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Today McDonalds operates in the global quick service restaurant industry business. McDonalds was the

pioneer of this business and it was McDonalds which made the quick service restaurant business a globalindustry by creating a huge global commercial empire. Currently McDonalds ranks 114th in the list ofFortune 500 companies and thanks to its pioneering processing and standardized approach to thecommercial production of fast food, McDonalds has placed the quick service restaurant industry amongstthe big economic driving force industries such as steel and automobiles.

Raymond Kroc the founder of McDonalds had the vision of a chain of fast food restaurants in every

American State and in the world as well. He wanted his fast food restaurants to serve quality food accordingto fixed standards and specification. When Kroc started business in 1955 there were other well establishedfast food chains in United States, amongst the most widely known were A&W, Dairy Queen, Tastee -Freez,and Big Boy, Burger King then known as InstaBurger King was just starting out. There were many thingswhich separated McDonalds from its rivals. Raymond Krocs goal was to create world wide fast food chain

whereas the rest of the major fast food chains were not so enthusiastic about expansion. Other fast foodchains which operated on a franchise basis viewed their operators as customers and only reaped benefitswithout providing much guidance relating to operation, promotion, sales strategy, financing and foodprocessing. Raymond Kroc extended his hand to operators of franchised McDonalds restaurants by treatingthem like trading partners in every respect of the business. This close relationship with operators ensuredthat McDonalds restaurants in any State in the United States would serve food according to fixedspecification and quantity. Raymond Kroc did more than by just give advice regarding process managementhe allowed his operators to exercise their innovatory skills relating to every aspect of the franchise business.McDonalds had set new standards for the fast food industry by selling a branded service not just patentedfood recipes and formulas. (Greatest Business Stories of All Times)

McDonalds trademark competition edge was its process management approach in which the companyliterally put hamburgers on the assembly line. For McDonalds outlets to succeed they had to attain

perfection by breaking the labor into parts and fine tune every aspect of hamburger manufacture. Thisapproach is being imitated by companies all over the world not just fast food companies. McDonalds evenhas a Hamburger University which is actively engaged in developing efficient food assembly processes andteaching and training McDonalds employees, no other fast food chain goes to such lengths to ensureproduct consistency. John Love, a McDonalds chronicler wrote, "Ray Kroc's genius was building a system

that requires all of its members to follow corporate-like rules but at the same time rewards them forexpressing their individual creativity. (Greatest Business Stories of All Times)

McDonalds was the first fast food chain which launched a central advertising campaign and built advertisingicons in the shape of Ronald McDonald the McDonald clown. McDonalds advertised in network television andradio which made its franchise even more popular. Later on the McDonalds Golden Arch would display the

yearly sales figure on them. The character Ronald McDonanld is so popular that he ranks second inrecognition to santa claus among children of 4 to 7 years of age. McDonald has also sponsored players andthe American All Starr Basket Ball teams. Among the sponsor list of McDonalds are names like Michael

Jordan and Magic Johnson.When McDonalds started operations in foreign countries like Uk, Germany and Japan they had to adopt tothe local environment, McDonalds did this by not only improving and changing its strict product line but also

changed its promotion strategies for example in Japan McDonald is known as Makudonaldo and in onepromotional campaign in Ireland McDonalds proclaimed, Our name may be American, but we're all Irish.(Greatest Business Stories of All Times)

McDonalds global strategy can be summarized as strict quality and consistency standards, innovation andcontinuous development, central promotional campaign and adaptability to local environments. McDonaldshas not only made an impact on the American culture but has also created an American symbol; McDonaldis now synonymous with everything American. McDonalds operates more than 31,000 outlets in 121countries in the world. Over the years McDonalds has diversified their restaurant interests by operating fast

food chains under other brand names such as Aroma Caf, Boston Market, Chipotle Maxican Grill, DonatosPizza and Pret A Manager. One of the unique features of McDonalds business model is that it extracts hugerevenues from the real estate business, unlike its competitors McDonalds owns many of its outlets andcollects rent for their use.

McDonalds faces stiff competition from global operators of fast food chains such as Burger King, KFC,Subway, Wendys and YUM! Burger King for example runs more than 11,500 outlets in United States aloneand 55 other around the world. An area of concern is that most of Burger Kings and KFC and Subways

sales strategies involve self service, drive through, patented burger recipes and other food items. All this isvery similar to McDonalds, in fact it would not be wrong to say that other fast food chains have adopted the

McDonald style of operational management and sales strategies quite successfully. Now McDonalds not onlyfaces competition at home from similar fast food chains but also faces competition abroad. Companies like

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KFC have utilized the McDonald model of product perfection and consistency while offering similar restaurantenvironment. When McDonalds introduced the play zone for kids other fast food restaurants followed.

Imitation of sales, operation and promotional strategies seems easy but no other fast food company cancompete the strong brand image created by the McDonalds corporation. (Full Company Description)The primary competitive advantage McDonalds has over its competitors is the constant emphasis oninnovation and consistency. McDonalds ensures this by setting quality assurance labs worldwide whichinvolves ongoing product reviews and on site inspection of suppliers facilities. While it is true thatMcDonalds hires inexperienced staff but it also trains them vigorously for handling and preparation of thecompanys products. Training for customer service is also provided by McDonalds.

The standardization of McDonalds operation is very advantageous for McDonalds as it not only providescost standards for outlets it also enables cost efficiencies, moreover outlets can compare there sales ratioswith other outlets of similar shop floor space. Therefore benchmarks for productivity can be set as well astargets for sales. Areas of weaknesses can easily be evaluated. Standardization in more than 30,000 outletsalso promotes innovation. Outlets want to reduce their costs so it is in their interest to use as cost efficientprocedures as possible without compromising on quality and any innovation in one outlet can beimplemented for others.

The Hamburger University also engages actively in market as well as product research and McDonaldsstandardized food assembly procedures have been acclaimed as industry standards. In 2003 McDonalds

was awarded the NSRS (National Skill Recognition SYStem award for French fries cooking. A McDonaldsDirector stated, "We have always had our own procedures. We are now helping Spring Singapore to developstandard skills that will be used as a benchmark for the quick-restaurant business under the NSRS and weare proud to have been selected for this role. (Dhalival, Rev)

Perhaps the biggest disadvantage to McDonalds is its rigid standards which can never capitalize on changingconsumer preferences. McDonalds offer a uniform food menu which in recent years it has amended

according to local tastes and preferences, however, the new menus can not compete with restaurants whichcan offer new and exciting meals and react to consumer changes more efficiently.

McDonalds operation system form financial management to customer service is extremely cost and timeefficient and to improve those standards the company is constantly looking to increase efficiency throughinnovatory procedures. McDonalds has built up an enduring brand image and a taste for their food.However, McDonalds only relies on its brand image to carry its sales. Consumer responsiveness if measuredagainst other fast food chains is not good considering the fact that other chains are extremely quick atbringing new products to market.

McDonalds performance is based on its brand image and exponential historic growth and of course thefactor that McDonalds is a status symbol in other countries because it is a representative of the American

culture. With revenues of more than 18.61 Billion and revenue growth of 11.3% McDonalds has the largestand fastest growing revenue figures and testament of its superior brand image. (Full Company Description)Other companies can imitate McDonalds operational strategies but they can not compete the invincible andresilient brand image of McDonalds.

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