International Directory of Company Histories - Case Study Example

Business Plan for McDonald Expansion in Africa Table of Contents Table of Contents 1 Executive summary 3 1.0 The Company and the product 3 1.1 Company history 3 1.2 Mission and objectives 5 1.3 The products 6 2.0 Marketing plan 6 2.1.0 Marketing strategy 6 2.1.1 Product design strategy 6 2.1.2 Pricing strategy 7 2.1.3 Promotion strategy 8 2.1.4 Distribution strategy 8 2.1.5 Value proposition 8 2.2.0 Market situation 9 2.2.1 Market size and growth 9 2.2.2 Market niches 9 2.2.3 Current rivals 10 2.2.4 Potential rivals 10 2.3.0 McDonald’s strategic advantages 11 2.3.1 Initial competitive advantages 11 2.3.2 Sustainable competitive advantage 12 2.4.0 Strategic options and alternative chosen 12 2.4.1 Alternative business models 12 2.4.2 McDonald’s business model 13 2.4.3 Target market 14 2.5.0 Research and Development 14 2.5.1 Future products and services and geographic markets 14 2.5.2 Research and development facilities and personnel 14 3.0 Operational plan 15 3.1.0 Company structure and ownership 15 3.2.0 Key personnel 16 3.2.1 Top management and key employees 16 3.3.0 Risk reduction strategies 17 3.3.1 Risks perceived 17 3.3.2 Pro-active risk strategies 17 3.3.3 Reactive risk strategies 18 3.3.4 Exit and harvest strategies 18 3.4.0 Financial plan 19 3.4.1 Underlying assumptions 19 3.4.2 Expected case scenario 19 3.4.3 Worst-case scenario 20 4.0 Conclusion 21 5.0 References 21 6.0 Appendices 24 5.1 Company’s start –up expenses 24 5.2 Sales forecast for the first three years 25 5.3 Profit and loss forecast for the first three years 25 Executive summary McDonald’s fast food corporation is the largest food chain in the world. It deals in products such as hamburgers, salads, French fries, as well as beverages. The company enjoys a strong global presence, alongside its outstanding brand name. This has enabled the company remain influential in the fast food industry and therefore it is expected that its endeavor to expand into the African market will as well be a success. However, there brands that are already established in the African market such as Wimpy and Nandos that are expected to present competition to McDonald. Some of McDonald’s competitive advantages such as brand recognition that is often associated with some aspects such as affordability and quality services. It is also expected that the company will consider into incorporating delivery services to its customers as well as extending its services to the rural areas in the future as an initiative to target more customers. McDonald is also bound to encounter risks such as fire but has effective strategies in place to ensure such risks are mitigated. The company has allocated a sum of $900 000 for the expansion and expects to make profits from this exercise. The general expectation the company has is that its expansion to Africa will reap more profits hence increasing the company’s sales. 1.0 The Company and the product 1.1 Company history The McDonald’s Corporation is rated as the largest chain dealing in fast food restaurants in the world. It serves over 58 million clients on a daily basis, with over 31000 restaurants situated in approximately 120 nations. The corporation was started in 1940 as a restaurant that was managed by three brothers, McDonald, Maurice and Richard in California, Bernardino. The concept of a modern fast food restaurant was introduced in 1958 and is rooted on the Speedee Service System. The basic amulet of the McDonald’s was Speedee, a man wearing a chef’s hat on a head that is shaped like a hamburger. In 1967, Ronald McDonald replaced Speedee when the company adopted a trademark on a man having a shape of a clown with puffed out costume legs. The company initially filed for a United States trademark under the name Mc Donald in 1961, having the description, Drive-In Restaurant Services, and has been subjected to continual improvements. For instance, in the same year, the company launched a trademark containing an overlying, double arched M logo. The M logo was disfavored in 1962, and was replaced with a single arch. The currently used double arched M was filed in 1968. The restaurant started its first operations in the United States, and then it expanded to other states such as Canada, Costa Rica, Germany, Australia and Sweden. The current corporation considers its foundation to the establishment of a franchised restaurant in Des Plaines in 1955 by Ray Kroc, which is considered as the ninth restaurant under the ownership of McDonald. Ray Kroc was a trader of Multi-mixer milk shaker machines, and after finding out that the McDonald brothers were making use of eight of his machines in their restaurant in San Bernardino, he went out to look for the McDonald brothers. Ray Kroc then bought the McDonald brother’s equity from the company, an undertaking that resulted in the company’s worldwide expansion. He made a suggestion to the McDonald brothers to license their restaurants throughout the country, a suggestion that encountered rejection from the McDonald brothers. He then decided to take the initiative of establishing fast food outlets. In 1955, the company was listed on the United States public stock markets. However, Kroc had forceful business practices that compelled the McDonald brothers to abscond the fast food industry. Kroc and the McDonald brothers also engaged in a dispute over the company’s management forcing the McDonald brothers out of the industry. The company’s expansion into global markets has made it become a mark of globalization and enhanced the American way of life. Its fame is also associated with the contemporary controversial issues such as corporate responsibility, obesity and corporate ethics (Stephen, 2004). The company embraces the customer focus since it is considered as a philanthropic organization with effective advertising techniques. 1.2 Mission and objectives The company’s vision is to become the best restaurant in the world, offering fast food services. This means that the company seeks to offer outstanding services, hygiene, value and quality to meet the customers’ expectations. In addition, McDonald’s has a mission that seeks to enhance the aspects of diversity and inclusion within its employees, the company’s operators or owners and the suppliers, all which embody the diverse population the company serves in the world. Some of the objectives the company seeks to attain include; To offer employment opportunities to the community it serves Provide operational excellence to its customers in all of its restaurants. To attain long-term profitable growth through expanding the company’s brand and strengthening the strengths. This can be attained by directing more efforts on technology and innovation. 1.3 The products The McDonald’s chain of restaurants deal in a variety of food items, for instance, chicken products, hamburgers, salads, cheeseburgers, French fries together with assorted beverages. The menus include the value meal menu and a dollar menu, which often go in line with some slight differences that are geographic based. However, it is also important to note that the company is responsive to the changing consumer tastes and preferences, since its major goal is to ensure it satisfies the needs of its customers. For instance, McDonald’s has expanded its menu to incorporate fruits and wraps to counter the contemporary greater concern people have for their health. 2.0 Marketing plan 2.1.0 Marketing strategy Among other strategies which include packaging, value proposition and offensive and defensive strategies, McDonald’s will employ marketing strategies that incorporates the four marketing P’s: price, product, promotion and distribution. This is termed as marketing mix and a company using these elements has the capability of reaching different clienteles within its target market (Rhonda and Eugene, 2003). It is apparent that, the mixture and coordination of these elements can be more efficient than merely depending on one element (Baker, 2008). 2.1.1 Product design strategy Predominantly, McDonald’s sells hamburgers, different kinds of chicken products and sandwiches, soft drinks, French fries, desserts and breakfast items. In addition, in nearly all markets, McDonald’s restaurants provide vegetarian items, salads and wraps (Thomas and Jay, 2004). Furthermore, McDonald’s restaurants in Portugal are presently serving soup. It is true that, this diversification and divergence from the standard menu is a feature which makes McDonald’s to be principally acknowledged, and one that is applied to both put up with regional food taboos and/or to offer foods that are familiar with the regional market (Smith, 2007). These characteristics has given the company a competitive advantage and in addition assisted it in meeting its goals and objectives. 2.1.2 Pricing strategy Effective marketing calls for a thorough understanding of the target market and the channels used to sell the products. In addition, the price of the product should match with the quality of the product. Price is the amount paid by customers for a certain product. Pricing strategies to be used usually takes into account visible pricing response of main rivals and the profit margins (Rhonda and Eugene, 2003). List pricing, discounts and financing are among the components of pricing. Generally, expanding a restaurant into a new market includes such costs as development costs, costs of infrastructure, promotions and other expenses. In order to attract new customers and retain existing ones, McDonald’s will aim at minimizing these costs in order to reduce the prices of its products. Due to its considerable competitive advantage, McDonald’s will use price skimming strategy whereby, it will offer its products at substantial higher prices compared to its competitors. This pricing strategy is efficient in that, it will help the company meet its objective of boosting its revenues and market share through amplified sales while still meeting its customer’s demands. Another pricing strategy that can be used by McDonalds is to price its products at an affordable price, one that can be afforded by most of its target customers. 2.1.3 Promotion strategy Promotion strategies are deemed to be the most essential in the current market (Koichi, 2009). They are developed in order to make clients aware of the existence of a certain product, the introduction of a new product in to the market or the expansion or establishment of a new outlet and it offerings. Promotion strategies incorporate all communications employed by a marketer including advertising, public relations, personal selling and sales promotions. For decades, McDonald’s has upheld a substantial advertising campaign that incorporates the use of media (radio, television and newspaper) (Thomas and Jay, 2004). Besides, the McDonald’s makes considerable use of signage and billboards, and sponsors sporting events (Henry, 2009). Nevertheless, television has played a fundamental responsibility in the company’s advertising strategy. These strategies can therefore be applied by McDonald’s while expanding its market to Africa as they have proven to be very effective. 2.1.4 Distribution strategy Place, which is also referred to as the channel of distribution represents the location or the mode in which a product can be obtained. McDonald's restaurant will sell its products directly to its customers. The corporation will use drive-through service and counter service to serve its customers. 2.1.5 Value proposition Establishing value preposition is considered an effective business strategy. It is a business statement that illustrates why a client should use a certain service or buy a certain product. Some of the examples of value prepositions include: efficient client service department, variety products and functionality of a product (Wild et al, 2008). McDonalds is seen to offer a wide range of quality products to its customers efficiently. Adopting these value prepositions will assist the company in setting itself apart from rivals, increase promotion by loyal clients, increase target customers, increase sales and general improvement in revenue (Carrada-Bravo, 2003). 2.2.0 Market situation 2.2.1 Market size and growth McDonald’s is the globes largest fast food chain. The restaurant has more than 32000 locations in more than 115 nations. In the contemporary society, there exist thousands of McDonald's chains serving more than fifty million people every day around the globe. Globally, McDonald’s restaurants employ over 1.5 million personnel and furthermore, it operates various restaurant brands, for instance piles Café (Thomas and Jay, 2004). Over the years, McDonald’s restaurants have registered an upward growth. For instance, the company’s revenues have increased greatly between the years 2004 and 2010. For the three year period ending in 2007, McDonald’s revenues grew by 27 percent to $22.8 billion. Moreover, the operating income grew by 9 percent to $3.9 billion (Thomas and Jay, 2004). The corporation has established a growth strategy of international expansion. 2.2.2 Market niches McDonald has entirely used niche marketing to market its products instead of mass marketing. This has assisted in improving the products brand standing. By attempting to have a specific appeal, the products may become well know to the target audience thus increasing its clients entirely (Armstrong & Kotler 2000). Through psychological and demographic aspects, McDonald has been able to reach its target customers. 2.2.3 Current rivals Despite the fact that McDonald is the market leader in the fast food industry based in terms of restaurants established and revenues generated, it still faces stiff competition from other restaurants chains that are introducing new products. Some of these key rivals in the fast food industry encompass: Subway– Largest single-brand restaurant chain Burger King– Second largest burger chain Wendy’s –third largest burger chain Yum! – Largest multi-brand restaurant chain 2.2.4 Potential rivals While trying to expand its market in Africa (Nairobi), McDonald may face competition from other restaurant chains based there. Some of the key competitors may include Wimpy and steers, both of which are well known as burger restaurants, Creamy in, Chicken Licken, Pizza Inn and Nandos. These restaurants are well placed at strategic locations while offering their products at affordable prices. 2.3.0 McDonald’s strategic advantages 2.3.1 Initial competitive advantages Business functions such as management, sales and marketing form an integral component of the business that are aimed at strengthening the company’s image and the quality of its outputs (Carrada-Bravo, 2003). Practices relating to such functions can be given more emphasis in order to enhance the manner in which the company’s goods or services are perceived in the market. One of the key practices the company should consider in trying to enhance its image is to increase its brand recognition. This determines how the company interacts with its customers, clients and the employees; ore generally determines the manner in which the company interacts with all those who are related to it. It enables the company attain its next level of success contributing to the company’s profitability (Carrada-Bravo, 2003). McDonald restaurants’ significant brand recognition and global presence is apparently the most significant strength. The company has managed to expand and penetrate into different markets, and has been able to maintain a positive reputation not only among its customers, but also among its competitors. Indeed, McDonald’s brand recognition offers it a substantial competitive advantage over new entrants into the fast food industry and its known competitors. Brand recognition is the company’s strong advantage since its name stands above the other companies in the fast food industry. Its name is often associated with quality and faster services, good tasting food and affordable prices. 2.3.2 Sustainable competitive advantage McDonald’s competitive advantage comes from the fact that the company has been able to possess a global image. Business analysts assert that companies with strong and positive global images are more likely to attract more customers as well as other businesses. Such companies attain more opportunities from suppliers as well as are able to attract more customers compared to the unknown companies. The fact that McDonald Company has made a global appearance, as it has made worldwide expansion into various countries makes it more competitive compared to other companies in the industry. The McDonald brand name is often associated with aspects such quality services, hygiene, and offers affordable products. This has enabled it attain brand loyalty as more people prefer its products compared to those of its competitors. Therefore, McDonald remains the most preferred company compared to other companies in the fast foods industry. In addition, this fact has been able to sustain the company by ensuring that it remains influential in the fast foods industry (Carrada-Bravo, 2003). 2.4.0 Strategic options and alternative chosen 2.4.1 Alternative business models A business model determines the manner in which the company markets its products or services to its customers. It is something that every business in the world needs as it can be applied in selling a business idea, attain the customers’ or clients attention and to operate as a business (Dan, 2000). Most important is that the type of business model adopted by a business illustrates the approach in which the company applies in making money through specifying its position in the value chain. There are numerous types of business models that businesses could apply in their operations, depending on the type of business, its size and its distribution channels among other factors (Keller, 2009). The alternative business model McDonald Company could apply includes the distributor model. A distributor could be defined as a business that engages in buying products from the producer or manufacturer of a product and in turn resells the products to other retail outlets, or directly to the consumers (William, 2011). For instance, McDonald Company would engage distributors in distributing its products in an aim to target more customers and attain higher sales. Nairobi for instance is an area that is inhabited by many people and in order to reach its extensive suburb, McDonald could engage distributors. 2.4.2 McDonald’s business model McDonald reaps its revenues as a franchiser of restaurants, investor in properties and as a restaurant operator (Kenway and Bullen, 2001). It is estimated that 15 per cent of the McDonald’s chain of restaurants are directly operated and owned by the company. The others are operated through joint ventures and franchise agreements. The marketing fees and the ordinary franchise fees are usually computed as percentage of the sales. The total rent collected is also computed on the basis of the company’s sales (Dan, 2000). Besides, the company is responsive to changes as it employs high technology, an undertaking that is aimed at reducing the amount of the human specialization in order to ensure the company attains higher profits. However, the maintenance of the technological equipment is also high, but then its business model is mainly driven by increased technological specialization, while the human specialization is minimal (Smith, 2007). 2.4.3 Target market McDonald’s promotional strategies target family units and more specifically the children (Kenway and Bullen, 2001). The company offers affordable prices to its customers, an aspect that has enabled it gain the backing of larger sized families. Regardless of the fact that McDonald’s generally targets the children as its main customers, the company’s commercials target the multiple audiences, for instance, the working class (Kenway and Bullen, 2001). It is also important to note that these products can be consumed by people of all age brackets (Thomson & Strickland, 2003). 2.5.0 Research and Development 2.5.1 Future products and services and geographic markets McDonald’s might look into venturing in delivery services as an initiative to target more customers. Apparently, the company deals with those who are able to reach its outlets, but then there lies a greater opportunity for making more profits for the company if it introduces delivery services to its customers (Dan, 2000). McDonald’s could also consider targeting the rural areas since most of its outlets are located in urban centers (Lawrence & Carl, 2008). 2.5.2 Research and development facilities and personnel McDonald’s operates research and development facilities in the United States, Asia and Europe. In addition, the company also contracts independent suppliers to carry out research activities that will have positive impacts to the company, its suppliers and the franchisees. 3.0 Operational plan 3.1.0 Company structure and ownership McDonald’s restaurants chains are structured based on functional lines. There exist five different departments that are managed by various individuals under the Chief Executive Officer. They include: operations, finance, development, marketing, and human resources departments. McDonald Corporation has a centralized organizational structure and a global strategy (Thomas and Jay, 2004). The company has more than 31,000 restaurants in over 110 nations. Despite the fact that these restaurant food chains are typically franchises, all of them obtain food and packaging from similar authorized vendors (Sharp and Dawes, 2001). That is, a McDonald restaurant in Canada is the same as one in the United States. The entire decision making concerning marketing and menus are made at the corporate level in the United States (Thomas and Jay, 2004). McDonald restaurants are owned by the company itself while others are franchised to third parties (Thomas and Jay, 2004). Franchises offer the initial capital that is needed in order to establish a restaurant. The table below shows the company owned restaurants and franchises between the years 2004 and 2010. Metric 2004 2005 2006 2007 2008 2009 2010 Total Restaurants 30,496 30,766 31,046 31,377 31,967 32,478 32,737 Franchised Restaurants 22,317 22,593 22,880 24,471 25,465 26,216 26,338 Company-Owned Stores 8,179 8,173 8,166 6,906 6,502 6,262 6,399 % Company-Owned Stores 26.8% 26.6% 26.3% 22.0% 20.3% 19.3% 19.5% 3.2.0 Key personnel 3.2.1 Top management and key employees The success of McDonald Corporation is built on a strong foundation of professional and personal integrity. Most people all over the world have become loyal customers to McDonalds. This trust has been built upon by offering quality and safe foods, respect to employee and customers, and above all good and dependable management. McDonald’s top management has the responsibility of ensure effective running of the corporation. Some of these top managements include the president who oversees the overall running of the corporation, and his vice presidents. Various sectors in the corporation such as the corporate relations and supply chain management are assigned a vice president. For instance, the vice president for supply chain management has the responsibility of purchasing paper and food in over 15, 000. Therefore McDonald’s restaurant in Canada and the United States are similar. Other top managers include the Chief Executive Officer, chairman, the vice chairman, and departmental managers. McDonald’s Corporation board of directors has a role of and entrusted with overseeing the Corporation in a fair, honest, honest and diligent manner. In order to fulfill the Corporations obligations to stakeholders, the board ensures that there is superior corporate governance. The board is committed to guaranteeing the integrity of the corporations system in its entire transactions with the stakeholders (Thomas and Jay, 2004). 3.3.0 Risk reduction strategies It is certain that, most organizations are subjected to various risks which require to be addressed and managed to ensure effective running (Rhonda and Eugene 2003). Most companies use risk reduction strategies while undertaking this responsibility. This part will analyze the risks perceived and the strategies that are employed by McDonald Corporation to reduce such risks. 3.3.1 Risks perceived There are various major perceived risks in restaurants and McDonald’s is no exception. These risks may range from the working environment to serving unsafe foods to the customers (Bent, et al. 2005). Some of the perceived risks in the McDonald’s Corporation may include the employees and customers may face a risk of fire resulting from electrical faults, falls among the employees, theft, and risk of diseases among the customers due to serving of contaminated foods. If not well managed, these risks may be of great threat to the corporation as a whole. 3.3.2 Pro-active risk strategies Proactive risk management offers product development managers and teams a step by step procedure for managing risks in an efficient cross-functional way (Smith and Merritt, 2002). On the other hand, pro-active risk strategies are those strategies which are employed to avoid and prevent risks, which as a result reduce harms caused by the same. Some of the proactive risk strategies encompass: provision of a good working environment for workers to prevent such risks as falls, ensuring the foods served are free from any contamination thus safe for consumption and ensuring that, the outlets are well fitted with emergency exits and fire extinguishers in case of fire risks. In most circumstances, proactive risk strategies are mostly preferred to reactive risk strategies (Smith and Merritt, 2002). The approach of proactive risk management provides: Techniques of identifying the causes of risks in order to manage the root causes instead of the symptoms. A suitable quantification of the main factors of a risk that enables the prioritization of risks without errors. Strategies and tools that give support to the implementation of an efficient risk management program. 3.3.3 Reactive risk strategies Reactive risks strategies are those which are employed by an organization to react to risks once they take place. Although they are a risk reduction strategy, they are deemed to be inefficient as they tend to treat the symptoms rather than the root causes of the same. Some of the reactive risk strategies that may be employed by McDonald’s restaurant may include employing fire fighters in case of fires, and reduction strategies to prevent further impacts. 3.3.4 Exit and harvest strategies An exit strategy, also termed as harvest strategy is the manner in which a business owner or venture capitalist plans to get out of an investment. That is, a technique of cashing out an investment. This is not an easy task to undertake especially while dealing with a private corporation. Some of the examples of exit and harvest strategies that can be employed by McDonalds encompass Initial Public Offering (IPO)/going public, and acquisition. The former is considered as the most profitable exit strategy and has been employed by many companies especially in the United States. 3.4.0 Financial plan Financial management is defined by some experts as the science of managing money (Kenway and Bullen, 2001). It encompasses managers planning income and expenditure and thereafter, making appropriate decisions that will allow a company to survive in the market financially. Financial management encompasses: financial planning and budgeting, financial accounting, financial analysis, and financial decision making (William, 2011). Managing finances enables a company to attain its objectives (David, 2010). 3.4.1 Underlying assumptions It is the expectation of any business that expanding to other markets holds greater opportunities for attaining higher sales and McDonald’s is not exceptional (Dan, 2000). The company intends to make more profits and attain a larger market share considering the fact that it has a well established brand name. There is also a basic assumption that the company will outdo its competitors because of its global image and brand recognition, which will indeed increase the sales of the company. 3.4.2 Expected case scenario The company expects to increase its sales after a given period, for instance 2 years, after making its products known among its target customers. It is also expected that the company will increase its market share since it is making entry into a newer market. It is also bound to encounter competition from the already established fast food companies in the African market. However, the company will have to incur some expenses for promotions and advertising, setting up new facilities and for conducting market research (Carrigan and De Pelsmacker, 2009). 3.4.3 Worst-case scenario Apparently, there are fast food brands that are already established in the African market like Wimpy and Nandos (Kenway and Bullen, 2001). Most people are used to products from these companies and thus it might be difficult to convince people to purchase McDonald’s products considering the fact that there such brands might have attained brand loyalty (Barnett, 2008). McDonald’s might therefore end up encountering losses. There other case concerns the taste and preference of the products. McDonald’s products might become the least preferred products in the market and therefore making the company incur further losses. McDonald’s expansion to Africa (Nairobi) requires approximately $900,000. The initial expenditures include such expenses like promotions, consulting services, capital expenditures, personnel, and market research and development. These startup expenses are summarized in the appendix section, table 5.1. The projected sales/revenue forecast for the three year period is expected to increase at a high rate. This is due to factors such as brand recognition and quality, and increased sales which may be as a result of high quality services offered by the company. This illustrates that the company’s expected revenues exceed operating expenses and therefore, McDonald’s company will make net profits for the projected period (Kotler and Kevin, 2006). The projected sales/revenue figures for the three years are illustrated in table 5.2 attached in the appendix section. The company is as well expected to make a net profit of $8,283,440 at the end of the third year. This illustrates that the company is going to benefit from the expansion. This projection is illustrated in table 5.3 attached in the appendix section. 4.0 Conclusion McDonald’s is a fast food company that deals in products such as hamburgers, salads, chicken products as well as beverages. Due to its wide recognition, the company seeks to expand its services to the African market (Nairobi). The company seeks to employs marketing strategies such as promotion in order to target customers in this new market. However, McDonald’s strategic advantages such as brand recognition and its competitive abilities are expected to make the company attain higher sales. Since this is a leading company in the fast food industry, it is expected that it will outdo the existing companies in this new market. The company is also bound to encounter certain risks and therefore it is important that measures are put in place to counter such risks. Since the company is globally known, it is its expectations that such an undertaking will make the company more profitable. 5.0 References Armstrong, G. & Kotler P. (2000). Marketing: An Introduction, 5th ed. Singapore: Person. Baker, Michael (2008). The Strategic Marketing Plan Audit. Oxford: Oxford University Press Barnett, R (2008). Global Reach: The Power of the Multinational Corporations, Oxford, Oxford University Press Bent, F, Mette K. Skamris Holm, and Soren L. Buhl (2005), "How (In) accurate are Demand Forecasts in Public Works Projects?" Journal of the American Planning Associations, 71 (2), pp. 131-146. Carrada-Bravo, F. (2003). Managing Global Finance in the Digital Economy. New York: Praeger Publishers. Carrigan, M. and De Pelsmacker, P. (2009). Will ethical consumers sustain their values in the global credit crunch? International Marketing Review, 26(6), pp. 674–687 Dan, Kennedy, (2000). The ultimate marketing plan: find your most promotable competitive edge, turn it into a powerful marketing message, and deliver it to the right prospect. California: Adams Media David, R (2010). Strategic management: concepts and cases, Upper Saddle River: Pearson Prentice-Hall. Keller, F (2009). Market Positioning & Framing Market Research, London: Oxford University Press. Kenway, J. and Bullen, E. (2001). Consuming Children, Buckingham: Open University Press. Koichi, S. (2009). Advertising Theory and Strategies, (16th  ed), Souseisha Book Company. Kotler, P and Kevin, L (2006). Marketing Management (12 ed.), New Jersey: Prentice Hall. Lawrence, J. G, & Carl, M. (2008). The Future of Business: The Essentials (4th ed). London: Cengage Learning McDonald's. (2007, November 25). McDonald's History. Retrieved June 22, 2011, from http://www.mcdonalds.com/corp/about/mcd_history_pg1.html Rhonda, A., & Eugene, K., (2003). The successful business plan: Secrets & strategies. New York: The Planning Shop. Samuel, H. (2009). "McDonald's restaurants to open at the Louvre". Telegraph.co.uk (London). http://www.telegraph.co.uk/news/worldnews/europe/france/6259044/McDonalds-restaurants-to-open-at-the-Louvre.html. Sharp, B. and Dawes, J. (2001). "What is Differentiation and How Does it Work?" Journal of Marketing Management, 17, pp. 739-59.  Smith, A. F. (2007). The Oxford companion to American food and drink. Oxford: Oxford University Press US. p. 371. Smith, P. G. & Merritt, G. M. (2002). Proactive Risk Management: Controlling Uncertainty in Product Development. London: Productivity Press. Stephen Evans (20 April 2004). "McDonald's: The journey to health". BBC News. http://news.bbc.co.uk/2/hi/business/3641603.stm. Retrieved June 23, 2011 Thomas, D. & Jay, P. P. (2004). "McDonald's". International directory of company histories. 67 (3rd ed.). London: St. James Press. pp. 108–109. Thomson, A. A. Jr. & Strickland, A. J. 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New York: AMACOM Div American Management Association. 6.0 Appendices 5.1 Company’s start –up expenses Expenses Amount in U.S $ Personnel 280, 000 Capital expenditures 140,000 Consulting services 80,000 Promotions 4,000 Research and Development 320,000 Total expenses 824,000 5.2 Sales forecast for the first three years Sales forecast for 3 year period in U.S $ Year 1 Year 2 Year 3 Total sales Other sources of revenue like investments 1,000,000 _ 3,800,000 20, 000 10,200,000 23,000 Total revenue 1,000,000 3,820,000 10,223,000 5.3 Profit and loss forecast for the first three years Profit and loss forecast for the three year period in U.S $ Year 1 Year 2 Year 3 Total revenues Total expenditure Personnel Capital expenditure Consulting services Promotion R&D Expenses Gross profits Taxes (12 percent) 1,000,000 280,000 140,000 80,000 5,000 320,000 824,000 176,000 21,120 3,820,000 380,000 132,000 200,000 5,500 _ 717,500 3,102,500 372,300 10,223,000 450,000 135,000 220,000 5,000 _ 810,000 9,413,000 1,129,560 Net profit 154,880 2,730,200 8,283,440 Read More