Hardly anyone is unfamiliar with the McDonald’s name or its iconic double-arched “M” logo, but the company was revolutionary when it first entered the fast food scene. However, one of the secrets of McDonald’s success has been constant innovation and the ability to change as the market it was serving changed.
McDonald’s has constantly heard what its customers have demanded and provided that, in addition to making sure they maintained strong ties to all the communities they serve.
Bottom Line Up Front
McDonald’s started as a small restaurant back in 1940 by two brothers named Maurice and Richard McDonald. What was first a small drive-through and pick-up restaurant later turned into an establishment that was dedicated to providing customers with quality, low-cost food options.
The menu was simple, the food was pre-made and warmed up when the customers demanded it, and the need for waiters was eliminated, all through a system termed as the Speedee Service System.
This was just the start of what made McDonald’s the huge brand it is today and all the controversies that came with it. McDonald’s has done a lot to grow out of its image as one of the biggest contributors to growing worldwide obesity rates, as well as to remove concerns about its wasteful packaging and poor labor treatment.
With initiatives aimed at being more involved with the communities it serves, marketing aimed at softening its brand image, and much more done over the years to keep McDonald’s where it is, the company has managed to weather quite a bit.
Today, McDonald’s is the biggest restaurant chain in the world, with a valuation of $186.50 billion and a presence in over 100 countries.
The First McDonald’s
The first McDonald’s was established in 1940 by brothers Maurice McDonald and Richard McDonald. At first, it was just a drive-in restaurant with a big menu, but they changed it up in 1948 to something that was simple, cheap, and eventually served a huge customer base.
To do this, McDonald’s came up with a system called the Speedee Service system. With limited menu items, they focused solely on providing cheap food that tasted good.
This McDonald’s offered fries, hamburgers, drinks, and pie. The need for waiters was also eliminated by putting in a self-service counter instead – customers were able to get their food faster, and it greatly reduced costs for the restaurant itself.
Because of these innovations, McDonald’s was selling its products at half the price of its competitors, and the restaurant was a huge success.
Franchising the Restaurants
The restaurant bought its supplies from someone named Ray Kroc. He saw the huge potential in McDonald’s business model, which is why he became a franchise agent for the restaurant. He was eventually the person behind McDonald’s growing to the size it is today.
Within just a year, he had turned into a partner in the McDonald’s business and established McDonald’s Systems Inc, which later became McDonald’s Corporation. He would eventually drive the McDonald’s brothers out of this business and become the sole owner.
An Aggressive Business Partner and Growing the Brand
Kroc was known to be a hostile business partner, which is something he talks about in his autobiography. He bought the company from the McDonald’s brothers for $2.7 million, a sum that was no joke back in 1961, and proceeded to aggressively grow the company.
The first McDonald’s franchise store opened in 1956 when the McDonald’s brothers gave the franchising rights to the Frejlach Ice Cream Company without telling Kroc, which angered him a lot. After this, the franchise grew at a very fast pace, and is still growing today, with over 38,000 McDonald’s in 100 countries.
Ronald McDonald, Hamburger University, and the M Logo
After Kroc came into the business and it began expanding quickly, he started to worry about maintaining quality throughout all of its branches. To ensure it stayed up to the mark, he introduced training programs under the name “Hamburger University.” This program ensured that quality stayed the same across all branches.
McDonald’s also amped up on marketing, doing away with the old mascot Speedee and introducing Ronald McDonald, the iconic clown that is still associated with McDonald’s today.
This was part of McDonald’s efforts to market to a younger audience but did not really work well because of negative cultural associations Americans had with clowns.
McDonald’s also introduced the iconic double-arch “M” logo during this phase of its growth, which is one of the most widely recognized brand logos today.
The McDonald’s menu started simple, sure, but that’s not how it is now. In addition to the best-selling items on its menu that are the same across all of its branches, McDonald’s has special menu items that are either seasonal or customized for the region the stores are in.
This is something the company has done well that other brands like Starbucks fail to do – remaining uniform across all branches while still catering to the tastes of local clients.
For example, items like the Big Mac can be found everywhere, but certain burgers will be available at McDonald’s outlets in one country and not the other. A prime example of this would be the menu for McDonald’s in japan, which is full of items like the teriyaki chicken fillet and cherry blossom themed desserts.
See also: Chick-Fil-A Mission Statement Explained
At the same time, menu items containing pork in the traditional recipe will have chicken in them instead in Muslim majority countries like Saudi Arabia and Pakistan.
The Big Mac was first introduced in America in 1968, while the quarter pounder was added in 1998, and McNuggets in 1993.
Since then, the company has expanded to include menu items like the McCafe line and seasonal items like McRibs.
Health Concerns and Environmental Impact
While McDonald’s was a huge success and more than popular among the masses, perhaps there came a time when it became too popular. This unexpectedly posed a problem for the company since most of its products were not developed with health in mind.
Portion sizes kept increasing over the years in order to keep up with customer demand, and concerns were raised about unhealthy additions to McDonald’s food.
When obesity rates started rising all over the world, Americans looked to blame the corporate giant – the unhealthy food it offered was part of the problem, and they weren’t entirely wrong.
In order to avoid some of this backlash, the organization set out to rebrand its image as a company that was involved with its communities and one that cared about its consumers.
It did so by trying to lower the environmental impact of its production, source ingredients from better suppliers, and to change the recipes of existing products as well as adding vegan and vegetarian options to the menu.
Items like a vegan hamburger dubbed the “McVegan,” among other names was added to certain menus as a result, and the company announced in 2018 that it has stopped using preservatives in most of its hamburger patties.
Restaurants in Canada also declared that McDonald’s items no longer contained trans fat, but all of this didn’t do well in addressing health concerns over the company’s food.
In some markets like Pakistan, McDonald’s was so committed to making sure that customers knew their food was in good hands among health and hygiene concerns that it opted for an open kitchen policy in 2015. Customers were welcome to tour the kitchen and see for their own eyes how their food was prepared and what the kitchen conditions were.
To this day, people see McDonald’s as a delicious but cheap and unhealthy food option, something to indulge in on your cheat days or when you can’t afford a healthy meal.
While the fast food chain continues to grow and stay among the top companies in the world, McDonald’s is seen as a less than ideal employer – with entries like “McJob” in the Mirriam Webster Dictionary meaning a “low paying job.”
It’s notoriety for how it handles cases brought to court against it for any of its practices. Documentaries like “Super Size Me,” which came out in 2004, didn’t help McDonald’s image either.
When McDonald’s was sued for its food causing health problems – the most notorious of these cases being one where a woman was burned from McDonald’s coffee, one that they were serving at alarmingly hot temperatures – none of the plaintiffs won a case against them.
At the same time, a lot of states across the US banned anti-obesity legislation against fast food companies. All of this hardly helped McDonald’s, but it is determined to be seen as the good guy here.
This included being involved in multiple charities, like a program that provided scholarships to Hispanic students, as well as the Ronald McDonald House Charities.
Beating the Competition
McDonald’s mission statement is “To create delicious feel-good moments for everyone.” And for the most part, it’s been successful. After all, there’s a reason the company is still so successful despite everything that it has faced in the court of public opinion.
One of the biggest reasons customers continue to flock to McDonald’s is because of its low prices and the quality of food it offers – the ingredients might not be the healthiest at times, but the food’s taste appeals to both an adult and younger audience.
While it was first done through maintaining efficiency in that first McDonald’s, now it is done solely with the help of economies of scale. McDonald’s has such a wide audience and demand for its products that it can produce its products at low cost and in huge amounts.
Not only does the company have thousands of restaurants around the globe, but things like the McDonald’s app, its partnerships with food delivery services, and being able to reach the customer where it’s at are key features that make the restaurant an appealing option for many.
It also runs frequent promotional campaigns that sell its products for cheaper than usual prices, attracting new customers and retaining older ones.
The company also collaborates with a lot of artists and large companies all over the world to attract fans, like their recent BTS meal, which was unsurprisingly a huge hit. McDonald’s collaborates with artists and animation studios for the toy that comes with McDonald’s Happy Meals, a meal targeted toward children.
FAQs – Mcdonald’s Business History
Question: How many McDonald’s Restaurants are there?
Answer: McDonald’s has over 38,000 branches in 100 countries, making it the biggest fast food chain in the world.
Question: What is the most Popular Item on the McDonald’s Menu?
Answer: The most popular item on the McDonald’s menu is the McFries, followed by the Big Mac.
Question: Are McDonald’s Meals Healthy?
Answer: McDonald’s meals aren’t known to be the healthiest, but recent efforts have led to healthier additions to their menu, like their vegan and vegetarian options. This means that when you eat at the restaurant, whether the meal you’re getting is healthy largely depends on what you order.
For example, instead of getting a Big Mac with a cold drink and fries, you can opt for a vegan hamburger and orange juice, something that is on the menu for most of its locations.
Question: Is McDonald’s a Good Place to Work at?
Answer: While this varies greatly from country to country, McDonald’s has often been criticized for its low wages.
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