Mcdonald's Corporation Case Analysis

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McDonald’s Corporation Case Analysis
Name left out
BUSN 412 Business Policy
July 27, 2008

CASE ANALYSIS
MCDONALD’S CORPORATION
COMPANY NAME: McDonald’s Corporation
INDUSTRY: Fast Food
COMPANY WEB SITE: http://www.McDonald’s.com/corp.html
COMPANY BACKGROUND:
The first McDonald's was built in 1940 by the brothers Dick and Mac McDonald. In 1954 Ray Kroc became the first franchisee appointed by Mac and Dick McDonald in San Bernardino, California. The following year, 1955, Kroc opened his first restaurant in Des Plaines, Illinois and the McDonald’s’ Corporation was created. By 1957 a company motto had been created; Quality, Service, Cleanliness and Value (Q.S.C. & V.) In 1961 Kroc bought out the McDonald brothers for all rights to the McDonald’s’ concept for $2.7 million. That same year Hamburger University opened in Elk Grove, near Chicago. In 1963, one billion hamburgers were sold, the 500th student graduated from Hamburger University, Ronald McDonald made his debut and McDonald’s’ net income exceeded $1 million (McSpotlight, 2005).

In 1965 McDonald’s’ Corporation went public and May 7th of the following year McDonald’s’ was listed on the New York stock exchange on the 7th May. 1967 was the year that the first restaurants outside of the USA opened, which were in Canada and Puerto Rico. In 1972 while assets exceeded $500 million and sales surpassed $1 billion, a new McDonald’s’ restaurant was opening every day. The 2,000th restaurant opened in Des Plaines, Illinois and the Quarter Pounder was introduced. All this plus Ray Kroc made a generous $250,000 donation to the 1972 presidential campaign of Richard Nixon “a donation which was perhaps a subject of investigation during the Watergate corruption scandal”) (McSpotlight, 2005). Today “McDonald’s’ is the leading global foodservice retailer with more than 30,000 local restaurants serving 52 million people in more than 100 countries each day. More than 70% of McDonald’s’ restaurants worldwide are owned and operated by independent local men and women” (McDonald’s’ Corp., 2008). SWOT ANALYSIS:

Strengths: McDonald’s has a number of strengths, one is brand equity world-wide. Basically this is saying that they have equity all over the globe with not only their restaurants, but other items like, lunch boxes and book bags, that have their name on it. They have 42% of the United States fast-food hamburger business. Another strength is their consistency of food. They do not change the way things are made from year to year. A customer knows that they can go to McDonald’s and get that tasty Big Mac and it will taste like it always does…yummy. They also have a few successful items such as their fries, the Happy Meal, the Big Mac, the Egg McMuffin, and other promotions like the McRib. They also have an overseas market. Having restaurants across the globe widens the market and gives them a competitive advantage over smaller burger businesses. Weaknesses: The first weakness is the declining market share. Every time a new restaurant opens, the market shares get smaller. There are more choices for customers and they may pick another fast food restaurant over McDonald’s. In my opinion, one weakness they have is the poor quality and taste of some of their products. Customers watch the commercials for a new product and say to themselves that it looks tasty, but when they buy it, it isn’t what they expected, like the Arch Deluxe sandwich. The last weakness I will mention is the slowed revenue and income growth. 2003 was their first ever quarterly loss and since then, the revenue and income has risen, although slowly (Shamsie, 2005, p. C387). Opportunities: International expansion is a great opportunity for them. They have restaurants across the globe, but they have become so popular, they could open more restaurants in many other countries. As our lives get busier and technology advances, people just don’t have time to stand over a hot...
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