Introduction
This assignment first gives an insight to McDonald’s corporation history and current situation. Then it describes the management features that are inherited from the founder, Ray Kroc and how the performance is impacted by the founder.
I. An Introduction to McDonald’s Corporation
McDonald’s holds the biggest name in the world’s fast food industry today. Since it’s foundation in 1954, McDonald’s has satisfied the customers with its main product, hamburger. With having more than 35,000 restaurants located in US, Europe, Canada, Asia Pacific, Meddle East and Latin America; it serves 52 million customers daily (McDonald’s 2006 Annual Report, 2007).
1954 was the year that reshaped the concepts of fast food industry. Fifty two year old milk shake salesman, Ray Kroc envisioned the idea of creating a hamburger product and delivering it to customers in very short time; when he visited his client McDonald’s. By that time, McDonald brothers were operating a restaurant which sold burger, French fries and milk shakes and was efficient but was limited to small scale operation. Kroc made a deal with McDonald brothers to sell McDonald’s franchises for a lower price.
He started duplicating the McDonald brothers’ single store in 1955 and introduced discipline to it. He took great pain to introduce a system to produced same quality hamburgers with fast delivery mechanism that can be replicate easily while maintaining the quality and standards. By 1960, there were more than 200 outlets around the country. Ray Kroc used different advertising methods at different levels to make a famous brand name. With the great success and saturation of the local market, in 1970, McDonald’s started an energetic push to make McDonald’s a global presence.
Today, most of the restaurants out of 35,000 located in more than 100 countries are operated as franchises and affiliates. “More than 70% of McDonald's restaurants worldwide are owned and operated by independent local men and women.” (mcdonalds.com). These restaurants are being fuelled by local staff of 1,600,000 around the world.
In resent past McDonald’s achievements are spread in different areas. In January 2007, company opened its first drive-thru restaurant at a Sinopec gas station location in Beijing. This was a result of the strategic partnership McDonald’s formed with the China’s largest oil producer. Because of the success McDonald’s company has been listed in the Dow Jones Sustainability index recently. The marketing campaign it ran, “i am lovin’ it”, is horned with one of advertising’s most prestigious awards † a Global EFFIE
A lot of people think that Ray Kroc created McDonalds. I will tell you that this is not true; he started out as a milkshake mixer salesman. One day he got a huge order for eight milkshake mixers from a small restaurant in California, he was really curious why they needed so much. He went to investigate and found Dick and Mac McDonald with their small business. According to www.mcdonalds.com they said “Ray Kroc told the McDonalds brothers that they should spread their business all over the U.S., in 19...
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.
While peddling about the country he came in contact with the super efficient McDonald's hamburger joint, which was started by Dick and Mac McDonald, who were brothers. He saw this place and optimistically envisioned many more opening up all over the country. He convinced the brothers to let him be their first franchisee. They agreed so in 1954 Ray opened up the first McDonalds franchise. A year later, Ray opened up the second McDonalds franchise in Des Plaines, Illinois. Only four years after the second restaurant's opening the one hundredth McDonalds was opened. In 1961 Ray Kroc bought the rights to the McDonalds franchise for a meager 2.7 million dollars. To pay this massive sum at the time he had to mortgage his house and take out numerous loans that would eventually cost him 14 million to pay back. After he bought the rights to the name and the company he forced Dick and Mac to remove their name from their original restaurant. But he went even further when he opened up a McDonalds restaurant a block down the road trying to put them out of business. Also that same year Hamburger University was opened.
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).
Ray Kroc was a shrewd entrepreneur who was all business. When buying out the McDonald’s brothers from their partnership the brothers had refused to sell Kroc their first store “The Big M”, Kroc then opened up a McDonald’s right across the street and drove them out of business. Not only do franchisees operate under the McDonald’s name but they also own the land they operate on which puts McDonald’s into the real estate business as well as the fast food business. This quote from Kroc puts into perspective how shrewd of a businessman he truly was, “If any of my competitors were drowning, I’d stick a hose in their mouth and turn on the water,” he said. “It is ridiculous to call this an industry. This is not. Th...
The McDonald's Corporation is the largest chain of fast food restaurants in the world. It is franchised in over 119 countries and serves an average of 68 million customers daily. The company started in 1940 as a barbecue restaurant operated by Richard and Maurice McDonald in the United States. They reorganized their business as a hamburger stand in 1948. In 1955, Businessman Ray Kroc joined the company as a franchise agent. He purchased the chain from the McDonald brothers and oversaw its global-wide growth (McDonald’s 2014).
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.
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.
McDonald’s was the first company to try to export America’s fast food and changes in eating habits to other nations. McDonald’s has over
McDonald’s restaurant was founded by two brothers, Richard and Maurice (Dick and Mac) McDonald, in 1940. They initially opened the restaurant under the name McDonald’s Barbeque which was located in San Bernardino, California. The McDonald brothers had a vision of a drive-in restaurant that focused on quality food and good service. They served a simple menu consisting of 20-25, mainly barbeque, items. In 1948 after eight years of operations the McDonald 's brothers discovered that the majority of their revenue was coming from hamburgers. With this in mind, they decided to change the menu and set their focus mainly on hamburgers. They also changed the name of the restaurant to simply “McDonald’s” and adopted an assembly line approach in the production process. After continued
“McDonald 's is the leading global foodservice retailer with more than 35,000 local restaurants serving nearly 70 million people in more than 100 countries each day” (About McDonald’s 2014).
Overall, McDonalds are able to reach customers all around the globe and they market their products inexpensively. According to Naim (2001, p. 1) it is acknowledged that, “McDonald 's is a global brand, but we run our business in a fundamentally different way that ought to appeal to some critics of globalization. We are a decentralized entrepreneurial network of locally owned stores that is very flexible and adapts very well to local conditions. We offer an opportunity to entrepreneurs to run a local business with local people supplied by a local infrastructure. Each creates a lot of small businesses around