1. Week 4 McDonalds Case study
Entrepreneurship
Week 4
McDonalds Case study

2. Assessment #1 – due September 28 at 3:30 pm
History of McDonalds
In 1 page (single spaced) answer these questions:
What was the basic strategy of the company?
What was changing in the world that helped them grow?
What personal and financial resources were needed for success?
You will give me this paper when you walk into class.

3. Basic Strategy? Simplify – 6 item menu
Cut costs – no car-hops – less labor
Cut costs – small restaurant
Speed – kitchen like an assembly line
Location – population center

4. What was changing that contributed to their success?
Cars. As more families purchased a car, restaurants that had parking lots and drive-through windows were more attractive.
Not only did cars being customers to McDonalds, but cars saved the company money. If people ate in their cars, McDonalds did not have to provide tables, nor did they need bigger restaurants to provide room for tables.

5. Personal Resources
Father opened a simple restaurant in 1937 – family experience in the restaurant business
Sons bought the restaurant in 1940 – personal experience (learned customers liked hamburgers)

6. Financial Resources
Franchising began in 1952 – local shops in California
Ray Kroc bought the rights to franchise in the rest of the U.S.
Franchisers paid for all the buildings, all the equipment, and paid some of the advertising costs. Using this method, they had over 100 restaurants by 1959.

7. Lessons for Entrepreneurs
The ideal new business
Provides real value to customers
Costs little to start
Can be scaled
(“Scaled” – means a business can grow to multiple locations or have multiple product lines. McDonalds continues to “scale” as it expands to many more countries.)

8. If you were to create a new business
Example Business - 1
If you were to create a new business
“Omani Sandals”
Who are your customers?
How would you:
Provide real value to customers
Keep your starting costs low?
Scale up once the business was successful?

9. If you were to create a new business
Example Business - 2
If you were to create a new business
“Oman Tourist Photos”
Who are your customers?
How would you:
Provide real value to customers
Keep your starting costs low?
Scale up once the business was successful?

10. Example Business - 3 If you were to create a new business –
“Omani Chocolate Treasures”
Who are your customers?
How would you:
Provide real value to customers
Keep your starting costs low?
Scale up once the business was successful?

11. Example Business - 4 If you were to create a new business –
“Traditional Omani Jewelry”
Who are your customers?
How would you:
Provide real value to customers
Keep your starting costs low?
Scale up once the business was successful?

12. How would you know what your customers want?
Next Class
How would you know what your customers want?