Mcdonald\'s Markets With the Recent

McDonald's Markets

With the recent decision of McDonald's CEO Jim Skinner to step down after seven years at the helm of the world's largest fast food restaurant; shareholders in the company are able to reflect on the durability and growth of the 100 billion market capitalization company, which has achieved in his tenure a 21.3% five-year compound annual return (Kowitt, B. March 23, 2012. PP. 2). Moving forward the company is well positioned globally, and in products and innovation, to continue to deliver value for its multiple stakeholders.

McDonald's is the "world's leading food service retailers, with more than 33,000 restaurants serving nearly 68 million people in more than 119 countries every day" (McDonald's.com. Our Story. 2012. PP. 1). Jim Skinner since day one has articulated a "mission is to be our customers' favorite place and way to eat" (McDonald's.com. Mission and Values. 2012. PP. 1). Evidently McDonald's customers agree with over 64 million served on average each day around the globe (McDonald's.com. 2010 Annual Report. PP. 2). The company's success over the past seven years can be traced to Skinner's return to the roots of the organization.

His development of "Plan to Win which has served as the strategic blueprint for the past eight-year; focuses on the core drivers of the business -- People, Products, Place, Price, and Promotion, or the five "P's" (McDonald's.com. 2010 Annual Report. PP. 3). Interestingly though, Products and Place have driven the positive trajectory of the company as geographical placement and food choice have reignited the brand.

Markets

Revenue generation for McDonald's comes from increasing same store sales, but also the deployment of new locations in the developed and developing economies. The "business is managed as distinct geographic segments: United States (U.S.),

Europe, and Asia/Pacific, Middle East and Africa (APMEA), as well as Canada and Latin America. In 2010, the U.S., Europe and APMEA segments account for 34%, 40% and 21% of total revenues, respectively" (McDonald's.com. 2010 Annual Report. PP. 11).

This mix of established and growth economies demonstrates the dynamism of the brand as well as the company's ability to capitalize on the: People, Price, and Promotion points of the five 'P's." Overall, global growth "contributed to 2010 comparable sales and guest counts increasing 5.0% and 4.9%, respectively, despite contracting Informal Eating Out (IEO) market in many countries" (McDonald's.com. 2010 Annual Report. PP. 12).

Product Offerings

Clearly, customers love McDonald's because they can depend on "great price, everyday affordability, and hot fast food in a clean environment" (Kowitt, B. March 23, 2012. PP. 2); the latter as a main driver to the company's sustainable growth. Reflecting back on the markets mentioned earlier; the: U.K. France, Germany, China, Australia, Japan, Canada, and the U.S. account for 70% of revenue (McDonald's.com. 2010 Annual Report. PP. 11); as such the products served in these markets determine the success of the company.

In the U.S. The company relies on the core staples: burgers, fries, and chicken nuggets; but has also done well with expansions of their dollar menu. In addition, product innovations such as: "McCafe beverage line, new snack offerings, and the national launch of McCafe frappes and real-fruit smoothies have provided a meaningful extension to the McCafe line that was well-received by customers" (McDonald's.com. 2010 Annual Report. PP. 12). The U.S. segment has also benefitted from a move to healthier options: salads, lower caloric meals, and reduced fat choices which have brought in new foot traffic to restaurants.

In Europe the focus has been on Coffee and the McCafe line. Like the U.S., coffee has proven to be a profitable menu item despite considerable competition from Starbucks, Green Mountain, and Dunkin. McDonald's has "expanded the coffee business to 1,300 McCafe locations, which are separate areas inside the restaurant that serve specialty coffees, indulgent desserts and light snacks" (McDonald's.com. 2010 Annual Report. PP. 12).

The APMEA market represents a diverse offering:

A third Angus burger option in Australia and the extension of the Spicy

Wings line in China. Japan executing a successful Chicken Festival promotion featuring several products; and a dessert strategy introducing consumers to the McDonald's brand with products such as McFlurries and dessert kiosks in China, where McDonald's has become one of the largest retailers of ice cream" (McDonald's.com. 2010 Annual Report. PP. 12).

The organization has prospered with food and drink offerings as diverse as the populations they serve around the globe.