While it began life as a barbecue restaurant in the 1940s the McDonald’s fast-food chain is often cited as the face of “capitalism” around the world. There are very few, if any, of the world’s major cities which do not have a McDonald’s and while the company has received massive criticism over the years it has been extremely successful. This is a company which reinvents itself time and time again in a bid to survive the changing trends in health and diet.
Moving with the times
There are obviously many diet fads which come and go but if you notice many of the so-called “fads” which survive in the longer term at taken up by McDonald’s. If we look at the move to less processed food, healthy salads and reduce salt and sugar, these are just some of the trends which have developed around the world. In many ways you could argue that McDonald’s helps to spread the word about these changing trends but in reality the company simply tweaks its profile on a regular basis and effectively reinvents itself.
When you bear in mind the McDonald’s has 1.5 million workers throughout its franchises around the world it is said to be the second largest private employer behind Walmart. Therefore, for many people the ongoing success of McDonald’s is vital to their long term income and job prospects.
Healthy eating
Politicians seem to have a dislike of companies which are successful on their own merits. McDonald’s, criticised for its fast food which is basically what the company is based on, is often the target of politicians when discussing the health of a nation. Behind-the-scenes there is significant pressure on McDonald’s to move with the times but in reality the company is always looking to deliver what its customers are asking for. Have you ever seen the questionnaires when you go for your next big Mac?
Restructuring the company
While the McDonald’s business ethos is based upon franchises many will have noticed the company has been buying back some successful franchises over the years. We have also seen sale and lease back agreements on many of the company’s property assets which has raised significant funds in the short-term and created spin-off businesses. We have seen directors come and go, business ideas change on a regular basis and, despite criticism by the political elite and the media, the company has no problem finding corporate partners for competitions and events.
Wherever in the world you visit a McDonald’s the detailed operation of the franchise will be broadly similar and instantly recognisable. This means that whether you go to McDonald’s in London, New York or Australia you know exactly what you are getting. In many ways this is the foundations upon which the company’s success has been based. Over the last five years the company’s shares have moved within a range from $87 up to the current near all-time high of $129.
The shares powered through the $100 barrier towards the end of 2015 and have never looked back. So, has McDonald’s finally reinvented itself as a health food outlet as opposed to a simple fast-food outlet?