McDonalds Case Study Example | Topics and Well Written Essays - 1750 words

McDonalds - Case Study Example Beefs are not allowed in India for the Hindus. Indonesian prefer to eat more rice and rice based foods. America is the heartland for McDonald's with 50% of global sales. Europe has one third of global sale and is catching up fast, with 39% of global earnings. McDonald's has a presence in 40 European countries though 65% of European earnings come from the Big Three France, Germany and Britain. France is first by profits, with Germany second and Britain third. Russia is the market with the strongest growth with only about 200 McDonald's outlets. It is the group's most profitable market worldwide in operating income per restaurant. Global consumption for burgers and fries made sales at McDonald's soar high in 2007. The company had 2007 sales up 9% year-on-year to $22.8bn($20.5 billion in 2005). Revenue in 2005, $5bn and net profit$2.26bn in 2005. Operating income fell 12% to $3.9b.Europe in 2007 over 2006 result, with sales up 7.5% year-on-year, contributed operating income of $2.13bn. There was disappointment over the fall of sale and operating income of the company resulting in drop in share price of McDonald's. McDonald has three major problems in Europe from where it gets its one third of its revenue. The beef crisis, which was supposed to create brain damage and foot and mouth disease, haunted the company's food business badly. This caused the reduction in consumption of McDonald's food by 60% in Germany and also in other European countries. This problem is now subsiding. This is a big problem because it concerns with health of human being, which is very sensitive matter. Weakening euro that hampered the sale of US products in terms of dollar causes the second problem. Weak euro reduced the dollar value of company sale in Europe. This is an economic problem a multinational company with thousands of outlets abroad will often face this problem because cross currency fluctuations. Third important problem mentioned later in this paper also is about the unhealth food by fast centres in general and by McDonald's in particular. The oily and fatty food damaged health but youths run after it. There is campaign all over the world against fast foods to distract students from them. Even Pricne Charls had riaed voice against it.The solution is recommende later in this paper. Supply strategy The company adopted the common strategy of opening more and more outlets in a country or in a city to increase its turnover. This made the supply side stronger to meet the growing demand of McDonald's food. The company also allowed the local outlet to change in the ingredients in the product to suit the local taste and menus. The company did not prefer the strategy to squeeze more out of the existing outlets but recently it has given green signal to bring changes to suit the local tastes. This strategy will increase the sales per restaurants and make the outlet organically stronger. Certain strategic changes in some restaurants with new interiors and new welcome logos of McDonald were made to attract new customers who look for changes. New McCafes' coffee shop chain has been started for serving the coffee lovers with special