Mcdonald’s: Serving Fast Food Essay

Ray Kroc opened the first McDonald’s restaurant in 1955. He offered a limited menu of high quality, moderately priced food served fast in spotless surroundings. McDonald’s QSC&V (Quality, Service, Cleanliness, and Value) was a hit. The chain expanded into every state in nation. By 1983, it had over 6000 restaurants in United States. In 1967, McDonald’s opened its first restaurant outside the United States, in Canada. By 1985 international sales represented about one-fifth of McDonald’s total revenue. Yet fast food had barely touched many cultures. While 90% of Japanese in Tokyo had never eaten McDonald’s Hamburger, in Europe, McDonald’s maintained a very small percentage of restaurant sales but command a large share of fast food market. It took the company 14 years of planning before it opened a restaurant in Moscow. But the planning paid off. People stand in line up to 2 hours for a Hamburger. After waiting for such a long time they had to pay $14. 40 (at the official rate) for a Big Mac and French Fries. Despite the high prices, McDonald’s restaurant in Moscow attracts more visitors on the average 27,000 daily the Lenin mausoleum (about 9000 people), which used to visit the place. The taste of American Fast Food is growing more rapidly in countries abroad than at home. McDonald’s international sales have been increasing by a large percentage every year. Every day more than 18 million people in over 40 countries eat at McDonald’s. Its traditional menu has been surprisingly successful. People with diverse dining habits have adopted burgers and fries wholeheartedly. Before McDonald’s introduced the Japanese to French Fries, potatoes were used in Japan only to make starch. The Germans thought Hamburgers were people from the city of Hamburg. Now, McDonald’s also serves chicken, sausages, and salads and sandwiches. The fast, family oriented service, the cleanliness and the value accounted for much of McDonald’s success. McDonald’s was one of the first restaurants in Europe to welcome families with children. Not only are children welcomed, but in many restaurants they are also entertained with crayons and papers, a play land or may be even Ronald McDonald’s who can speak twenty languages. McDonald’s golden arches promise the same basic menu and QSC&V in every restaurant. Its products, handling and cooking procedures, and kitchen layout are standardized and strictly controlled. McDonald’s revoked the first French franchise because the franchisee failed to meet its standards for fast service and cleanliness, even though their restaurants were highly profitable. This may have delayed its expansion in France. The restaurant is run by the local manager and crews. Owners and managers must attend the Hamburger University near Chicago to learn how to operate a McDonald’s restaurant and maintain QSC&V. The main campus library and modern electronic class room (which include simultaneous translation system) are the envy of many universities. When McDonalds’s opened in Moscow, a one page advertisement resulted in 30,000 inquiries about the job; 4000 people were invited, and some 300 were hired. The pay is about 50 % higher than the average soviet salary. McDonald’s ensures consistent products by controlling every stage of distribution. Regional distribution centers purchase products and distribute them to individual restaurants. The centers will buy from local suppliers if the suppliers meet the detailed specifications. McDonald’s has had to make some concessions to available products. For example, it is difficult to introduce the Idaho potato in Europe. McDonald’s uses essentially the same competitive strategy in every country: Be first in the market, and establish your brand as rapidly as possible by advertising very heavily. New restaurants are opened with a bang. So many people attended the opening of the Tokyo restaurant that the police closed the street vehicles. The strategy has helped McDonald’s develop a strong share in the fast food market, even though its US competitors and new local competitors likely enter the market. The advertising campaigns are based on local themes and reflect the different environments. In Japan, where burgers are snacks, McDonald’s competes against confectionaries and new â€Å"fast sushi† restaurants. Many of the charitable causes McDonald’s supports abroad have been recommended by the local restaurants. McDonald’s have been willing to relinquish the most control to its Far Eastern operations, where many restaurants are joint ventures with local entrepreneurs, owning 50% or more of the restaurant. European and South American restaurants are generally company-operated or franchised (although there are many facilities- joint venture-in France). Like the U. S. Franchises, restaurants abroad are allowed to experiment with their menus. In Japan, Hamburgers are smaller because they are considered a snack. The Quarter Pounder did not make much sense to people on a metric system, so it is called a Double Burger. Some of the German restaurants serve beer; some French restaurants serve wine. Some of the eastern restaurants offer oriental noodles. But these new items must not disrupt existing operations. Despite success, McDonald’s faces tough competitors such as Burger King, Wendy’s, and Kentucky Fried Chicken, and now also Pizza Hut. Fast food in reheat able containers is now also sold in super markets, delicatessens and convenience stores, and even gas stations. McDonald’s has done very well, with a great percentage of profits coming now from international operations. Aiming to be the world’s best quick service restaurant, McDonald’s opened first store in Pakistan in September 1998. Since then they have opened seventeen new stores throughout 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 of 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. 300crore in the country and payment of taxes and duties amounting to more than Rs. 100crore. McDonald’s is operating, presently in 6 cities of Pakistan Karachi, Hyderabad, Lahore, Faisalabad, Rawalpindi and Islamabad, in future, very soon planning to expand in many cities in Pakistan. Instructions †¢ Read the case carefully (you may not understand it first time so read again and again) †¢ It’s better to take out prints and highlight the important information †¢ Read and understand the question carefully. †¢ After understanding question, read the case again and find the important information which is relevant †¢ Your answer should not exceed 300 words †¢ To count your words select the paragraph, then in tools menu select word count †¢ Irrelevant, extra material and long answers (more than 300 words) will be awarded zero †¢ Copied material from any source will be graded zero Question What opportunities and threats did McDonald’s face? How did it handle them?