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McDonald’s FEATURE
UNDERNEATH THE
GOLDEN ARCHES Fifteen years after opening in South Africa, McDonald’s has 132 restaurants across the country. And each month 3.5 million South Africans eat at McDonald’s – slightly more than the population of Johannesburg. Happy, satisfied customers are critical to this scale of growth, McDonald’s SA Managing Director Greg Solomon talks to South Africa Mag.
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McDonald’s FEATURE
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ith the Golden Arches symbol of globalism and the power of duplication, McDonald’s came to South Africa in 1995. Today there are 134 restaurants across the country and every year another ten to fifteen restaurants are added, a growth rate McDonald’s South Africa Managing Director Greg Solomon says is sustainable for the next few years. Solomon, 40, joined McDonald’s fifteen years ago in project management. A qualified civil engineer, he played a leading role in the restaurant building expansion program. Six years ago he moved into operations and trained in the restaurants for two years. Today he oversees everything from bricks to beef burgers and fries. On any one day McDonald’s serves 58 million people at 31,000 restaurants in 118 countries. In South Africa McDonald’s serves over 3.5 million, or slightly more than the population of Johannesburg in one month. McDonald’s is present in all the major malls and now also in the townships - three restaurants are in South Africa’s biggest township, Soweto.
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So what does Solomon take into account when scouting potential new locations? “We look across a variety of different factors; we consider the demographics, passing traffic, retail components, to name a few and convenience is number one among these”. “We are pretty much a brand that caters for all the diverse community in this country
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McDonald’s FEATURE
and this is largely on the strength of the variety in our menu offering and convenience platform. We offer fish, meat and chicken, we have dining and we have 24/7 drive-thru which gives us a particular differentiation edge. We are popular with the moms, kids and young adults too. We have a tremendous amount of choice, and our customers who understand our brand recognise us for that. Happy, satisfied customers are critical to this scale of growth. ” says Solomon. Choice was extended again last October with the introduction to South Africa of McCafé, a coffee-house-style food and drink offering premium 100% Arabica. Every cup promises the perfect balance of aroma,
full-bodied taste and sweetness combined with a rounded smooth aftertaste. The move that has seen McCafé established in 17% of McDonald’s SA restaurants is a result of studying best practice business models working in other countries, specifically Australia and Germany, and seeing how this extension was growing their business. More importantly, listening to customers, asking such questions as how the brand can become more relevant to them and what their need is today and what it may be tomorrow. “Among many other things that emerged was an appetite for premium coffee. So we put that into the market place at a very
Our franchisees do a lot of work within their communities. They sit on various local boards and they serve local charities
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McDonald’s FEATURE
competitive price. There is a great coffee culture in South Africa, and it’s appealing to everybody and adding variety to our consumers. The business result has met my expectations... it is not a Big Mac, but it has huge room for growth and will certainly grow our business” says Solomon. McDonald’s employs 1.5 million people worldwide and 7000 in South Africa with sixty per cent of its restaurants being franchisee-owned. Asked how he measures
the national entrepreneurial spirit, Solomon explained that holistically it is pretty strong. McDonald’s is building a strong culture of entrepreneurial men and women and they are an integral part of the business. The attributes looked for in an aspiring franchisee are firstly an entrepreneurial spirit – one of placing the customer first, a demonstration of historical financial discipline and strength of character which is required in great restaurant operations. McDonald’s calls its franchisees ‘Owner Operators, a job description that goes beyond the obvious. As well as delivering on 8
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FINLAR FOODS Finlar Foods set up its first plant in Cape Town in 1994, to supply world standard food products to the food and retail markets in South Africa. Today it operates out of two plants, the one in Cape Town and the other in Johannesburg, both HACCP compliant, from where it services the South African market with top quality beef and chicken products.
performance, Golden Arch franchisees must commit to a strong community ethic. “Our franchisees do a lot of work within their communities. They sit on various local boards and they serve local charities. We don’t speak about that a lot and we don’t intend to, but this really builds brand trust in the McDonald’s business. These small but significant relationships our franchisees have with their local communities are powerful and very important skills fit for leadership within our business and for our brand.” explained Solomon. Obviously, one of the cornerstones of the McDonald’s business is people. In 2009 McDonald’s South Africa was voted Best Company to Work For in the medium-sized category of the Deloitte Survey. Unsurprisingly in view of its history of backing major sporting events, McDonald’s is a leading sponsor of the 2010 FIFA World Cup and will be using its involvement to grow the brand in the South African market. Initiatives like the McDonald’s Player Escort, the McDonald’s Fan Dancers – who are appearing at selected matches - and the McDonald’s Ultimate Fan Program are geared to engaging customers and providing a unique experience. “Playing a key role in a world cup hosted in our own country is very exciting for all of us. It is good for business too with an anticipated 5% - 7% boost in country wide sales in addition to our current trends. The country is ready, McDonald’s South Africa is ready – so bring on the World Cup 2010!” Solomon shared excitedly. END
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