Balance Sheet - McDonalds

Executive Summary

The business began with two brothers. In 1937, Dick and Maurice McDonalds opened a small drive-in restaurant east of Pasadena, California. They served hotdogs and shakes. This led to the creation of a bigger drive-in which operated successfully and by 1948, the brothers had a made a fortune they never expected. The brothers realized that hamburgers comprised of 80 percent of their sales and closed their doors to re-evaluate their business model. The same year, in 1948 the model was about affordable dining for family who wanted to eat out. The "Speedy Service System" was also implemented that included an assembly line of sorts, a nine-item menu, and an all male staff. The operations were proven successful in 1952 ad the first franchise was sold to Neil Fox who opened a restaurant in Phoenix, Arizona and created the well-known golden arches of McDonalds. Fox had huge success with the store and the brothers were reluctant at first to begin a national franchise system, but soon realized that too many copycats were creeping up and they needed an advantage and a head start. Ray Croc joined the team as the exclusive franchise agent in the United States.

Some of the problems and challenges facing the company is the increase in competition, poor management, bad marketing, and lack of response to the changes in the needs of franchises and customers. This resulted in the strategic issues that needed to be implemented to continue growing success for the company. Going global is critical in the expansion of McDonalds. Over the past couple of decades, the major chains have also begun to expand into the global marketplace and have opened franchises up around the world. McDonald's currently operates in over 120 countries around the world with over 30,000 stores.

In analyzing this company, the strengths, weaknesses, opportunities, and threats were inevitably explored to better understand the current situation. This SWOT analysis shows us that although there are numerous threats against the fast-food industry, McDonald's occupies a relatively strong position in the global marketplace. According to the five forces model, the strongest competitive force is between rival sellers in the industry. This SWOT analysis shows the many strengths that Mc Donald's employs to keep itself at the top of the fast-food industry. Although there are various weaknesses, these can all be turned around following the McDonald's Plan to Win, which was implemented with the hiring of Jim Cantalupo.

Keeping in mind, the core competencies of this company is what makes it so successful today. For the past ten years, one of McDonald's key success factors has been its franchises, taking in approximately 60 percent of total sales. Another success factor is the "Plan to Win" strategy. It is a plan that focuses on five key drivers of success; people,