The Business and Financial Performance of McDonald's Corporation from 2009 to 2011

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TABLE OF CONTENTS

PART 03: RESULTS, ANALYSIS, CONCLUSIONS AND RECOMMENDATIONS1

SWOT Analysis of Mc Donald1

Strengths2

Strong Brand Value2

Diversified Geographic Presence2

Large scale of operation compared to peers3

Weaknesses3

Legal proceedings affect brand image adversely3

Product failures3

Opportunities4

Growth of franchisee4

Positive outlook for out-of-home eating market4

Growing hot drinks market5

Threats5

Rise in food prices5

Intense competition in retail food industry5

Growing consumer consciousness for healthy food products6

Ratio Analysis6

Profitability Ratios6

Return on Assets (%)7

Return on Equity (%)8

Return on Investment (%)9

Liquidity Ratios10

Quick ratio10

Current Ratio11

Gearing Ratios12

LT Debt to Equity12

Total Debt to Equity13

Interest Coverage14

Efficiency Ratios15

Total Asset Turnover16

Receivables Turnover17

Inventory Turnover18

Accounts Payable Turnover19

Investor Ratios20

Cash Flow per Share20

Book Value per Share21

Conclusion22

Recommendations23

SLS-SKILLS AND LEARNING STATEMENT25

What did you learn from the meetings with your Project Mentor, including the presentation that you gave to your Project Mentor?28

How have you demonstrated you're interpersonal and communication skills during the project work?29

REFERENCES32

APPENDICES36

Appendix A: Company Financials of Mc Donald Corporation36

Appendix B: Company Financials of YUM Brands44

PART 03: RESULTS, ANALYSIS, CONCLUSIONS AND RECOMMENDATIONS

SWOT Analysis of Mc Donald

Strengths

Weaknesses

Strong brand value sustaining the leadership position of the company.

Diversified geographic presence provides opportunity to gain from economic buoyancy in emerging markets.

Large scale of operation compared to peers

Legal proceedings affect brand image adversely

Product failures such as Arch Deluxe

Opportunities

Threats

Growth of franchisee operated restaurants

Positive outlook for out-of-home eating market can boost top line in long run

Growing hot drinks market - another favorable trend to drive top line

Rise in food prices

Intense competition in retail food industry

Growing consumer consciousness for healthy food products

Strengths

Strong Brand Value

McDonald's is one of the well-established global brands. The company's 32,737 restaurants in 117 countries have reinforced the brand identity of McDonald's. Many of its products like Big Mac, McGriddle, McMuffin are iconic fast food brands with strong customer loyalty. McDonald's brand is now almost synonymous to affordable quality fast food products and enjoys remarkably high brand value worldwide. The company's brand equity can be gauged by the fact that on an average the company serves 64 million customers per day. Also, the company consistently ranks in the top ten lists of several brand surveys. The robust brand equity has enabled the company to sustain its leadership in the fast food chain industry. The company has increased its global market share, both in developed and emerging.

Besides, the strong brand recognition has also helped successful product extensions aimed at capturing new customer base. Some of the launches like McCafe branded coffee products and a full range of breakfast and salads menu have been instant hit with customers. Strong brand recognition hence enables the company to consolidate its market share both through new restaurant openings as well as product extensions.

Diversified Geographic Presence

Revenues from outside the US accounted for about 66.3% of the company's total revenues whereas the US accounted for around 33.7% of the company's total revenues. The aforementioned figures signify that McDonald's does not depend on particular economies to generate it revenues. Also, large scale geographic diversification partially insulates the company from the effect of downturn in particular market. Moreover, this factor also gives the company the opportunity to gain from economic buoyancy ...