Yuqing Feng
Econ 101
12/01/2011
Book assignment
McDonald's Behind The Arches by John F.Love
1. The brief summary of the book.
This book is about the how this famous chain fast food restaurant grow up then
become a well known fast food symbol around the world. At first, Richard James
"Dick" McDonald
and his brother, Maurice James "Mac" McDonald started up the
first McDonald restaurant in California in 1948, which was the original shape of
today’s McDonald restaurant. But McDonald restaurant was modified and expanded
by their business partner, Ray Kroc. Both Dick, Mac and Kroc shaped the modern fast
food restaurant together. In between the development of McDonald, it experiences
lots of success and failure, but only in this way, McDonald this brand become more
mature and successful. In this book, we can find some economic strategies like
advertising, expansion and creation that McDonald used to expand its career. In
nowadays, McDonald become the most outstanding symbol of modern fast food
restaurant, it has more than 32,000 restaurants among 121 countries and areas.
2. What do you think the entrepreneur did wrong?
Although how magical wonder had McDonald made, it ought to experienced fault and
failure. In this book, it gives some examples that the entrepreneur did wrong to
influence the development of McDonald. In my opinion, there were some cases I
thought the entrepreneur did wrong or not satisfied. First, about the food. The main
menu of McDonald restaurant is fried food with high calorie and some elements cause
cancer. They just focused on the good taste but pay no attention on what bad element
the food involve and the customers’ health. Second, we know a chain fast food
restaurant needs lots of labor to develop its industry so quiet a lot capital to put on
labor. But actually they paid too little to the workers. Under the management of
McDonald, workers worked for long hours and can’t get enough rest, in addition they
get lower paid compare to the other same industries. Furthermore, the restaurant
didn’t provide them enough insurance and protection. Workers lived in a low rules
and their physical and mental health were in bad influence. Third, making hamburger
had a great need of beef and chicken. In between McDonald’s development, in order
to get more beef and chicken in a cheaper and faster way, they used antibiotic to feed
them, which do bad to peoples’ health.
3. What did the entrepreneur do right?
Because McDonald is one of the most outstanding representative, it has lots of
valuable experience we can learn from its development. First, the entrepreneur can
meet the costumers’ need and taste. Kroc can catch customers’ mind to create fast
food with good taste. People felt fresh about this idea and they just spent few time can
get fresh food. Second, in order to develop the restaurant industry and get more
benefits, Kroc led his team to upgrade the building and equipment, which made the
worker make food in a more efficient way. With the step of industrial revolution, lots
nof industries were desired to update their technology and equipment to become
stronger in the competition, McDonald also felt so. The leader had advancing and
brilliant sight about the society and time changed. Third, the entrepreneur knew that
only several kinds of menu can’t absorb customers in a long time, they tried to
improve their products in a better materials and taste, or they created some new
product to attracts people to eat. At last, the company use advertising to advertise its
product to make more people recognize it also to try it. Although the cost of
advertising was not a small number, it can enlarge McDonald’s influence power in
American even in the world.
4. How would you have done things if you were in their position?
I really felt awesome about the achievement of McDonald nowadays, and I appreciate
the leader of McDonald what they had done. In general, I agree with the strategies
they used. If I was one of the leader in McDonald, I would made some changes about
the development of the restaurant. First, I would pay more attention on the food style.
Because the main menu of McDonald is fried food, which involves high calories and
something cause cancer, we should put more healthy food on the menu. Vegetables
and fruits should be added in the food. Second, as a manager in a big industry, we
should pay more attention on the benefits of our workers. They are one of the key
elements in the industry, without them people can’t get their food quickly. They
worked for long hours but were paid unequally. Under the management of McDonald,
their living standard was low, in this way, they would lose motive power to do their
work. In a long time, the quality of food and service in McDonald will be influenced,
which is really for its development.
5. What economic principles were used in this business?
First, what the company produce or the supply should meet customers’ needs.
McDonald gave out the idea of fast food and provide fast food to customers, which
was attractive and convenient for them. Customers could spend less time and money
on food.
Second, advancing technology can improve the productivity. Kroc upgraded the
equipment of producing food. Although the advancing equipment cost money and
time to upgrade, but it can improve the efficiency to produce product, which can save
money for labor and other fixed cost.
Third, change in supply determinants-technology, productivity of resources. Using
advancing technology can increase the supply because the company can increase
more product in the same time compared to the past.
6. What did you get out of this book?
McDonald is a miracle story about restaurant industry. It create the idea of fast food,
which influence the development of fast food restaurant nowadays. There are lots of
secret and important experiences that we can learn in this case. Fast food is a brand
new idea at that time, and people always like to try new product so it become a fresh
thing to attract customers.
Then, the spirit of entrepreneur is very important. In the beginning of career, Kroc
put out lots of new ideas to push McDonald to develop, but his ideas were against by
other managers. Failure can't put out his warmth to be succeed. He never gave up
what he insisted, at last he tried countless times did he achieve his goal.
In addition, in a competitive economy, company should recognize the market trends
and can react quickly to market. Market changes with customers’ minds, so merchant
should be sensitive about customers’ choice and the market need. If you only see the
change but doesn't do anything to meet it, you will fail and disappear in the market
gradually.
Furthermore, McDonald really did a great job in global expansion. Maybe it is not a
hard work expand your company in a small area, but it is really hard to expand your
restaurants in a huge number around the world. McDonald has more than 32,000
restaurants in 121 countries and areas. In order to make correct expansion to another
place, the company should use right way to influence its impact. Before expanding to
another place, it should get full and deep understanding of the eating habit and the
living style in this place. Take an example about McDonald restaurant in China.
Although McDonald is popular among Chinese people, but there is not a good choice
for them to eat everyday because there are all fried food, people can’t stand eating
fried food as the dinner in a long time in China. So McDonald in China put out some
new menu especially for Chinese involve some fresh food like vegetables and fruits.
At last, workers’ skill is important in a industry especially for a restaurant. In
McDonald’s case, the manager is willing to open training school for their workers to
advance their skills so it can maintain the food standard of the restaurant. Workers’
skill is one of the most important element in a industry. Cultivate workers’ skill can
improve their work efficiency, which can also improve the industry’s supply.