McDonald's global expansion strategy under Jim Skinner's leadership

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).

Conclusion

The McDonald's brand has grown across Asia, Europe, and North America as well as into Africa, and South America. The organization prides itself on delivering value as well as consistency to its 33,000 store presence. Yet under Skinner, the McDonald's name has recaptured the vibrancy of the establishment that Ray Kroc founded, and the juggernaut of growth that established it as a global leader. The "Five P's" have allowed the company the room to expand, innovate, and lead; points which Skinner says are instrumental in positioning the company as:

More contemporary and convenient, providing great value with menus that feature iconic favorites -- from Big Mac sandwiches to French fries -- along with local offerings and new products that today's consumers want. Whether it's McWraps in Europe, Angus Burgers in Australia, or McCafe specialty coffees and smoothies in the U.S., McDonald's is strategically enhancing the menu to appeal to more customers more often. (McDonald's.com. 2010 Annual Report. PP. 4)