...ase 3–6: McDonald’s and C KFC: Recipes for Success in China Quick Service Restaurant Giants in the Middle Kingdom In 2008, McDonald’s and KFC were the two largest quickservice restaurants (QSR) in the world, with 31,999 and 15,580 outlets, respectively.1 Both chains were renowned for their broad spectrum of consumers on a global basis. McDonald’s appeared to be a clear winner in international expansion. It had over 17,500 international outlets and was the first corporation to set up a solid foundation for international franchising. It spearheaded global expansion with its first overseas outlet in Canada in 1967, and entered Japan in 1971.2 McDonald’s outlets had tremendous success in Japan—despite the difference in culture— with record-breaking daily sales and speed of expansion in the initial stage.3 KFC also started international expansion early, opening its first overseas outlet in England in 1964. However, it was given a bumpy ride when it began to penetrate the market in Asia. The Japanese outlets were far less successful than McDonald’s and only started to make a profit in 1976, six years after KFC entered Japan. KFC outlets opened in Hong Kong in 1973 but were all closed down within two years. The company would eventually win the confidence of Hong Kong customers ten years after its first entry. In Taiwan it experienced relatively smoother development, although KFC headquarters was to spend a huge amount of money and effort in order to get the...
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...entrants and a high threat of substitutes. Buyers have a high degree of bargaining power and suppliers have a moderate degree of bargaining power. The restaurant industry is highly competitive and experiences intense rivalry. In terms of macro-environmental factors, emerging markets around the world over are having an impact on how restaurants execute strategy both domestically and abroad. The growth of the middle class in emerging markets, such as China and India, presents a new demographic and an opportunity for quality growth in an industry that is simultaneously experiencing levels of maturity in the US and European markets. Internal analyses of the industry’s top players yields an in depth look into McDonald’s, Yum Brands, Burger King, and Darden Restaurants. McDonald’s is the industry leader in terms of revenues with $89B in 2013 systemwide sales, more than double of nearest competitor...
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...YUM! BRANDS, PIZZA HUT, AND KFC Teaching Note Overview This case describes the evolution of the global fast-food industry and Yum! Brands, Inc.’s development of the Pizza Hut and KFC franchises worldwide. It focuses on international business risk assessment and develops a model of country evaluation that students can use to analyze international business and market entry decisions in a variety of industries, regions, and countries. Teaching Objectives 1. Develop skills in industry analysis 2. Develop skills in global industry analysis. 3. Develop knowledge of franchising and the costs and benefits of expanding globally using franchises versus company-owned stores. 4. Develop skills in international business risk analysis. 5. Develop skills in country portfolio evaluation and assessment. Suggestions for Using the Case This case has been used successfully in undergraduate, MBA, and Executive MBA classes in strategic management, marketing management, and international business. It can be used in undergraduate courses to develop student skills in industry structure analysis, strategy analysis, and international business risk assessment. The teaching note is designed to give students practice in each of these three areas. Instructors may choose to use the case to discuss only one of these three areas during a single class period or to cover all three areas over two class periods. The case can be also...
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...Comparative Study of McDonald's and Kentucky Fried Chicken (KFC) Development in China Wei Hu & Yuanyuan Xie Bachelor’s Thesis 28. 04. 2013 International Business Administration Bachelor’s degree (UAS) SAVONIA UNIVERSITY OF APPLIED SCIENCES THESIS Abstract Field of Study Social Sciences, Business and Administration Degree Programme Degree Programme in International Business Author(s) Wei Hu & Yuanyuan Xie Title of Thesis Comparative Study of McDonald's and Kentucky Fried Chicken (KFC) development in China Date 28.04.2013 Pages/Appendices 53+2 Supervisor(s) Jari Niemelä &Heikki Likitalo Client Organization/Partners McDonald's Corporation & Kentucky Fried Chicken Corporation Abstract McDonald's and KFC are two international fast food restaurants. They both expended their businesses in global scale. It is obvious that McDonald surpassed KFC in terms of sales and fame in international level. However, in China, KFC performs better than McDonald's. The aim of this study is to find out how these two companies developed differently in Chinese market. By making a comparative study of McDonald's and KFC, different operation and competitive strategy theory will be integrated with their development situation. Research is made based on strategy theory, Internet sources and interviews. The thesis is started with general information, Chinese fast food industrial situation introduction and thesis structure. After having introduced the two companies background, we illustrated strategy...
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...Comparative Study of McDonald's and Kentucky Fried Chicken (KFC) Development in China Wei Hu & Yuanyuan Xie Bachelor’s Thesis 28. 04. 2013 International Business Administration Bachelor’s degree (UAS) SAVONIA UNIVERSITY OF APPLIED SCIENCES THESIS Abstract Field of Study Social Sciences, Business and Administration Degree Programme Degree Programme in International Business Author(s) Wei Hu & Yuanyuan Xie Title of Thesis Comparative Study of McDonald's and Kentucky Fried Chicken (KFC) development in China Date 28.04.2013 Pages/Appendices 53+2 Supervisor(s) Jari Niemelä &Heikki Likitalo Client Organization/Partners McDonald's Corporation & Kentucky Fried Chicken Corporation Abstract McDonald's and KFC are two international fast food restaurants. They both expended their businesses in global scale. It is obvious that McDonald surpassed KFC in terms of sales and fame in international level. However, in China, KFC performs better than McDonald's. The aim of this study is to find out how these two companies developed differently in Chinese market. By making a comparative study of McDonald's and KFC, different operation and competitive strategy theory will be integrated with their development situation. Research is made based on strategy theory, Internet sources and interviews. The thesis is started with general information, Chinese fast food industrial situation introduction and thesis structure. After having introduced the two companies background, we illustrated strategy...
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...PART A 1.0 ELEMENTS OF THE MARKETING MIX 1.0.1 PRODUCT Subway offered a menu with wide variety meal and better quality fresh product such as pasta, salad, desserts, soup, the chain's flagship sandwich which is the classic BMT, the 7 under 6 menu which featuring seven submarine sandwiches with 6 grams of fat or less, fresh veggies which already boasts lettuce, tomato, red onion and green peppers (Subway, 2012). Subway also brings in a line of new crab-controlled wraps in 2004 and the product itself has only 5grams Net Crabs. Moreover, in the year 2005, a new menu has been added to Subway’s menu that is a delicious fresh toasted sub and the menu still in consumer demand until now. 1.0.2 PRICING The potential element of marketing mix is the price of the company offered because it is direct impact on the company, consumer and economy as well. Subway uses a little higher of upscale pricing than normal subs in the market. Subway offers different pricing strategy with value pricing. But create value products by service in terms of quality. 1.0.3 PLACE This is concerned with activities needed to move the product or service from the seller to the buyer (Lancaster & Reynolds, 2003). Subway use nontraditional places such as supermarkets, airports, convention centers and business center and also another new market development as their major selling location as a franchise. People who in any kind of Subway sales point are on hand to ensure customer’s demands are coordinated...
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...Healthy Menus Mean Positive Financial Performance? A Case Study of Chipotle Mexican Grill An honors thesis presented to the Department of Accounting, University at Albany, State University of New York in partial fulfillment of the requirements for graduation from The Honors College. Cara N. Veneziano Research Advisor: Raymond K. Van Ness, Ph.D. May, 2013 Abstract The purpose of this study is to assess the consequences of offering healthy menus versus providing historically popular fast foods. Healthier foods are better for society and being able to understand how serving healthier menus will impact the financial performance of a company is crucial. I focus my attention on Chipotle Mexican Grill since it has been making a concerted effort to provide healthier foods. I have selected McDonald’s Corporation as a benchmark comparison. My specific investigative question is: Does a healthier menu translate into greater profits. My study begins with a comparison of Chipotle and McDonald’s meal options and ingredients in order to assess the overall health of their menus. This comparison revealed that Chipotle clearly had a healthier menu. Succeeding the menu comparisons, a financial analysis was performed on Chipotle and McDonald’s. The results of this study found that Chipotle, the healthier company, performed better in terms of Share Price, Stock Volatility, and Liquidity. The findings indicate that McDonald’s, the unhealthier firm, performed better in the areas...
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...Case Study of McDonald’s I. Name of the Company McDonald’s Corporation II. Point of View Newly appointed CEO of McDonald’s, Charles Bell III. Time Context April 15, 2004, after the death of James R. Cantalupo IV. Historical Background of the Company The business began in 1940, with a restaurant opened by brothers Richard and Maurice McDonald at 1398 North E Street at West 14th Street in San Bernardino, California. Their introduction of the "Speedee Service System" in 1948 furthered the principles of the modern fast-food restaurant that the White Castle hamburger chain had already put into practice more than two decades earlier. The original mascot of McDonald's was a man with a chef's hat on top of a hamburger-shaped head whose name was "Speedee". By 1967, Speedee was eventually replaced with Ronald McDonald when the company first filed a U.S. trademark on a clown-shaped man having puffed-out costume legs. Since it was founded more than 50 years ago, McDonald’s has been defining the fast food business. However, the company had been stumbling over the past decade due to its rapid expansion in the 1990s and the lack of adequate employee training. McDonald’s was headed into serious trouble until the arrival of James Cantalupo, who turned around the company by introducing new additions in its menu and cutting back on its expansion plans. During his brief tenure, McDonalds recorded strong growth in sales over the last three quarters. V. Statement of the...
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...McDonald’s Corporation Analysis & Prognosis July 18, 2012 Table of Contents Overview 2 Analysis 2 The History of McDonald’s 2 Mission and Values 3 Company Structure and Organization 3 Sales, Profit, & Cash 4 Key Metrics 5 Position in the Industry 5 Stock Market Performance 6 Strengths and Weaknesses 7 Opportunities and Threats 8 Corporate-Level and Business-Level Strategies 10 Significant Product Failures 10 Prognosis 10 Sales 10 Profits 11 Key Metrics 11 Position in the Industry 11 Conclusion 11 Works Cited 12 Appendix 13 Appendix A 13 Appendix B 13 Appendix C 14 Appendix D 14 Appendix E 15 Overview McDonald’s Corporation is the world’s largest fast food restaurant chain. I have done hours of extensive research on McDonald’s and the limited-service restaurant industry and have been eating McDonald’s for over 20 years. I will discuss McDonald’s past performance versus the industry and provide a prognosis for the future. There is a rich history behind McDonald’s, starting in 1948 with the McDonald brothers. Ray Kroc started franchising McDonald’s in 1955 and from there built a corporation. Most missions and values still used today are those Kroc implemented. McDonald’s is structured as a multifunctional form. It is mainly organized by geographical area. There are four main geographical areas and those are then it is broken up even further. McDonald’s has had steady revenues over the last ten years and...
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...University of Jordan Faculty of Business Strategic Management “McDonald's” Case Study STRATEGIC MANAGEMENT Prepared By Fathi Salem Mohammed Abdullah 2009 Table of Contents Topics Introduction History analysis Vision, Mission, Value The Five Forces Framework PESTEL Framework External Audit CPM-Competitive Profile Matrix External Factor Evaluation (EFE) Matrix Financial Ratio Analysis Internal Audit Internal Factor Evaluation (IFE) Matrix SWOT Matrix SPACE Matrix Grand Strategy Matrix The Boston Consulting Group (BCG) Matrix The Internal-External (IE) Matrix The Quantitative Strategic Planning Matrix (QSPM) Recommendations Page 3 3 4 5 6 7 8 9 10 12 13 14 15 16 17 17 18 20 Introduction: 2 McDonald's Corporation is the world's largest chain of fast food restaurants, serving nearly 47 million customers daily through more than 31,000 restaurants in 119 countries worldwide. McDonald’s sells various fast food items and soft drinks including, burgers, chicken, salads, fries, and ice cream. Many McDonald's restaurants have included a playground for children and advertising geared toward children, and some have been redesigned in a more 'natural' style, with a particular emphasis on comfort: introducing lounge areas and fireplaces, and eliminating hard plastic chairs and tables. Each McDonald's restaurant is operated by a franchisee, an affiliate, or the corporation itself. The corporations' revenues come from the rent, royalties and fees paid by the franchisees...
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...CASE 27 McDonald’s and Obesity THE PROBLEM Governments and influential health advocates around the world, spooked that their nations’ kids will become as fat as American kids, are cracking down on the marketers they blame for the explosion in childhood obesity. Across the globe, efforts are under way to slow the march of obesity. In the United States, roughly 30 percent of American children are overweight or obese. According to the U.S. Centers for Disease Control and Prevention (CDC), an estimated 64.5 percent of Americans tip the scales as overweight or obese, the highest percentage of fat people of any country in the world. However, adults and kids in other countries are catching up. THE WORLD The World Heart Federation reports that globally there are now more than 1 billion overweight adults and that at least 400 million of those are obese. An estimated 155 million children are overweight worldwide including 30–45 million who are obese.1 In many countries, the worst increases in obesity have occurred in young people. About half a million children in Europe are suffering classic middle-aged health problems because they are too fat. Obesity among European children has been on the rise over the last 25 years. The number of overweight children in Europe did not change much from 1974 to 1984; then the rate started to creep up during the next 10 years, and it exploded after 1995. In Britain, one in five children is overweight or obese; in Spain 30 percent;...
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...CASE 27 McDonald’s and Obesity THE PROBLEM Governments and influential health advocates around the world, spooked that their nations’ kids will become as fat as American kids, are cracking down on the marketers they blame for the explosion in childhood obesity. Across the globe, efforts are under way to slow the march of obesity. In the United States, roughly 30 percent of American children are overweight or obese. According to the U.S. Centers for Disease Control and Prevention (CDC), an estimated 64.5 percent of Americans tip the scales as overweight or obese, the highest percentage of fat people of any country in the world. However, adults and kids in other countries are catching up. THE WORLD The World Heart Federation reports that globally there are now more than 1 billion overweight adults and that at least 400 million of those are obese. An estimated 155 million children are overweight worldwide including 30–45 million who are obese.1 In many countries, the worst increases in obesity have occurred in young people. About half a million children in Europe are suffering classic middle-aged health problems because they are too fat. Obesity among European children has been on the rise over the last 25 years. The number of overweight children in Europe did not change much from 1974 to 1984; then the rate started to creep up during the next 10 years, and it exploded after 1995. In Britain, one in five children is overweight or obese; in Spain 30 percent;...
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...CASE 27 McDonald’s and Obesity THE PROBLEM Governments and influential health advocates around the world, spooked that their nations’ kids will become as fat as American kids, are cracking down on the marketers they blame for the explosion in childhood obesity. Across the globe, efforts are under way to slow the march of obesity. In the United States, roughly 30 percent of American children are overweight or obese. According to the U.S. Centers for Disease Control and Prevention (CDC), an estimated 64.5 percent of Americans tip the scales as overweight or obese, the highest percentage of fat people of any country in the world. However, adults and kids in other countries are catching up. THE WORLD The World Heart Federation reports that globally there are now more than 1 billion overweight adults and that at least 400 million of those are obese. An estimated 155 million children are overweight worldwide including 30–45 million who are obese.1 In many countries, the worst increases in obesity have occurred in young people. About half a million children in Europe are suffering classic middle-aged health problems because they are too fat. Obesity among European children has been on the rise over the last 25 years. The number of overweight children in Europe did not change much from 1974 to 1984; then the rate started to creep up during the next 10 years, and it exploded after 1995. In Britain, one in five children is overweight or obese; in Spain 30 percent;...
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...Gitlin MGMT 3800 Business Policy and Strategy Lowell Miller April 14, 2016 Kiara Gitlin Strategic Case Strategic Case I. Core Problem/Issue McDonald’s current challenges consist of many things including their menu, product quality, appealing to millennials, and labor concerns. The new president and CEO, Steve Easterbrook, came at a time when the corporate giant was on its knees in desperate need of way to get back up. One of bigger issues is product quality because it relates to getting the younger customer as well as how the company is perceived worldwide. McDonald’s is one the top 10 biggest brands according to Forbes and Easterbrook desperately wanted to improve public perceptions of the McDonald’s brand. McDonald’s wants to position themselves as a modern, progressive “healthy” burger company in a highly competitive market. Their size made them a convenient target, and more than a decade of negative press including the 2001 book “Fast Food Nation,” the 2004 documentary “Supersize Me,” and Jamie Kennedy’s 2012 “pink slime” exposé had taken its toll. In July 2014, the Big Mac earned the dubious distinction of being America’s worst hamburger, placing last out of 21 in a study by Consumer Reports. McDonald’s also ranked lowest among peers in the 2015 American Customer Satisfaction Index. Fast food restaurants overall dropped 3.8 percent, but McDonald’s fell by 6 percent from 2014, holding firm in the last spot. As the baby boomers get older, the millennials...
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...Table of contents 1. Introduction ................................................................................................................................... 1 1.1. 1.2. 1.3. Structure of the report.............................................................................................................. 1 Mc Donald’s’ Business Model ................................................................................................ 1 Credit crunch ........................................................................................................................... 1 2. Theoretical framework ................................................................................................................. 2 2.1. The credit crunch 2008 ............................................................................................................ 2 The deregulation of the financial markets ....................................................................... 2 The U.S. housing market ................................................................................................. 2 Consequences of the subprime mortgage crisis............................................................... 3 Impact on businesses and consumers in the U.S. ............................................................ 4 2.1.1. 2.1.2. 2.1.3. 2.1.4. 2.2. 2.3. 2.4. 3. SWOT analysis ...................................................................................................
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