The Founder: A lesson in Business by McDonalds

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The Founder: A lesson in Business by McDonalds by Mind Map: The Founder: A lesson in Business by McDonalds

1. They have a system settled ready

1.1. How did they develop this and how does it meet the needs of McDonald's target market? they saw how inefficient they old way of cooking was.

2. What else is relevant to business or touches on topics we have covered?

2.1. Forms of Business Ownership

2.1.1. Franchising: franchiser sells franchisee the right to use business idea

2.1.2. Partnership

2.1.3. McDonalds Brothers set up a company with Ray, legal papers etc with the aim of franchising the brand. There seemed to be conflict from early on in the company - when Ray was trying to get the new McDonalds built quickly but the brothers felt it needed more time - Ray slams down the phone on them. Ray Kroc suggests getting sponsorships but McDonalds Brothers rejects the suggestion McDonalds Brothers wanted to keep the number of stores small but Ray Kroc wants to expand McDonalds throughout America

2.2. Marketing

2.2.1. Needs to convince customers to buy brand instead of substitutes Size of store

2.2.2. Who was McDonalds targeted at, which segment of the market? Low to medium class people

2.2.3. Is the location

2.2.4. Convince customers to walk out of car to order

2.2.5. The golden arches concept - recognisable to people driving by - this is branding!

2.2.6. Ray Kroc is talking about building a big McDonald's brand through franchising this new idea and the golden arches - the new american church - what a brand!!!

2.2.7. They are trying to use the strategy of market development

2.3. Human Resources

2.3.1. Different staff trained to do same tasks, little changes are made to prevent confusions. Staff doing the same thing means...

2.3.2. Hiring people who are willing to work Handing the responsibilities of franchising to middle-class investors Middle-class investors are willing to follow McDonald's formula "making a living"

2.4. Finance

2.4.1. Sell basic quality with cheap prices so that in the long term earn high profit margin.

2.4.2. Low wage costs because they have less employees ( self service ) and the skills are very basic so pay is low

2.5. Skills are developed by all employees; reduces boredom.

2.5.1. Task switching for staff every month

2.6. Strategy

2.6.1. If you increase supply demand will follow - is this true or is he just trying to sell?

2.6.2. Repetitive work for staff, lower wage costs

2.6.3. Quality control is easy in one location but not multiple locations

2.6.4. Spreading awareness of brand via public speeches Hiring more franchisees to spread McDonald throughout the whole America

2.7. Entrepreneurship

2.7.1. Ray Kroc - Persistent and determined listens to his record at night after work to build these qualities.

2.7.2. Ray Kroc - Hard working - drives all over the country to sell his mixers, prioritises his work over his marriage which then fails.

2.7.3. Ray Kroc - Ruthless in his takeover of McDonalds and his treatment of the McDonald brothers and his wife in the divorce.

2.7.4. Taking a big risk of mortgaging his house

2.7.5. Ray Kroc - enough is never enough, very driven always wants more.

2.7.6. McDonald Brothers - had a vision they believed in and saw this through. Were they guilty of being too trusting and naive?

2.7.7. Killer instinct - he doesn't care who he treads on to get to the top!!!

2.8. Operations

2.8.1. Why does McDonalds appeal to families more than the other burger restaurants that Ray visited? Has problems with place aspect attracting the wrong customers at first - it wasn't family friendly which is what they wanted. Did this by getting rid of waitresses and reduced menu - this got rid of the younger people who were seen as undesirable and helped them to develop their brand as being family friendly.

2.8.2. Very quick production of the burgers which surprises Ray - how was this achieved? Through their layout which the McDonald's brothers developed - links with the training of their staff. Had a very planned out kitchen and production line within it. "A symphony of efficiency - not a wasted motion"

2.8.3. specialisation only making a few types of food rather than a whole new menu

2.9. McDonald's was founded with the idea of family not just pure profit - McDonald's brothers.

2.9.1. Product ready 90% faster than competitors What a great USP!/way of adding value! Which will have lead to cost savings.

3. Could: Evaluate whether or not you believe that becoming a franchise was the best way for McDonalds to grow

3.1. In terms of growing financially- it was a good idea, however the

4. Should: Be able to to identify the advantages and disadvantages to both the franchisor (McDonalds parent company) and franchisee (individual business people who purchase the right to open a McDonalds franchise)

5. Must: Be able to explain what a franchise is Be able to explain the advantages and disadvantages of a franchise

5.1. The McDonald's brother's did franchise it but were dissatisfied with the way the franchisee ran it - felt their brand was being damaged.

5.2. Decreases originality- quality control is difficult with franchises.

5.3. Advantage: idea is already made, and spreads awareness of brand as more franchises open

5.3.1. if the managers are hard working and motivated to have a successful franchise then the quality will stay the same

5.4. DisadvantageS

5.4.1. Quality control is challenging hard to control that all the franchieses are working the way they want them to. Standards start to slip and Ray is unhappy with the quality - the golf scene when he is yelling at his friends - lettuce on the burgers and fried chicken!!! Not McDonalds!! "if people want chicken let them go to a restaurant that sells chicken".

5.4.2. Brand image lies at the hands of franchisee - if they damage the brand at one outlet all outlets could suffer the loss in image.