McDonald case

Good Essays
Topics: Fast food, Hamburger
Opened in 1941 by Dick and Mac McDonald, McDonald is the longtime leader in fast food industry. It has sustained a remarkable place in industry by fast and consistent quality services, in starting days, McDonald enjoyed tremendous growth where its average annual return on equity was 25.2% between 1965 and 1991. But the company found its sales per unit slowing between 1990 and 1991. Plus growth in the quick service market was projected to only keep pace with inflation in the 1990s.
Question- Why has McDonald sustained its prosperity for so long?
Answer- The mantra for success of McDonald was its consistency, quality, speed, vendor relation and innovation. They innovated product regularly, even some outlets were trying to catch up with the consistent quality, but they were always enthusiastic for the innovations.
McDonald has made customer convenience its main focus, the speed in serving the customer had no match. Locations of outlets were strategically selected. Freestanding restaurants, tucking restaurant into schools, stores made possible that customer is never few minutes away from outlets.
McDonald’s understood the importance of strategic placement, and was aware of the ways in which to most effectively target and service target consumers. Outlets were placed in areas of high footfall, areas that were easily accessible to the consumer and areas that have an optimum demographic.
McDonald’s developed a well-defined operating system. They designed the operations to ensure that all the outlets serve same quality and consistency across globe. The SOPs guaranteed that every time, same food and service is delivered to the customer.
The relationship with vendor was the other differentiator, they treated their vendor with dignity and respect. Franchises saw themselves as a partner in organization. McDonald made sure that franchises make money before company does and insisted that corporate revenue come not from initial franchise fees but from success of the

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