Mcdonalds Case Study

Topics: Balance sheet, Financial ratio, Asset Pages: 10 (2283 words) Published: May 11, 2013
McDonald Corporation
One McDonald Plaza

Oak Brook, IL 60523 USA

BUSN 5200

Company Description
McDonald’s is the leading global food service retailer with more than 33,500 local restaurants serving approximately 69 million people in 119 countries each day. For years their philosophy of providing good food for a low price has led to astounding growth throughout the world. This has led to new jobs and economic benefits for wherever the stores are located. More than 80% of McDonalds restaurants worldwide are owned and operated by independent local men and women. McDonald’s uses strong marketing and solid economic practices to insure they will not lose their position in the fast food industry.

Ray Kroc a 52 year old milk shake salesman came across the McDonald brothers who owned and operated a small hamburger shop in Southern California. The shop served only hamburgers, French fries, sodas and milk shakes. Kroc’s was curious as to why the brothers were purchasing so many milk shake mixers and with further investigation he recommended that the brothers expand their business. Kroc’s offered his services and the first McDonalds open 1955 in Chicago and by 1965 there were more than 700 sites across the United States. It wasn’t long before McDonalds caught on in several countries and today forty seven million people are being served every day and sales are at a hefty $17 billion.

The corporate structure uses a management policy and is highly decentralized, the company manages the franchises with a mixture of strict regulation and a high entrepreneurial freedom. The company believes that good management is more than a simple collection of laws and regulations and a good connection must exist between the Board of Directors, their management and the stock holders. The Leadership of the corporation rest on the shoulders of President and Chief Executive Officer Don Thompson. The governing structure of the organization is comprised of a Board of Directors headed by Andrew McKenna. There is also Board Committees which include an Audit Committee, Compensation Committee, Executive Committee, Finance Committee, and a Sustainability/Corporate Responsibility Committee.

Products and Services
McDonald’s is a well-known in the food industry for being the world’s best quick food service industry. The menu concentrates on five main ingredients: beef, chicken, bread, potatoes and milk. The Big Mac is the major food seller along with other core favorites such as the famous French Fries, Quarter Pounder and some products have become well known simply by added ‘Mc’ to it such as the ‘McChicken’, ‘Chicken McNuggets’ and even ice cream has become the ‘McFlurry’. McDonald's Corporation receives revenues through investments in properties, franchising and operating restaurants. The corporation believes that franchising is important to delivering great customer service and driving profitability. About 20% of McDonald’s restaurants are owned and handled by the corporation and the majority of the restaurants are operated by others through variety of franchise agreements and combined ventures. Approximately 80% of McDonald’s restaurants are franchised and nearly 21% are licensed to foreign affiliates or developmental licensees.

Geographic Area
The business is managed as distinct geographic segments that include: United States
Asia/Pacific, Middle East and Africa (APMEA)
Other countries & Corporate (OCC) include:
Latin American and Corporate

Recent Developments

The corporation hasn’t had any major developments recently but in the last ninety days the company has announced a partnership with KaBOOM, a national non- profit that envisions a great place to play within walking distance of every child in America. During the 2012 summer Olympics announced advances in children‘s well-being, Menu innovation and access to nutrition...
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