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The Business of McDonald’s

Kipp takes a look at the strategies and inner working s of McDonald’s, arguably one of the smartest companies on the planet.

January 12, 2011 5:07 by

History

The story of McDonalds’ is a rather long one: in 1955, Ray Kroc decided to franchise the Mc Donald brothers’ fast food concept – he took the franchise all over America and it wasn’t long before the company started eyeing international expansion, though always with a strong belief in the values of quality, service, cleanliness, and value. Somewhere around the mid-1990’s the fast food joint began to stumble. It wasn’t doing as well as its competitors, and it struggled to find its niche, offering pizzas and sandwiches at one point. It even bought into non-burger franchises like Chiptole and Boston Market.

Desperate to find its edge, Mc Donald’s apparently even made fourteen different changes to the special sauce of the big Mac in a year. And while the chefs played around with different burger alterations, McDonald’s spear headed a major expansion drive, opening as many as 2,000 new shops in a year. The ‘00s brought Mc Donald’s the greatest PR challenge it would have to face in its lifetime. From the publishing of the best seller Fast Food nation to the release of the very popular documentary Super Size Me, Mc Donald’s came under serious fire from critics who claimed McDonald’s sold unhealthy food. And while everyone was ready to write off the Golden Arches, McDonald’s execs stepped up their game: they altered their menu to include healthy options like salads, apple slices, fresh juices, grilled sandwiches and milk.

McDonald’s is now the leading fast-food joint. It rebranded and redesigned and got McDonald’s back onto the top with many industry experts observing McDonalds’ ‘recession-proof’ status over the last couple of years of crisis. In fact, the $32 billion in revenue from franchise stores makes  McDonald’s the 56th biggest economy on the planet – bigger than Ecuador.

 

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