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What business is McDonalds in? Why will they never go broke

by Woodward82
32 replies
Interested on warriors thoughts on this. Its actually a pretty intriguing strategy and can be implemented quite heavily to IM.

Like to hear others thoughts/opinions before I reveal the answer.
#broke #business #mcdonalds
  • Profile picture of the author Jill Carpenter
    They could go broke.

    Never say never.
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  • Profile picture of the author Woodward82
    Well yes NEVER is a bold statement . But lets say the other fast food businesses start to steal their customers . The sales in cheeseburgers and nuggets just drop to drastic measures . They can still walk away in good standing and possibly profit.
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  • Profile picture of the author Jeff Lenney
    What business are In? They are in fast food… However, as to if they can go broke… That's a good question, but I feel they are adopting properly and offering healthier options such as salad fruit turkey burgers etc.… they're at least trying to take things in the right direction
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  • Profile picture of the author mikeac
    McDonalds is in the Real Estate business. Their main focus is NOT selling Hamburgers. There main objective is opening up as many establishments as they can in strategic areas, to capitalize off consumers buying their foods.
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    • Profile picture of the author Woodward82
      Originally Posted by Mike Currie View Post

      McDonalds is in the Real Estate business. Their main focus is NOT selling Hamburgers. There main objective is opening up as many locations as they can in strategic areas, to capitalize off consumers buying their foods.
      Well I didnt expect such a quick answer but this is definitely correct. Something like this is often overlooked and can be implemented in IM. They own some of the most lucrative street corners around the world. And that property will always be worth money even if their business (food) fails.
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    • Profile picture of the author PerformanceMan
      Originally Posted by Mike Currie View Post

      McDonalds is in the Real Estate business. Their main focus is NOT selling Hamburgers. There main objective is opening up as many establishments as they can in strategic areas, to capitalize off consumers buying their foods.
      Absolutely. They own much of THE BEST retail location real estate in the world!
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    • Profile picture of the author Young Financier
      Originally Posted by Mike Currie View Post

      McDonalds is in the Real Estate business. Their main focus is NOT selling Hamburgers. There main objective is opening up as many establishments as they can in strategic areas, to capitalize off consumers buying their foods.
      Yep. Ray Kroc said it himself that his business it real estate. He leases out the fast food model to franchisees but he owns the real estate where they do business and collects a ton of fees.
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    • Profile picture of the author writeaway
      Originally Posted by Mike Currie View Post

      McDonalds is in the Real Estate business. Their main focus is NOT selling Hamburgers. There main objective is opening up as many establishments as they can in strategic areas, to capitalize off consumers buying their foods.
      Yep. Location. Location. Location. The same logic can also support the argument that McDonald's is really in the self-advertisement and self-branding business.
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  • Profile picture of the author AlmightyGreg
    to answer your question, they can go broke. However the reason they haven't so far is because:

    1. They have a franchise system that allows them to reduce direct cost
    2. They also build their own restaurants in countries and places that are worthy, increasing their gains
    3. They have a VERY strong cash flow.
    4. They have diversified world wide.
    5. They are known for serving culture relevant food on other countries, so most cultures accept them and they are able to expand fast.
    6. Like all corporations their size, they use a lot of tax loops to avoid overpaying unnecessary taxes.

    Among others, these are just the ones to come to mind
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  • Profile picture of the author Warrior X
    Oo.. oo I was gonna say real estate. The burgers buy the real estate, learned that from rich dad poor dad. How does that apply to IM?
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  • Profile picture of the author Woodward82
    The internet is nothing more than Real Estate in a virtual world. I have never heard of Rich Dad Poor Dad. Book, Audio? I actually was in a debate with a friend and somehow it got off track and ended up in this direction of how business are sometimes profitable or should I say have a security blanket because they have a hidden value
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    • Profile picture of the author Warrior X
      Originally Posted by Woodward82 View Post

      The internet is nothing more than Real Estate in a virtual world.
      That metaphor sounds good, but I don't know how useful it is. The internet is mostly a cheap way to communicate with a large number of people.

      Yeah the rich dad books are a good read: Rich Dad, Poor Dad: What the Rich Teach Their...Rich Dad, Poor Dad: What the Rich Teach Their...
      -Jeremy
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  • Profile picture of the author Mark Singletary
    And with that real estate, if every living soul swore off hamburgers, they could flip the property, open up a chicken joint, sell tires, open a 7-11 type store, etc. etc. etc.

    They may stop selling hamburgers if it all goes south but they could quickly pick something else up not just because of the real estate but because of the systems and infrastructure they have in place.

    Mark
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  • Profile picture of the author seobro
    It is the dollar menu. Yeah, that is what keeps em going. McChicken helps them survive. Those burgers are make from old hens that do not lay any more eggs. Basically, that is a lesson for all of us. Produce great results or you are gone.
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    • Profile picture of the author Woodward82
      Originally Posted by seobro View Post

      It is the dollar menu. Yeah, that is what keeps em going. McChicken helps them survive. Those burgers are make from old hens that do not lay any more eggs. Basically, that is a lesson for all of us. Produce great results or you are gone.
      Well lets just say you are 100% on track. You are saying they dont produce great results correct? They certainly do produce great profits.
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  • Profile picture of the author Raydal
    So all those billions of hamburgers are just a front?

    At least they are helping IMers in the weight loss market.

    -Ray Edwards

    Disclaimer: I'm a vegan.
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    • Profile picture of the author George Wright
      Originally Posted by Raydal View Post

      So all those billions of hamburgers are just a front?

      At least they are helping IMers in the weight loss market.

      -Ray Edwards

      Disclaimer: I'm a vegan.
      That represents at least 18 pounds of beef.
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  • Profile picture of the author Malcolm Thomas
    McDonalds is a great business model for aspiring marketers to imitate because they focus on serving repeat customers which is how every business model (online or offline) should operate.
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    • Profile picture of the author Walter Parrish
      Mcdonalds like most all companies can go broke even with their real estate.

      If their restaurants were accused or had contaminated products they would go broke in law suits.

      In order to have a chance at never going broke business needs to invest in or control the things that people have to have.
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      • Profile picture of the author Woodward82
        Originally Posted by Walter Parrish View Post

        Mcdonalds like most all companies can go broke even with their real estate.

        If their restaurants were accused or had contaminated products they would go broke in law suits.

        In order to have a chance at never going broke business needs to invest in or control the things that people have to have.
        But even if someone was to invest in things they had to have, wouldnt it be true that they could even be subject to lawsuits. ?
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        • Profile picture of the author ElGuapo
          One hand: I used to visit McDonald's on a fairly regular basis (24 hour place nearby). But nowadays it's online delivery places which are all the rage. A cause of concern for McDonald's.

          Other hand: my old man visited Japan a few years ago. Not a fan of seafood or raw food at all. So he spent most of his days eating at McDonald's, because he knew exactly what he was going to get. A universal language.

          I think the influence of McDonald's will diminish in years to come as food options become more diversified, but as long as they have that satisfactory baseline and global reach, they'll always have a solid customer base.
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        • Profile picture of the author Walter Parrish
          Originally Posted by Woodward82 View Post

          But even if someone was to invest in things they had to have, wouldn't it be true that they could even be subject to lawsuits. ?
          In the beginning yes your business would have to be on it's toes legally, but when you start making the big bucks then you will probably be able to work around it.
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  • Profile picture of the author theory expert
    Banned
    McDonalds is in real estate but they are also in the burger business. The success of their restaurants provides them to charge franchise fees royalties that have carried them on as industry giants. They have been strategic in several areas; streamlining fast food in a systematic way, marketing to kids/families, and, geographically finding areas to develop real estate. People like to talk about how their burgers are any kind of burger. Actually it isnt... because I never cooked a burger like McDonald's, Burger King, or, Wendy's. Though, it sounds good philosophically.
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  • Profile picture of the author Robert Montgomery
    They use false advertising no? I mean you go inside look at the menu and see the pictures of the big juicy burgers be it hamburger or chicken burger then when you get your order its as thick as your thumb at best and nothing like the advertisement shows.

    Then not to mention the food also lacks the quality of good food.

    So it shows that false advertising and low end quality products do sell.
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    • Profile picture of the author Brandon Tanner
      They're in the business of poisoning people, lol. That's some of the most disgusting, unhealthy stuff you could ever put in your body!
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  • Profile picture of the author BarberShop
    I think McDonalds sells hamburgers & fries.
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  • Profile picture of the author Brian John
    Originally Posted by Woodward82 View Post

    What business is McDonalds in?
    "We're not in the food industry, we're in people industry. We just happen to sell hamburgers." - Ray Kroc
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    • Profile picture of the author Luis Vaugier
      Yes the real business of McDonalds is real state, it's a great idea, the have a system that works and works very well, if you want the system you have to pay for it, it's profitable to you and Ray Kroc gets a new property.

      And yes, absolutely any business can go broke.
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  • Profile picture of the author WillR
    They are in the advertising business.

    It would be very easy for businesses with such reach and familiarity to just get comfortable and stop spending money on advertising and getting their brand message out there. But you'll notice companies like McDonalds and Coke still spend huge amounts of money on advertising what are already very well known brands. Top of mind awareness is key to their success.
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  • Profile picture of the author igl0w
    they adapt to situation ie now they ty to be more like KFC
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  • Profile picture of the author smodha
    McDonald's makes money by selling cheap food. That's it.

    In times of austerity, takeaways always do well. Check the statistics.
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  • Profile picture of the author J50
    McDonald's actually works much like a drug cartel. If they can addict you to the taste of their salty and sugary products from a young enough age, chances are you'll be a customer for life.
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