The Founder Mcdonald Film Study

What makes an entrepreneur is his attitude towards opportunities, Ray Kroc shows passion and determination, he never gives up trying to sell his multi-mixer machines ,you can identify his dedication in the scene when he was making phone call after phone call for opportunities to sell multi-mixers, he lost hope until he had received a call for a potential customer- this shows that he stayed determined until he was rewarded. This led him to McDonalds, in San Bernardino. He has self-belief and has confidence when taking risks, this is seen in mere seconds of the start of the movie with his opening lines as he attempts to sell another multi-mixer machine, he is confident with his mannerisms and he is a people person that promotes exceptionally well, he took a risk when he spontaneously drove across country for a new market. An entrepreneur is made successful by having the right connections, and so Ray Kroc forms a new interest, which later becomes McDonalds, his connection is his secretary until later in the movie when he is well known and has plenty more connections across the state.

Ray Kroc sells multi-mixers/ milkshake machines, and he targeted road house fast food shops, because the product itself is just that: fast. The multi-mixer like any other machine makes the job easier and quickens the process of making a milkshake, Ray Kroc seeing the fast food industry in need of such machines chose to sell them and promote them even though he himself is not the inventor, so its more about the product than morals.

The challenges faced by the brothers are:

• Attracting the right customers, for the first stretch they only attracted lousy teenagers that made a mess of things
• The service took ages to arrive at its customer and if it did end up arriving, it ended up being wrong anyways
• The expenses for the large pay rolls for the amount of staff, and a huge amount of staff is required as well
• Dishes kept breaking or getting stolen
• Waitresses would be violated when delivering orders.

They solved these issues by:

• They got rid of the things that attracted the lousy teenagers such as the cigarette machines and the juke-box
• They made sure to cut the service time from 30 minutes to 30 seconds.
• They cut down their costs by focusing on what to sell and those are the main items such as hamburgers, french-fries and soft drinks.
• They stopped using dishes and started using paper wrappings which are disposable
• They stopped the extra staff waitering the ‘car-hops’ and introduced the fetch your own food system.

Ambient is the atmosphere: When people speak of ambience it usually refers to the surroundings and feel to the area they are in, for McDonalds it would be the family friendly feel and the casual informal setting, however the system the McDonalds brothers use in their fast food kitchen gives the ambiance of sophistication along with dedication. The brothers saw an opportunity to move their restaurant to another town, and did so by cutting the building in half, this shows their dedication towards their vision and mission.

In The Founder, fast food outlets are shown as over-crowded, with a lack of quality and they had many issues when it came to delivery of the food and even delivering the right food, they had many different kinds of customers, many being the reckless teenagers that McDonalds stayed clear from, there is a lot of litter and not much structure to the process of fast food.

Product development: this is the early stages of McDonalds Barbeque, with the McDonald’s brothers doing market research, and evaluation opportunities such as moving their outlet to San Bernardino, where it is more populated and developed. Whilst they are evaluating the market in San Bernardino and analysing the trends, they see the drive ins are the new rage, this starts their process of development.

Market introduction: With the McDonalds brothers changing their business completely, adding many different items to the menu (27 other options om the menu), it was still being introduced and needed advertising and prices, soon people were attracted to this McDonalds Barbeque for the variation of food, they also introduced carhops and uniformed waitresses to give them a new edge.

Growth: with the business becoming more developed it would have increased its profits, and it continues to grow from these profits, they also increasing their competitive advantage in the process.

Maturity: the competitive advantage gained by the development of their business and catchy logo brought them up ion the market, their competitive advantage are the uniforms and carhops that differs from other road house outlets.

Decline: in the declining stage the brothers would have noticed all the issues they have with the drive-in concept and may have experienced a loss in profits due to customers finding these issues as well, they later chose to improve on these issues.

The issues found when introducing their new concept of food delivery, was not grasped by the customers as easily, but in their attempts to make a grand opening night with fireworks and entertainments flies started attacking people, the McDonalds brothers were sure of customers never coming back after such a failure. Since this has to do with the market environment it would be easy to analyse these issues by looking at the Porters Six Forces, where they mention things such as the power of the buyer, this is evident when the customers don’t fully understand where to get their food on opening day, and even though the McDonalds brothers tried to explain it to them they could have easily driven off and bought at another fast food outlet, this impacted on the brothers, but after a few more failed attempts people started grasping the idea of getting out of your car and ordering and fetching your food yourself, everyone knew what to do. And because the other issue is environment related there was not much analysing with the business environments in consideration.

Because the food quality itself did not waver, the customers must have realised that getting out of your car isn’t such a sacrifice when the quality of food and the quality of the service is so great already, it might just have taken a bit of time to adjust to the changes of the business.

Quality control is making sure that all your products, service and staff are up to standard, making sure that they are dedicated and determined to grow with the business.

The original McDonalds will always have the quality control up to standard because the staff had Mac and Dick supervising them teaching them what’s right and what’s wrong, its difficult to keep this quality control when the franchises are all over the place and transport wasn’t the best. Relying on new staff members and new franchisers to keep up the quality control was misleading, in the sense that they would want to strive to be the best McDonalds, but this didn’t happen, and the quality decreased as well as the condition of the buildings and the ambience lost its value too. Many new franchisers are not as passionate about the business as the original business owner and this is evident when you see the way the businesses are taken care of. The brothers hired supervisors that were to make sure everything is up to standard but instead their “creations were being mismanaged”.

It was such an innovative creation that he seemed mesmerized by it, and saw more golden opportunities for McDonalds, and the future success it will receive.

For a contract to be legally valid both parties must be in the right mindset (sober/sane) they should be mentally capable of understanding what is on the contract and be able to discuss necessary issues.

Ray Kroc had a disregard towards the contract and therefore broke it several times, he was not allowed to franchise his franchise to other franchisees on his name because this would end up taking over the McDonalds brothers control of their business. Ray Kroc ended up taking the entire business from the brothers and left them with nothing.

Competitive advantage is when you have a superior position in the market compared to your competitors. Examples of competitive advantage are:

The quality of your product or service, in this case McDonalds strives with both product quality and service delivery, this is because of their incorporated Speedy System that is the process of making the food and delivering it in a short amount of time. This also brings in the quality control which the brothers were very strict on, but McDonalds as an industry, decreased its quality control once Ray Kroc took over.

Location is quite important, you can’t be completely hidden away, this will not give you the acknowledgement that you need to run a business. It helps to be some place central or popular so that your business is easily attracting customers that need a quick fix for food. An example of location would be when the brothers moved from one town that didn’t give them enough profits to another time where they were thriving, even if they had to cut their building in half to achieve this.

Differentiation made it easy to support McDonalds, by them changing their menus from 27 options to the 3 main options which enabled them to focus on what the customers enjoy most, they also incorporated the walk-up system by getting your own food, instead of having carhops. When it comes to differentiation is all about what makes your business different and unique, for Ray Kroc it was those golden beams and definitely the name McDonalds itself, it was catchy.

Price is everything, if its too expensive people won’t support your business, if it’s too cheap you will lose profit and will also make people wonder about the quality for the food for the price they’re paying. And because the brothers were very friendly and welcomed all customers they made the priced very appealing and kept the great quality of food.

In the Founder, Ray Kroc goes on his mission to get wealthy investors, these are a variety of people, from people who own successful businesses to people he knows from the wealthy country club that are a bit snobby. Eventually he gains plenty of wealthy investors through his meetings and propositions that he introduced during speeches and talks. After this he saw the quality of the products decreased marginally, and decided to look for different types of investors, he came across a Jewish bible seller and saw his potential, this then started his journey on finding couples that will manage the businesses together. In his mind, this would add to the family friendliness of McDonalds as well.

In this profound scene, he kneels to the ground and grabs the soil as a way of hoping that after all his different failed job opportunities that this one would be successful, that this one would be enough. However, he never bargained for it to be the most successful fast food outlet internationally even until this day. This is profound because it is the true start if his journey with McDonalds, he says in the scene “just be right one time” this refers to his poor decision-making skills in the past, even though they led him to McDonalds and his multi-million-dollar business.

In this scene, the Jewish bible seller and his wife are signing a investors contract, and she mentions that she knows he can do it and that she trusts him, this is key to a business for trust can make or break a business. The second scene is the teamwork between the employees, and it is also important to know that synergy is crucial in a business.

Forming: Forming is the start of teamwork as the team has just been put together it would be the introducing of each team member; the members are still getting used to one another and being in a team makes them bond for they all would like the same success of an outcome.

Storming: Members in this stage are very competitive and want to rake ownership of the superior roles, there is a lot of conflict during this stage as they try to get into their roles, members are tested too see who works better in different categories, such as leader and innovator. But not all conflict is bad, some conflict is functional conflict where good ideas are introduced or considered and there is a sense of determination.

Norming: Team members are now calmer and less at each other’s throats, this is because the conflict has subsided, and they have a common understanding of one another’s roles and they begin to appreciate what every member brings to the team, they also start focussing on the set goal.

Performing: Team members are now very productive and work harder when together (synergy), once the goal is reached it is common for the members to start leaving as their goal is achieved and no more work is to be expected of.

This would be market development, when an already existing product is advertised or sold in a different area, because McDonalds products were already existing it isn’t legal to say that Ray Kroc invented them when he started making the products and business more developed into a franchise.

The advice given to Ray was to start working for himself instead of the McDonalds brothers, so that he can earn way more, this also appeals to him as he can now use more of his entrepreneurial skills. Sonneborn advises Kroc to make the contract say that he owns all land with McDonalds buildings on it. This meant that he would be earning a lot more money as he wouldn’t have to pay the brothers anything, he soon earned enough money to buy the brothers out of the business.

What I thought to be unethical was Ray Kroc not discussing his plans with the brothers instead he did it behind their backs, which ended up messy for them losing their business and their royalties. Another unethical thing is that Ray Kroc became very greedy when he made his contract and even though it was legal, it was unfair to the brothers who did not expect such a turn of events.

Even though the contract was biased to Kroc he still would not have broken it and taken the business away from them, he still respected them for they did basically create his fortune, he also didn’t want to just take it, he wanted to earn it, as an achievement.

After a while under the apprenticeship of Sonneborn, he realised he could just buy them out of the business, this caused Mac to have health issues and end up in hospital and even though it was Rays fault he still offered them a blank cheque, which they eventually signed for $2.7m and took keep 1% of the business and their original outlet in San Bernardino, this was all granted however they were not allowed to have the McDonald logo anywhere in the business.