This document discusses the operations of McDonald's franchise in Pakistan. Some key points: 1) McDonald's granted a franchise license to Lakson Group in Pakistan in 1998 and has since expanded to 34 restaurants across 8 major cities, capturing 43% market share in the fast food industry. 2) Initial threats to McDonald's in Pakistan included convincing the public that halal meat is used and competition from perceived healthier options. However, McDonald's has invested $30 billion and pays $10 billion in taxes. 3) A SWOT analysis finds strengths in McDonald's strong brand image and quality, while weaknesses include targeting the middle-income class and threats from inflation and new competitors. Opportunities lie in profit potential from

1. By Wendell Godinho
International Trade Policies
Pakistan

2. 01

3. If US dollar appreciate then :
The price of Pakistan rugs fall.
More rugs are imported from Pakistan.
Profit of importers, such as pier one imports
The price of American machinery, to Pakistani retail firm.
Demand for American dollar.
If us dollar depreciate the:
Farmers will be benefited.
Favorable for line worker in auto plant
Not good for ONGC.
Agriculture product will be affected.
CURRENCY: $1 = 104.82 PRs
02
Effect of Currency

4. 03
Balance O f Payment
Systematic record of a nation’s total payments to foreign
countries, including the price of imports, the outflow of
capital and gold, and the total receipts from abroad,
including the price of exports and the inflow of capital
and gold
MEANING
CURRENT BOP OF PAKISTAN
According to the Economic Survey of Pakistan
2013-14, It is showing a deficit of $ 8.3 billion
A - LIMITED EXPORT CAPACITY
1. Consumption Oriented Society
2. Less Modernization of Machinery
3. Foreign Debts Servicing
B - UN-RESTRICTED IMPORT NEEDS
1. Rise in Oil Prices
2. Import Oriented Industry
3. Defence Needs
MEASURES TO CORRECT ADVERSE BOP
 Export Manufactured goods
 Export Marketing
 Import of Only Essential Items
 Substitutes for Imported Items

5. The Foreign Ministry contributes towards safeguarding Pakistan’s security
and advancing Pakistan’s development agenda for progress & prosperity.
Dynamic, progressive, moderate & democratic Islamic country.
Friendly relations countries of the world.
Security and geo-strategic interests.
Commercial and economic cooperation.
Safeguarding the interests of Pakistani Diaspora abroad.
Ensuring optimal utilization.
International Policies
04http://www.mofa.gov.pk/content.php?pageID=objectives

6. Franchise Model
McDonalds granted the franchise license to Lakson Group of Companies.
Lakson Group is a conglomerate whose business portfolio includes Tobacco,
Insurance, and consumer goods
Fast-food industry thrives on footfall of customers and high volume sales at low
prices instead of premium pricing strategies.
A service fee of 4% of monthly gross sales is charged from the franchisees.
McDonalds do not provide any financial assistance to the franchisee.
Presence in more than 120 countries and 20% revenue comes from these
Franchise.
04(2012). Retrieved Jan 25, 2012, from www.McDonalds.com.pk.
Mc Donald's Franchise

7. Lahore, Pakistan in 1998.
34 restaurants in 8 major cities of Pakistan.
Launched in Gulbarga and Lahore (mostly middle class people lives).
The market share of fast food industry in Pakistan is around 13 percent.
McDonalds has 43% market share in fast-food industry in Pakistan
A strong low-cost leadership as its business strategy.
Adults desire change more often; while, children remain more loyal in
Pakistan.
Mc Donald opted for Value pricing in Pakistan “giving more for less”.
05http://www.mcdonalds.com.pk/
Mc Donald's

8. 09
The first threat faced by the company was to convince the public that “halal”
meat or chicken is used for preparation Of products.
Competition from newer formatted chains like Subway, coffee shops &
grilled outlets, which are perceived healthier.
Bird flu and Mad cow fear resulted in the fear of eating at Mc D.
McDonalds has invested Rs. 30 billion in the country and pays Rs. 10 billion
towards taxes.
(2012, Jan). Retrieved Jan 25 Jan, 2012, from www.McDonalds.com.pk.
Main threats faced by Mc Donald

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PESTAL
POLITICAL FACTOR
Government policies do not affect the company.
 Weak Consumer protection law
ECONOMICAL FACTOR
Middle class
Profits of Mcdonald Pakistan dwindled.
SOCIAL FACTOR
Acceptance of the fast food by
youths
TECHNOLOGICAL FACTOR
McDonalds has an edge over others
in terms of technology
LEGAL FACTOR
socio-cultural market signs e.g Halal
requirements.
Tax obligations, employment standards, and
requirements to a degree of quality
ENVIROMENTAL FACTOR
 Decompostion of bio
degradable and non
bio degradable waste

10. 10
STRENGTHS
• Strong image.
• Less Cost.
• Quality.
OPPORTUNITY
 profit potential.
 Increasing
disposable income
THREATS
• Double digit inflation
prevailing in the
country.
• Entry of new
Competitor
WEAKNESS
• middle- income
class.
• Prone to attack by
niche players
SWOT

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