The Making of a Fast-Food Magnate - Research Paper Example

The Making of a Fast-Food Magnate Introduction A merchant of milk-shake machine spotted a hamburger shop in California in 1954, and visualized a colossal new business, fast food (Hall 2003). The originator of McDonald’s Corporation, Raymond Kroc, established himself as a business mogul no less accomplished than the automobile magnate, Henry Ford (Hall 2003). He transformed the restaurant business in America by obliging order and control on the production of milk shakes, French fries, and hamburgers. By creating an ingenious production and delivery method, he assured customers that the French fries purchased in Topeka would be similar to those bought in New York City (Heinemann 2005). This uniformity established the brand name of McDonald’s as a definition of American fast food. McDonald’s outlets mushroomed all over the country by the 1960s, a drastic growth triggered by affordable franchising costs. Ray Kroc had established one of the most persuasive trademarks of all time (Heinemann 2005). However, he was hardly reaping profit. Eventually, it was his judgment to employ real estate as a monetary force that established the operation of McDonald’s as feasible (Hall 2003). Kroc formed the Franchise Realty Corporation in 1956, acquiring lands and serving as a proprietor to willing franchisees (Gross 1997). McDonald’s started to reap substantial profit with this step and the business prospered. Kroc afterwards pioneered national advertising plans to strengthen the fast growing franchises, and when it seemed that development in the home territory of the company was dawdling in the 1970s, he initiated a vigorous and triumphant stride to establish the global popularity of McDonald’s (Gross 1997). During the remarkable progress of the company, Kroc sustained a subtle balancing step, obliging strict system-wide rules while promoting an industrial character that received insights and suggestions from all levels (Fishwick 1995). Numerous of these suggestions strengthened the remarkable success of the company. In building up millions of wealth, the hamburger mogul revolutionized the cultural landscape of America and built an industry that is among the greatest exports of the nation (Heinemann 2005). The broadly replicated success of the company provides a good example for contemporary executives and managers aiming for higher efficiency in production. Kroc demonstrated to the world how to use ingenious process management to the most ordinary activities by placing the modest hamburger on the assembly line (Heinemann 2005). To become successful like McDonald’s, companies should determine the fundamental principle of the service they provide, distribute the work into basic parts, and afterwards regularly reconstruct and improve the multiple procedures until the system operates smoothly (Gross 1997). Nowadays, companies undertake pizza delivery, toy selling, and insurance processing from the form of organizations that Ray Kroc introduced (Hall 2003). To the extent that such endeavors sustain quality control, and value consumer satisfaction, proceeds may pour. A Short Biography of Ray Kroc Raymond Albert ‘Ray’ Croc was born on October 2, 1902 in Chicago, Illinois from a poor family (Eggenberger 1987). He pursued his studies in Oak Park, Illinois but was not able to finish school because he had to work as an ambulance driver during the First World War. Kroc became a musician after the war (Eggenberger 1987). He was employed by the Lily-Tulip Company but eventually left to pursue his career in the music industry (Hall 2003). However, Kroc’s desire to travel was not gratified with this, and the growth of real estate in Florida eventually reached him in Fort Lauderdale participating in the real estate industry (Hall 2003). In 1926, when the growth subsided, Kroc was quite penniless that he had no choice but to work in a night club as a pianist to send his family back to Chicago (Hall 2003). He afterward followed them in his old Model-T Ford (Gross 1997). The rest was history. The Journey of a Great American CEO The story of McDonald has become an eminent domain. Ray Kroc was even compelled to write his own life story (Heinemann 2005). The legendary success of the company in the Global Village of the 1990s, particularly in China and Russia, took place at a period when the world is filled with stunning failures but yearning for progress as trading obstacles were being questioned: GATT, APAC, and NAFTA paved the way (Heinemann 2005). Hence, the relevant questions are: is there a point here in the success of Kroc? Have Ray triumphed while other aspirants have failed? The great contribution of Ray Kroc to the food business is to decipher how to mass-produce food evenly in astonishing numbers, and afterwards to persuade a large population of Americans to buy this food (Gross 1997). In order to realize the first goal, Kroc transformed the restaurant industry into science. The logistics of the company’s operations were thoroughly studied by modern methods (Mascola & Lazzarino 1989). The accuracy of the operation can be understood when it is known that all McDonald hamburgers were produced with a thick and wide beef patty. All other components of the process are similarly thoroughly supervised (Mascola & Lazzarino 1989). Kroc also obstinately emphasized quality and details, disallowing from his hamburgers such stuffing ingredients as soybeans (Fishwick 1995). The other part of the success story of McDonald is promotion, marketing, and franchising. A considerable portion of McDonald outlets are owned by franchisees (Hall 2003). When picking franchisees, Kroc consistently sought for a people-oriented one. As Kroc stated, “… we’d rather get a salesman than an accountant or even a chef” (Eggenberger 1987, 58). The owners of franchises were afterward thoroughly trained at the Hamburger University of McDonald’s in Illinois. The company also disseminated an extensive handbook that summarized every component of the process, from how to cook French fries to how to be customer-oriented (Eggenberger 1987). However, the highlight of the company’s operation was advertising. A vast amount of investment were allocated to marketing, to the point where executives of other fast food companies believe that consumers were “so preconditioned by McDonald’s advertising blanket that the hamburger would taste good even if they left the meat out” (Fishwick 1995, 13). In spite of its astonishing success and in spite of the fact that McDonald’s persevered to establish a consumer-oriented and altruistic image, the company was subjected to severe criticism on multiple aspects. Several communities declined to allow its chains in their territory, viewing it as a “symbol of the asphalt and chrome culture” (Fishwick 1995, 13). McDonald’s was also disparaged for its widespread hiring of teenagers as part-time crews, and specifically for the large money which Kroc gave to the re-election campaign of Richard Nixon, since the regime eventually proposed the minimum wage law to support a ‘youth differential’ (Fishwick 1995, 14). This proposal would have permitted employers to employ the services of youngsters. The foods’ nutritional content and the structural design of the buildings were attacked, even if nutritionist Jean Mayer attested that as “a weekend treat, it is clean and fast” (Fishwick 1995, 14). Just as Henry Ford provoked the criticism of prying reforming politicians and members of the press, the prestigious industrial image of Ray Kroc drew attention from several quarters (Gross 1997). As the company’s products became a common part of the American die, it provoked the arrogance of the food industry moguls. Mimi Sheraton of New York’s Magazine announced: “McDonald’s food is irredeemably horrible, with no saving graces whatever” (Gross 1997, 189). Nutritionists also did not comment nicely to the offerings of McDonald’s. As a Harvard professor, Dr. Jean Mayer, stated: “The typical McDonald’s meal—hamburgers, French fries, and a malted--- doesn’t give you much nutrition. It’s typical of the diet that raises the cholesterol count and leads to heart disease” (Gross 1997, 189). Numerous analysts saw the uncontrolled growth of McDonald’s as shaky. Yet, Kroc deemed that the company has to keep on expanding in order to live on. He pronounced, “I don’t believe in saturation. We’re thinking and talking worldwide” (Gross 1997, 190). Kroc visualized a globe where in thousands of Golden Arches would appear as stations of a powerful commercial kingdom (Gross 1997). Hence, just as Henry Ford aimed for overseas markets for his auto designs, Ray Kroc engaged in a grand operation. McDonald’s commenced in 1971 by overrunning ex-Axis powers Germany and Japan (Heinemann 2005). And after six years, it pioneered the fast-food sandwich, launching McDonald’s 3,000th outlet in London: “With all the fervor of the Pilgrims returned, McDonald’s set out to introduce Europe to the joys of the real American hamburger, (Gross 1997, 190)” stated by Forbes. Building the company’s presence in European metropolises was only the beginning. Throughout the decade, the large number of outlets that McDonald’s launched abroad triggered its astonishing growth rate (Gross 1997). Kroc’s envisioned Golden Arches mushroomed in the soil of every continent—Asia, Europe, and South America (Fishwick 1995). The chain turned out to be quite globally known as an icon of American venture and supremacy that, when leftists destroyed a McDonald’s store in 1979 in San Salvador, they declared that revolutionary act a fatal attack against ‘imperialist America’ (Fishwick 1995, 14). The great American CEO Ray Kroc did not witness the final success of his company. When McDonald’s value exceeded that of Sears in 1985, the New York Stock Exchange included the company to the Dow. Wall Street, with this development, confirmed the argument of Ray Kroc that beef patties could be put on the production line (Gross 1997). The ordinary hamburger at last achieved its rightful position among the legends of the American industry. References Eggenberger, D. Encyclopedia of World Biography: 20th Century Supplement. The University of Michigan, 1987. Fishwick, M. “Ray and Ronald Girdle the Globe”, Journal of American Culture, 1995, 13+. Gross, D. Forbes Greatest Business Stories of All Time. New York: Wiley, 1997. Hall, M. Ray Kroc. Heinemann Library, 2003. Heinemann. Ray Kroc: MacDonalds. Heinemann Library, 2005. Mascola, M. & L. Lazzarino. Ray Kroc: Famous Restaurant Owner. Rourke Enterprises, 1989. Read More