Operations Management McDonald’s

Introduction:

McDonald’s is the world largest chain of fats food restaurants with more than 30000 localrestaurant serving 52 million customers in more than 100 countries each day.McDonald’s primarily sells hamburgers, cheeseburgers, chicken products, french-fries, breakfast items, soft drinks, milkshakes and desserts. More recently, it has begun to offer salads, wraps and fruit.Each McDonald’s restaurant is operated by franchise, an affiliate, or the corporation itself.The corporation revenues come from the rent, royalties and fees paid by the franchisees, aswell as sales in company-operated restaurants. McDonald’s revenues grew 27% over the threeyears ending in 2007 to $22.8 billion, and 9% growth in operating income to $ 3.9 billion.

History:

The business began in 1940 with a restaurant opened by brothers Dick and Mac Donald inSan Bernardino, California. Their introduction of the “speedee service system” in 1948established the principles of the modern fast-food restaurant. The original mascot of McDonald’s was man with a chef’s hat on top of hamburger shaped head whose name was“speedee”; speedee was eventually replaced with Ronal McDonald in 1963.The present corporation dates its founding to the opening of a franchised restaurant by RayKroc,( in Des Plaines, Illinois on April 15,1955) who took over the small scale McDonald’scorporation franchise in 1954 and built it into the most successfully fast food operation in theworld. Kroc later purchased the McDonald brother’s equity in the company and led itsworldwide expansion and the company became listed on the public stock markets in 1965.  

A hundred shares of stock costing $ 2.250 dollars that day would have multiplied into 74,360shares today, worth approximately $ 3.3 million on December 31,2006). In 1985 McDonald’swas added to the 30 company down Jones industrial average.With the expansion of McDonald’s into many international markets, the company has becomea symbol of globalization and the spread of the American way of life.

Internal and external factors affecting McDonald’s:

 There were three factors that were chosen to outline the success of McDonald’s corporation.The first factor is globalization, which is define as closer contact between different parts of the world, with increasing possibilities of personal exchange, mutual understanding andfriendship between "world citizens". Diversity, the difference among people and cultures, isthe second factor. The final factor is ethics, which can be defined as a set of principles of rightconduct. This paper explains how the McDonald Corporations uses the factors to conduct business around the world.In today’s society, corporations and enterprises are expanding their businesses in the globalmarkets. Globalization is necessary for success and survival in the worldwide market;however, global competition is not easy. By the end of the twentieth century, the list of Fortune 500 companies was no longer only United States corporations due to an increase ininternational companies joining the list. As a leading food service retailer, McDonald’s joinsthose corporations with restaurants in 119 countries. Important strategic decisions are a keyfactor to their success with consideration for both internal and external factors. Whenconsidering the foreign market, companies need to consider there are risks. There must belocal marketing to appeal to the local consumers and also to build relationships and trust.