Essay: The McDonald Business Model

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Essay: The McDonald Business Model

Sample Essay

In order for operators to come into contract and become a McDonald franchise, the operator is required to have a vast knowledge in business operations. The vast knowledge can be from running business, learning in school or employment in a certain business with a business model similar to that of McDonald. McDonald does not supply products to its franchises but organizes a third party through operators who are contracted to supply the franchises with food and other materials. The McDonald business model is unique and makes McDonalds to be at a competitive advantage over other food chains since besides collecting the marketing fees and the franchise fees, McDonald also may collect rent that is expressed as a percentage or in reference to the sales (Kincheloe 20-43).

Since McDonald is associated with business success in all parts of the globe, the franchises are required to continuously adhere to the business guidelines set by the principal, McDonald, failure to which a failure can be referred to a breach of the contract. McDonald invests many resources in research and development in order to have the best policies in place. Additionally, globalization that has been catalyzed by the technological invention and innovation has made the food industry very competitive. A firm has always to be on toes failure to which it will be employing obsolete technology and therefore lose its market share. The McDonald inspectors ensure that the firm franchises adhere to the set rules and implement the necessary changes one approved by McDonald. One great competitive strategy for McDonald is that the technology employed is compatible with most innovations and does not require an overhaul that could be very expensive for any firm. More so, the technology employed is efficient and aids the franchises to carry out its operations smoothly hence beating the competitors.

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