2. INTRODUCTION
• McDonald's Corporation is a restaurant franchise recognized for its
affordability.
• Their menu consists of a variety of fast foods, deserts and drinks.
• Headquarters are located in Oak Brook, IL.
• They employ approximately 1.8 million worldwide.
• Major subsidiaries are Chipotle Mexican Grill Inc. and Boston Market
Corporation.
3. MCDONALD'S CORPORATE
STRUCTURE
Chairman of the Board (11 Directors)
• Chief Executive Officer (CEO)
• Chief Operating Officer (COO)
• Corporate Affairs
• Marketing
• Human Resources
• National Operations
• Regional Managers
• Finance
• Strategic Planning
4. MCDONALD’S ORGANIZATIONAL
PHILOSOPHY
• “If I had a brick for every time I’ve repeated the
phrase Quality, Service, Cleanliness and Value, I think I’d probably be
able to bridge the Atlantic Ocean with them.” —Ray Kroc
• Ray Kroc’s philosophy:
• Serve high-quality food
• Uniform methods of preparation
• Menu; burgers, fries, buns, and beverages
5. MCDONALD’S VALUES
• We place the customer experience
at the core of all we do.
• We are committed to our people.
• We believe in the McDonald’s
System.
• We operate our business ethically.
• We give back to our communities.
• We grow our business profitably.
• We strive continually to improve.
6. MARKETING STRATEGY
• McDonald's marketing strategy starts
by determining key audiences
• Their main focus is on the 4Ps:
•
•
•
•
Product
Price
Promotion
Place
• Goal is to retain as many people as
possible once they become
customers
• Major marketing strategy: association
with athletes and celebrities.
7. KEY AUDIENCES
• Parents with two children: Take
children to get a treat.
• Children: See it as a fun place to
eat and play.
• Business customer: Great food, fast
service, on-the-go.
• Teenagers: Dollar menu and free
Wi-Fi Internet.
8. FINANCIALS
• McDonald’s is a company characterized for providing steady returns and
safe investments; it is a low risk company.
• In the latest 10-K report, we found that McDonald's revenues for 2012 were of
$27.6 billion.
• Total operating costs and expenses were of $19 billion yielding to an
operating income of $8.6 billion.
• Net income for 2012 is $5.5 billion.
• This is a 2.1% increase from the previous year.
10. FINANCIAL GROWTH
• Stockholder's dividends have been
increasing over the last five years.
• Current dividend per share (2012):
$0.77/share.
•
•
•
•
2011: $0.70
2010: $0.61
2009: $0.55
2008: $0.50
11. PROFIT HISTORY
McDonald's had a profit growth from
2007 to 2012 of 128%
In the following chart we can see the
net income for the previous six years:
12. EXPECTATIONS FOR THE FUTURE
• Projected total revenue for 2013 is
expected to be $28.47 billion; a
3.3% growth.
• Projected stakeholder's share
expected to be $0.89/share
13. CONCLUSION
PROS OF INVESTING
CONS OF INVESTING
• Mature company = low investment
risk
• Stagnant marketing throughout the
years
• Stable rise of profit/ revenue
• Undesired product due to more
health conscious options
• International renowned success
• External Factors
• 118 locations worldwide
14. FINAL DECISION
• The pros greatly outweigh the cons of investing.
• Steady increase will result in safe investment with profitable ROI
16. RECOMMENDATION
The chart above shows how the stock price has
increased in the past 50 years. There have been regular
dividends and a good amount of stock splits. There is no
signs that this steady increase in stock price and
dividends is going to stop. It is definitely a wise
investment choice for the long term investor.
17. RECOMMENDATION
Reasons to Invest
• Strong increase in stock price and dividends
• Strong marketing strategy
• Has withstood the test of time and economy
• Strong fan base
• Endorsed by many celebrities
• Foothold in most countries world wide
• Strong company values
• Low product prices
18. REFERENCES
•
Krock , R. (1977). The ray kroc story. Retrieved from
http://www.mcdonalds.com/us/en/our_story/our_history/the_ray_kroc_story.html
•
McDonalds. (2010-2013). Mission & values. Retrieved from
http://www.aboutmcdonalds.com/mcd/our_company/mission_and_values.html
•
McDonalds. (2010-2013). Mcdonald's corporate governance. Retrieved from
http://www.aboutmcdonalds.com/mcd/investors/corporate_governance.html
•
McDonald's , C. (2012, Dec 31). Mcdonald's corporation form 10-k. Retrieved from
http://www.sec.gov/Archives/edgar/data/63908/000006390813000010/mcd-12312012x10k.htm
•
NYSE. (2013, November 22). Mcdonald's dividend yield. Retrieved from
http://ycharts.com/companies/MCD/dividend_yield
•
Mcdonald's corp. (2013, November 22). Retrieved from
http://www.marketwatch.com/investing/stock/mcd
•
Science, N. (2013, July 18). Mcdonald's (mcd) earnings expected to rise. Retrieved from
http://www.forbes.com/sites/narrativescience/2013/07/18/mcdonalds-mcd-earnings-expected-torise/
19. REFERENCES CONT.
• McDonald's , C. (2008). Marketing at mcdonald's . Retrieved from
http://www.mcdonalds.co.uk/content/dam/McDonaldsUK/People/Schoolsand-students/mcd_marketing.pdf
• McDonald's (n.d.). Getting to know us. Retrieved from
http://www.aboutmcdonalds.com/mcd/our_company.html
• Mourdoukoutas, P. (2013, April 25). Starbucks and mcdonald's winning
strategy. Retrieved from
http://www.forbes.com/sites/panosmourdoukoutas/2013/04/25/starbucksand-mcdonalds-winning-strategy/
Notas del editor
McDonald's Corporation is a restaurant franchise recognize for its affordable prices all over the world. The restaurant offers a diverse menu with some slight changes depending on the country. Their specialty is affordable fast‑food but in recent years they have added a new line of specialty coffee and deserts. McDonald’s provides their services to more than 69 million people in 118 countries. About 80% of their restaurants are franchised and it is expected that they will keep growing. McDonald’s headquarters are located in the city of Oak Brook, IL. They employ approximately 1.8 million people worldwide. Their major subsidiaries in the United States are Chipotle Mexican Grill Inc. and the Boston marketCorporation.
McDonalds Executive structure consists of : at the top are the chairman, with 11 directors, chief executive officer, and the chief operating officer. Consequently, under it comes the department of corporate affairs, marketing, human resources, national operations, regional managers, finance and strategic planning. In addition, other functional departments are legal, customer services, franchising, security, hygiene and safety, property and construction, supply chain and restaurant services.
Although it is to say Ray Kroc became an overnight success, he says “30 years, was a long, long night”. –Ray KrocRay Kroc’s philosophy consists of selling high quality food with uniform methods of preparation. He wanted to sell burgers, fries, buns, and beverages. He wanted his food to taste the same everywhere, so he established a standard menu for all of his restaurants.
McDonald’s Values are as following: by placing the customer experience at the core, their customers are the reason of their existing, their most important mission is to apply Ray Kroc’s philosophy of “quality, service, cleanliness and value” for each and every customer. By being committed to their people they provide opportunities to develop leaders, nurture talent and reward achievement. They believe a system of well-trained individuals with different backgrounds fosters respect and drives high levels of engagement. In addition, they believe in the McDonalds system which is their business model portrayed by their “three-legged stool” of owner/operators, suppliers, and company employees, is their foundation, and balancing those interests is key. Operating their business ethically is McDonald’s fourth value, they imply holding their business with integrity, honesty and fairness. Additionally, McDonalds gives back to the community by donating money to better their communities and supporting Ronald McDonald house charities, also they grant scholarships to students with high academic standards who cannot afford Universities' tuitions. “We grow our business profitably” is another McDonald’s value where they state to provide a continuous profit to their shareholders by performing an unceasing attention to their customers and the company’s health. Such value is of our interest since we are considering investing is this company. Last but not least, they strive to improve by constant evolution and innovation.
McDonald’s is one of the best-known brands worldwide. McDonald’s aims to continually build its brand by listening to its customers. McDonald’s rode the baby-boomer trend in the 1960s, the swelling ranks of teenagers and the rising female labor force participation, supplying a fast and inexpensive menu. In the 1970s and the 1980s, McDonald’s rode the globalization trend by transferring the American Way of Life to many countries around the world. At the same time, McDonald’s adapted to the social context of each county by franchising to locals. A company as old and large as McDonald’s must be efficient in their marketing strategy in order to maximize their profits and ensure the durability of their brand.The starting point is to find out who McDonald’s potential customers are, as not everyone will be interested in what McDonald’s has to offer. These potential customers are known as key audiences. The basic marketing strategy focuses on the 4Ps, that is: product, price, promotion, and place. McDonald’s combines this basic knowledge with detailed research on the customers in order to ascertain the correct marketing strategy. They focus on: which products are well received, what prices the consumers are willing to pay, what television shows, newspapers and advertisement customers read and view, and finally which restaurants are visited.
Basic knowledge of economics shows us that there are a limited number of customers in the market. Therefore, in order to build a long-term business, it is crucial to retain as many people as possible once they become customers. However, not all customers are the same. A few examples of McDonald’s customers are: parents with two children, children, a business customer, and teenagers. Each of these respective customers is attracted to McDonald’s for different reasons. A parent with two children visits McDonald’s to give their children a treat. Children want to visit McDonald’s because they view it as a fun place to eat. A business customer eats at McDonalds because the food is great, the service is fast, and the food itself can be eaten on the go. Teenagers are attracted by the Dollar Menu, which is highly affordable, and the Internet access available. By far the most successful marketing strategy that McDonald’s has used is its association with athletes and celebrities. This strategy has translated well not only in the U.S. but also throughout the world as children everywhere idolize superstars such as Lebron James and Kobe Bryant.With all this research in mind, McDonald’s constantly continues to change its strategy to evolve with its ever-changing consumer base. What always remains however is the Golden Arches, a symbol that is associated worldwide with McDonald’s. McDonald’s association with athletes and celebrities, highlights that McDonald’s is hip and fashionable, ensuring that, everyone wants to eat McDonald’s.
McDonald’s is consider a mature company due to its stability and time in the industry.Even though it does not provide excessive returns, it is a company characterized for providing steady returns and safe investments; it is a low risk company.In the latest 10‑K report, which is the annual report with all the financial information, we found that McDonald's revenues for 2012 were of $27.6 billion.Their total operating costs and expenses were of $19 billion yielding to an operating income of $8.6 billion. Including tax expenses and interest expense the net income for 2012 is $5.5 billion. This is a 2.1% increase from the previous year. Details can be seen in the following chart:
As we can see, the highlighted areas indicate McDonald’s revenues of $27,567 billion.
The stockholder's dividends at McDonald's have been increasing over the last five years, which indicates great financial health. The current dividend per share is $0.77, in 2011 was $0.70/share, and in 2010 was $0.61/share, in 2009 $0.55/share and in2008 was $0.50/share.
Over the past six years McDonald's has also increased profit per year. The profit growth from 2007 to 2012 was of 128%. In the following chart we can see the total revenues and net income of the previous six years:
It is expected that McDonald’s continues to grow the way it has being growing for the past years. The projected total revenue for the year 2013 is expected to be $28.47 billion, which is a growth of 3.3%, more than the 2.1% growth from 2011 to 2012. The future projected stakeholder's share is expected to be $0.89/share.McDonald’s offers the perfect stock in a weak economy since they offer very low prices for meals with the convenience of a fast restaurant. In the current economic situation many people may be cutting out on restaurant meals by cooking at home but McDonald’s provides a second choice to American. In addition, they don't only target the low‑income population but now McDonald’s has developed a line of specialty coffee, the McCafé. This new line has help McDonald’s broaden their clientele base but not only offering fast, un‑expensive food but also delicious treats and specialty coffee.
