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McDonald‘s Corporation. McDonald‘s Corporation. McDonald‘s Corporation. 1. Introduction. 2. History. 3. Description of Business. 4. Stock. 5. Criticism. 6. Conclusion. McDonald‘s Corporation. 1. Introduction 2. History 3. Description of Business 4. Stock 5. Criticism

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McDonald‘s Corporation

1. Introduction

2. History

3. Description of Business

4. Stock

5. Criticism

6. Conclusion


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McDonald‘s Corporation

1. Introduction

2. History

3. Description of Business

4. Stock

5. Criticism

6. Conclusion


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McDonald‘s Corporation

1. Introduction

2. History

3. Description of Business

4. Stock

5. Criticism

6. Conclusion

1. Introduction

The world‘s biggest fast-food company.


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McDonald‘s Corporation

1. Introduction

2. History

The Start

Ray Kroc

Expansion

Today

3. Description of Business

4. Stock

5. Criticism

6. Conclusion

2. History: The Start

- 1948: Maurice (Mac) and Richard (Dick) McDonald open a little drive-in-restaurant in San Bernardino, California

- new concept: speedy service, low prices, big volume, limited menue

- re-engineered their kitchen and established assembly-line procedures for mass production

- their concept captured the spirit of post-war America; mid 1950s annual revenues of $350,000

- 1952: a cover article in America Restaurant Magazine prompted 300 inquiries a month


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McDonald‘s Corporation

1. Introduction

2. History

The Start

Ray Kroc

Expansion

Today

3. Description of Business

4. Stock

5. Criticism

6. Conclusion

2. History: Ray Kroc

- 1953: Neil Fox becomes first franchisee; design of a new red-and-white-tiled building with “Golden Arches“

- 1954: Ray Kroc, a milkshake machine salesman visits Mc Donald‘s for the first time and recognizes: “This will go anyplace. Anyplace!“

- He purchases the exclusive right to sell franchises for McDonald‘s restaurants and becomes the founder of Mc Donald‘s System, Inc.

Ray Kroc

- 1955: prototype McDonald‘s restaurant openes in Des Plaines, Illinois

- 1960: 400 millionth hamburger was sold

- 1961: Kroc buyed out the Mc Donald‘s brothers for $2.7m in cash; profit $77.000, long term debt $5.7m


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McDonald‘s Corporation

1. Introduction

2. History

The Start

Ray Kroc

Expansion

Today

3. Description of Business

4. Stock

5. Criticism

6. Conclusion

2. History: Expansion

- 1961: hamburger university openes: “If you ‘ve got time to lean, you ‘ve got time to clean!“

- 1963: Ronald McDonalds first TV appearance

- 1965: McDonald‘s becomes a public company

- 1968: franchisee Jim Delligatti designs the “BigMac“

- 1967: international expansion starts in Canada, since 1971 overseas in Japan, Germany, Australia, France, England

- 1977: Fred Turner, who started as a grill man, becomes chairman

- 1975: establishment of the first drive-thru operation

- 1979: introduction of the “Happy Meal“


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McDonald‘s Corporation

1. Introduction

2. History

The Start

Ray Kroc

Expansion

Today

3. Description of Business

4. Stock

5. Criticism

6. Conclusion

2. History: Today

- current CEO and chairman: Jack Greenberg

- “Way over 100 billion hamburgers served!“

- 395,000 employees

- in 121 countries around the world

- over 30,093 restaurants

- in 2001 McDonald‘s Germany celebrated its 30th anniversary


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McDonald‘s Corporation

1. Introduction

2. History

3. Description of Business Operations Principles Franchise Campaigns SuppliersMarket Power FinancialNew Concepts

4. Stock

5. Criticism

6. Conclusion

3. Description of Business: Operations

- food service industry

- quick service restaurants

- Company-operated restaurants

- selling franchises

- real estate business: franchisees lease their restaurants from McDonald‘s


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McDonald‘s Corporation

1. Introduction

2. History

3. Description of BusinessOperationsPrinciples Franchise Campaigns SuppliersMarket Power FinancialNew Concepts

4. Stock

5. Criticism

6. Conclusion

3. Description of Business: Principles

- McDonald‘s offers the same great taste worldwide and creates new products that refer to the local taste

- McDonald‘s brothers formula: limited menu, quality food, an assembly-line production system, fast friendly service

- McDonald‘s operating principle today:QualityServiceCleanliness &Value

“Don‘t worry about making money. Love what you‘re doing and always put the customer first - and sucess will be yours!“ Ray Kroc


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McDonald‘s Corporation

1. Introduction

2. History

3. Description of BusinessOperations PrinciplesFranchiseCampaigns SuppliersMarket Power FinancialNew Concepts

4. Stock

5. Criticism

6. Conclusion

3. Description of Business: Franchise

- Franchise: vertical distribution-network, cooperation between a producer and an independent entrepreneur, rights and duties of both sides are adjusted in a contract

- McDonald‘s supports its franchisees

- franchisees may create new products (BigMac, Filet-o- Fish)

- 600,000 Euro fee, percentage fee of sales

- 2001: 17,395 franchise restaurants created sales of $24,8 billion

- 2001: 288 franchisees in Germany operated 744 restaurants


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McDonald‘s Corporation

1. Introduction

2. History

3. Description of BusinessOperations Principles Franchise Campaigns SuppliersMarket Power FinancialNew Concepts

4. Stock

5. Criticism

6. Conclusion

3. Description of Business: Campaigns

- McDonald‘s is famous for it‘s very funny advertising campaigns

- Ronald Mc Donald is it‘s own Comic character

- campaigns with local stars

- sponsoring of global events

- one toy in every “Happy Meal“


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McDonald‘s Corporation

1. Introduction

2. History

3. Description of BusinessOperations Principles FranchiseCampaignsSuppliersMarket Power FinancialNew Concepts

4. Stock

5. Criticism

6. Conclusion

3. Description of Business: Suppliers

- McDonald‘s revolutionized industrial food production

- developt the production of deep frozen fries and meat together with their suppliers

- strong quality-controls

- suppliers have to follow the McDonald‘s Principles

- purchases goods from national companys with strong brands


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McDonald‘s Corporation

1. Introduction

2. History

3. Description of BusinessOperations Principles FranchiseCampaigns SuppliersMarket Power FinancialNew Concepts

4. Stock

5. Criticism

6. Conclusion

3. Description of Business: Market Power

- McDonald's is Coca-Cola's largest customer in the world

- McDonald's uses about 7% of the potatoes grown in the United States for its French fries.

- 8% of the American adult population visits McDonald‘s on an average day

- The Big Mac Index:

- since 1986 “The Economist“ magazine tracked the price of Big Mac around the globe

- measures purchasing power, comparison of exchange rates and relative prices

- indicator for an over- or undervalued US-Dollar


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McDonald‘s Corporation

1. Introduction

2. History

3. Description of BusinessOperations Principles FranchiseCampaigns SuppliersMarket PowerFinancialNew Concepts

4. Stock

5. Criticism

6. Conclusion

3. Description of Business: Financial

2001

Total revenues: $14.87 billion

-company operated restaurants: $11.041 billion

-franchised restaurants: $3.829 billion

Operating costs and expenses: $12.173 billion

Net Income: $1.637 billion


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McDonald‘s Corporation

1. Introduction

2. History

3. Description of BusinessOperations Principles FranchiseCampaigns SuppliersMarket Power FinancialNew Concepts

4. Stock

5. Criticism

6. Conclusion

3. Description of Business: New Concepts

- the company reaches the limits of growth

- reported ist 6th straight quarterly earnings decline (BSE crisis)

- management searches new concepts for future growth

- McDonald‘s Japan offers high-speed Internet in its 4000 restaurants

- possibly they will start non-food retailing in their restaurants


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McDonald‘s Corporation

1. Introduction

2. History

3. Description of Business

4. Stock The PastDevelopmentOutlook

5. Crticism

6. Conclusion

4. Stock: The Past

- 1965: Going Public of McDonald‘s for $22,50 each share on the OTC-market

- 1966: McDonald‘s gets listed on the New York Stock Exchange (stock symbol: MCD)

- 1985: MCD is the first service industry company to become a member of the Dow Jones Industrial Average

- McDonald‘s is the only company in the S+P 500 to have reported 100 consecutive quarters of year-to- year combined increases in revenues, income, and earnings per share.


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McDonald‘s Corporation

1. Introduction

2. History

3. Description of Business

4. StockThe PastDevelopmentOutlook

5. Crticism

6. Conclusion

4. Stock: Development

- MCD has got 1,027,000 shareholders

- Market capitalization: $37,9 billion

- dividend was paid on common stock for 26 consecutive years

- The McDonald‘s Stock has been splitted 13 times since its initial public offering, the first one in 1965, the last one in 1999.

- An investment of $2,250 to purchase 100 shares of McDonald's Stock in 1965 would have grown to be 74,360 shares worth more than $2.1 million on June 14, 2002.


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McDonald‘s Corporation

1. Introduction

2. History

3. Description of Business

4. StockThe PastDevelopment Outlook

5. Crticism

6. Conclusion

4. Stock: Outlook

- the last 52 weeks it was traded in a range between $25 - $31

- analysts assume it will develop like the rest of the market

- ratings: 8 buy, 9 hold, 2 sell

- median target price: $ 32


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McDonald‘s Corporation

1. Introduction

2. History

3. Description of Business

4. Stock

5. Criticism

6. Conclusion

5. Criticism

- McDonald‘s food is not healthy: high in fat, sugar, animal products and salt

- Some lawyers want McDonald‘s to pay damages for the consequences of their food. 40% of the American population is overweight

- McDonald‘s offers only low payed part-time jobs

- McDonald‘s destroys the environment by using one- way packages


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McDonald‘s Corporation

1. Introduction

2. History

3. Description of Business

4. Stock

5. Criticism

6. Conclusion

6. Conclusion

1. Introduction

2. History

3. Description of Business

4. Stock

5. Criticism

6. Conclusion

Mc Donald‘s still offers excellent products and has a brilliant marketing concept.

Mc Donald‘s will grow again, but not as fast as it did in the past.




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