Tuesday, April 3, 2012

SOUTHWEST AIRLINES - BUSINESS STRATEGY

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Background


The great American icon, McDonald’s, known for its infamous golden arches began in the late 140’s in San Bernardino, CA. Dick and Mac McDonald sought to find ways of improving their existing restaurant business and instead of remodeling and restructuring what they already had in operation, the brothers decided to focus on an entirely new concept. The guidelines for the new concept were to provide restaurant style hamburgers in a relatively speedy fashion while guaranteeing low prices and mass production of the menu items. Initially, the brothers exchanged car hops for self-service at the counter, and ditched the 5 item menu in favor of the limited menu of just nine items. Upon opening up the San Bernardino location, the McDonald brothers slashed the price of their hamburgers from what was a competitively priced 0 cents to a ridiculously low 15 cents. At the age of 5, Ray Kroc founded the company as revolutionized it into what is today is one of the international power-houses of big business.


Kroc invested his entire life savings into the idea of “fast food” and inevitably became the exclusive distributor of the product line Multimixer. Multimixer was the primary ingredient that enabled the product of the McDonald’s milk shakes. With the opportunities staring Kroc in the face, he opted to become the exclusive national franchising agent for the company formally known as McDonald’s. On March , 155, Kroc officially formed a franchising company under the fictitious name of McDonald’s System Inc. In 160, Kroc realized the potential for exponential growth and decided to buy out the McDonald brothers and any and all interest in the company for $.7 million in order to realize his vision.


McDonald’s growth in the United States was nothing short of phenomenal. McDonald’s set a series of milestones for itself and subsequently benchmarked levels in sales revenues, number of restaurant locations, number of persons served, and establishing industry standards for quality in sales/service, cleanliness, and value. By the end of 16, McDonald’s restaurants were selling more than one million hamburgers per day. In 165, McDonald’s went public selling its shares over the counter for $.50 each, a price that sky rocketed to $4 within just a few weeks of McDonald’s going public. On July 5, 166, McDonald’s was listed on the New York Stock Exchange, which at the time was an extraordinary accomplishment for a hamburger restaurant.


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Growth within the industry and further advancements took place in the years to come. In 167, McDonald’s opened its first non-US location in Canada. In 175, to help speed up the transaction process, the first drive-thru operation was established. In 177, Ray Kroc was named senior chairman of MacDonald’s. By McDonald’s silver anniversary in 180, the 6,6 restaurants in 7 countries rang up sales of over $6 billion and passed the 5 billionth hamburger milestone. Ray Kroc died on January 14, 184, leaving behind a legacy that will forever been recognized through the 800 restaurants throughout 6 different countries.


Today, McDonald’s is the largest and most notable global food service retailer in the entire world operating out of 0,000 restaurants in 10 countries. McDonald’s outstanding brand recognition, experienced management, high quality fast food, site development expertise, advanced operational systems, and unique global infrastructure, positions McDonald’s on the hierarchy of those operating within the fast food industry. What had started off as an idea revolutionized into the great American icon, now symbolized as the global dominator for fast food retailing. Its stocks are traded internationally as McDonald’s has positioned itself among the international corporate leaders such as Coke and Nike Corp.





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