McDonald鈥檚: SERVING FAST FOOD AROUND THE WORLD
Ray Kroc opened the first McDonald鈥檚 restaurant in 1955. He offered a limited menu of high quality, moderately priced food served fast in spotless surroundings. McDonald鈥檚 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鈥檚 opened its first restaurant outside the United States, in Canada. By 1985 international sales represented about one-fifth of McDonald鈥檚 total revenue. Yet fast food had barely touched many cultures. While 90% of Japanese in Tokyo had never eaten McDonald鈥檚 Hamburger, in Europe, McDonald鈥檚 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鈥檚 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鈥檚 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鈥檚.
Its traditional menu has been surprisingly successful. People with diverse dining habits have adopted burgers and fries wholeheartedly. Before McDonald鈥檚 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鈥檚 also serves chicken, sausages, and salads and sandwiches.
The fast, family oriented service, the cleanliness and the value accounted for much of McDonald鈥檚 success. McDonald鈥檚 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鈥檚 who can speak twenty languages.
McDonald鈥檚 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鈥檚 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鈥檚 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鈥檚 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鈥檚 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鈥檚 has had to make some concessions to available products. For example, it is difficult to introduce the Idaho potato in Europe.McDonald鈥檚 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鈥檚 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鈥檚 competes against confectionaries and new 鈥渇ast sushi鈥?restaurants. Many of the charitable causes McDonald鈥檚 supports abroad have been recommended by the local restaurants. McDonald鈥檚 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鈥檚 faces tough competitors such as Burger King, Wendy鈥檚, 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鈥檚 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鈥檚 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鈥檚 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. Idiots spilling hot coffee on their laps, and blaming Mcdonalds for it as if the idiots ordered frozen coffee. Mcdonalds paid $1 million dollars in the court case.
Your question lost me. My ADD kicked in. I couldn't finish reading your question in its entirety. what's your question? The McDonald brothers opened the first restaurants. Ray Croc sold shake machines and wanted to meet the customer who wanted to buy so many machines. He went into business with them and later bought them out.
The challenge McD has faced (faces) is how to differentiate themselves from the rest of the fast food option out there. They also face opposition abroad as being a threat to local cuisine and culture.
Hope this helps. You kind of answered your own question. Their opportunities and how they handled them is summed up in this statement: "Be first in the market, and establish your brand as rapidly as possible by advertising very heavily."
Their greatest threat and handling of it is summed up in these sentences: "Despite success, McDonald鈥檚 faces tough competitors such as Burger King, Wendy鈥檚, 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鈥檚 has done very well, with a great percentage of profits coming now from international operations." |
