McDonald’s in Norway
Team 4
Robert Jameson
Becky Tibbenham
Charlotte Jorgensen
Matthew Byler
McDonald’s
 World’s largest chain of hamburger restaurants
 Serve 60 million people in 117 countries daily
 32,000+ locations worldwide
 465,000 full-time employees (2008)
 1.5 million total employees worldwide
 Annual revenue of $22.6 Billion
 QSC&V (Quality, Service, Cleanliness & Value)
McDonald’s:
Comparison with Competitors
# Stores
# Employees
# Countries
Revenue
Burger King
12,150
41,000
76
$2.54 billion
KFC
15,000
24,000
109
Not given
McDonald’s
32,000
465,000
117
$22.6 billion
Pizza Hut
12,685
30,000
92
Not given
Subway
33,733
(not given)
92
$9.03 billion
McDonald’s History
 1940s: Began by brothers Richard and Maurice McDonald in
San Bernardino, California
 1948: "Speedee Service System” established the principles
of the modern fast-food restaurant
 Current corporation’s Founding
 April 15, 1955
 Franchised restaurant by Ray Kroc - in Des Plaines, Illinois
 Ninth McDonald's restaurant overall
 Kroc later purchased McDonald brothers’ equity
 He led its worldwide expansion
 1965: Company listed on the public stock markets
McDonald’s History
 May 4, 1961: McDonald's first filed for a U.S. trademark on
the name “McDonald’s”
 September 13, 1961: Filed a logo trademark on an
overlapping, double arched "M" symbol
McDonald’s History
 Kroc noted for aggressive business practices, so the
McDonald brothers left the fast food industry
 McDonald brothers and Kroc feuded over control of the
business, as documented in their autobiographies
 McDonald brothers’ original restaurant now a monument
 International symbol of globalization
 Because of its expansion into many international markets,
symbol of globalization and the spread of American way of life
 Its prominence has made it a topic of public debate about
obesity, corporate ethics, and consumer responsibility
McDonald’s in Norway
 Entered Norway in 1983 (the 31st country)
 Initially limited menu: only 4-5 burgers to choose from
 Many different things tried, but today similar menu
 Currently 69 total stores
 Last year’s revenue: one billion Kroner ($167 million)
 Mixed perceptions by Norwegians
McDonald’s in Norway
 “The restaurants
stretching from
Kristiansand in
Vest-Agder, to
Steinkjer in NordTrondelag”
 Very different
architecture, so
location of stores
not always where
American’s expect
McDonald’s in Norway:
Restaurant Structure - Franchises
 Primary system when expanding abroad
 75% of McDonald's restaurants worldwide are franchises
 85% of McDonald’s in Norway are franchises
 McDonald’s believes franchising a key reason for success
 Owners can influence their own work
 Can also use company resources: system's experience, network,
and expertise in operations and development
 Locally-owned better for environment
 Allows for local customization of menu
McDonald’s in Norway:
Franchising System (Comparison)
Franchise
Fee
Burger King
$50,000
KFC
$25.000
Start-up
Cost
$300,000 –
$2.8 million
$1.2 - $1.8
million
Basic
Royalty
Advertising Net Worth
Requirements
Royalty
4.5%
4.0%
$1.5 million
4.0% or
$600/mo
5.0%
$1.5 million
No minimum,
but requires
$500,000
liquidity
McDonald’s
$45,000
$1.06 -1.88
million
12.5%
Included,
but 4.9%
service fee
Pizza Hut
$25,000
$317,000 $3 million
6.5%
None
$1 million
3.5%
$30 - 90,000
but requires
$80- 310,000
liquidity
Subway
$15,000
$78,600 $238,000
8%
McDonald’s in Norway:
Restaurant Structure - Franchises
 Goal: Fewer number of franchises, but larger in size
 More profitable to run 3+ restaurants
 Owners change initial contract for how much paid to
McDonald’s
 Depends on size of restaurant
 Varies 5-25% of sale
 Franchisees start “their restaurant” in one of two ways:
 Renting agreement: 3 year
 Buy it right away
McDonald’s in Norway:
Suppliers and Distribution
 Control every stage of to ensure product consistency
 Same distribution system
 Norwegian government ensures only approved, high
quality food is used (more on this later)
 Supplier: HAVI Logistics firm
 Only approved McDonald’s distributor
 McDonald’s is their only customer
McDonald’s in Norway:
Quality Assurance
 Stays in close contact with customers’ tastes and needs,
despite rapid global expansion.
 Through quality assurance centers located throughout
Europe (similar to those located throughout America)
 Aims to provide 100% satisfaction
 Provide training for employees at “Hamburger
Universities” (similar to those in America)
 Promises same basic menu
 Promises same quality, service, cleanliness and value (QSC&V)
McDonald’s in Norway:
Environmentally Friendly
 Government
 Encourages new technology
 Eight companies, 20 million NOK for five years
 McDonald’s






Raw Materials: 75% Norwegian
Logistics: Alternative fuels, Careful shipping planning
Heating: Energy-saving systems
Packaging: 80% recycled
Waste: Frying oil for biodiesel
Recycling: cardboard, paperboard, foil packaging, bottles
McDonald’s in Norway:
Quality
Assurance
Employees
 Partnership to work across EU links 29 countries together
(similar to different states in the USA with transfers, etc)
 Employees from more than 70 countries
 Must be at least 16 years old
 Can be full-time or part-time
 McDonald's is one of the biggest employers for youth:
Most of their 2000+ employees are between 16 and 25 years old
and working part time in conjunction with school
 2008: Voted fourth best workplace among large companies in
Norway and 36 (out of 1,250) across Europe
McDonald’s in Norway:
Hamburger University
 Same program worldwide
 Managers go here to learn how to own and operate a
McDonald’s restaurant
 Learn how to maintain QSC&V
 All products, kitchen layouts, and procedures are strictly
controlled and essentially the same worldwide
 If restaurants cannot maintain QSC&V they are closed,
even if highly profitable
McDonald’s in Norway:
Hamburger
University
Employee Training
 Comprehensive Training & Leadership Development:
“With so many career opportunities, it is important that
we have equal opportunities for training. This is one of the
reasons for the high satisfaction among McDonald's
employees.”
 All employees given the opportunity to further educate
themselves by learning new tasks
McDonald’s in Norway:
Employee Training
 McDonald's education prepares people for the
challenges that come with increased responsibility
 Advancement in the career ladder is very easy
 Five-level Career Ladder
 Restaurant Staff (crew)
 Assistant Shift Leader
 Shift Leader
 Assistant Restaurant Manager
 Restaurant Manager
McDonald’s in Norway:
Employee Training
 Continuing education consists of practical and
theoretical exercises, courses and exams.
 Separate, modern training center in Oslo’s main office
 By following the course programs, employees qualify for
the next step on the career ladder
 Also cross-border cooperation on training and continuing
education
McDonald’s in Norway:
Employee Wages and Benefits
 All employees receive a salary adjustment on April 1
 Norwegian Working Environment Act
 Norwegian Tariff Agreement: Pay based on age
 Salary rates:




Depends on seniority and evening/weekend work
Ages 16-17: 88.68 to 98.68 per hour ($14.63 to 16.28)
Ages 18-20: 113.68 to 134.99 per hour ($18.76 to 22.76)
Age 20+: Starting salary of $134.99 ($22.76+)
 Benefits
 All receive pension and insurance
 May receive bonus, gift card, gym membership
McDonald’s in Norway: The
Menu
 80% of their food comes from Norway
 Gluten Free (only country for McDonalds)
 Kjerstin: “There is one menu that is supposed to be
available in every country in the world. [But] each
country has to look at who their customers are and
choose a selection based on this. For instance, in some
countries they have fried snails in addition to fries. In
Norway, [there is] a big focus on a health menu, with
salads, yoghurt, fruit, carrots, salmon wrap… but this is not
that profitable. The customers go there to buy a burger.”
McDonald’s in Norway: The
Menu
McDonald’s in Norway: The
Menu
June 13, 2007: Salmon Wrap
McDonald’s in Norway: The
Menu
 1994 Introduced McLaks Sandwich (salmon)
McDonald’s in Norway: The
Menu
 Burgers are similar (Big Mac, Quarter Pounder, etc.)
 Side items




French fries
Carrots
Salads
Fruit
 Portion Sizes
 Burgers same size
 Fries and soda are smaller portions
 No soda refills
 Norway very health conscious
 Food has to be approved by Norwegian government:
guaranteed high quality & manufactured in sustainable way
 “Our standards often exceed national food safety
standards, so our guests will be assured of optimal products
and meals when they are in the restaurant.”
McDonald’s in Norway:
Price Comparison
Norway has the
most expensive
Big Mac in the
world (2008)
McDonald’s
Norway: The
McDonald’s inin
Norway:
Price
MenuComparison
Meal for Two:
1 Filet O’Fish
1 Big Mac
1 Cheeseburger
2 French Fries
1 Smoothie
1 Diet Coke
$31.50
McDonald’s in Norway:
The Experience
 Focus: Convenience
 Central locations
 Hours: 11 am to 11 pm. (some 24/7 during the summer)
 Focus: Families with children
 Playgrounds
 Toys in Happy Meals
 Comprehensive Birthday Party Packages
 Locations near kid-friendly attractions
 Example: Gjøvik they sell children’s advent calendar
McDonald’s in Norway:
The Experience
 Similar to America
 Drive Thru
 Happy Meals
 Similar Food (mostly)
 Different from America
 No breakfast (not profitable)
 Some menu items
 Different for Norwegians
 Drive-thrus uncommon
 Official Website: “Many of our restaurants are drive-thru
restaurants.”
McDonald’s in Norway:
The
Experience
Giving
Back
 “We want to give something back to the communities
where we operate. Local franchisees often support local
clubs and associations to help in their local environment.
At national level we have established the Ronald
McDonald Children’s Fund, an independent foundation
that works to raise money for chronically ill children.”
McDonald’s in Norway:
Marketing
 Same competitive strategy as in U.S.
 Be first in your market
 Establish brand as rapidly as possible
 Advertise heavily
 Strategy has helped McDonald’s succeed in Norway
over other fast food competitors
 However, they have had to adjust advertising campaigns
to be more classy and sophisticated
McDonald’s in Norway:
Marketing
Advertisement for burger in Norway
McDonald’s in Norway:
Marketing
 More sophisticated in Europe
 Similar to Sweden
 Norway redecorating stores
 Modern
 Customer-friendly
 Look similar so easy to recognize
McDonald’s in Norway:
Competitors
 Many American fast food restaurants not in Norway
 Burger King main competitor
 Gas stations also competitors (7-Eleven)
 McDonald’s competitive advantage: Drive-thrus
 Only restaurant with drive-thrus in Norway
 Drive-thrus account for 50% of their sales
McDonald’s in Norway:
Difficulties
 Advertisement for
McAfrika burger
 Norway one of world’s
richest countries
 Bad timing: Africa’s
worst hunger
catastrophe
 Solution: Donate
percentage of profits
to African Charities
McDonald’s in Norway:
Difficulties
 Norwegian Hotel and Restaurant Workers Union (HRAF)
 Agreement in 1930s & 1940s that related to hospitality industry
 1983 When McDonald’s entered, would not sign agreement
 High turnover
 Young workforce anti-union
 1993 Agreement signed
 Only wholly-owned stores
 Franchises exempt because independent owners
McDonald’s in Norway:
Managing
 Egalitarian: more like a coach than a typical boss
 Little distance between employees and managers
 Jante Law: does not think that they are better than their
team members
 Make employees feel actively engaged and valued
Active in decision making
 Norwegian management culture with McDonalds Policy
and Procedure (QSC&V)
Interview
 Kjerstin Bratelien Larsen