INTRODUCTION

McDonald's is an American hamburger and fast food restaurant

chain. It was founded in 1940 as a barbecue restaurant operated by
Richard and Maurice McDonald. In 1948, they reorganized their
business as a hamburger stand, using production line principles.
Businessman Ray Kroc joined the company as a franchise agent in
1955 and subsequently purchased the chain from the McDonald
brothers. Based in Oak Brook, Illinois, McDonald's has confirmed
plan to move its global headquarters to Chicago by early 2018.
Today, McDonald's is the world's largest restaurant chain, serving
approximately 68 million customers daily in 119 countries across
approximately 36,538 outlets. McDonald's restaurant is operated by
either a franchisee, an affiliate, or the corporation itself. The
McDonald's Corporation revenues come from the rent, royalties, and
fees paid by the franchisees, as well as sales in company-operated
restaurants. McDonalds owned some of subsidiaries in domestic and
foreign areas.

COMPANYS STRATEGY
Business Strategy
Value for Money
McDonalds aims to lured price sensitive customers with its value for
money meals such as the Buffalo Ranch McChicken ($1) and the Jalapeo
McDouble ($1.49). The company initially targeted high-priced value
items in its menu but has recently shifted its focus towards lower-priced
products.

Customer Service
McDonalds has always focused on its service excellence to provide
customers with high-quality food served quickly and in clean
surroundings. However, with increasing demand and a complex food
menu, the restaurant has been experiencing service delays due to the
longer preparation time required for menu items. Speed of service is one
of the most crucial aspects of fast food. During peak traffic times (lunch
and dinner rush times), customers expect to receive their orders within
about one minute after placing them. During slower times, customers are
willing to wait two or three minutes for their orders before they start to
form negative opinions about the company. McDonald's has realized that
a return to its former reputation for serving quality fast food quickly
means elimination of certain menu items and greater focus on its more
traditional menu items, such as Big Macs, Quarter Pounders, Fish,
Chicken, and French Fries.
Brand Marketing
McDonalds has been adversely affected by the growing health concerns
of consumers all over the world. The products of McDonalds have been
labeled as junk food and declared unfit for daily consumption.
McDonalds now aims to increase the trust of its customers in the food
quality and brand of McDonalds products as healthy food options. To do
this, it has started offering salads, iced tea, sugar free drink options,
fruit juices, and other options that are either low in calories and/or low
in carbohydrates.
Menu Standardization
McDonalds has implemented menu customization for various countries
of operations that has actually complicated the menu items and increased
the preparation time and thus wait time customers. McDonalds needs to
standardized and simplify its menu items to include food items that can
be prepared quickly and served in the shortest possible time. Again,
McDonalds is focusing on its traditional menu of Big Mac, Quarter
Pounders, McFish, McChicken, French Fries, sugar-free drink options,
juices, and breakfasts.
Digital Marketing
McDonalds has shifted its focus on digital marketing strategy so as to
engage and target the young online audience through social media
networks such as Facebook and Twitter. The company hired its first

digital marketing officer Atif Rafiq in the year 2013 (Morrison, 2014).
Digital marketing is paying off, as results show that more young people
are visiting McDonald's than before. The drop-off in sales and market
shares is among families; that is where McDonald's Corporation's
challenge lies.
Breakfast Menu Items
McDonalds has recently launched new additions in its menu items and
offers an expanded breakfast menu with coffee, milkshakes and pastries
for customers. The strategy is quite successful for the brand and the
demand for breakfast menu items have increased substantially for the
company. One possible solution that McDonald's might want to consider
is to follow the lead of one of its smaller regional competitors, Jack-inthe-Box, which sells breakfast 24 hours per day. With the popularity of
the Golden Arches' breakfasts, it might be a successful way to snag some
additional market share and bolster sales and profits.

Corporate Strategy
Expansion strategy
McDonalds has adopted a Market Development strategy for expanding
into growing economies, especially those of Asian countries. The Golden
Arches have set their sights on penetrating Asian markets, as those
markets have high income potential. McDonald's already enjoys
unqualified success in Tokyo, Seoul, Beijing, India, and the United Arab
Emirates, to name a few Asian markets. There are many other markets
throughout the Asian region that offer the promise of high sales, market
share and profit for the creative fast food company that is fast enough on
its feet to set up operations there.

Refranchising
To carry on the expansion strategy the company used the franchising
strategy worldwide. It has successfully replicated its business model, not
in the US but also in the global locations. In 2015, franchised margin
dollars decreased $297 million or 4%. The constant currency increase

was due to positive comparable sales performance, expansion and

refranchising. In 2014, franchised margin dollars decreased $32 million
reflecting a benefit from expansion and refranchising, offset by negative
comparable sales performance. In connection with the companys longterm financial targets, the company plans to refranchise about 4,000
restaurants for the four-year period ending 2018. Easterbrook's biggest
decision may be to refranchise 4,000 restaurants in order to free up
capital to return to shareholders. CEOs long-term goal is for 95% of
McDonald's restaurants to be owned by franchisees, up from 81% today.
While this refranchising activity may have a dilutive effect on the
franchised on the franchised margin percent, it typically results in higher
financial margin dollars.

Source: McDonalds Annual Report 2015

Adaptation strategy
Due to different rules and regulation in foreign countries, the company
sometimes cannot follow standard practices everywhere. For instance,
meat is purchased in a specific way in Russia due to local regulations.
Adaptation in the standardized process is done to meet legal and cultural
demands. There used to be a McCenter in Russia for purchasing all the
raw materials that go into McDonald's meals, but now meat, potatoes,
buns, vegetables, milk, soft drinks, etc., are purchased from wholesalers.
It is now more of a challenge for the fast food giant to maintain
uniformity of quality and cost for its outlets in Russia. This affects
everything from quality to profit, and from market share to food cost.

GLOBALIZATION STRATEGY
To further emphasize the globalization element incorporated by the company,
the success globalization of McDonalds includes:
Emphasis on Local Management
Throughout the world, McDonalds prides itself in hiring locals, specifically
management in order to gain acceptance into the country by the citizens.
The emphasis is based on the think global, act local theme of the
company. This strategic move allowed the company to gain easy access to
bureaucracy associated with the countrys government.

Politically Sensitive Strategy

One of the companys major concerns was to develop ways to avoid political
confrontation with Indonesian Government. The other major concern was
to be careful of the religious sensitives in Indonesia. Almost 82% of
Indonesian are Muslims and do not eat pork, therefore, instead of supplying
pork in their menu, they served beef instead.

Employment Opportunity
Foreign enterprises are often not willing to hire locals in their companies,
specifically at the managerial positions, however, McDonalds research
concluded that in order to survive with the Indonesian government.
McDonalds outsources its products to several Indonesian companies
throughout India. This provides evidence to the Indonesian government
that McDonalds is not only customer friendly, but also employee friendly.

Environmental Friendliness
In order to achieve a positive reputation, as well as follow local and
national policies of a country. McDonalds tries to establish services that
are environmentally friendly. For example, in Indonesia they conduct

McDonalds Mari Berbagi, which is the social event that conducted by

McDonalds Indonesia to help the local orphanage and elderly.

Corporate Citizenship
In order to better its reputation, this multinational firm gives back to the
local citizen in all countries it operates. For examples, McDonalds provides
several financial donations to local organization like we have already
mentioned before. This is one way to encourage consumers to eat at its
restaurants, as it is an incentive that is used to spread the name.

RECOMMENDATIONS
McDonalds needs to focus on service differentiation strategy in order to position the
restaurant as a superior service restaurant in the minds of the target consumers. The
service differentiation strategy implies that McDonalds shall offer superior services at
each step of the customer touch points right from the placement of order through the
delivery of the products.
Be more creative in creating new ideas for the menus of McDonalds that adapts culture
in where state they opened the franchise. With so many new creative and attractive menus
that shows the specialty of its own culture, eventually it will attract more customers to try
and add an additional value for McDonald's in customizing the menu with the culture and
characteristics of the food in each state.

In present era, there are many people who have the intentions to eat healthy foods and
implemented in their daily lives with a quality flavor, and especially the increasing
number vegans that spreads throughout the world, in order to change the image of
McDonald's as a fast foods restaurant, we suggest McDonalds continuously innovate
mainly by doing creation of appropriate food products healthy lifestyle with a taste of
quality.

Total Quality Management must be done to control the quality of the service, service,
cleanliness and taste of the food itself. Cleanliness is very considered for a fast food
restaurant.

The rise of technology, now everyone is using the technology in doing anything and
ordered anything. Utilizing advances in technology such as the Internet to increase sales
and provide convenience for customers.

CONCLUSION
Being operated by either a franchise, affiliate, or the corporation itself McDonalds is the
worlds largest restaurant chain, serving approximately 68 million customers daily in 199
countries across approximately 36538 outlets. Its true that McDonalds implement value for
money in their business strategy because as we can see it has very affordable prices in each
countries where they sell their products. It also has great customer services by having high
quality food served quickly in clean surroundings. For brand marketing and menu
standardization they focused on healthy food options when they offered food or beverages in
low calories or low carbohydrates and prepared quickly and served in the shortest possible
time likewise they serve different menus for breakfast. McDonalds expanding into growing
economies in worldwide markets used the franchising strategy worldwide. Due to different
rules and regulation in foreign countries, the company sometimes cannot follow standard
practices everywhere. Thats why they have globalization strategies such as politically
sensitive strategy when they develop ways to avoid political confrontation in the country they
sell their products. Also they hire locals in order to gain acceptance into the country by the
citizens not only for clerical jobs but also in managerial positions. This provides evidence to
the world that McDonalds is not only customer friendly, but also employee friendly. For
gaining better reputation as well as follow local and national policies of country, this
multinational firm gives back to the local citizen in all countries it operates such donations
and other social events. McDonalds still running their strategies to be a better fast food
restaurants for different kinds of people.