McDonald's Case Study
Company overview
McDonald's Corporation is the world's largest chain of fast-food restaurants, primarily selling hamburgers, chicken, french fries, breakfasts and soft drinks. More recently, it also offers salads, fruit, snack wraps, and carrot sticks. The business began in 1940, with a restaurant opened by brothers Dick and Mac McDonald in San Bernardino, California. Their introduction of the "Speedee Service System" in 1948 established the principles of the modern fast-food restaurant. The present corporation dates its founding to the opening of a franchised restaurant by Ray Kroc, in Des Plaines, Illinois on April 15, 1955, the ninth McDonald's restaurant overall. Kroc later purchased the McDonald brothers' equity in the company and led its worldwide expansion.
With the successful expansion of McDonald's into many international markets, the company has become a symbol of globalization and the spread of the American way of life. Its prominence has also made it a frequent topic of public debates about obesity, corporate ethics and consumer responsibility.
McDonald's restaurants are found in 120 countries and territories around the world and serve nearly 54 million customers each day. The company also operates other restaurant brands, such as Piles Café and Boston Market, and has a minority stake in Pret a Manger. In addition, McDonald's opens a new restaurant every three hours. Also, McDonald's has twice the market share of its closest U.S. competitor, Burger King, representing 7% of total U.S. eating-out
sales. Similarly, McDonald's serves about 1% of the world's population on any given day through its 23,000 restaurants internationally. Big Mac, the world's most sold hamburger was developed by...
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... a sponsorship deal involving the pop star Justin Timberlake. He will appear in five advertisements throughout the English-speaking world, promoting the company's products. The company also will sponsor the singer's world tour, but refuse to say how much they are paying him although some experts suggest it's in the region of $6 million (£3.6 million). The marketing campaign will be entitled 'I'm Lovin' It' and the associated tour of 35 European cities is entitled the "McDonald's Presents Justin Timberlake 'Justified' World Tour 'lovin' it' live".
References:
1. http://en.wikipedia.org/wiki/McDonald's, Wikipedia, the free encyclopedia, accessed 08.10.07
2. Merriam-Webster: 'McJob' is here to stay". The Associated Press. November 11, 2003.
3. www.mcdonalds.com/facts, accessed 09.10.07
4. http://www.transnationale.org/companies/mcdonald_s.php, accessed 09.10.07
From just one restaurant in San Bernadino, California, run by two brothers, McDonald’s has grown to become the best known and most popular fast food restaurant chain in the world.
As a company, McDonald’s was first introduced in Des Plaines, Illinois in 1955. This was the very first McDonald’s restaurant, which all started in San Bernardino, California in 1954 when Ray Kroc approached the McDonald brothers with a business proposition to start a new company. In 1965 McDonald’s went public and was later, in 1985 added to the Dow Jones Industrial Average. (www.mcdonalds.com) The company has gone through quite a few changes with its changing CEO’s over the years, but the company seems to be on track with CEO Jim Skinner, named in 2004. Skinner was named the new CEO just in time to clean up after McDonald’s first ever quarterly loss. He succeeded by showing that McDonald’s revenue had climbed 11% during 2006 and net profits had climbed 36%. (Dess, Case 40 Pg. 1)
Everyone has heard of McDonald’s, but where did this familiar name come from? When people think of American food, it is not uncommon for two golden arches to appear in their minds. This story began with two brothers Dick and Mac McDonald who owned and ran a small restaurant in San Bernardino, California during the 1940s. In 1954 a man named Ray Kroc came across these two brothers while selling multi-mixers and was impressed with the business they were running. The menu was compact, listing options for only a few burgers, fries and beverages, but the restaurant was effective in its operation. Ray Kroc pitched the idea of spreading McDonald’s restaurants across the United States and in 1955 he founded the McDonald’s Corporation. By 1960 he bought the exclusive rights to the name. Kroc was able to expand substantially on this small business so that by 1958 McDonald’s sold its 100 millionth hamburger. (“McDonald’s.com”)
According to Royle (1999) McDonald’s is a very large multinational enterprise (MNE) and the largest food service operation in the world. Currently the company has 1.5 million workers with 23,500 stores in over 110 countries with the United Kingdom and Germany amongst the corporation’s six biggest markets, and over 12,000 restaurants in the United States. In 1974 the United Kingdom corporation was established and in 1971 the Germany corporation was established, currently the combined corporation has over 900 restaurants and close to 50,000 employees in each of these countries (Royle, 1999).
McDonald's Corporation is the largest fast-food operator in the World and was originally formed in 1955 after Ray Kroc pitched the idea of opening up several restaurants based on the original owned by Dick and Mac McDonald. McDonald's went public in 1965 and introduced its flagship product, the Big Mac, in 1968. Today, McDonald's operates more than 30,000 restaurants in over 100 countries and have one of the world's most widely known brand names. McDonald's sales hit $57 billion company-wide and over $25 billion in the United States in 2006 (S&P).
McDonald’s has the largest fast food market share in the world. As mentioned, it serves 68 million customers every day in 119 countries, allowing it to be the second largest outlet operator with more than 34,000 outlets.
Have you ever wondered how the business empire of McDonalds was started? With over ninety nine billion served, it was started in 1940 in San Bernardino, California. It was started off as just a Bar-B-Q that served just twenty items. Its first mascot was named “Speedee” They eventually realized that by setting up their kitchen like an assembly line that they could be much more productive and get their food done faster, with every employee doing a specified job; the restaurants production rate became much higher. A milkshake machine vendor came into their small restaurant one day, his name was Ray Kroc. He saw how much potential the restaurant has, so he bought it out and opened one of the first franchises. Within the first year of Ray Kroc buying it, there were one hundred and two locations all around the world. McDonalds currently is one of the largest fast food restaurants in the world and currently has served over sixty four million customers through one of their thirty two thousand sites. It has almost become a way of life for America. Though, McDonalds started off as a small business between two brothers, it grew into one of the largest restaurant franchises in the world and greatly affects our society and how we eat our food.
The broad issue facing McDonald’s U.K is the current attitude toward rising obesity, The Company seems to have tried many different approaches to deal with the problem, but the problem persists. List all the problems facing McDonald’s and critique its various approaches to solve the
McDonald’s has proven over time that the business practices they utilize work well and have led them to obtaining the title of the largest food retailer in the world. The founder of the company made a tactical decision in franchising the idea of providing fast food at a cheap price. Today, fast food has become a staple of not only American life but a viable food option all over the world. For McDonald’s a critical factor in them reaching the level of growth they currently experience has been franchising. It can be assured that McDonald’s will continue to grow through the usage of the franchising techniques as new food markets continue to develop all over the world.
McDonald's was started in 1955 by Ray Kroc and has grown to more than 30,000 restaurants in 121 countries. McDonald's also had $10.1 billion in system-wide sales and $271.9 million in corporate profits on revenues of $3.7 billion in the year 2001.
In today’s market, McDonalds faces numerous challenges such as fierce competition, a more health conscious customer, and the continual need for improved customer satisfaction and menu. McDonalds needs to go through some changes in order to remain ahead in the fast-food industry.
At the time, Ray Kroc was selling multi-mixer machines for milkshakes and McDonald’s had already purchased eight of his machines. Wondering why this restaurant was using eight of his machines, he decided to visit the restaurant and was really taken back by how efficient the restaurant was being operated. Being a businessman himself, Krock eagerly spoke with the McDonald brothers about expanding their operations towards Chicago and the east coast where Kroc was from. Reluctant at first, the brothers eventually agreed to let Kroc handle all operations of franchising and in return Ray Kroc would give the McDonald brothers half of the sales. Kroc had a bigger vision of expanding all over the states, and becoming the number one fast-food chain in America. He wanted to perfect the production side of the operation and offer the same consistency in the food that McDonald 's offers anywhere in the states. In 1955 Kroc opened McDonald’s System, Inc. Now Kroc was able to not only run his own restaurant but also find other franchisees and expand the business even
Vignali, C. (2001). McDonald’s: “think global, act local”--the marketing mix. British Food Journal, 103(2), pp.97--111.
McDonalds uniform menu offerings can be mass produced; therefore helps to lower production costs. Additionally, the company bargaining power with its suppliers lowers its input costs and boost margins and even more importantly, McDonald 's offers a very large advertising budget which gives the company a significant competitive advantage over its competitors. Much of McDonald 's sales occur outside the United States and thus, with McDonald 's tapping extensively into global expansion therefore the company’s international operations will continue to strive and
Headquartered in the United States Of America, the McDonald's Corporation is the world's largest chain of hamburger fast food restaurants. It is serving around 68 million customers daily in 119 countries across 35,000outlets. The company began in 1940 as a barbeque restaurant operated by Richard and Maurice McDonald. In 1948, they reorganized their business as a hamburger stand using production line principles. Businessman Ray Kroc joined the company as a franchise agent in 1955. He subsequently purchased the chain from the McDonald brothers and oversaw its worldwide growth.