32 min read · Jan 6, 2019
A guy named Ray Kroc, aged 52, diabetic, with medical problems in knee and hip, who went to sell multi-mixer machines to McDonald brothers ended up purchasing the franchise rights for McDonald’s stores. Though he began with an aim to sell more multi-mixers through McDonald’s’ franchises, his thoughts transformed over a period of time, and finally, McDonald’s became his passion. In the next 63 years, McDonald’s network grew to nearly 35,000 stores in 119 countries.
How did McDonald’s become a leader? What right things did Ray Kroc and his team did? What could we learn from them?
The first step for any business is to ponder how to occupy space inside a consumer’s mind, which is called ‘Positioning’. It can also be termed as a consumer’s perception of a brand with respect to competing brands. A customer would notice a brand only when there is a markable difference from other brands.
Michael Porter writes, “A company can outperform rivals only if it can establish a difference that it can preserve. It must offer greater value to customers or create comparable value at a lower cost, or do both”
What values did McDonald’s offer in those initial years?
In the 1930s, the ‘fast food’ concept was spreading among the masses. A lot of drive-in restaurants sprouted in many places. The fast-food menu was revolving around Barbecue Beef, Pork, and Chicken. Into this scenario, in the year 1937, two brothers Maurice and Richard McDonald started their own fast-food restaurant in San Bernardino. The business soon attracted a lot of teenagers and continued to grow rapidly.
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The article discusses the success of McDonald's and the strategies employed by Ray Kroc and his team. It emphasizes the importance of "positioning" in the business world and how McDonald's was able to establish a strong position in consumers' minds.
Positioning in Business
Positioning refers to how a brand occupies space in a consumer's mind and how it is perceived in relation to competing brands. According to Michael Porter, a company can outperform its rivals by offering greater value to customers, creating comparable value at a lower cost, or doing both .
McDonald's Early Years
In the 1930s, the fast-food concept was gaining popularity, and many drive-in restaurants were emerging. In 1937, Maurice and Richard McDonald opened their own fast-food restaurant in San Bernardino, California. Their business attracted a lot of teenagers and experienced rapid growth.
Ray Kroc and McDonald's Success
Ray Kroc, a 52-year-old diabetic with medical problems in his knee and hip, initially aimed to sell more multi-mixer machines through McDonald's franchises. However, his thoughts transformed over time, and McDonald's became his passion. Under Kroc's leadership, McDonald's grew its network to nearly 35,000 stores in 119 countries over the next 63 years.
Lessons from McDonald's Success
The success of McDonald's can be attributed to several factors, including:
- Strong Positioning: McDonald's was able to establish a distinct position in consumers' minds by offering a fast-food experience with a limited menu and efficient service.
- Consistency: McDonald's maintained consistency in its products, service, and branding across its franchises, ensuring a uniform experience for customers.
- Efficiency and Speed: McDonald's introduced innovative systems and processes to ensure fast service and efficient operations.
- Franchise Model: McDonald's adopted a franchise model, allowing for rapid expansion and leveraging local entrepreneurs' knowledge and resources.
- Continuous Innovation: McDonald's continuously introduced new menu items, marketing strategies, and technological advancements to stay relevant and meet changing consumer preferences.
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