Mcdonald's Executive Summary

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Case Study: Mcdonald’s
Professor Wayne Ledbetter

Executive Summary Official Name | McDonald's Corporation | Location of HQ | Oak Brook, Illionois | State Incorporated | llinois | Internet address | | Stock symbol | MCD | Fiscal year-end | December 12-31 | Date of the 10-K filing | 2/24/2012 | Independent accountant | ERNST & YOUNG LLP |

McDonald's Corporation is the leading global foodservice retailer with more than 33,000 local restaurants employing more than 1.7 million and serving more than 64 million people in 119 countries each day. More than 80% of McDonald's restaurants worldwide are owned and operated by independent local men and women. The Company franchises and operates McDonald’s restaurants. Of the 32,737 restaurants in 117 countries at year-end 2010, 26,338 were franchised or licensed (including 19,279 franchised to conventional franchisees, 3,485 licensed to developmental licensees and 3,574 licensed to foreign affiliates (affiliates)—primarily Japan) and 6,399 were operated by the Company. Under their conventional franchise arrangement, franchisees provide a portion of the capital required by initially investing in the equipment, signs, seating and décor of their restaurant businesses, and by reinvesting in the business over time. The company serves the world some of its favorite foods - World Famous Fries, Big Mac, Quarter Pounder, Chicken McNuggets and Egg McMuffin.
MacDonald’s has a strong global presence with its nearest domestic competitor being only half its size, their major competitors are Burger King, Yum! Brands, Starbucks, and Wendy’s. McDonald’s is the market leader in both the domestic and international markets. The company benefits from cost reduction through economies of scale because of its enormous size and its huge global presence allows it to diversify risk involved with the economic performance of specific countries. In international markets, the company is well placed to expand and take advantage of long-term economic growth. MacDonald’s also has a strong real estate portfolio. The company’s outlets are located in areas that are highly known for visibility, traffic volume and ease of access. MacDonald’s also has exceptional brand recognition. This strong brand recognition creates significant opportunities for the company. They are able to generate more sales because of its brand recognition. Through aggressive market planning, MacDonald’s has been able to recapture its youth market once again. The company aims to offer a friendly, fun environment for everyone to enjoy. They seek to appeal to a wide range of people, from families who love our Happy Meal, to workers grabbing breakfast on-the-go or eating in to enjoy our freshly ground coffee and free WiFi.
Company History
The McDonald's concept was introduced in San Bernardino, California by Dick and Mac McDonald of Manchester, New Hampshire. It was modified and expanded by their business partner, Ray Kroc, of Oak Park, Illinois, who later bought out the business interests of the McDonald brothers in the concept and went on to found McDonald's Corporation. In 1954 Ray Kroc discovered McDonalds and believed that the McDonalds' formula was a ticket to success, he suggested that they franchise their restaurants throughout the country, volunteering to do it himself. By 1958 McDonalds grew to over 102 locations and sells its 100 millionth hamburger. McDonald's placed great emphasis on effective training. It opened its Hamburger University in 1961 to train franchisees and corporate decision-makers. By 1990, more than 40,000 people had received "Bachelor of Hamburgerology" degrees from the facility. In 1967 the First international McDonald’s restaurants open in Canada and Puerto Rico. Today the restaurants are in 117 countries around the world. In 1968 the Big Mac was developed and added to the national menu.