The Global Success of McDonald's

MBA/521

Jan-7th-2012

Abstract

When people think about the franchising concept, McDonald's usually comes up first as a prime example. Although McDonald's was not the first franchise business Isaac Singer, the inventor of the sewing machine gets credit for originating the franchise idea-the hamburger chain certainly exemplifies franchising success.
The first McDonald's restaurant was opened by brothers Dick and Mac McDonald in 1940 on Route 66 in San Bernadino, California. The menu had about 25 offerings, and carhops brought the food out to patrons waiting in their cars.
Today, McDonald's franchise network is the world’s leading food service retailer with more than 30,000 franchise
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(Daszkowski, n.d.).
Recovering from stagnation and Taking the company back to the Growth About eight years ago McDonald's was looking obsolete. The company announced the first quarterly loss in its history, and its stock fell to a woeful $13 from an all-time high of $48 till that point which comes to a loss of 72% of the peak value.
Today, McDonald's stock is trading at nearly $100 a gain by 669% from the lows of $13, same-store sales have grown constantly month over month and the company can boast of having achieved double-digit operating-income growth during the onset of 2008 year's financial crisis. After a better-than-expected quarterly earnings quarter after quarter, Jim Cramer, the famously outspoken market analyst, went so far as to call McDonald's "the best-run major international company in the world."
Some observers credit the focus on better execution, beginning in 2004 when Jim Skinner was hired as chief executive officer. Others point to the recent redesign of the company's restaurants and the introduction of espresso drinks, or to consumer trends in a tough economy (although McDonald's (nyse: MCD - news - people ) had equally impressive gains in the happier time of 2007). But the real story behind the resurgence of the chain has to do with something simpler: empathy, the ability to see how the world