 35%
Increase in Stores - 1997 to 2002

83. 37%
2000 - 2002 Operating Income

84. 55%
2000 - 2002 Net Income

85. $40.31
1999
$16.08
2002
Stock Price

86. “Adding customers to the
restaurant” instead of “adding
restaurants to the customer”
-CEO Jim Skinner, on Plan to Win

87. 32,000
2.5%
29,000
26,000
23,000
20,000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Total Systemwide Restaurants

88. $25,000
$21,250
42%
US$ in Millions
$17,500
$13,750
$10,000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Revenue

89. $4,445.00
109%
$3,333.75
US$ in Millions
$2,222.50
297%
$1,111.25
$0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Operating Income
Net Income

90. $5,000
50%
$4,000
US$ in Millions
$3,000
$2,000
$1,000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Cash Flow from Operating Activities

91. $1.00
$1.00
$0.75
$0.50
$0.25
$0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Divided per Share

92. $50
$44.33
$40
$30
$20
$10
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Year-end Stock Price

93. $57.10
Stock Price Today

94. Change in Brand Value
$22,000
41%
$16,500
US$ in Millions
$11,000
$5,500
18%
$0
2002 2003 2004 2005 2006
McDonald’s Wendy’s

95. challenges &
opportunities
}

96. Challenges
customer worries
saturation in the U.S.
new competition

97. Opportunities
growth in India & China
cashless payment
greying population

99. McDonald’s exists to revolutionize the
fast food industry’s practices to
enhance the welfare of society.
- brandFolio

100. i’m lovin’ it

101. are you?