McDonald’s (NYSE:MCD) shares continue to move higher as the stock touched $100 for the first time on Friday. The company’s stock has returned more than 30% this year in party due to its Asian expansion, which is performing exceptionally well. The company’s comparable sales for Asia/Pacific, Middle East and Africa division grew by 8.1% last month.  This can be attributed to McDonald’s ability to dynamically change itself to cater to the needs of local consumers while keeping prices affordable at the same time. McDonald’s currently competes with Yum! Brands (NYSE:YUM), Subway, Starbucks (NASDAQ:SBUX), Wendy’s (NYSE:WEN), among many others.
McDonald’s plans to double the number of outlets in India to 500 by the end of 2014 at an investment of Rs 1000 crore ($200 million). Currently, there is no company-owned restaurant in India and the company is present through 2 franchisees, Hardcastle and Connaught Plaza Restaurants.  Most of the new restaurants will be drive-throughs, a concept which is yet to be fully tested in India. Out of the 250 restaurants in India currently, only 45-50 are drive throughs.
The expansion plans are in line with our estimates, and we expect the number of franchisee restaurants to cross 27,000 by the end of 2012.
If You Can’t Reach Us, We’ll Reach you
In a place where real estate is expensive and streets are narrow allows for limited parking, and so McDonald’s introduced the delivery model in China, India and other Asian countries. Home delivery is a popular concept in Asian countries due to relatively cheap labor. Also, it helps to save on precious real estate which is a scarce commodity in Asia. McDonald’s has very limited delivery in the U.S. so it had to flexible as well as brave enough to introduce this concept.
McDonald’s German Burgers a Hit in Hong Kong
Restaurants are under the constant pressure to innovate and come up with new items on their menu and McDonald’s seems to have perfected this art. McDonald’s German Sausage Burgers are selling like hotcakes in Hong Kong.  This is a new concept and isn’t even available in Germany and goes to show how seriously the restaurant takes innovation.
We have a $95 price estimate for McDonald’s, which is in line with the market price.Notes:
- How McDonald’s Hit The Spot, WSJ, December 13, 2011 [↩]
- McDonald’s India to double outlet network in 3 years, Economictimes.com, December 23, 2011 [↩]
- McDonald’s German Chicken Sausage Burger Blitzes Hong Kong, inventorspot.com [↩]