Ray Kroc Case Study Of Mcdonalds

In “The Founder” we learn that when Ray has dinner with the McDonald brothers they explain the history of their business and reveal that they realized that selling a wide range of items was not working for them as they were not making enough sales. They also realized that their drive-in restaurant was targeting teenagers, service was slow, they had too many employees and crockery was either broken or stolen. The business was at risk. After identifying this problem, and after careful analysis, they came up with a solution. Most of their profit was from selling hamburgers, French fries and milkshakes and therefore they focused on selling those items. In order to change their target market they did away with the drive-in style restaurant …show more content…
He was able to recognize that the McDonald’s method (of self-service with a limited menu produced in an assembly-line where customers received their meals in less than 30 seconds) was different to other restaurants and that it could expand globally. This growth would mean higher profitability and greater returns. Thanks to Harry Sonneborn, who pointed out to Kroc that he was in the real estate business and not the hamburger business, they came up with the strategy where Kroc was to buy the land of every McDonalds and the Franchisee had to pay monthly rent. No McDonald’s Franchisee, to this day, is allowed to own the land that their restaurant is on. In my opinion, this was and still is the key to McDonald’s …show more content…
Ray Kroc managed to convince the McDonald brothers that they needed to franchise their business. He made them visualize it by telling them that McDonalds could become the new American church and that it would be open, not only on Sundays, but every day of the week. These powerful words managed to convince the McDonald brothers that franchising was the way forward, even after they had tried it before and failed. Ray Kroc has sold them his vision.

In “The Founder” we see how empowerment and talent development lead to certain employees climbing the corporate ladder. An example of this, in the movie, is Harry Sonneborn who helped Ray Kroc by introducing a new business model. He later became McDonald’s Chief Executive and President. Another example was Fred Turner, who cooked burger patties and eventually became CEO of McDonalds. June Martino, the bookkeeper, became second-in-command of McDonald’s. All these employees were given new skills through training and new responsibilities and authority to carry out more challenging new