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McDonald’s Company University of Alabama Birmingham SCHOOL OF BUSINESS Introduction to Business BUS 102 Assignment for Introduction Purpose of the Paper The purpose of this report is to analyze the McDonald’s Corporation. This report will provide a detailed strategic analysis, which describes the industry that the company is currently in and its business segments. Secondly, an external analysis, internal analysis, and the strategies McDonald’s Corporation has implemented into their company will be evaluated.
The results provided in this analysis will provide necessary information so that the performance of McDonald’s Corporation can be ssessed. Finally, recommendations will be suggested on ways the company can be successful in the future and also how to correct existing problems for the McDonald’s Corporation. McDonald’s History McDonald’s Corporation began when an individual by the name of Ray Kroc, a seller of milkshake machines in which he called Multimixers, decided to visit two brothers named Richard and Maurice after hearing that they were using eight of his machines in their restaurant in California.
Ray Kroc was amazed by the efficiency of the restaurant owned by the brothers and suggested an idea to open similar restaurants to Richard and Maurice McDonald. Kroc suggested that they franchise the restaurants throughout the United States, however, the brothers were hesitant and as a result, Ray Kroc offered to do it for them himself. McDonald’s has been in drive-in to become a self-serve operating restaurant.
McDonald’s was incorporated in 1955 and is considered to be the largest quick-service restaurant worldwide, serving more than 46 million people daily in over 31,000 restaurants located in over 119 countries (Business & Company Resource Center, 2012). Current Summary of the McDonald’s Corporation Location of Corporate Office: 2111 McDonald’s Drive, Oak Brook, IL 60523 Founded: May 15, 1940 Business: Retail-Fast Food restaurant chain, franchiser of fast food restaurants, holding company Annual Sales: 5. Billion Number of Employees: 1,800,000 Year Founded: 1954 Number of Locations: 30,000 in 119 countries worldwide McDonald’s Corporation Timeline 1948-Dick and MacDonald open the first McDonald’s in San Bernardino, CA; a little hamburger man named “Speedee” becomes the company’s logo 1956-Ray Kroc opens his first McDonald’s in Des Plaines, IL after visiting Dick and Mac’s CA McDonald’s 1957-McDonald’s become known for its motto-“Quick Service, and Cleanliness” 1958-
McDonald’s sells its 100 millionth hamburger and McDonalds opens its 100th restaurant in Fond Du Lac, Wisconsin 1959- McDonald’s begins billboard advertising 1960-McDonald’s celebrates its 5th anniversary and opens its 200th restaurant in Knoxville, TN 1961 -Ray Kroc buys out the McDonald brothers for $2. million, Golden Arches becomes the company’s new logo, “Look for the arches” becomes the company’s first advertising theme 1962-McDonald’s opens its first restaurant with inside seating 1963-McDonald’s sells its one billionth hamburger, Ronald McDonald makes his debut, and the company’s 500th restaurant opens 1964- McDonald’s issues ts first annual report 1965-McDonald’s celebrates its 10th anniversary with the first public stock offering, the Filet-O-Fish is added to the menu, and McDonald’s begins network television advertising. 966-McDonald’s holds its first annual public shareholder’s meeting, the company is listed on the NYSE with the ticker symbol MCD, and Ronald McDonald appears in his first television commercial 1967-McDonald’s first international restaurant is opened in Canada followed by Puerto Rico 1968-The 1000th restaurant opens in Des Plaines, IL, the company begins to support the Olympics, and the Big Mac sandwich and apple pie are added to the U.
S. menu 1969-McDonald’s forms its International Division 1971 -M)U Deserve a Break Today’ becomes the new advertising theme, Hamburglar, Grimace, Mayor McCheese, Captain Crook Join Ronald McDonald, The first McDonald’s Playland opens in Chula Vista, CA. 1972-McDonald’s becomes a billion dollar company and they open a restaurant in France. 973-McDonald’s makes the cover of Time Magazine, Fred Turner becomes President and CEO, the Quarter Pounder is added to the menu, and first Ronald McDonald House opens in Philadelphia, PA 1975- McDonalds opens in the Bahamas and Hong Kong, the new campaign,” We Do It All or You”, is introduced, the Egg McMuffin is added to the U. S. menu, and the first drive-thru is established in Sierra Vista, AZ 1976-McDonald’s pays it first cash dividend 1977-McDonald’s adds a breakfast line to the U. S. enu; the first McDonald’s All- American High School Basketball player is elected 1978-McDonald’s 500th restaurant opens in Kanagawa, Japan 1979-McDonald’s introduces its first Happy Meal promotion, McDonald’s launches a new advertising theme,” Nobody Can Do It like McDonald’s Can”. celebrates its 25th anniversary 1981- The first Ronald McDonald House outside the US opens in Toronto, Canada 982-McDonald’s receives the American Marketing Association Achievement Award 1983-Chicken Nuggets are introduced into U.
S. restaurants, and a new Hamburger University opens in Oak Brook, IL 1984-Ray Kroc, founder of McDonald’s dies and McDonald’s serves its 50 billionth hamburger 1985-McDonald’s celebrates its 30th anniversary, the Sausage McMuffin is added to the U. S. menu, and McDonald’s opens restaurants in Aruba, Italy, Mexico, and Thailand 1987- Salads are added to McDonald’s menu 1988-McDonald’s opens its 10,000th restaurant in Dale City, VA; McDonald’s launches a new advertising theme, “Good Time.
Great Taste. ” 199()-McDonald’s announces a decision to cook French fries in 100% cholesterol-free vegetable oil 1991- “Food, folks, and Fun” becomes McDonald’s new advertising theme and the company phases in recycled carry-out bags 1993- The Big Mac celebrates its 25th anniversary, and Ronald McDonald Children’s Charities celebrates its 20th anniversary 1994-The new advertising theme, “Have you had your break today? debuts. 1995-McDonald’s celebrates its 40th anniversary, and the first McSki-Thru opens in Sweden 1996- McDonald’s opens in India serving burgers made of lamb 1999-McDonald’s opens its 5,000th restaurant in Chicago, IL 2000-McDonald’s new advertising theme, “We love to see you smile”, is introduced, and the Chicken McGrill and Crispy Chicken sandwiches are added to the U. S. enu 2002-McDonald’s publishes its first Global Social Responsibility Report 2003-McDonald’s first global ad campaign, “I’m lovin’ it”, is introduced, and Premium Salads are added to the U. S. menu 2004- McDonald’s Chairman and CEO Jim Cantalupo passes away, Chicken Selects and Go Active! Happy Meal for adults are added to the U. S. menu, and The Happy Meal celebrates 25 years 2005-Former President and CEO Charlie Bell passes away and McDonald’s celebrates its 50th anniversary on April 15 McDonald’s Corporation. (2006). McDonald’s Timeline. Yahoo! Finance, 2013) (Wikipedia, 2013) (Business & Company Resource Center, 2012) Stakeholders and the Corporate Mission Stakeholder Impact Analysis The stakeholders’ impact analysis provides information such as the identification of the stakeholders; identify stakeholders’ interests and concerns, and mainly their overall input of the company (Hill & Jones, 2004). Stakeholders include the environment, customers, community, and resources. McDonald’s stakeholders include customers, employees, owners and operators, suppliers, and shareholders.
McDonald’s seeks to learn about their stakeholders’ special interests, concerns, and expectations for the business. The stakeholders are also important because they inform the company about what they are doing and also to gain feedback to use as guidance. The stakeholders who are most important to the organization are the customers. The customers are important to McDonald’s because they contribute to the day-to-day contacts that are at the restaurant level and they have the opportunity o initiate contact to the organization as a whole (McDonald’s, 2013).
Customers are also important because they are why the business is profitable in the restaurant industry. Mission Statement, Values, and Goals McDonald’s mission is to “be our customers’ favorite place and way to eat” (McDonald’s, 2013). The values that McDonald’s practices are “Aspiring to be the best employer, giving back to the community, holding ourselves to the highest possible ethical standards and more” (McDonald’s, 2013). The goals that McDonald’s aims to achieve embrace and reflect the diversity of the customers and communities they serve each day.
They provide a framework of common values to empower their owner/operators, suppliers, and company staff to be committed to fulfilling its corporate responsibility (McDonald’s, 2013). Corporate Governance A company’s goal is to uphold certain principles when it comes to the well-being of the company. McDonald’s has put mechanisms in place to collectively put together the interests of different levels of management from corporate to local. An organization’s function cannot be strategically carried out if the mechanisms put in place are insufficient.
The corporate governance of McDonald’s imposes a code of onduct for directors as well as chief officers. McDonald’s is proud of its governance structure (McDonald’s, 2013). There are not any problems that occur because of the mechanisms present in the governance structure. These mechanisms include the board of directors, and board compensation. Ethical Climate company. The board of directors ensures the oversight of the business and assets of the corporation are always conducted in an ethical manner. The board also adopted a written governance of McDonald’s principles in 1994.
The corporation is dedicated to preserving the veracity in all of its dealing with stakeholders. McDonald’s mission statement proclaims to “Promote Diversity and Inclusion among our Employees, Owner/Operator’s and Suppliers who represent the diverse populations McDonald’s serves around the globe” (McDonald’s, 2013). The company strives to be a good neighbor in the community and integrate both environment and social priorities into their relationships with suppliers, restaurants, and business allies (McDonald’s, 2013).
However, in 2002, McDonald’s was in one of largest corporate PR disasters in the world. They were handed writs for libel where a Judge issued a verdict that McDonald’s was responsible for worker’s low wages and exploiting children in their advertising (“The Issues Advertising”, 2006). Yet, McDonald’s polices and guidelines stipulate how they define and perform business. The operating guidelines also determine means for termination and disciplinary action for employees who violate standard business conduct or the law (“McDonald’s Family’, 2013).
Corporate Social Responsibility McDonald’s does well over its share to better serve the community and to pay attention to social and environment issues regarding its restaurants. The company as initiated the following programs for the community: Balanced, Active Lifestyles Initiative and Ronald McDonald House Charities. The programs are geared toward social and environment issues including McRecycle and water conservation. McDonald’s also has a code of conduct to make sure that its suppliers do their part to be socially responsible.
McDonald’s program Balanced, Active Lifestyles Initiative is all about helping everyone learn and make healthy choices in their lifestyles. The program provides information on what is healthy in the menu choice, the importance of physical activity, and information regarding nutrition facts. The information provided in the menu choice informs people of healthy foods available such as fruits, salads, and grilled chicken. The restaurants in Denmark and Sweden have taken notes and now offer carrot slices in their menu.
The information provided on the importance of physical activity stresses ways for people to get exercise into their daily routine. The global program “Go Active” has been created to promote fitness through walking and through its Ronald McDonald fitness show. The program is also a sponsor of the Olympic Games. In addition, the “Go Active” program helps to inform people with utrition facts through the information from the menu choice and by the nutrition information label found on the products.
The Ronald McDonald House Charities consist of programs called Ronald McDonald Home, Ronald McDonald Family Room, Ronald McDonald Care Mobile, and Ronald McDonald Scholarship Program. All of these programs are geared toward helping to ensure that children all over can live a healthy and safe lifestyle. Majority of the donations are distributed during World Children’s Day, which is a global fundraiser that is held every year for children in over 100 countries. Recently, McDonald’s has been using their donations from the Ronald McDonald House Charities to help support the hurricane relief efforts.
The hurricane relief effort workers who are in need of financial help. McRecycle is a program in which McDonald’s utilizes recycled-content products such as tray liners, Happy Meal boxes, and carryout bags. The company is the largest user of recycled-content products in the fast-food restaurant industry. The McRecycle program has helped to create new markets for many recycled-content products. McDonald’s has developed a Global Water Team that develops water safety and conservation programs. The program target is to conserve water where it is scarce.
Their duties include collecting rain water for land irrigation, installing low-flush toilets, auto-sensor faucets, and to ensure that the staff tries to conserve water in operating the restaurant facilities. McDonald’s feels that it is important that its suppliers do their part to be socially responsive. That is why the code of conduct and animal welfare guiding principles has been established. The code of conduct for suppliers lays out how McDonald’s expects its suppliers to treat their employees, conduct their procedures, and to nsure that any outside employee adheres to the code as well.
There is training, facility assessments, and enhancement plans that are required by suppliers as part of their accountability. The animal welfare guiding principles are targeted toward safety, quality, animal treatment, partnership, leadership, performance measurement, and communication. The main activity in the animal welfare program is its global audit system for beef, poultry, and pork processing plants. This activity involves animal research and contains technical standards for animal treatment that must be adhered to (McDonald’s, 2013).