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McDonald's
Corporation
McDonald's Corporation (NYSE: MCD) is the world's
largest chain of fast food restaurants, primarily
selling hamburgers, cheeseburgers, chicken products,
french fries, breakfast items, soft drinks, milkshakes
and desserts. More recently, it also offers salads,
fruit, snack wraps, and carrot sticks.
History
The
business began in 1940, with a restaurant opened
by siblings Dick and Mac McDonald in San Bernardino,
California. Their introduction of the "Speedee
Service System" in 1948 established the principles
of the modern fast-food restaurant. The present
corporation dates its founding to the opening
of a franchised restaurant by Ray Kroc, in Des
Plaines, Illinois on April 15, 1955, the ninth
McDonald's restaurant overall. Kroc later purchased
the McDonald brothers' equity in the company and
led its worldwide expansion.
With
the successful expansion of McDonald's into many
international markets, the company has become
a symbol of globalization and the spread of the
American way of life. Its prominence has also
made it a frequent topic of public debates about
obesity, corporate ethics and consumer responsibility.
Corporate
Overview
McDonald's
restaurants are found in 120 countries and territories
around the world and serve nearly 54 million customers
each day. The company also operates other restaurant
brands, such as Piles Café, and has a minority
stake in Pret a Manger. The company owned a majority
stake in Chipotle Mexican Grill until completing
its divestment in October 2006. Until December
2003, it also owned Donatos Pizza. On August 27,
2007, McDonald's sold Boston Market to Sun Capital
Partners. It also has a subsidiary, Redbox, which
started in 2003 as 18-foot (5.5 m) wide automated
convenience stores, but as of 2005, has focused
on DVD rental machines.
Types
of restaurants
Most
standalone McDonald's restaurants offer both counter
service and drive-through service, with indoor
and sometimes outdoor seating. Drive-Thru, Auto-Mac,
Pay and Drive, or McDrive as it is known in many
countries, often has separate stations for placing,
paying for, and picking up orders, though the
latter two steps are frequently combined; it was
first introduced in Arizona in 1975, following
the lead of other fast-food chains. In some countries
"McDrive" locations near highways offer
no counter service or seating. In contrast, locations
in high-density city neighborhoods often omit
drive-through service. There are also a few locations,
located mostly in downtown districts, that offer
Walk-Thru service in place of Drive-Thru.
Specially
themed restaurants also exist, such as the "Solid
Gold McDonald's," a 1950s rock-and-roll themed
restaurant. In Victoria, British Columbia, there
is also a McDonald's with a 24 carat (100%) gold
chandelier and similar light fixtures.
To
accommodate the current trend for high quality
coffee and the popularity of coffee shops in general,
McDonald's introduced McCafés. The McCafé
concept is a café-style accompaniment to
McDonald's restaurants. McCafé is a concept
of McDonald's Australia, starting with Melbourne
in 1993. Today, most McDonald's in Australia have
McCafés located within the existing McDonald's
restaurant. In Tasmania there are McCafés
in every store, with the rest of the states quickly
following suite. After upgrading to the new McCafe
look and feel, some Australian stores have noticed
up to a 60% increase in sales.
As
of the end of 2003 there were over 600 McCafés
worldwide.
Some
locations are connected to BP gas stations/convenience
stores, while others called McDonald's Express
have limited seating and/or menu or may be located
in a shopping mall. Other McDonald's are located
in Wal-Mart stores. McStop is a location targeted
at truckers and travelers which may have services
found at truck stops.
Children's
areas
Some
McDonald's in suburban areas and certain cities
feature large indoor or outdoor playgrounds, called
"McDonald's PlayPlace" (if indoors)
or "Playland" (outdoors)[citation needed].
The first PlayPlace with the familiar crawl-tube
design with ball pits and slides was introduced
in 1987 in the USA, with many more being constructed
soon after. Some PlayPlace playgrounds have been
renovated into "R Gym" areas.
"R
Gyms" are in-restaurant play area that features
interactive game zones designed for children aged
4 to 12. Equipped with stationary bicycles attached
to video games, dance pads, basketball hoops,
monkey bars, an obstacle course, and other games
which emphasize physical activity.
The
"R Gym" features the Toddler Zone, an
active play environment with age appropriate games
that develop physical coordination and social
skills; the Active Zone, designed for children
aged four-to-eight that promotes physical fitness
through fun play; the Sports Zone which features
a series of sport oriented activities to promote
aerobic exercise for children aged 9-to-12; the
Parent Zone which features seating and provides
a monitoring area for their children; and the
Dining Area which allows families to eat.
Redesign
In
2006, McDonald's introduced its "Forever
Young" brand by redesigning all of their
restaurants, the first major redesign since the
1970s.
The
new design will include the traditional McDonald's
yellow and red colors, but the red will be muted
to terra cotta, the yellow will turn golden for
a more "sunny" look, and olive and sage
green will be added. To warm up their look, the
restaurants will have less plastic and more brick
and wood, with modern hanging lights to produce
a softer glow. Contemporary art or framed photographs
will hang on the walls.
The
exterior will have golden awnings and a "swish
brow" instead of the traditional double-slanted
mansard roof.
The
new restaurants will feature areas:
* The "linger" zone will offer armchairs,
sofas, and Wi-Fi connections.
* The "grab and go" zone will feature
tall counters with bar stools for customers who
eat alone; Plasma TVs will offer them news and
weather reports.
* The "flexible" zone will be targeted
toward families and will have booths featuring
fabric cushions with colorful patterns and flexible
seating.
Different
music will be targeted to each zone.
Business
model
The
McDonald's Corporation's business model is slightly
different from that of most other fast-food chains.
In addition to ordinary franchise fees, supplies,
and percentage of sales, McDonald's also collects
rent, partially linked to sales. As a condition
of the franchise agreement, the Corporation owns
the properties on which most McDonald's franchises
are located. The UK business model is different,
in that fewer than 30% of restaurants are franchised,
with the majority under the ownership of the company.
McDonald's trains its franchisees and others at
Hamburger University in Oak Brook, Illinois.
According
to Fast Food Nation by Eric Schlosser (2001),
nearly one in eight workers in the U.S. have at
some time been employed by McDonald's. (According
to a news piece on Fox News this figure is one
in ten). The book also states that McDonald's
is the largest private operator of playgrounds
in the U.S., as well as the single largest purchaser
of beef, pork, potatoes, and apples. The selection
of meats McDonald's uses varies with the culture
of the host country.
Global
impact
McDonald's
has become emblematic of globalization, sometimes
referred as the "McDonaldization" of
society. The Economist magazine uses the "Big
Mac Index": the comparison of a Big Mac's
cost in various world currencies can be used to
informally judge these currencies' purchasing
power parity.
The
EFTA countries are leading the Big Mac Index with
the top 3 most expensive Big Mac's. Iceland has
the most expensive Big Mac, followed by Norway
and Switzerland.
The
brand is known informally as "Mickey D's"
(in the US and Canada), "Macky D's"
(in the UK), "Mäkkäri" (in
Finland), "McDo" (in France, Quebec,
the Philippines, and the Kansai region of Japan),
"Maccer's" (in Ireland), "Macarrannis"
(in Mexico), "Maccas" (in New Zealand
and Australia), "McD's" (in New Zealand),
"Mackedonkan" or just "Donkan"
(in Sweden), "de Mac" (in the Netherlands),
or "Mac" (in Brazil).
Thomas
Friedman once said that no country with a McDonald's
had gone to war with another.[9] However, the
"Golden Arches Theory of Conflict Prevention"
is not strictly true. Careful historians point
to the 1989 United States invasion of Panama,
NATO's bombing of Serbia in 1999, and the 2006
Lebanon War as exceptions.
Some
observers have suggested that the company should
be given credit for increasing the standard of
service in markets that it enters. A group of
anthropologists in a study entitled Golden Arches
East (Stanford University Press, 1998, edited
by James L. Watson) looked at the impact McDonald's
had on East Asia, and Hong Kong in particular.
When it opened in Hong Kong in 1975, McDonald's
was the first restaurant to consistently offer
clean restrooms, driving customers to demand the
same of other restaurants and institutions. In
East Asia in particular, McDonald's have become
a symbol for the desire to embrace Western cultural
norms. McDonald's have recently taken to partnering
up with Sinopec, China's second largest oil company,
in the People's Republic of China, as it begins
to take advantage of China's growing use of personal
vehicles by opening numerous drive-thru restaurants.
In
addition to its effect on business standards,
McDonald's has also been instrumental in changing
local customs. By popularizing the idea of a quick
restaurant meal, Watson's study suggests, McDonald's
led to the easing or elimination of various taboos,
such as eating while walking in Japan.
Arguments
in defense of McDonald's
In
response to public pressure, McDonald's has sought
to include more healthy choices in its menu and
has introduced a new slogan to its recruitment
posters: "Not bad for a McJob". (The
word McJob, first attested in the mid-1980s and
later popularized by Canadian novelist Douglas
Coupland in his book Generation X, has become
a buzz word for low-paid, unskilled work with
few prospects or benefits and little security.)
McDonald's disputes the idea that its restaurant
jobs have no prospects, noting that its CEO, Jim
Skinner, started working at the company as a regular
restaurant employee, and that 20 of its top 50
managers began work as regular crew members. In
2007, the company launched an advertising campaign
with the slogan "Would you like a career
with that?" on Irish television, outlining
that their jobs have many prospects.
In
a bid to tap into growing consumer interest in
the provenance of food, the fast-food chain recently
switched its supply of both coffee beans and milk.
UK chief executive Steve Easterbrook said: “British
consumers are increasingly interested in the quality,
sourcing and ethics of the food and drink they
buy". McDonald's coffee is now brewed from
beans taken from stocks that have been certified
by the conservation group the Rainforest Alliance.
Similarly, milk supplies used for its hot drinks
and milkshakes have been switched to organic sources
which could account for 5% of the UK's organic
milk output.
In
other cases, the firm has shown itself ready to
adjust its business practices. When the public
became concerned that product packaging was environmentally
damaging, McDonald's started a joint project with
Friends of the Earth to eliminate the use of polystyrene
containers, in the United States, to reduce the
amount of waste produced.
Products
McDonald's
predominantly sells hamburgers, various types
of chicken sandwiches and products, french fries,
soft drinks, breakfasts, and desserts. In most
markets, McDonald's offers salads and vegetarian
items, wraps and other localized fare. This local
deviation from the standard menu is a characteristic
for which the chain is particularly known, and
one which is employed either to abide by regional
food taboos (such as the religious prohibition
of beef consumption in India) or to make available
foods with which the regional market is more familiar
(such as the sale of McRice in Indonesia).
Advertising
McDonald's
has for decades maintained an extensive advertising
campaign. In addition to the usual media (television,
radio, and newspaper), the company makes significant
use of billboards and signage, sponsors sporting
events from ranging from Little League to the
Olympic Games, and makes coolers of orange drink
with their logo available for local events of
all kinds. Nonetheless, television has always
played a central role in the company's advertising
strategy.
To
date, McDonald's has used 23 different slogans
in United States advertising, as well as a few
other slogans for select countries and regions.
At times, it has run into trouble with its campaigns.
(Credit:
Wikipedia).
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