GENERAL COMPANY/INDUSTRY INFORMATION

INTRODUCTION

McDonald's Corporation (NYSE: MCD) is the world's largest chain of hamburger fast food restaurants, serving around 68 million customers daily in 119 countries. Headquartered is in the United States. A McDonald's restaurant is operated by a franchisee, an affiliate, or the corporation itself. The corporation's revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants. McDonald's revenues grew 27 percent over the three years ending in 2007 to $22.8 billion, and 9 percent growth in operating income to $3.9 billion. McDonald's primarily sells hamburgers, cheeseburgers, chicken, french fries, breakfast items, soft drinks, milkshakes and desserts. In response to changing consumer tastes, the company has expanded its menu to include salads, wraps, smoothies and fruit.

McDonalds Timeline 1937 Patrick McDonald opened "The Airdrome", an octagonal food stand, on Huntington Drive (Route 66) near the Monrovia Airport in Monrovia, California. Hamburgers were ten cents, and all-you-can-drink orange juice was five cents. 1940

His two sons, Maurice and Richard ("Mac" and " Dick"), moved the entire building 40 miles (64 km) east, to West in San Bernardino, California. The restaurant was renamed "McDonald's Famous Barbeque" and served over forty barbequed items.

1953 The McDonalds begin to franchise their restaurant, with Neil Fox the first franchisee. The second McDonald's opens in Phoenix, Arizona at N. Central Ave and Indian School Road. 1954 1955 Kroc opens his first McDonald's restaurant in Des Plaines, Illinois; he incorporates his company as McDonald's Corporation. 1960 The McDonald's advertising campaign "Look for the Golden Arches" gave sales a big boost. Kroc believed that advertising was an investment that would in the end come back many times, and advertising has always played a key role in the development of the McDonald's Corporation. 1961 Kroc buys out the McDonald brothers for $2.7 million. Ray Kroc gains the rights to set up McDonald's restaurants in most of the country.

1962 McDonald's first national magazine ad appears in Life magazine.

1963 1964 1965 McDonald's Corporation went public. Common shares were offered at $22.50 per share. By the end of the first day's trading, the price had shot up to $30. 1967 1968 McDonald's opened its 1,000th restaurant, and Fred L. Turner became the company's president and chief administrative officer. 1973 The company opens its first foreign restaurant in British Columbia, Canada. McDonald's issues its first annual report. One billion hamburgers sold. The 500th restaurant opened. McDonald's net income exceeded $1 million.

 1974

Breakfast items begin to appear on the menu, with the debut of the Egg McMuffin.

With the opening of the first restaurant in the United Kingdom, the corporation became embroiled in a public relations nightmare. On the employment forms (brought in from the U.S.) it asked employees if they wished to contribute money to an I.R.A. (Individual Retirement Account). Given that the I.R.A. is also an acronym for the terrorist organization the Irish Republican Army, the employees believed that McDonald's was contributing money to a terrorist group.

1975 McDonald's opened its first drive-thru window in Sierra Vista, Arizona, following Wendy's lead. This service gave Americans a fast, convenient way to procure a quick meal. The company's goal was to provide service in 50 seconds or less. 1976 1979 1982 Michael R. Quinlan became president of McDonald's Corporation, and Fred L. Turner became chairman. The children's Happy Meal makes its debut. McDonald's pays its first cash dividend.

1983 1985 McDonald's becomes one of the 30 companies that make up the Dow Jones Industrial Average. 1991 McDonald's were responsible for a serious food poisoning outbreak in Preston (UK), when several customers were hospitalized as a result of eating undercooked burgers contaminated by potentially deadly bacteria. 1995 McDonald's receives complaints from franchisees that too many franchises are being granted, leading to competition among franchisees. McDonald's starts conducting market impact studies before granting further franchises. 1996 1998 The company takes its first stake in another fast-food chain, buying a minority interest in Colorado-based Chipotle Mexican Grill. 1999 February 16th 10am, the McSpotlight website was launched. Chicken McNuggets are introduced.

Revenue at Boston Market during 1999 totaled $670 million.

2000 2002 Restructuring charges of $853 million result in the firm's first quarterly loss since going public. 2003 In December 2003, for instance, same-store sales increased 7.3 percent. Same-store sales rose 2.4 percent for the entire year, after falling 2.1 percent in 2002. Also, in that month, McDonald's announced that it would further its focus on its core hamburger business by downsizing its other ventures. 2010s McDonald's announced that their largest restaurant in the world will be built on the 2012 London Olympics site. The restaurant will contain over 1,500 seats and is half the length of an American Football field. Over 470 staff will be employed serving on average (during the 2012 Olympics) 100,000 portions of fries, 50,000 Big Macs and 30,000 Milkshakes. This restaurant will overshadow the current largest McDonald's in the world in Moscow, Russia. McDonald's sells Donatos in order to refocus on its core hamburger business. McDonald's buys the bankrupt Boston Market chain.

The company announced revenue for 2011 reached an all-time high of $27 billion, and that 2400 restaurants would be updated and 1300 new ones opened worldwide.

In 2012, McDonald's is going to post the calories count for items on the menus and menu boards in the drive-thru.

Major Product, Segments, Stock, and Auditors McDonalds major products are Big Mac, Golden Arches, chicken, finish and pork, soft drinks, beverages, deserts. McDonald is managed as distinct geographic segments that include: US, Europe, Asia/Pacific, Middle East and Africa (APMEA), other Countries & Corporate (OCC) including Canada, Latin America and Corporate. McDonalds stock always traded in New York. Peter J. Bensen and James A. Skinner are the auditors of McDonald. The outlook for 2012 McDonald holds a strong competitive position intends to further differentiate our brand by striving to become their customers favorite place and way to eat and drink. There are three global priorities that McDonald will execute: optimizing their menu, modernizing the customer experience and broadening their accessibility. Menu will include expending beverages and desserts. The company will enhance customer experience by interior and exterior reimaging efforts and providing our restaurant teams with the appropriate tools, training, technology, and staffing. The accessibility efforts will include increasing the level and variety of conveniences provided to our customers through greater proximity extended operating hours and stronger value platforms.

In the U.S., McDonald will forces on balancing their core menu classics with new products and promotional food events. Such as Chicken McBites, made with bite-sized pieces of premium chicken breast, Blueberry Banana Nut Oatmeal and so on. In Europe, McDonalds plan is focus on building market share with the right mix of guest counts, average check, strategic restaurant reimaging and expansion. In APMEA, the company will continue to become their customers first choice for eating out by continuing to serving robust value platforms and focusing on menu variety, restaurant experience and convenience.

Industry outlook Fast food franchises are focusing on expanding into new product lines, such as the coffee initiative in the McCafe. Intended to offer competition to Startbucks, McDonalds is luring customers back into their stores, hoping they will purchase food as well. McDonalds Corp is facing tough competition from other brands. The companys third quarter results have been lower than expectations. Market saturation is also a relevant issue in the fast food industry today, at least in the U.S. There is a McDonald franchise is in almost every town, and it usually sits in a row with several competitors. With so many competitors who offer similar products there are fewer customers per location. Increasingly fast food restaurants are also losing market share to fast casual, a relative newcomer in the restaurant space. McDonald is going to provide several new products in the future, such as Chicken McBites, Blueberry Banana Nut Oatmeal, and additional McCaf beverage offerings such as the Cherry Berry Chiller. They will have new point-of-sale system with other technology enhancements such as using hand-held order takers and advancements to improve our front counter service system in the work. Also, they will

expand our major remodel program to another 800 locations in 2012 in the U.S. McDonald has introduces low calorie products in many of their restaurants and a calorie information sheet in every tray along the menu. Awareness about food and nutrition has never been more important, McDonald's has moved to provide more salads and other healthier foods with less sugar, salt and fat in them, in response to public concerns about diet. In the future, McDonald will more focus on lower calorie foods and healthier foods.

Competitor McDonald's has thousands of competitors, each seeking a share of the market. McDonald's recognizes that it is up against not only other large burger and chicken chains but also independently owned fish and chips shops and other eat-in or take-out establishments. Subway, Burger King, Taco Bell, Wendys and several other key fast-food brands in the US have upped or revised their menu choices and increased advertising. They are also marketing more aggressively, which has translated into sales.

Issues On February 1992 seventy-nine year old Stella Liebeck went to a Albuquerque New Mexico Mc Donalds where she went to order a coffee. In her car she put the 190-180 degrees in her lap and tried to take of the coffee lid. When she got the lid of the coffee spilled on her lap at 160 degrees which caused third degree burns on her lower body with third degree burns which caused her permanently disfigured and disabled for two years. MCD settled the case for $27,500, but she wanted them to pay $90,000 for her medical expenses as well as pain and suffering. When she gave MCD her offer they countered her offer to $800,000. In 1993 she filled a lawsuit against

MCD for purchasing a defective coffee because it was excessively heated and inadequate warning causing her damages. She also stated MCD acted with conscious indifference for the safety of its customers. Before the case was settled Liebecks lawyers offered a $300,000 settlement. At the end of the trial she received 2.7 million two days of McDonald coffee sales. In November 1994 both parties ended up settling the case or less than $600,000.