Mcdonald's Corporation Term Paper

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McDonald's Corporation

This is an attempt to study the history and development of one of the great institutions of United States and a part of the images of the country that has spread in the whole world. As is well-known, the dominance of the world by United States came after the Second World War when the traditional leaders of United Kingdom and Germany lost their predominant positions due to the destructions of the war, and the impact of change in economic order due to the freedom of many countries. This was the freedom of the colonies and United States had been one of the first colonies to be free, and the former colony became the leader, along with Russia which was the pathfinder of the failed social and economic structure of communism. It was a contest between the two to prove the relative superiority of the two systems, and the old structure of Russia has passed into history. At that time it was important to spread the message of the free world and her economic methods into the rest of the world who were waiting on the sidelines and deciding on which of the leaders they should follow.

McDonald's was one of the institutions that came out then and later spread throughout the world. It is a system where the concept of food was made simple and easy to serve. The system was to give people a bundle of taste, energy, nutrition and health in a form that the person could easily take up. He could even carry it with him to eat at some other place and it freed him from the drudgery of cooking his own meals. This led to its immediate acceptance among a group of people who came out to face the brave new world and make their own fortunes in it, and that helped them in their search. It was comparatively much cheaper as it did not have certain built in costs of restaurants like the rental for space, the cost of tables and chairs where the people would eat and wait, the cost of the large team of servers and cleaners who would maintain the restaurant, etc. this made the food cheap and easily affordable. This increased the popularity of the system.

Within a short period it spread to a great part of the world, and with the food went the message of a free country. It is still traveling in different parts of the world, as those parts still contain a large number of people who are the hardy pioneers trying to build up their own countries into leaders of the world from being back of beyond. It is a process that will continue as man feels that all are the same and entitled to become a leader if they work hard enough for it, and that was the reason for the success of United States. In the rest of the world, McDonald's is still popular and spreading, but in the home country, it has probably reached a plateau. The reason for this is probably more psychological than anything else, and the reason is that people feel that they are now entitled to more comforts, as they can afford to pay for the comforts. This is also bound to happen, as in the process of development, it is a cycle and the society will slowly change.

The generation which took McDonald's to the top in USA is now becoming older and their thoughts are changing as will happen to any individual with age and economic prosperity. They are slowly loosing interest and the new generation has different dreams and that is not all McDonald's. It is like the change of tastes in music, in movie stars, in dress and many other forms of entertainment. Ultimately when one looks at it, humans have been eating from the days they started life on this planet thousands of years ago. The nature of the food that they took first changed when they went from hunting to farming, the discovery of fire, and so on. The advent of McDonald's and its progress through the hands of man is also one such chapter. As an organization one has to think of the concept of an organization as a living being which is born, then grows, reaches maturity and finally declines. All organizations will also die, but their life can be extended if the form is changed bringing different interests to the organization. The present management is trying that.

I. Introduction

Why I chose this topic?

The image of McDonald's is not like the image of the United States in certain countries and the same time, it represents a great American brand name. The largest market for McDonald out side the United States is Japan and there the brand name is "Makadonaldo" in Japanese and the first restaurant was opened in 1971 on the world famous Ginza. It was situated inside a store called the Mitsukoshi Department Store and was then the smallest McDonald's restaurant in the world with an area of only 500 sq. ft. Of course that was only the beginning and the store has been expanded since and taken in another location. There are also another 2,000 McDonald restaurants that have joined the sale of McDonald products. (Fascinating Mcfacts about McDonald's International)

This is in spite of the fact that the Japanese are basically against foreigners and they do not like outsiders. Probably this feeling comes from the country being just a small island and they do not like even the neighbors like Korea and China. There is dislike of Americans because of the Second World War. At the same time, there is no dislike of this brand, and this was cultivated very carefully. The advertising in that country are all emotional advertisements just as it is in the United States, and the only difference is in the fact that all the families are Japanese and that extends even to their dress. (In Japan, McDonalds means great marketing)

Importance of this research

Every research has an objective, and one of the prime objectives in marketing and advertising is to study the question of branding. There is an importance of branding that is more than the importance of the product itself, and essentially, the basic product sold by McDonald's are simple hamburgers. The brand name is also not very old. The first restaurant was opened less than 50 years ago in Des Plaines, Illinois, USA. It was then expanded only in the country till 1967 when the first restaurant was opened outside United States in Canada and then in Puerto Rico. Today there are McDonald's in over 10 countries of the world and there are more than 20,000 restaurants. (Fascinating Mcfacts about McDonald's International) This is the greatest achievement of McDonald's in that it has succeeded in spreading a brand name all over the world for a basically simple product. It is a success story in marketing and advertising, and that is the importance of this research.

Goals

The objective of this research is to go through the history of the company in the last few years, and it is quite clear that the company is facing a certain amount of trouble. In the history of marketing of any product, the life of the product is like a human being - birth, development and growth and then decline. This is the fate of all brands in all areas, and part of this is because of the development of human beings and their changes in taste, likes and dislikes, development of new products which make some other products redundant, changes in lifestyles and associated choice of products, availability of new products, etc. It is important to study old brands so that we can find out why the products are gradually loosing out on their popularity. That is the objective of this research. "Their most serious problem is the belief they can grow the business forever," says Atlanta marketing strategist Al Ries. (Slumping McDonald's shrinks its super-size expansion strategy) "No brand lasts forever. McDonald's is a brand built on hamburgers, and 282 million people can only eat so many hamburgers." (Slumping McDonald's shrinks its super-size expansion strategy)

Company overview

History

The company was formed by the founder Ray Kroc who had taken over the Speedee Service system that had been developed by two brothers named Richard and Maurice McDonald. This gradually became an empire of burgers and fries, with the basic assumption that there could never be too many McDonald's. The same thought keeps going on today, and only the limit has changed from the United States to cover the entire world. The situation has developed to the extent that there are now more than 30,000 restaurants in 121 countries, and has increased in size by three times since the death of Kroc in 1984.

The difficulties had started appearing outside United States for quite some time, but are now being seen in the States also. (Slumping McDonald's shrinks…[continue]

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