These income bases include the company’s restaurant operations (McDonald’s and its partner brands), its vast real estate holdings and the retail sales of merchandise. The retail sale of merchandise is a category that has great potential to grow and contribute a larger percentage of total revenue. McDonald’s ownership of one of the world’s most recognized and a respected brand is strength. It carries many associations in the mind of people: hamburger, fun, children, fast-food, Golden Arches. This is also the opinion of Kotler (2003, p. 11). In addition, McDonald’s also drawing its strength from being the world’s leading foodservice retailer (Market-leader strategies, Kotler (2003 p. 254-5). Adding to this, it also has an unparalleled global infrastructure.
Furthermore, it has competencies in restaurant operations, real estate, retailing, marketing and franchising. Most important of all, its operation generates substantial amounts of cash from serving nearly 50 million customers a day (McDonald’s Corporation 2004 Summary Annual Report). The company own and franchise operations are strengths. Results show that over the past ten years, franchised restaurants typically had accounted for approximately 60 percent or more of McDonald’s total systemwide sales while the company’s own restaurants brought in another 30% of its sales revenue. The amount of profit generated by the company-owned restaurants is strength.
Although the lion’s share of existing McDonald’s outlets were franchises, the company owned restaurant contributes a fairly significant portion of the total income. The company kept and applied 100 percent of those profits rather than the much smaller portion of the franchises’ profit it received. McDonald’s Plan to Win is strength. The plan stays focus on five key drivers, the people, products, place, price and promotion. It clearly spelt out the strategy and the direction that it is heading. This plan has been instrumental in McDonald’s successful turnaround, as evidenced by the latest financial results. McDonald’s product offerings are strength. It is offering a variety of high-quality menu options, innovative products that are well accepted by customers worldwide.