Business Strategy of McDonald's | Assignment
Added on 2022-08-18
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TABLE OF CONTENTS
1.0 EXECUTIVE SUMMARY........................................................................ 3
2.0 INTRODUCTION................................................................................... 4
2.1 MCDONALD’S HISTORY.................................................................. 4
2.2 MCDONALD’S LOGO....................................................................... 6
2.3 MCDONALD’S VISION & MISSION..................................................... 7
2.4 MCDONALD’S MANAGEMENT......................................................... 8
2.5 MCDONALD’S PRODUCT................................................................. 9
3.0 LITERATURE REVIEW........................................................................... 10
4.0 STRATEGY PLANNING.......................................................................... 14
5.0 RECOMMENDATION & IMPLEMENTATION STRATEGIES........................... 15
6.0 CONCLUSIONS.................................................................................... 15
7.0 REFERENCES....................................................................................... 16
1.0 EXECUTIVE SUMMARY........................................................................ 3
2.0 INTRODUCTION................................................................................... 4
2.1 MCDONALD’S HISTORY.................................................................. 4
2.2 MCDONALD’S LOGO....................................................................... 6
2.3 MCDONALD’S VISION & MISSION..................................................... 7
2.4 MCDONALD’S MANAGEMENT......................................................... 8
2.5 MCDONALD’S PRODUCT................................................................. 9
3.0 LITERATURE REVIEW........................................................................... 10
4.0 STRATEGY PLANNING.......................................................................... 14
5.0 RECOMMENDATION & IMPLEMENTATION STRATEGIES........................... 15
6.0 CONCLUSIONS.................................................................................... 15
7.0 REFERENCES....................................................................................... 16
2
1.0 EXECUTIVE SUMMARY
McDonald’s has become the largest restaurant chain in the world with the majority of over 90% of
these stores run as franchises, with over 36,000 stores in over 100 countries. As they quote it: “The
power of our franchisees, suppliers, and employees working together toward a common goal are what
makes McDonald’s the world’s leading quick-service restaurant brand”. McDonald's founder, Ken
Croc defined its value proposition this way: “McDonalds stands for friendliness, cleanliness,
consistency, and convenience”. The company basically has two profit formulas, namely one for a
company-owned restaurant, where it gets all the revenue and bears all the costs, and one for a franchise
restaurant, where it gets a rental fee, and royalty fees that depend on a percentage of the franchise sales.
McDonald’s was essentially one of the first restaurants for the creation of fast food. This set up
McDonald for success because their system of producing foods was at a super-fast rate. Which
benefited their brand name tremendously, bringing in tons of customers. As their reputation grew for
quick food, they extended to grow their company, now being the most well-known fast-food restaurant
in the world. McDonald’s was essentially one of the first restaurants for the creation of fast food. This
set up McDonald’s to succeed because their food production system was at a very fast pace, which
greatly benefited their brand, bringing in many customers. As their reputation grew for fast food, they
expanded to grow their company, now the most famous fast food restaurant in the world. McDonald’s
best system for generating revenue is to own real estate, and since their company has grown so large,
they have opened up new locations around the world. They have a comfortable and friendly atmosphere
with great parking, playgrounds, restrooms, and sometimes even free newspapers, which ultimately
attracts many customers as well. With the ability to buy properties and buildings around the world and
also having several places in one area attracts a lot of attention from the public.
McDonald brothers San
Bernardino McDonald’s
restaurant 1948-1955.
1.0 EXECUTIVE SUMMARY
McDonald’s has become the largest restaurant chain in the world with the majority of over 90% of
these stores run as franchises, with over 36,000 stores in over 100 countries. As they quote it: “The
power of our franchisees, suppliers, and employees working together toward a common goal are what
makes McDonald’s the world’s leading quick-service restaurant brand”. McDonald's founder, Ken
Croc defined its value proposition this way: “McDonalds stands for friendliness, cleanliness,
consistency, and convenience”. The company basically has two profit formulas, namely one for a
company-owned restaurant, where it gets all the revenue and bears all the costs, and one for a franchise
restaurant, where it gets a rental fee, and royalty fees that depend on a percentage of the franchise sales.
McDonald’s was essentially one of the first restaurants for the creation of fast food. This set up
McDonald for success because their system of producing foods was at a super-fast rate. Which
benefited their brand name tremendously, bringing in tons of customers. As their reputation grew for
quick food, they extended to grow their company, now being the most well-known fast-food restaurant
in the world. McDonald’s was essentially one of the first restaurants for the creation of fast food. This
set up McDonald’s to succeed because their food production system was at a very fast pace, which
greatly benefited their brand, bringing in many customers. As their reputation grew for fast food, they
expanded to grow their company, now the most famous fast food restaurant in the world. McDonald’s
best system for generating revenue is to own real estate, and since their company has grown so large,
they have opened up new locations around the world. They have a comfortable and friendly atmosphere
with great parking, playgrounds, restrooms, and sometimes even free newspapers, which ultimately
attracts many customers as well. With the ability to buy properties and buildings around the world and
also having several places in one area attracts a lot of attention from the public.
McDonald brothers San
Bernardino McDonald’s
restaurant 1948-1955.
3
2.0 INTRODUCTION
2.1 MCDONALD’S HISTORY
The establishment of McDonald's first began in 1940 when brothers Maurice and Richard
McDonald opened their first restaurant in San Bernardino, California. McDonald brothers turned
their restaurant into a hamburger and milkshake restaurant located in San which was
originally selling products like burgers, fries and shakes for half the price and in half the time of
competing restaurants. Ray Kroc was the exclusive distributor of a milk shake maker called the
Multimixer and heard how well the McDonald brothers used their Multimixers to serve their
customers. He met with them and obtained the franchise rights from them to operate a
McDonald’s restaurant.
In 1955, Ray Kroc founded the McDonald's Corporation and opened the first restaurant
in Des Plaines, Illinois. By early 1960’s he had already opened 200 restaurants throughout USA
and also brought the McDonald hamburger share of the business for $3 million. By 1965 with
over 700 restaurants open, the company became McDonald’s Corporation with the company’s
first offering on the stock exchange (History of the Golden Arches 2010). It wasn’t long before
McDonald’s also captured the attention in several other countries. Throughout the company’s
growth, Kroc managed to maintain a balancing act, imposing system-wide standards while still
an entrepreneurial spirit that welcomed ideas from all levels.
Founder of McDonald: Richard McDonald, Maurice McDonald & Ray Kroc
And the rest, as they say, is history. McDonald's has grown into the largest restaurant
organization in the world. Ray Kroc was chairman of the McDonald’s corporation from 1968
until his death in 1984, but his legacy lives on. Its success story continues with the families of
employees, franchisees, and McDonald’s suppliers. His commitment, dedication, and
accomplishments live on in McDonald’s restaurants around the world.
2.0 INTRODUCTION
2.1 MCDONALD’S HISTORY
The establishment of McDonald's first began in 1940 when brothers Maurice and Richard
McDonald opened their first restaurant in San Bernardino, California. McDonald brothers turned
their restaurant into a hamburger and milkshake restaurant located in San which was
originally selling products like burgers, fries and shakes for half the price and in half the time of
competing restaurants. Ray Kroc was the exclusive distributor of a milk shake maker called the
Multimixer and heard how well the McDonald brothers used their Multimixers to serve their
customers. He met with them and obtained the franchise rights from them to operate a
McDonald’s restaurant.
In 1955, Ray Kroc founded the McDonald's Corporation and opened the first restaurant
in Des Plaines, Illinois. By early 1960’s he had already opened 200 restaurants throughout USA
and also brought the McDonald hamburger share of the business for $3 million. By 1965 with
over 700 restaurants open, the company became McDonald’s Corporation with the company’s
first offering on the stock exchange (History of the Golden Arches 2010). It wasn’t long before
McDonald’s also captured the attention in several other countries. Throughout the company’s
growth, Kroc managed to maintain a balancing act, imposing system-wide standards while still
an entrepreneurial spirit that welcomed ideas from all levels.
Founder of McDonald: Richard McDonald, Maurice McDonald & Ray Kroc
And the rest, as they say, is history. McDonald's has grown into the largest restaurant
organization in the world. Ray Kroc was chairman of the McDonald’s corporation from 1968
until his death in 1984, but his legacy lives on. Its success story continues with the families of
employees, franchisees, and McDonald’s suppliers. His commitment, dedication, and
accomplishments live on in McDonald’s restaurants around the world.
4
Newspaper advertisement announcing the
opening of Ray Kroc’s first McDonald’s.
McDonald’s franchise was first brought to Malaysia in the early 1980s by Tan
Sri Dato’ Vincent Tan of the Berjaya Corporation Group in a joint venture under the name Golden
Arches Restaurants Sdn Bhd. The first McDonald’s restaurant was opened in Jalan Bukit Bintang,
Kuala Lumpur in 1982, and the chain was managed by Mohamad Shah bin Tan Sri Abdul Kadir.
After more than 20 years, the franchise returned to McDonald's Corporation which directly
operated the Malaysian operation until the transfer of rights to Lionhorn. While McDonald’s
Corporation manages its operations in Malaysia, the franchise is open to Malaysians to operate
McDonald’s restaurants in selected areas, but that option does not appear to be available right
now.
The first McDonald in Malaysia
Newspaper advertisement announcing the
opening of Ray Kroc’s first McDonald’s.
McDonald’s franchise was first brought to Malaysia in the early 1980s by Tan
Sri Dato’ Vincent Tan of the Berjaya Corporation Group in a joint venture under the name Golden
Arches Restaurants Sdn Bhd. The first McDonald’s restaurant was opened in Jalan Bukit Bintang,
Kuala Lumpur in 1982, and the chain was managed by Mohamad Shah bin Tan Sri Abdul Kadir.
After more than 20 years, the franchise returned to McDonald's Corporation which directly
operated the Malaysian operation until the transfer of rights to Lionhorn. While McDonald’s
Corporation manages its operations in Malaysia, the franchise is open to Malaysians to operate
McDonald’s restaurants in selected areas, but that option does not appear to be available right
now.
The first McDonald in Malaysia
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