In the beginning of the movie, set in the 1900’s, Ray Kroc a milkshake mixer salesman tries to introduce his milkshake mixers to restaurants and drive-ins but no one is interest. This is until McDonald’s owner Richard “Dick” McDonald finds him and wants to buy his mixers. When Ray Kroc arrives at McDonald’s, he meets Maurice McDonald, he invites Ray to visit their McDonald’s kitchen and explain to him how the system works. Afterwards Ray takes them to dinner and the two brothers tells him about the McDonald’s story. The next day, Ray gets inspired, he seeks an opportunity and goes to McDonald’s again and wants to franchise McDonald’s. The brothers tried before to franchise their idea but it failed because Quality Control could not be managed and now they are hesitant to try again, so they refuse Ray’s offer. However, Ray insists his idea will work and his idea about the golden arches of McDonald’s makes him succeed in franchising McDonald’s.
Ray starts his first McDonald’s restaurant in Des Plaines, Illinois where he gets wealthy people to invest in McDonald’s. However new issues arise, these investor’s do not care about the McDonald’s name, the management is not so good and the quality worsens. Then, Ray finds a “committed” couple to operate and manage McDonald’s, this leads to some success and he allows more couples to invest. Ray Kroc’s contract with the McDonald’s brothers leads to him breaking even and not getting enough profit, he tries to increase his franchises profit but the McDonald’s brothers refuse.
While McDonald’s keeps growing, Ray becomes a successful businessman and leads to him divorcing Ethel. He keeps insisting on using powdered milkshake to save on electrical fees but the brothers still refuse to do that. Ray wants to be released from his contract, he buys out the brothers and renames his franchise to The McDonald’s Corporation. Finally, he is the full owner of McDonald’s. The central point in this film is to create awareness of entrepreneurship and franchising and how persistence is the key to success.
Management & Leadership
Management and Leadership are two different things. A manager focus on the long-term goal of a business and is responsible for controlling people as well as the business. Management abilities include: decision making and problem solving, planning, organisation, leading, control, coordination, communication, delegation and discipline, motivation, resource use and time management. They make sure each plan is availed and design the vision, mission and objectives for the business. A Leader focus on how to achieve the business goals, inspiring, pushing and empowering team members to do their best, and lead towards the goals. The leader always leads by example. This leadership ability includes: team work, building relationships, coaching and mentoring and to lead a successful business.
In the beginning of the film, the two brothers are both the managers because they control every piece of the McDonald’s shop. They are also leaders because they believe in their business. They want to create a new “burger” system in the fast food industry. They are the managers and they plan, strategize and make decisions for their goals, with this in mind they simplify the menu and focus on selling the bulk of their sales, which are Hamburgers, French fries and soft-drinks. They coordinate and organise their workers in order to use the value chain and to plan a “perfect kitchen” on the tennis court. These are to solve the problems of the sales level and the order waiting time. As leaders, the two brothers are really trying hard to “lead by example”, mentoring and pushing the workers towards their goals. When Ray visits their kitchen, Richard McDonald is busy checking the operation system in their kitchen and finds the inadequacy which is the fries that are 5% to crisp.
As a manager, Ray’s goal of McDonald’s is that it becomes the new American church, which refers to the golden arches, that is like the church crosses and the American flag on the court buildings. He gets the contract with McDonald’s and begins his business. He has excellent communication skills, for example he goes to a lot of different people to execute his building plan and to find funding. Ray sees that the electricity bill is too big of an expense because of mixing the milkshakes so he replaces milkshakes with powder milkshakes to save more money. He sees the opportunity to expand his business and by making young couples manager over a restaurant to control the quality of the food and moves towards McDonald’s goals. As a leader, Ray inspires and motivates other young couples and wealthy individuals to manage and invest in more restaurants. He builds relationships with them and also acts as a mentor towards them to keep his restaurants’ quality high and caution them. This makes him a very good business manager and incredible.
An Entrepreneur is a person who starts a business with capital, labour and raw material. They are top management level and popular entrepreneurial qualities includes identifying an opportunity, to understand the target market, identifying the positives and use these to the advantage of the business, creativity, implementing a plan, motivation, the ability to evaluate achievements, communication, personally motivated and making decisions.
Ray is doing very well in identifying opportunities. At the beginning of the film, Ray needs and seeks the opportunity, he sells everything that has potential, such as milkshake mixers, the fold-a-nook and the paper cup, but these all fail. Then he finds a huge opportunity in franchising McDonald’s, the cost if it fails will be to losing all that he has such as his money, house and everything he has worked for. After franchising McDonald’s, he cannot go back because this opportunity is a last chance of success, and he made a success of it. Ray always seeks the opportunities around him, he wants to franchise McDonald’s because he sees the differences and potential between McDonald’s and other fast food restaurants.
Richard and Maurice are extremely understanding of their target market and also in creating a new environment in the fast food industry. The two brothers find out that the Drive-in model is full of problems, these model always tend to attract a less than desirable clientele such as teenagers, hooligans and juvenile delinquents in blue jeans, so they reorganise their target market to create a family friendly environment in McDonald’s. These creative change in McDonald’s made it unique and new restaurant.
Ray implements and achieves his golden arches plan, the motivation to push himself is his persistence and determination, “A man is what he thinks about all day long.” He motivates himself to have a good and positive attitude. Even when his milkshake mixer did not sell he persevered and kept his attitude positive until he reached his goal.
The entrepreneur needs to have good decision making traits. Ray decides to franchise McDonald’s and the two brothers agreed after Ray’s persistence. The decision for both of them are risky but it is the best decision because Ray becomes a successful businessman and it makes the McDonald’s restaurant of the two brothers extremely successful and it leads to two dreams being realized. As a businessman, Ray is prosperous, but as a man he does not thrive. He says: “Business is war. It is dog eat dog, rat eat rat.” He makes two cold-hearted decisions, one is divorcing his wife and the second is to take full ownership of McDonald’s by throwing out the two brothers, but this decision leads to his ultimate success.
Marketing & Branding
According to Wikipedia, Marketing is the study and management of exchange relationships. Marketing is used to create, keep and satisfy the customer. With the customer as the focus of its activities, it can be concluded that Marketing is one of the premier components of Business Management – the other being innovation.
Marketing is a process of making your business look better than your rivals. Thus advertising all the things that the business has to offer, luring the target market by using Unique Selling Proposition, and using your unique. Any business need a marketing scar which includes performing an environmental scan, defining the target market, determining the market budget, implementing the marketing mix to achieve the aims of the marketing strategy and lastly to evaluate the effectiveness of the process and take corrective measures where necessary.
McDonald’s is the most successful restaurant in the 1900’s in the USA. They put their logo on all their product, this way they market their business. McDonald’s is marketing itself by claiming to be the fastest fast food chain and people can eat anywhere with their “take-away” meals. By making the menu smaller and focusing on three main items namely Hamburgers, French fries and soft-drinks, they are once again marketing their brand as different and creating more clients because of this. The brothers organize a brand re-opening with sparklers and spotlights to get the customers attention.
The brand is the name of the product, the trade mark and the image of the business. It is also the impression employees make when interacting with customers as well as the reputation of the business. The brand tells people what is special about the business, in this case McDonald’s, and what sets it apart from any other restaurant.
The values and believes of a business is also seen as branding, in this case McDonald’s wants to be the no.1 fast food restaurant in USA. The branding that makes McDonald’s recognisable is the golden arches that Dick comes up with. Ray also explains that the name McDonald’s is a wholesome and genuine name which is a brand on its own. He goes on to say that if the name was to be something else the restaurant would not do so well. It goes to say that a name of a business is very important and can be the make or break of that business.
The advantages and disadvantage of franchising
Franchising refers to a relationship between the Franchisor and the franchisee, and a system by selling the brand of the business to another person/business, to help a business expand. The Franchise and the franchisee need to sign a contract, then the franchisor allows or issue the franchisee to sells the product or service.
The advantages of franchising for Ray is that he does not need a prior experience to start McDonald’s, the product and the brand are already successful, effective and stronger than other restaurants, he does not create another name, menu and unique working system and makes the market testing successful. Ray uses the franchise to get the name, product and brand from McDonald’s, however he uses those to create a successful restaurant and to make a success of himself.
For the brothers, the advantages are that they can use the franchising contract to “make him (Ray) listen” and keep control of every piece of McDonald’s. They do not pay the development or advertisement cost and take risks, which means it is a quick development, low cost and low risk. McDonald’s expands quickly and becomes well-known after Ray’s franchising, from a business view, it is a successful example of franchising.
The disadvantages of franchising for Ray is that he always gets restricted by the franchising contract. For the franchise profit (Ray’s revenue), he is almost out of capital because the contract’s profit percent is limited. For the Instamix Milkshake powder, Ray is not allowed to change the milkshake into Milkshake powder without the brothers’ consent, because there is the clause in the contract that the brothers “have full say over what goes on inside the restaurants” and “anything relating to McDonald’s is within (their) purview.”. Another disadvantage is the cost is higher than what Ray expect, such as the electrical fees of making milkshakes and the training, the system, the operation.
The disadvantages of franchising for the brothers is that Ray becomes intrusive after he feels uncomfortable. As the franchisors, they cannot directly control the franchisee. For example, the quality control, if the franchise restaurant is far away, they cannot control the “filthy kitchens, inconsistent menus”, because their energies is limited to control their own restaurant and “it’s almost impossible to enforce standards from afar.” The two brothers also cannot control Ray to expand explosively by breaking even and the result of mandatory control is bought out the business by Ray.
Ray Kroc is a faithful founder and entrepreneur. He is doing well in seeking opportunity and expanding the business. He makes the golden arches become a new American image and Ray has done the entrepreneurial work very well. He understands the market as he exactly knows what his target market is and what they need and want. Ray believes that persistence and determination are the keys that make him successful, Ray implements and achieves his golden arches plan. His decision-making is always fast, influential and enthusiastic. When he realises the bad quality of the restaurant, he makes the decision to get new, hot “blood” into the business. When he finds the high electricity fee, he decisively changes to the milkshake powder and when he feels uncomfortable with their contract, he apace to cancel the contract. Ray is good in the business brand, he understands what it means and finds the value of the brand and the name “McDonald’s” and why it is important, wholesome and genuine.
He is a quite capable entrepreneur. He can identify an opportunity, understands the target market, identifying and taking the risk of the business, he is creative, implementing a plan, motivated, the ability to evaluate achievements, clear communication and in making decisions.