Scale Advantage Of Mcdonalds

McDonald is known for the quality the restaurant serves, and the opportunities the McDonald restaurant offer. McDonald's has been

Furthermore, McDonald’s is a true franchise success; the success of McDonald’s goes back to its roots, the start. By being consistent and providing quality service, cleanliness, and values at all times, customers have nothing to complain about and customers always know what to expect locally and internationally. With making things new and fresh, innovation is a key component to the success

1. Franchisees gain numerous advantage when they purchase a franchise. First, while a franchisee may be opening a new store, it is part of an already established business and system. This means a franchisee has access to turnkey operations, allowing an increased speed to establishing and growing the business. Franchisees also get support for management and training activities, as well as financial assistance. Going hand in hand with this, a franchise already has an established brand name, quality of goods and service which have been standardized across the franchisor’s larger company, and national advertising programs from franchisors. Franchises also have large-volume, centralized buying power. A franchise has proven products, and

McDonald's has successfully created a brand/name for itself as the leading fast food retailer in the world. It is somewhat of impossibility for one to not come across a McDonald's with over 30,000 local restaurants in over 100 countries (McDonald's, 2011). Those restaurants are owned either by a franchise owner or a corporation; a percentage of all the earnings from a franchise owner, including a percentage from their annual revenue go to McDonald's.

Almost sixty-four percent of its stock holders held are institutions. Places such as, Bank of America, Northern Trust Corp, Wellington Management Co and many others that are interested in this company’s growth. Since opening in the middle of 1960’s, McDonald’s any one can recognize its trademark golden arches. We as Americans cannot turn a street corner without seeing a different McDonalds down the road. They are located everywhere, but that just means more profit for the company and its stockholders. The company owns and leases out real estate primarily in connection with its restaurant business. It generally owns the land and buildings or secures out long-term leases for the restaurant sites.

McDonalds was first incorporated in the year 1955 in USA with a single restaurant. Currently, McDonald has transformed to be the biggest and the fastest growing in the industry of fast food services (Employee handbook, 18). The corporation sales are now at a staggering $30 billion an year contributed by the 21,000 stores that are located across 101 different nations around the world. The success of the corporation has been as a result of a great contribution by the company’s management where there has been application of new ideas to give the corporation an upper edge in the market. On analysis of the company’s blueprints, a projection has been made where the corporation

McDonalds is a corporation that has great success because of good strategy and planning. In the next five years, McDonalds needs to keep up with the changes of the consumer and social

Questions 1: How would you describe McDonald 's business strategy? What are the foundations of its competitive advantage?

REFERENCES•www.mcdonalds.com, accessed on 18 July, 2008•www.mcdonldsindia.net, accessed on 18 July, 2008•en.wikipedia.org/wiki/McDonald's, accessed on 19 July, 2008•http://www.associatedcontent.com/article/263943/mcdonalds_strategic_marketing_mix.html?cat=4, accessed on 19 July, 2008•www.kfc.com, accessed on 25 August, 2008

In contrast with McDonalds their success is from globalization. Since the early 1940’s McDonalds has been a burger business, and accomplished to be the first one’s to become global. McDonalds has invested into several community organizations that helped the business to earn trust from the communities and gave more of a positive outlook towards their restaurants. They support their own employees, their families, and other groups of society in every country where it has business. McDonalds has website links to promote healthy living for kids, teens, and Latin and African Americans. McDonalds Happy Meals, McDonalds for teens, Me Encanta, and 365Black. They have corporate governance, which shows in detail of their operational structure. There is a whole webpage that is dedicated to explain about what is their drive to stay successful, what the board of

McDonalds obtained an additional customer base and this had a positive impact on sales. Also McDonalds have sponsored past Olympics and this increased the demand of a product especially the Big Mac, they also gained free publicity and this also increases the customer base. This avoids customers to switch to competitors and this means that they will obtain a healthy and stable profit for the future. In the past year if a customer bought a meal from McDonalds the customer would receive a cup as part of their purchase. This increased the amount of customers they get and it also made McDonalds stand out from its competitors. A unique selling point of products differentiates McDonalds from its competitors because they will be more customers visiting the restaurant and this will result to increase of sales.

McDonald’s has extremely strict rules when it comes to awarding franchises. First, it is very costly to open a new location or purchase an existing location, with the median startup cost being $300,000 (Kalnins & Lafontaine, 2004, p. 750). As well, the company does an extensive background check on a variety of issues including credit history, business management experience, and the acceptance of the contractual agreement that the company provides. Because of these strict rules and the large amount of capital needed to purchase a location, “rates for franchise applicants are 1% for McDonald's” (Norton, 1988, p. 204). This is an extremely low acceptance rate and is even lower than McDonald’s chief competitor, Burger King, who accepts 1.5% percent of applicants (Norton, 1988, p. 199). These low numbers are understandable in the context of the business and risk that is involved. Though the franchise purchaser must pay a large amount of money to gain the rights to the restaurant, they truly have nothing to lose besides money because they are simply running another company’s business model as well as using their trademarks and logos. McDonald’s on the other hand, has a great amount at stake because they place the well being of an entire restaurant into the caretaking of an individual who simply purchased the rights for the store. If the store does poorly or if there are issues with customer service, it reflects

Throughout its restaurants across the globe, McDonald's Corporation consists of various operations that are associated with the overall strategy of the company. Some of

Since McDonald’s is the most well know fast food chain in the world with a market cap of 69.35 billion, brand recognition is their biggest strength. The secret of McDonald’s success is its willingness to innovate and maintain consistency in the operation of its many outlets. In recent years McDonald’s has introduced Premium Salads, Snack Wraps, fresh Apple Dippers in the United States, and Corn Cups in China. Also, McDonald 's products are priced so low that economic conditions are almost insignificant.

When people think about the franchising concept, McDonald's usually comes up first as a prime example. Although McDonald's was not the first franchise business Isaac Singer, the inventor of the sewing machine gets credit for originating the franchise idea-the hamburger chain certainly exemplifies franchising success.