McDonald's
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| McDonald's Corporation | |
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| Type | Public (NYSE: MCD) |
| Founded | May 15, 1940 in San Bernardino, California McDonald's Corporation, 1955 in Des Plaines, Illinois |
| Founder | Dick and Mac McDonald McDonald's restaurant concept Ray Kroc, McDonald's Corporation founder. |
| Headquarters | Oak Brook, Illinois, USA |
| No. of locations | 31,000+ worldwide[1] |
| Key people | Andrew J. McKenna Sr. Chairman Jim Skinner Vice Chairman & CEO Ralph Alvarez, president & COO |
| Industry | Restaurants |
| Products | Fast Food (hamburgers • chicken • french fries • soft drinks • milkshakes • salads • desserts • breakfast) |
| Revenue | ▲ $22.79 billion USD (2008)[2] |
| Operating income | ▲ $14.445 billion USD (2006)[2] |
| Net income | ▲ $3.544 billion USD (2006)[2] |
| Employees | 465,000 (2005)[2] |
| Website | www.mcdonalds.com |
McDonald's (NYSE: MCD) is the world's largest chain of fast food restaurants, serving nearly 47 million customers daily[3]. McDonald's primarily sells hamburgers, cheeseburgers, chicken products, French fries, breakfast items, soft drinks, milkshakes and desserts. More recently, it has begun to offer salads, wraps and fruit. Many McDonald's restaurants have included a playground for children and advertising geared toward children, and some have been redesigned in a more 'natural' style, with a particular emphasis on comfort and the absence of hard plastic chairs and tables.
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History
The business began in 1940, with a restaurant opened by siblings Dick and Mac McDonald in San Bernardino, California. Their introduction of the "Speedee Service System" in 1948 established the principles of the modern fast-food restaurant. The present corporation dates its founding to the opening of a franchised restaurant by Ray Kroc, in Des Plaines, Illinois on April 15, 1955, the ninth McDonald's restaurant overall. Kroc later purchased the McDonald brothers' equity in the company and led its worldwide expansion.
With the successful expansion of McDonald's into many international markets, the company has become a symbol of globalization and the spread of the American way of life. Its prominence has also made it a frequent topic of public debates about obesity, corporate ethics and consumer responsibility.
Corporate overview
Facts and figures
McDonald's restaurants are found in 119 countries[4] and territories around the world and serve nearly 47 million customers each day. McDonald's operates over 31,000 restaurants worldwide, employing more than 1.5 million people[5]. The company also operates other restaurant brands, such as Piles Café, and has a minority stake in Pret a Manger. The company owned a majority stake in Chipotle Mexican Grill until completing its divestment in October 2006. Until December 2003, it also owned Donatos Pizza. On August 27, 2007, McDonald's sold Boston Market to Sun Capital Partners.[6]
Types of restaurants
Most standalone McDonald's restaurants offer both counter service and drive-through service, with indoor and sometimes outdoor seating. Drive-Thru, Auto-Mac, Pay and Drive, or McDrive as it is known in many countries, often has separate stations for placing, paying for, and picking up orders, though the latter two steps are frequently combined; it was first introduced in Arizona in 1975, following the lead of other fast-food chains. In some countries "McDrive" locations near highways offer no counter service or seating. In contrast, locations in high-density city neighborhoods often omit drive-through service. There are also a few locations, located mostly in downtown districts, that offer Walk-Thru service in place of Drive-Thru.
Specially themed restaurants also exist, such as the "Solid Gold McDonald's," a 1950s rock-and-roll themed restaurant. In Victoria, British Columbia, there is also a McDonald's with a 24 carat (100%) gold chandelier and similar light fixtures.
To accommodate the current trend for high quality coffee and the popularity of coffee shops in general, McDonald's introduced McCafés. The McCafé concept is a café-style accompaniment to McDonald's restaurants. McCafé is a concept of McDonald's Australia, starting with Melbourne in 1993. Today, most McDonald's in Australia have McCafés located within the existing McDonald's restaurant. In Tasmania there are McCafés in every store, with the rest of the states quickly following suit. After upgrading to the new McCafe look and feel, some Australian stores have noticed up to a 60% increase in sales. As of the end of 2003 there were over 600 McCafés worldwide.
Some locations are connected to BP gas stations/convenience stores,[7] while others called McDonald's Express have limited seating and/or menu or may be located in a shopping mall. Other McDonald's are located in Wal-Mart stores. McStop is a location targeted at truckers and travelers which may have services found at truck stops.[8]
Playgrounds
Some McDonald's in suburban areas and certain cities feature large indoor or outdoor playgrounds, called "McDonald's PlayPlace" (if indoors) or "Playland" (outdoors)[citation needed]. The first PlayPlace with the familiar crawl-tube design with ball pits and slides was introduced in 1987 in the USA, with many more being constructed soon after. Some PlayPlace playgrounds have been renovated into "R Gym" areas.
"R Gyms" are in-restaurant play area that features interactive game zones designed for children aged 4 to 12. Equipped with stationary bicycles attached to video games, dance pads, basketball hoops, monkey bars, an obstacle course, and other games which emphasize physical activity.[9]
The "R Gym" features the Toddler Zone, an active play environment with age appropriate games that develop physical coordination and social skills; the Active Zone, designed for children aged four-to-eight that promotes physical fitness through fun play; the Sports Zone which features a series of sport oriented activities to promote aerobic exercise for children aged 9-to-12; the Parent Zone which features seating and provides a monitoring area for their children; and the Dining Area which allows families to eat.
Redesign
In 2006, McDonald's introduced its "Forever Young" brand by redesigning all of their restaurants, the first major redesign since the 1970s.[10][11]
The new design will include the traditional McDonald's yellow and red colors, but the red will be muted to terra cotta, the yellow will turn golden for a more "sunny" look, and olive and sage green will be added. To warm up their look, the restaurants will have less plastic and more brick and wood, with modern hanging lights to produce a softer glow. Contemporary art or framed photographs will hang on the walls.
The exterior will have golden awnings and a "swish brow" instead of the traditional double-slanted mansard roof.
The new restaurants will feature areas:
- The "linger" zone will offer armchairs, sofas, and Wi-Fi connections.
- The "grab and go" zone will feature tall counters with bar stools for customers who eat alone; Plasma TVs will offer them news and weather reports.
- The "flexible" zone will be targeted toward families and will have booths featuring fabric cushions with colorful patterns and flexible seating.
- Different music targeted to each zone.
Business model
McDonald's Corporation earns revenue as an investor in properties, a franchiser of restaurants, and an operator of restaurants. Approximately 15% of McDonald's restaurants are owned and operated by McDonald's Corporation directly. The remainder are operated by others through a variety of franchise agreements and joint ventures.
The McDonald's Corporation's business model is slightly different from that of most other fast-food chains. In addition to ordinary franchise fees and marketing fees, which are calculated as a percentage of sales, McDonald's may also collect rent, which may also be calculated on the basis of sales. As a condition of many franchise agreements, which vary by contract age, country and location, the Corporation may own or lease the properties on which McDonald's franchises are located. In most, if not all cases, the franchisee does not own the location of its restaurants.
The UK business model is different, in that fewer than 30% of restaurants are franchised, with the majority under the ownership of the company. McDonald's trains its franchisees and others at Hamburger University in Oak Brook, Illinois.
In other countries McDonald's restaurants are operated by joint ventures of McDonald's Corporation and other, local entities or governments.
As a matter of policy, McDonald's does not make direct sales of food or materials to franchisees, instead organizing the supply of food and materials to restaurants through approved third party logistics operators.
According to Fast Food Nation by Eric Schlosser (2001), nearly one in eight workers in the U.S. have at some time been employed by McDonald's. (According to a news piece on Fox News this figure is one in ten). The book also states that McDonald's is the largest private operator of playgrounds in the U.S., as well as the single largest purchaser of beef, pork, potatoes, and apples. The selection of meats McDonald's uses varies with the culture of the host country.
Controversies
As a prominent example of the rapid globalization of American fast food industry, McDonald's is often the target of criticism for its menu, its expansion, and its business practices.
For example, in 1990, two British activists, David Morris and Helen Steel, distributed leaflets entitled What's wrong with McDonald's? on the streets of London. McDonald's wrote to Steel and Morris demanding they desist and apologize, and, when they refused, sued them for libel in a case known colloquially as the McLibel case.
In 2001, Eric Schlosser's book Fast Food Nation included criticism of McDonald's' business practices. Among the critiques are allegations that McDonald's (along with other companies within the fast-food industry) uses its political influence to increase their own profits at the expense of people's health and the social conditions of its workers. The book also brings into question McDonald's advertisement techniques where it targets children. While the book does mention other fast-food chains, it focuses primarily on McDonald's.
In 2002, vegetarian groups, largely Hindu, successfully sued McDonald's[citation needed] for misrepresenting their French fries as vegetarian.[12]
Morgan Spurlock's 2004 documentary film Super Size Me said that McDonald's food was contributing to the epidemic of obesity in society, and failing to provide nutritional information about its food for its customers.
Six weeks after the film premiered, McDonald's announced that is eliminating the super size option, and created the adult happy meal.
Anthony Bourdain on his show, No Reservations, has criticized McDonald's among other fast-food restaurants for its culinary blandness.
In 1999 José Bové vandalized a McDonald's in France to protest against the introduction of fast food in the region.[13]
Arguments in defense of McDonald's
In response to public pressure, McDonald's has sought to include more healthy choices in its menu and has introduced a new slogan to its recruitment posters: "Not bad for a McJob". (The word McJob, first attested in the mid-1980s[14] and later popularized by Canadian novelist Douglas Coupland in his book Generation X, has become a buzz word for low-paid, unskilled work with few prospects or benefits and little security.) McDonald's disputes the idea that its restaurant jobs have no prospects, noting that its CEO, Jim Skinner, started working at the company as a regular restaurant employee, and that 20 of its top 50 managers began work as regular crew members. [15] In 2007, the company launched an advertising campaign with the slogan "Would you like a career with that?" on Irish television, outlining that their jobs have many prospects.
In a bid to tap into growing consumer interest in the provenance of food, the fast-food chain recently switched its supplier of both coffee beans and milk. UK chief executive Steve Easterbrook said: “British consumers are increasingly interested in the quality, sourcing and ethics of the food and drink they buy". McDonald's coffee is now brewed from beans taken from stocks that have been certified by the conservation group the Rainforest Alliance. Similarly, milk supplies used for its hot drinks and milkshakes have been switched to organic sources which could account for 5% of the UK's organic milk output.[16]
In other cases, the firm has shown itself ready to adjust its business practices. When the public became concerned that product packaging was environmentally damaging, McDonald's started a joint project with Friends of the Earth to eliminate the use of polystyrene containers, in the United States, to reduce the amount of waste produced.
Oak Brook, Ill-based McDonald's Corp. announced on May 22, 2008 that it is switching to transfat-free cooking oil for French fries in the U.S. and Canada. The company will use canola-based oil with corn and soy oils, by year's end for its baked items, pies and cookies.[17][18]
Environmental record
In April 2008, McDonald's announced that 11 of its Sheffield restaurants have been using a biomass trial that had cut its waste and carbon footprint by half in the area. In this trial, waste from the restaurants were collected by Veolia Environmental Services and used to produce energy at a power plant. McDonald's plans to expand this project, however the lack of biomass power plants in the U.S. will prevent this plan from becoming a national standard anytime soon.[19] In addition, in Europe, McDonald's has been recycling vegetable grease by converting it to fuel for their diesel trucks.[20]
Furthermore, McDonald's has been using a corn-based bioplastic to produce containers for some of their products. Although industries who use this product claim a carbon savings of 30% to 80%, a Guardian study shows otherwise. The results show that this type of plastic does not break down in landfills as efficiently as other conventional plastics. The extra energy it takes to recycle this plastic results in a higher output of greenhouse gases. Also, the plastics can contaminate waste streams causing other recycled plastics to become unsaleable.[21]
The U.S. Environmental Protection Agency has recognized McDonald's to demonstrate a continuous effort to solid waste reduction by inspecting its packaging for efficient material for and by promoting the use of recycled-content materials. [22] McDonald's report that they are committed towards environmental leadership by effectively managing electric energy, by conserving natural resources through recycling and reusing materials, and by addressing water management issues within the restaurant. [23]
When McDonald’s received criticism for its environmental policies in the 1970s, it began to make substantial progress towards source reductions efforts.[24] For instance, an “average meal” in the 1970s—a Big Mac, fries, and a drink—required 46 grams of packaging; today, it requires only 25 grams, allowing a 46 percent reduction.[25] In addition, McDonald’s eliminated the need for intermediate containers for Coke by having a delivery system that pumps syrup directly from the delivery truck into storage containers, saving two million pounds of packaging annually.[26] Overall, weight reductions in packaging and products, as well as the increased usage of bulk packaging ultimately decreased packaging by 24 million pounds annually.[27]
Legal cases
McDonald's has been involved in a number of lawsuits and other legal cases, most of which involved trademark disputes. The company has threatened many food businesses with legal action unless they drop the Mc or Mac from their trading name. In one noteworthy case, McDonald's sued a Scottish café owner called McDonald, even though the business in question dated back over a century (Sheriff Court Glasgow and Strathkelvin, 21 November 1952).
It has also filed numerous defamation suits. The McLibel case is probably the best known of these. McDonald's sued two Greenpeace activists for distributing pamphlets attacking its environmental, labor and health records. After the longest trial in UK legal history, McDonald's won a technical victory for showing that some allegations were untrue. But it was a massive public relations disaster since the judge also found that more than half of what was on the pamphlet was truthful, or were simply the opinions of the activists and therefore non-prosecutable.
McDonald's has defended itself in several cases involving workers' rights. In 2001 the company was fined £12,400 by British magistrates for illegally employing and over-working child labor in one of its London restaurants. This is thought to be one of the largest fines imposed on a company for breaking laws relating to child working conditions (R v [2002] EWCA Crim 1094). In April 2007 in Perth, Western Australia, McDonald's pleaded guilty to five charges relating to the employment of children under 15 in one of its outlets and was fined AU$8,000.[28]
Possibly the most infamous legal case involving McDonald's was the 1994 decision in The McDonald's Coffee Case.
Products
- See also: McDonald's products (international)
McDonald's predominantly sells hamburgers, various types of chicken sandwiches and products, French fries, soft drinks, breakfast items, and desserts. In most markets, McDonald's offers salads and vegetarian items, wraps and other localized fare. This local deviation from the standard menu is a characteristic for which the chain is particularly known, and one which is employed either to abide by regional food taboos (such as the religious prohibition of beef consumption in India) or to make available foods with which the regional market is more familiar (such as the sale of McRice in Indonesia).
Advertising
McDonald's has for decades maintained an extensive advertising campaign. In addition to the usual media (television, radio, and newspaper), the company makes significant use of billboards and signage, sponsors sporting events from ranging from Little League to the Olympic Games, and makes coolers of orange drink with their logo available for local events of all kinds. Nonetheless, television has always played a central role in the company's advertising strategy.
To date, McDonald's has used 23 different slogans in United States advertising, as well as a few other slogans for select countries and regions. At times, it has run into trouble with its campaigns.
Children's advertising
Global operations
McDonald's has become emblematic of globalization, sometimes referred as the "McDonaldization" of society. The Economist magazine uses the "Big Mac Index": the comparison of a Big Mac's cost in various world currencies can be used to informally judge these currencies' purchasing power parity.
The EFTA countries are leading the Big Mac Index with the top 3 most expensive Big Mac's. Iceland has the most expensive Big Mac, followed by Norway and Switzerland.
The brand is known informally as "Mickey D's" (in the US and Canada), "Macky D's" (in the UK and Ireland), "Mäkkäri" (in Finland), "McDo" (in France, Quebec, the Philippines and the Kansai region of Japan), "Maccer's" (in Ireland), "Macarrannis" (in Mexico), "Maccas" (in New Zealand and Australia), "McD's" (in New Zealand), "Donken" (in Sweden), "de Mac" (in the Netherlands), Mäkkes (in Germany), "Mac" (in Brazil and the Kanto region of Japan) or "Mek" (in Serbia).
Thomas Friedman once said that no country with a McDonald's had gone to war with another.[29] However, the "Golden Arches Theory of Conflict Prevention" is not strictly true. Careful historians point to the 1989 United States invasion of Panama, NATO's bombing of Serbia in 1999, and the 2006 Lebanon War as exceptions.
Some observers have suggested that the company should be given credit for increasing the standard of service in markets that it enters. A group of anthropologists in a study entitled Golden Arches East (Stanford University Press, 1998, edited by James L. Watson) looked at the impact McDonald's had on East Asia, and Hong Kong in particular. When it opened in Hong Kong in 1975, McDonald's was the first restaurant to consistently offer clean restrooms, driving customers to demand the same of other restaurants and institutions. In East Asia in particular, McDonald's have become a symbol for the desire to embrace Western cultural norms. McDonald's have recently taken to partnering up with Sinopec, China's second largest oil company, in the People's Republic of China, as it begins to take advantage of China's growing use of personal vehicles by opening numerous drive-thru restaurants.[30]
Global locations
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See also
- Fast Food Nation, book by Eric Schlosser
- Maxime, McDuff & McDo, documentary film about the unionizing of a McDonald's in Montreal, Quebec, Canada.
- McDonaldization, term used by sociologist George Ritzer to describe the process by which a society takes on the characteristics of a fast-food restaurant.
- McDonald's Video Game, a satirical game placing the player in the role of McDonald's management.
- Don Gorske, a McDonald's enthusiast, has consumed over 20,000 Big Mac hamburgers. He appeared on Super Size Me, is listed in the Guinness Book of World Records, and has a movie called MacDaddy.
- Super Size Me, a documentary by Morgan Spurlock.
- Redbox
- Big Mac's Makeover: McDonald's Turned Around. The Economist (2004-10-14). Retrieved on 2008-04-08.
References
- ^ McDonald's publication. Corporate FAQ. McDonald's Corporation. Retrieved on 2007-11-24.
- ^ a b c d Joe Bramhall. McDonald's Corporation. Hoovers. Retrieved on 2007-11-24.
- ^ McDonald's :: About Us :: FAQ
- ^ http://www.mcdonalds.ca/en/aboutus/faq.aspx, retrieved 08 May 2008
- ^ http://www.mcdonalds.ca/en/aboutus/faq.aspx, retrieved 08 May 2008
- ^ McDonald's Wraps Up Boston Market Sale. Dow Jones & Company, Inc. News Services (2007-08-27). Retrieved on 2007-08-28.
- ^ McDonald's and BP test combined operations. (McDonald's Restaurants; BP Oil Co.)
- ^ MCDONALD'S SERVES UP 'MCSTOP' -- ITS RESTAURANT FOR BIG CROWDS
- ^ McDonald's(R) Unveils R Gym(TM): The New and Fun Way for Kids to Play
- ^ McDonald's wants a digital-age makeover
- ^ Mickey D's McMakeover
- ^ Letter from McDonald's headquarters claiming fries are vegetarian
- ^ José Bové. BBC. Retrieved on 2008-05-29. “In 1999, Bove spent another three weeks in jail after he led activists in the destruction of - guess what - a branch of McDonald's. For Bove, the golden arches represent the industrialization of all food production, the worst of "malbouffe - bad food". For the anti-global movement, his imprisonment made him one of its first martyrs.”
- ^ "Merriam-Webster: 'McJob' is here to stay". The Associated Press. November 11, 2003.
- ^ McDonald's Debuts Advertising on the World of Opportunity Under the Golden Arches
- ^ McDonald's milk goes organic - 03/07/2007 - FarmersWeekly
- ^ ibtimes.com, McDonald's Holds down Dollar Meal, Making Menu Healthier
- ^ www.gmanews, McDonald's says all US French fries cooked in zero-trans-fat oil
- ^ "McDonald's hails success of waste-to-energy trial" businessgreen.com. April 14, 2008. Accessed April 22, 2008.
- ^ "Local woman creates environmental-friendly Web site" herald-dispatch.com. April 19, 2008. Accessed April 22, 2008.
- ^ "'Sustainable' bio-plastic can damage the environment" gaurdian.co.uk. April 26, 2008. Accessed May 6, 2008.
- ^ U.S. Environmental Protection Agency retrieved 17 April 2008
- ^ McDonald's Corporation website retrieved 17 April 2008
- ^ National Pollution Prevention Center for Higher Education
- ^ [Environmental Defense Fund. Task Force Report. p. 42.]
- ^ [ Environmental Defense Fund and McDonald's Corporation. Waste Reduction Task Force Final Report. Oak Brook, IL: McDonald's, 1991. p. 22.]
- ^ [ McDonald’s Corporation. McDonald's Packaging — The Facts. Oak Brook, IL: McDonald’s, 1990. p. 7.]
- ^ "McDonald's fined for employing underage workers", ABC News Online, 2007-04-12. Retrieved on 2007-04-12.
- ^ "The Lexus and the Olive Tree". thomaslfriedman.com. Accessed June 4, 2007.
- ^ McDonald's deal with oil company marries China's new love of fast food, cars
External links
- McDonald's
- McDonald's Canada
- Worlds Biggest McDonald's Photo Collection All kinds of storefronts of McDonald's restaurants in the world.
- McSpotlight, an "Anti-McDonald's extravaganza"
- alt.mcdonalds FAQ
Multimedia
- CBC Archives CBC Television reports on the opening of Moscow McDonald's (1990).
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