McDonalds History [PDF]

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McDonalds History McDonald's is a restaurant that everybody knows. McDonald was created by sibling Dick and Mac McDonald. The Brothers started out with opening a hotdog stand in 1937 called Airdrome. So the brother decided to expand the business and come up with a different type of restaurant. The Airdrome building 40 miles to San Bernardino California, where they open the first McDonalds restaurant, on U.S. Route 66, at 14th and E St., on May 15. McDonald opens in 1940 in San Bernardino, California. The menu consisted of 25 items and most of was barbecue products. McDonald became a popular place for teen to hang out at. So McDonald stays open for several years but they wanted to close down. The reason they closed down they want to do something different with their restaurant. So they closed down for several months. They brother wanted to be the first restaurant that implement "Speedee Services". They came up with this idea because they most there profit off of burgers, and since the burger did not take that long to make they could have fast services. In 1948 McDonald establish the principles of the modern fast-food restaurant. They also started selling French fries and milkshakes to go along with their burgers. So they became popular in San Bernardino, California, so the brother decided to franchise the restaurant. The second McDonald open in Phoenix, Arizona. The third open in Saginaw, Michigan and the forth open in Downey, California. In 1961 The McDonald sold the business to a man name Ray Kroc. Ray Kroc has been working with McDonald for



about six years helping the franchise expand. So it was a smart move by McDonald brother to give their business to him. So McDonald really branch out in the 60's. In 1967 McDonald open there first restaurant outside America. They open one in Richmond, British Columbia. In 1970 McDonald opens in Costa Rica which is the third country that has a McDonalds. It was the first restaurant in Latin America. In 1971 McDonalds open in Tokyo, Japan. The business was really spreading across the world. By 1974 McDonald had 3000 plus McDonald across the world. There are 31000 number of location in overall worldwide. Its head quarter at Oak Brook in U.S.A.



A brief history of McDonald's The first McDonald's was built in 1940 by the McDonald brothers (Dick and Mac).



1954 • Ray Kroc became the first franchisee appointed by Mac and Dick McDonald in San Bernardino, California.



1955 • Ray Kroc opened his first restaurant in Des Plaines, Illinois (near Chicago), and the McDonald's Corporation was created.



1957 • Quality, Service, Cleanliness and Value (Q.S.C. & V.) became the company motto.



1959 • The 100th McDonald's opened in Chicago. The McDonald brothers (Dick right and Mac canter) discussing plans with an executive.



1961 • Ray Kroc bought all rights to the McDonald's concept from the McDonald's brothers for $2.7 million. • Hamburger University opened in Elk Grove, near Chicago.



1963 • • • • •



One billion hamburgers sold. The 500th restaurant opened. The 500th student graduates from Hamburger University. Ronald McDonald made his debut. McDonald's net income exceeded $1 million.



1964 • Filet-o-Fish sandwich introduced.



1965 • McDonald's Corporation went public. Per earnings ratio varies from 10 to



22 during year; stock price range, 15 - 33.5.



1966 • McDonald's listed on the New York stock exchange on the 7th May.



1967 • The first restaurants outside of the USA opened in Canada and Puerto Rico.



1968 • The Big Mac was introduced. • The 1,000th restaurant opened in Des Plaines, Illinois.



1970 • McDonald's restaurant in every US state. • Ray Cesca (Director of Global Purchasing of the McDonald's Corporation) has admitted that when McDonald's opened stores in Costa Rica in 1970, they were using beef from cattle raised on ex-rainforest land, deforested in the 1950's and 1960's. • New countries - Virgin Islands, Costa Rica. The first Japanese McDonald's in Tokyo.



1971 • The Egg McMuffin sandwich was test marketed in the US as McDonald's first breakfast menu item.



McDonald's restaurant still in operation Key people James A. Skinner (Chairman) & (CEO). Revenue ▲ US$ 22.6 billion (FY 2008) Operating income▲ US$ 6.51 billion (FY 2008) Net income▲ US$ 4.31 billion (FY 2008) Total assets ▲ US$ 29.2 billion (Q2 2009) Total equity▲ US$ 13.2 billion (Q2 2009) Employee s 400,000 (2008)



Introduction: This wonderful phrase echoes around the world 50 millions times a day, in 30,000 locations, in multitude of languages, in more than 120 countries around the globe. And this simple thought sums up the reason McDonald's has become the best known and most popular quick service restaurant around



the world, quite a tribute to Ray Kroc, who founded this company nearly 50 years ago with the simple vision expressed by his phrase 'Take good care of those who work for you, and you will float to greatness on their achievements' We provide our customers with the quality of our great tasting food; our fast, friendly service; our clean restaurants and facilities; the value of our food and the McDonald's experience. Working at McDonald's open up a world of opportunities for people. At McDonald's a job is never just a job it's a wealth of experience and skills, strongly accepted by the employees' world over. We strongly suggest that before you apply for any position in McDonald's Pakistan, you should seek maximum useful information. Not only it will help you to choose the right career but also help you to get through the hiring process successfully. We, at McDonald's Pakistan feel proud to guide you and provide any information you may required.



McDonald’s Pakistan McDonalds first opened a store in Pakistan in September 1998. Since then they have opened seventeen new stores through Pakistan. Today millions of Pakistanis place their trust in McDonald's everyday to provide them with food of a very high standard as well as good service. In the past five years, the response to McDonalds coming to Pakistan has been overwhelming. Today Lakson Group Companies has taken over McDonalds Corporation, USA and a local partner making it a 100% owned and operated Pakistani company. McDonalds located in Pakistan are currently employing about 1,000 Pakistanis and each store is managed by Pakistani managers. They have also contributed in other ways than food service. McDonalds has investment of over Rs 300 crore in the country and payment of taxes and duties amounting to more than Rs 100 crore. Since McDonalds is doing so well in Pakistan they will continue to grow and add more stores in more cities in the future. Islamabad: A lush green park location in the beautiful F-9 Sector in Islamabad has been designed and developed and is maintained by McDonald’s. Covering an area of about 5 acres, the park was inaugurated in residents of the capital city, who visit it regularly for jogging and sightseeing, while kids have a great time on the swings. Lahore:



McDonald’s has developed and maintain Defence Recreational Park in DHA, Lahore, making it one of the city’s most popular and attractively landscaped parks.



Karachi: McDonald’s, along with Defence Housing Authority, has adopted the park around Corniche, Seaview. Its maintenance and beautification is done by McDonald’s as a social responsibility and community service. A beautiful additional to the Clifton beach, it has become a recreational facility and an option for people who don’t want to go out on the sand.



Ronald McDonald Field Programs The world’s most popular character, Ronald McDonald, frequently visits the paediatrics department of local hospitals to entertain sick children and distribute gift among them. His visits to various schools and orphanages are always eagerly awaited by children.



McSaviors Public Awareness Program To make people realize that the world’s natural resources are fast diminishing and something must be done about it, McDonald’s has created a public awareness program called ‘McSaviors’.Launched as a special initiative on the part of McDonald’s to protect the environment, ‘McSaviors’ involves children as they are going to be in charge of the future. ‘McSaviors’ children are empowered to penalize adults found wasting water and electricity. The minimum penalty amount is Rs. 10. McDonald’s will use the penalty money to promote measures that will prevent further wastage, such as replacing regular bulbs with energy savers, repairing leaking water supply lines, etc. The program has been launched in association with the express news.



GOALS AND OBJECTIVES 1. McDonald’s vision is to be the world’s best quick service restaurants experience. 2. McDonalds is committed to maintaining and developing the best food products in the quick service restaurant market. 3. In order to deliver this, the company has made a number of commitments to food safety and nutrition. 4. Lead the Quick Service Restaurant market by a program of site development and profitable restaurant openings, and by attracting new customers. Increasing sales through promotions will enable them to continue their program of expansion. 5. McDonalds have an objective to continual enhance and improve their menu. This will better satisfy their customers and give customers more reason to visit. Many ideas for new items on the menu come from the franchisees responding to customer demand. Consumer tastes change over time and McDonalds has to respond to these changes.



MISSION STATEMENT "McDonald's vision is to be the world's best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile."



CORE COMPETENCY AND SUSTAINABLE COMPETITIVE ADVANTAGE McDonald’s core competency is providing convenience when people need and want to eat fast food at prices that are competitive and provide best value for the customer’s money. One of McDonald’s competitive advantages is its focus on consistency of quality, production of food and use of raw materials all around the world. The world recognition associated with the brand McDonald’s itself is also one of McDonald’s competitive advantages.



Demand Trends: There are many variations observed in the demand trends for McDonald’s in Pakistan. The trend followed by the high income group is relatively stable and they comprise a very small percentage. The changes in the economy have very little effect on the demand trends of McDonald’s that is being followed by this high income group. Other reasons for these variations are: McDonald’s is a brand that is mostly perceived by an average Pakistani customer to be a place which is visited on some occasion or once in a while. The main reason for this is the low disposable income that people have because of the inflation and some other unemployment reasons. On the other hand McDonald’s lovers such as college students, working individuals, kids and families fond of spending a lot on fast food restaurants make it a place to be visited very frequently. One of the reasons is high disposable income by blue collar individuals. Another reason is the attraction for McDonald’s by kids as well as those who love it for every reason. There are also global issues which affect food demand for McDonald’s e.g. bird flu and cow diseases in western countries brought down demand for McDonald’s some years ago as it was a known fact that



they get their meat from international suppliers in order to maintain quality. The demand also fell because of the security issues that affected demand for McDonalds, e.g. suicide attacks on western establishments a year ago. One of the reasons for the decrease in the demand trend for McDonald’s is the hostile attitude of the general public in Pakistan towards all the Western restaurants and multinational companies. Therefore the demand trends for McDonald’s have declined because of the some of the ill activities that have been observed during past some years regarding McDonald’s. Like many other nations people in Pakistan are becoming quite health conscious. Fast food restaurants are giving rise to problems related to heart and others such as obesity and excessive cholesterol that are making people very conscious. Therefore it has been observed that to avoid such problems people have changed their eating patterns and are spending less on restaurants such as McDonald’s.



KEY SUCCESS FACTORS McDonald's Pakistan has an aggressive plan to expand in all other cities of Pakistan and is rapidly growing with the focus to provide friendly and a quick service restaurant experience to its customers.



McDonald’s FRANCHISES All the franchises of McDonalds in Pakistan are owned by Lakson Group of Companies. Apart from the fact that LGC is one of Pakistan’s biggest corporations, their management allows not only standardization of quality but a more uniform and effective marketing strategies in order to sustain in the market. Therefore McDonald’s being its part had to continue to strive to maintain its standards in the local region.



McDonald’s FRANCHISE COST



As a guide, the McDonalds franchise cost of an average restaurant is £200,000. You will need provide



at



least



25%



of



the



value



to



as



unencumbered funds, the remaining 75% can be funded through a bank loan with favourable funding terms. There's also a one-off franchise fee of £30,000 and a training deposit of £5,000 which will be refunded when you complete your training.



McDonald’s PLAY PLACE Many McDonald's restaurants have included a playground for children and advertising geared toward children, and some have been redesigned in a more 'natural' style, with a particular emphasis on comfort: introducing lounge areas and fireplaces, and eliminating hard plastic chairs and tables. This has given a new outlook to the McDonald’s as a quick service restaurant that is still not be seen on other fast food restaurants.



REMODELING OF LOCATIONS An estimated 7,000 U.S restaurants will be rebuilt, relocated or refreshed as part of the far reaching plan to upgrade its public persona with updated restaurant designs intended to boost the bottom line.



McDonald’s COMPETITORS 1. McDonalds doesn’t offer just burgers. Their well diversified menu is also one of the key success factors as most of McDonald’s competitors are quite specialized: KFC in chicken, Pizza Hut in pizzas etc. 2. When it comes to eating out during Ramadan in any fast food restaurant, the name that clicks to the customers is McDonald’s. The reason is the affordable deals that they offer, that seem to beat all others when it comes to prices. 3. Another advantage that McDonald’s has on its competitors is the location of its franchises. Its main advantage is that it is located in vicinity that is easily approachable. Secondly it has got in its surroundings other very attractive places to be visited by people who want to enjoy their life to the full. These places are a source of attraction not for the services they provide but for McDonald’s as well. For example one of its outlets has been opened in Park Towers in Karachi so as to attract the shoppers who visit it very frequently. Another strategic location that McDonald’s has acquired is at the Clifton beach. This has forced many others nearby restaurants and one of the very famous cuisine restaurants with the name of Kublai Khan to get closed. Same is the case in Rawalpindi/Islamabad



where



McDonald’s



holds



an



important



strategic location. The customers that are driven to the Cinepax are automatically attracted towards McDonald’s.



BCG Matrix (BOSTON CONSULTING GROUP ANALYSI



According to BCG Matrix McDonald’s is a star. The reason for this is its high market growth and high market share in the Pakistani market. On the other hand KFC and Pizza Hut are the cash cows because of their low growth rate and high market share. During past some years KFC and Pizza Hut have lost their market growth because of the fact that they lost their standard war to their competitor i-e McDonald’s. Another direct competitor of McDonald’s is Subway. According to BCG Matrix it is a dog. Some of the reasons that are responsible for its low market share and low market growth are the less expansion strategies



being followed by the company. Secondly they are not focusing at all on all the major cities; rather they are only focused on the target segments of Lahore and Karachi.



FINANCIAL REQUIREMENTS AND START-UP COSTS TO OPEN A McDonald's An initial down payment is required when you purchase a new restaurant (40% of the total cost) or an existing restaurant (25% of the total cost). The down payment must come from non-borrowed personal resources, which include cash on hand; securities, bonds, and debentures; vested profit sharing (net of taxes); and business or real estate equity, exclusive of your personal residence. Since the total cost varies from restaurant to restaurant, the minimum amount for a down payment will vary. Generally, you need a minimum of 25,067,999.27 PKR of non-borrowed personal resources to be considered to open a McDonald's franchise. Individuals with additional funds may be better prepared for additional or multi-restaurant opportunities which McDonald's encourages. Other Requirements to Open a McDonald's •



Significant business experience - Individuals who have demonstrated successful ownership or management of multiple business units or have managed multiple departments.



•



Rapid growth - Individuals who possess the capability to grow rapidly with McDonald's.



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Business plan - The ability to develop and execute a business plan.



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Manage finances well - Ability to manage finances including a thorough understanding of business financial statements.



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Good management skills - Commitment to personally manage the day-to-day operations of the restaurant business.



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Training - Willingness to complete a comprehensive world class training program and become proficient in all aspects of operating a McDonald's restaurant business.



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Exceptional customer experience - The capability to effectively manage an organization that recruits, trains, and motivates restaurant employees who deliver an exceptional customer experience.



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Good credit history - An acceptable credit history



Ongoing Fees to McDonald's



During the term of the franchise, you pay McDonald’s the following fees:



•



Service fee- A monthly fee based upon the restaurant’s sales performance (currently a service fee of 4.0% of monthly sales).



•



Rent - A monthly base rent or percentage rent that is a percentage of monthly sales. McDonald's usually owns the property and also acts as the landlord.



GOOD COMMUNICATION AND FRIENDLY ENVIORONMENT McDonalds has always ensured a friendly environment to offer to its customers. Children love going there, having a happy meal and the toys that they get as a gift. Play places also serve as a significant attraction where children can go and make friends and play. Employees are also very polite and they are always ready to serve you in every best possible way that they can.



PARTNERSHIP WITH COCA COLA McDonalds and Coca Cola are official global partners. Coca cola is a big brand name serving people all over the world with beverages.



PARTNERSHIP WITH TELECOM COMPANIES McDonalds offered special deals to its clients with up size meals who are the users of a particular company such as Warid and Ufone.



OBSTACLES •



Public purchasing power is less



•



Security Concerns



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Religious Concern, that McDonalds are backed by Jews Zionist



•



People make rumors that they are not providing Halal meat



CONCLUSION : McDonald’s is one of the best fast food restaurant in the whole world. It provides a good quality and hygienic food to its customers daily. If a person has enough resources to meet the requirements of McDonald’s he must get its franchise, it will be a financially rewarding and life-changing experience.