Mcdonalds Case Study
McDonald’s Case Study
G. Scott Truman
MGMT 1451 Capstone: Business Management
March 22, 2011
Introduction In 1955, Ray Kroc founded the McDonald’s Corporation after partnering with Richard and Maurice McDonald to franchise a small restaurant that sells burgers, french fries, and beverages (Dess-Lumpkin-Eisner, 2009). Kroc bought out the McDonald brothers in 1961 for 2.7 million dollars and began a campaign to open McDonald’s restaurants around the nation and ultimately around the world (Dess, et al., 2009). McDonald’s has grown to become the largest restaurant chain in the world (Dess, et al., 2009). It all started with a vision by a milkshake machine salesman from Oak Park, Illinois (Dess, et al., 2009). He envisioned a chain of restaurants selling burgers and fries and more milkshakes than one could have imagined (Benvenuti, Dosija, Georgiev, Shah, & Wu, 2003). As a multi-mixer milkshake machine salesman, his idea was initially an innovative way to sell his product (Benvenuti, et al., 2003). Little did he know at the time how popular the franchise business would become as it expanded rapidly throughout the country, the fast food industry was born (Benvenuti, et al., 2003). Ray Kroc’s contribution to the McDonald’s corporation was his sales ability and his experience in the franchise business (Benvenuti, M, et al., 2003). In the beginning, Kroc and the McDonald brothers charged a fee of $950 per restaurant and a fee of 1.9 percent of restaurant sales, of which .5 percent went to the McDonald brothers (Benvenuti, et al., 2003). After buying out the McDonald brothers in 1961, Kroc founded Hamburger University in a basement of one of the restaurants (Benvenuti, et al., 2003). He wanted to ensure that his franchisees had the proper management skills and had been trained well in the McDonald’s system (Benvenuti, et al., 2003). Kroc established quality standards within his system that were the basis to his success and he wanted to maintain these
G. Scott Truman
MGMT 1451 Capstone: Business Management
March 22, 2011
Introduction In 1955, Ray Kroc founded the McDonald’s Corporation after partnering with Richard and Maurice McDonald to franchise a small restaurant that sells burgers, french fries, and beverages (Dess-Lumpkin-Eisner, 2009). Kroc bought out the McDonald brothers in 1961 for 2.7 million dollars and began a campaign to open McDonald’s restaurants around the nation and ultimately around the world (Dess, et al., 2009). McDonald’s has grown to become the largest restaurant chain in the world (Dess, et al., 2009). It all started with a vision by a milkshake machine salesman from Oak Park, Illinois (Dess, et al., 2009). He envisioned a chain of restaurants selling burgers and fries and more milkshakes than one could have imagined (Benvenuti, Dosija, Georgiev, Shah, & Wu, 2003). As a multi-mixer milkshake machine salesman, his idea was initially an innovative way to sell his product (Benvenuti, et al., 2003). Little did he know at the time how popular the franchise business would become as it expanded rapidly throughout the country, the fast food industry was born (Benvenuti, et al., 2003). Ray Kroc’s contribution to the McDonald’s corporation was his sales ability and his experience in the franchise business (Benvenuti, M, et al., 2003). In the beginning, Kroc and the McDonald brothers charged a fee of $950 per restaurant and a fee of 1.9 percent of restaurant sales, of which .5 percent went to the McDonald brothers (Benvenuti, et al., 2003). After buying out the McDonald brothers in 1961, Kroc founded Hamburger University in a basement of one of the restaurants (Benvenuti, et al., 2003). He wanted to ensure that his franchisees had the proper management skills and had been trained well in the McDonald’s system (Benvenuti, et al., 2003). Kroc established quality standards within his system that were the basis to his success and he wanted to maintain these
Cited: Benvenuti, M., Dosija, A., Georgiev, V., Shah, N., & Wu, W. (December, 2003). The Center For Hospitality Research at Cornell University. McDonalds Corporation – A Case Study. Retrieved March 10, 2011 From Website: http://www.hotelschool.cornell.edu/chr/pdf/showpdf/chr/research/casestudies/McDonalds_Case.pdf Dess-Lumpkin-Eisner. (2009). Strategic Management: Creating Competitive advantages (Ed. 5), (pp. 366-372). New York, NY: McGraw Hill/Irwin. McDonalds.com. (March, 2011). Meet Our Suppliers. Retrieved March 11, 2011 From Website: http://www.mcdonalds.com/us/en/food/food_quality/see_what_we_are_made_of/meet_our_suppliers.html?DCSext.destination=http://www.mcdonalds.com/us/en/food/food_quality/see_what_we_are_made_of/meet_our_suppliers.html McDonalds.com. (March, 2011). Our History. Retrieved March 10, 2011 From Website: http://www.mcdonalds.com/us/en/our_story/our_history.html Nelson, J. (2010). McDonald’s Case Study. Retrieved March 10, 2011 From Website: http://home.comcast.net/~nelson1397/mcdonaldscase.htm Thinking Made Easy, (February, 2009). McDonald’s Strategic Business Analysis. Retrieved March 11, 2010 From Website: http://ivythesis.typepad.com/term_paper_topics/2009/02/mcdonalds-strategic-business-analysis.html#_Toc215290834