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The Business of McDonald's Corporation

Essay by   •  July 11, 2011  •  Case Study  •  1,965 Words (8 Pages)  •  2,015 Views

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Executive Summary

The beginning of this now mega corporation began as a hamburger stand on 1937 by Patrick McDonald, which was located in an airport on the West coast of the United States. A few years later, his sons decided to move this business and open the first Mc Donald's restaurant. They devised a "Speedy Service System" which accelerated the process of making hamburgers, and by adding fries and milkshakes to their menu, provided a filling meal at half the expense of traditional meals. During 1954, then milkshake-mixer sales representative, Ray Kroc convinces the Mc Donald brothers to let him begin franchising restaurants outside of the original territory then named his company "Mc Donald's Systems Inc." In 1960, he renamed it Mc Donald's Corporation and in 1961 bought the rights to the business for a staggering amount of money (Mc Donald's Corporation, 2011).

Today, this corporation has grown to consist of more than 32,000 restaurants around the world and presently located in 117 countries including Japan, China, Italy, Spain, Finland, just to name a few, and an average of 64 million customers that visit the Golden Arches on a daily basis around the world. The mission statement for this corporation is to "be our customers' favorite place and way to eat," They also believe in their plan to win program which is carried out throughout the world their five basics for exceptional customer service. These consisted of People, Products, Place, Price, and Promotion that is part of life for every franchise and employee who is affiliated with this corporation (Mc Donald's Corporation, 2011).

For Mc Donald's, they believe in being supporting corporate responsibility on a daily basis. They believe in taking action, achieving results, and maintaining open lines of

Key Assignment 3

communication with their stakeholders, as well as, customers and employees. They achieve this goal by incorporating sound ethics and good governance. Their Board of Directors act as advisor to the corporation's management teams on such issues as product and workplace safety, opportunities for employees and training, diversity, and the environment. In addition to the Board of Directors, they also have a worldwide corporate relations council. This council has several areas of responsibility. First, providing support for corporate leadership regarding their global social responsibility programs. Next, develop and execute worldwide food strategies, which include food safety. In addition, they assist in the development of plans for a vision of sustainable supply systems. Lastly, distinguishes global environmental precedence

(Mc Donald's Corporation, 2011).

Unfortunately, there is still a growing concern about obesity and the risks associated with this disease. Mc Donald's Corporation takes this growing epidemic seriously and is currently working on solutions, which can produce a positive outcome. Recently, they launched the nutrition information initiative, which provides information such as calories, fat, sodium, carbohydrates and proteins in their core products, which is formatted in a globally relevant bar icons that are easy to understand. In addition, they introduced new menu options into some of their diverse markets. They now offer oatmeal and fruit combination as a breakfast choice, as well as, juice that contains fewer calories and sugar. They have not left out the happy meals in order to provide a better choice, depending on each individual child's nutritional needs. In all of their nine markets, they have added items such as fruit and vegetable options. In addition, they

Key Assignment 4

have included yogurt desserts with fruit and sugar free soft drinks (Mc Donald's Corporation, 2011).

The safety and well-being of their current and future customers is their first priority. Because of this, their suppliers have food management systems in place that includes good manufacturing practices, proper sanitation, and critical control points. In the ability to monitor adherence to specific elements, they have instituted a partnership with independent third-party experts to assist in identifying opportunities for improvement.

The Mc Donald Corporation's commitment to the safety of children in regards to toy manufacturing is nothing new. These toys are currently tested numerous times and have imposed rigorous safety protocols throughout every step of the toy's design. After these toys are manufactured, they are sent through to a third party organization to be tested and confirm that the products are safe for distribution (Mc Donald's Corporation, 2011).

Since Mc Donald's is a global food service company, they have developed a multifaceted effort, which focuses on energy efficiency. They are currently working to reduce energy consumption in their restaurants, which in turn reduces environmental impacts and assists them in saving money. One of the ways they are attempting to accomplish this goal is by energy management systems which are used in many of their restaurants to control energy usage This management systems controls such functions such as lighting and climate control which helps reduce energy use. Another way is by using low oil volume fryers. This allows restaurants to prepare the same amount of a particular product, with less oil. In addition, this equipment

Key Assignment 5

requires less maintenance and provides enhanced environmental benefits (Mc Donald's Corporation, 2011).

James Skinner is currently holds the position of the Vice Chairman and Chief Executive Officer of the McDonald's Corporation. This corporation is the world's biggest food service corporation with 32,000 restaurants in the United States and around the world. Prior to becoming the Chief Executive Officer in 2004, Mr. Skinner set several priorities for his direction. These included long standing sustaina.ble development for the corporation, ability organization, and promoting committed energetic ways of daily living. Peter Bensen currently holds the position of Executive Vice President and Chief Financial Officer for this corporation. He has held this office since the beginning of 2008. Mr. Bensen has a variety of financial manners for which he is responsible (McDonalds Corporation, 2011).

In 2010, worldwide sales and their marginal performance increased from $591 million to S6.3 billion. They had capital expenditures of approximately $2.1 billion, used this

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