Mcdonald\'s: Polishing the Golden Arches

McDonald's: Polishing The Golden Arches

Devon Reitzes

Fall 2, 2006

Case Summary:

McDonald's corporation is one of the most successful organizations in world history. It has restaurants in almost every country on the globe and for the first time in 2004, its international revenue beat its domestic revenue. The overall growth of the company over the past century suggests that McDonald's more than its competitors have maintained a strong brand equity despite changing leadership, times and customer demands.

McDonald's corporation was started in 1940 by two siblings, the McDonald's, they originally started their store in San Bernardino, California and ran a successful drive through restaurant for more than ten years. Eventually under the leadership of Ray Kroc, of Des Plaines, Illinois, the company became one of the world's most successful franchises. It quickly spread throughout the United States and became the unquestioned leader of fast food. Throughout the 70s, 80s, and 90s, McDonald's became an American icon and emblem, it was used to communicate a certain lifestyle as well as the American approach to good business. McDonald's currently has over 31,000 locations worldwide and is considered the largest world fast food chain by far. One of the most important and intriguing aspects of McDonald's history is its success within the global market. It was one of the first American franchises to take its good on the international market, and became an instant sensation, in many markets this good became synanamous with the American way of life.

In the following analysis, we will fully examine the case and understand the implicit values that come with it. Specifically we will analyze how the McDonald corporation has imprinted its vision and its mission statement to be emblematic of its continuing rise and conquest of the international marketplace.

VISION ANALYSIS

Definition

In defining the term vision when it comes to business, it is important to realize what a vision is not. It is not a mission statement, it is not a projection, it is not a demand. A vision in business is simply a blueprint image of what the company hopes to achieve in the future. It is "a statement giving a broad, aspirational image of the future that an organization is aiming to achieve.." More than anything else, a vision defines the ultimate goals of the company and creates an understanding of its overarching deliverables both internally and externally.

When a hospital or bank or other company decides to build a new location, they have an artist produce a rendering of what that building is going to look like upon completion. In much the same way, a vision of a business is a "rendering" of what the company hopes to become as it grows and follows the plans laid in place.

There are several key essential components to a vision statement. These components are mission critical to the success of the overall company because it provides the principles and foundational approach that the company will pursue. A vision must first feature a compelling picture or image of what the company can become in the future. Second, the vision itself must be grounded within reality and is something feasible and attainable. Third, a vision is connected to and articulates deeper values and hopes for the future. Fourth, a vision needs to be translated into actions and plans that can be and are implemented effectively by the business. Finally, a vision must be put worth in a manner that is easily communicated and remembered, because a vision will easily die if it is not regularly communicated. These components creates the defining characteristics of a strong vision statement. They ineffect allows the vision to become an emblem of the corporation and how it wishes to function. Moreover, it becomes the defining characteristic of the organization and defines its future pathway.

The vision is used as a guideline for planners, financers and others to follow as they make plans for the future. Whether it is the growth, the decisions for products or services or the impact the company wants to have on the world, the vision provides an image from which the specific plans and needed steps can be drawn to make that vision become a reality. A vision allows everyone in the company to periodically take a look at the rendering and guide the current decisions on a path that will eventually become that rendering.

Analysis

While McDonald's started out in the 1940s with a very simple mission of serving high quality food to customers that demand convenience and accessibility, over time their corporate vision has changed significantly. McDonald's vision, "is to be the world's best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness and value, so that we make every customer in every restaurant smile. To achieve our vision, [McDonald's is focused on three worldwide strategies;

Be the best employer for its people in each community around the world,

Deliver operational excellence to its customers in each of its restaurants, and Achieve enduring profitability growth by expanding the brand and leveraging the strengths of the McDonald's system through innovation and technology."

McDonald's vision statement, although very long tries to be very concise in its specific definition. Its overarching principle is that it will be the best fast food restaurant in the world, however its vision specifies precisely how it plans to accomplish this lofty goal. Overall this vision is extremely well crafted because it embodies all of the characteristics of a very good vision statement. First, it provides an overall dream and goal that the organization is moving towards, this is the vision to become the best provider of fast food in the world. Second, it provides very concrete and grounded realities of how they can achieve this overall goal by specifying that they will focus on their employees, operational excellence, and brand equity on an international stage.

McDonald's overall vision is very successful for several reasons, it states a very concise and definitive goal that is well articulate and simple to understand. It provides deliverables that will achieve its vision and it is very emblematic of how the company functions as a whole. It is evident that McDonald's put a lot of thought into its overall vision and that it strongly believes in it.

Summary vision statement is sometimes confused with mission statement but the two are completely separate and stand alone designs. A vision statement provides an image of what the company hopes to become while not outlining any specifics about how that is going to happen. A vision is a loosely-based hope or goal of the overall picture that the company founders and workers have for its future. It provides a mental picture that can be related in similarity to the rendering that an artist provides for building a future bank or store location.

McDonald's has a vision of being the best provider in the world of quick meals. Its vision statement is clear and concise when it comes to the dining experience of its customers and it allows for enough flexibility that the company has been able to maintain the vision throughout history with many changes in attitude by the consumer with regard to healthy eating, trans-fat issues and other things that may have interfered with a less well crafted visions.

What I Learned that a vision statement provides a guideline by which all future statements and plans should be able to relate back to. It is important that the vision statement provide a broad-based idea about the future desires of the company while at the same time providing room to make changes that will still comply with the vision as a concept.

This means that it is important to reduce the vision statement to its most basic and free flowing components so that future team members will be able to formulate the needed steps based in their current economy and current society to maintain the original vision.

I believe that the vision statement is the defining characteristic of how a good company begins its transformation from good to great. In order to become successful as economies of scale takes place, a company must gear itself so that all the members of the team understand precisely what they are doing in order to accomplish their goal, this at times is extremely hard and it must be evidenced by everyone who is working within the institution. Therefore, a vision statement provides the groundworks for what employees should be doing on a daily basis to better the company and better themselves, this is at times an extremely difficult metric to accomplish.

MISSION ANALYSIS

Definition

The definition of a mission statement is that it builds on the vision statement. While the vision provides the overarching principles that companies are after, the mission statement defines the core purpose of the organization, or more simply why it exists. The mission statement goes beyond surface level goals of simply increasing shareholder wealth, and reflects the employees' motivations for engaging in the company's work. Effective missions are inspiring, long-term in nature and easily understood and communicated. While a mission statement does need to be very based in nature so that the management interpretation can come into play it has to provide some guidance about how the vision will be reached through the use of specific plans.

The mission statement of any company speaks directly to the products and services that the company will provide to its consumers. A mission statement does not review the vision of the company but when held against it the mission statement must be clearly in agreement with the vision statement. A Mission statement may define the purpose or broader goal for being in existence or in the business. It serves as an ongoing guide without time frame.

The mission statement should be a clear and succinct representation of the enterprise's purpose for existence. It should incorporate socially meaningful and measurable criteria addressing concepts such as the moral/ethical position of the enterprise, public image, the target market, products/services, the geographic domain and expectations of growth and profitability (Mission (http://www.businessplans.org/Mission.html)."

The intent of the mission statement should be the driving force behind any company strategic decision making process.

The mission statement should say it all in a nutshell while incorporating the desired company values into its general area of meaning. The following are examples of some mission statements by well-known companies that define the meaning of mission statement.

Mary Kay Cosmetics

To give unlimited opportunity to women."

Wal-Mart

To give ordinary folk the chance to buy the same thing as rich people."

Walt Disney

To make people happy."

Although it is commonly perceived that these are slogans rather than mission statements, the reality is that the simple nature of these statements make them ideal mission statements. This is evidenced by several factors, each of these statements provides an implicit goal for these companies that goes beyond profits, growth or any other nebulas factor, but rather focuses at a core level what these companies define themselves by. These mission statements are long-term in nature and targets what employees themselves feel captures the essence of their business.

Analysis

The Disney mission statement is a classic example of what a mission statement can set the stage for within a company. The mission statement incorporates the vision of the company and adds the method by which it plans to fulfill that vision.

Disney's mission statement is simply "to make people happy!." This vision statement, although very short goes into the heart of what the company prides itself on. As a roadmap to the future of the organization, it simply means that anything Disney does will move it closer towards giving people happiness and joy. Also at its core, this mission statement explains precisely what differentiates Disney from all other companies in the world. it's only focus in all of its acquisitions, adventure parks, television shows, etc. is to make people happy. In effect this simply statement is the justification for why Disney as an organization continues to exist.

The employer dedication of the mission statement provides the world with the understanding that the company plans to value its workforce and treat its employees with respect. This is an important factor to consider when making a mission statement in light of the many critical groups that are currently working to attack large corporations like Wal-Mart.

Overall, the mission statement of Disney is an excellent example of how mission statements should be constructed. While it does not have a substantial amount of detail, it cuts to the very core of what Disney plans to do with every decision. It also reduces the value addition of the company into one easy statement that anyone can understand and appreciate. More than anything else, it provides a triumphant summary of an entire organization's philosophy in five words.

Summary

The mission statement is a statement that provides a hint of how the vision statement will be attained. It allows the company to place actual values and priorities on the methods the company plans to use to bring the vision statement and image to completion.

It is flexible in the sense that it can be changed however, it is better to provide a mission statement that can change with climate changes through managerial interpretation and decisions rather than changing the actual mission statement itself. Disney's mission statement is an example of an overarching principle that has the cumulative effect of defining its overall value addition to society and its customers.

It discusses not only the way it is going to go about providing the vision it has set up but it also addresses the way it plans to treat its employees, which in the current political climate it is a positive step to provide this information to the public.

What I Learned

What I learned is that the mission statement is not for the general public as much as a roadmap for the individuals who are working for the company. It provides the simple but powerful statement of intent that shows this company or organization is completely different but also valuable. In a sense, it captures what the company does, at a core philosophical level rather than its pure deliverables. This is a very important tool for large corporations to help their employees understand at a principle level what they are doing and how they can improve their customer experience. Both are key to understanding and defining the scope of their project.