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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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.The film starts off with Ray Kroc (a man in his early fifties) trying to sell a milkshake machine to a store owner which seems to fail. Thereafter, he has a call with his secretary who reveals to him that an order for 6 machines was placed by a single restaurant. Ray thinks it to be a mistake and calls the restaurant and is shocked to find it true. He then decides to visit the store and is extremely baffled but enticed by the whole concept of the speedy system where he immediately gets his food after ordering that the restaurant follows.

Mac McDonald (one of the owners) approaches Ray and offers to give him a full tour of it. Ray is very interested with what he sees. He meets Dick McDonald (the other owner) and asks if he can take them both out to dinner which they reluctantly accept. During the dinner the brothers reveal to Roy the history of how their store came into action and how they wanted something different, hence, they came up with the speedy system.

Ray goes home but cannot stop thinking about it and so the next day he suggests to the brothers franchising which they've already thought of, however, Ray wants more and better stores and eventually the brothers agree to join forces with Ray. Ray gets capital, starts building new stores and goes on to promoting the idea of franchising to other people. However, throughout this journey Ray realizes he cannot adhere to his contract with the brothers and sees another problem with his capital running out.

Thereafter, he begins finding loopholes when he meets someone in the financing department who helps him to go against the brothers vision and mission, thus, angering them both resulting in Mac becoming so stressed that he ends up in hospital. Ray visits and hands them a blank cheque in order to settle the matter and terminate his contract and create a new one. The brothers see it as their only option and eventually agree to it handing over the McDonald's name to Ray – thus making it seem as if he is the one true founder of McDonald's.

If you would like to buy into a franchise the risk of business failure is reduced as your business is based on an idea that is already proven and you can check how successful other franchises are before you decide to invest your time and commit to the franchise. A franchisor also provides support such as training, helping with the set up of a business and informing you how the business should run, therefore, there is also no experience required as the franchisor will ensure the franchisee has the necessary skills. One will also benefit due to the brand name being recognizable meaning advertising is essentially done for you. Banks are also more likely to aid with finance if one is buying a franchise that holds a good reputation.

If one is looking to franchise one's business there is an additional revenue source and one will receive additional income in the form of royalties paid by the franchisee, therefore, successful franchises can result in higher royalties. It is also cost effective as franchisees would deal with the funding for outlets meaning one's own capital will not have to be spent. Expansion can also occur quicker as the franchisee provides labour and sales give growth. Franchisee's are also the ones responsible for the success of the company which will motivate them to work harder enabling higher success rates.

Disadvantages

If one is looking to buy a franchise a disadvantage is that the costs may be higher than anticipated and you need to agree to buy products from the franchisor. The franchise agreement may include restrictions and one may not be able to change the running of the business to suit the local market. It may also be found that continuous franchisor monitoring becomes intrusive. The franchisor may go out of business and the franchisee will suffer. It could also be that other franchisees may give the brand a bad reputation and one may not have great sales due to it. All profits are also shared with the franchisor.

If one is looking to franchise their business possible disadvantages could be that establishing a franchise require lots of time and legal document preparation which may be too much to handle. The recruitment process is much slower and can be less efficient than employee recruitment. If one were to select the wrong franchisee, it may ruin the reputation of the whole franchise and can result in franchise failure. It can also be said that sharing confidential information with franchisees is risky if they aren't committed as they may ruin the franchise name. If a franchisee refuses to cooperate taking legal action can be expensive and can damage the reputation.

Management can be defined as the process of accepting accountability for the innovative application of resources in order to achieve business goals, hence, a manager is appointed in a position of authority which enables one to direct people on what to do. There are three levels in management namely: top, middle and lower. Top management is responsible for strategic decisions (ensuring a sustainable future). Middle management is responsible for tactical decisions which are medium-term, they interpret the top management's decisions and an overall plan is implemented in each department. Lower management is responsible for the day to day decisions as in they manage the operations of the daily business.

Management Tasks

POLC

Nevertheless, management on each level has the same basic tasks: planning, leading, organizing and controlling. Planning is a combination of logical and creative thinking utilized to improve business performance in the future. During planning; vision, mission, objectives and procedures are formulated and discussed as well as how the business will obtain the required resources. Plans need to be flexible and need to minimize risks. Organising is next which includes identifying activities that need to be undertaken to achieve the objectives. Organising allows for the focusing of resources towards achieving the goals, it provides a communication structure and helps identify key stakeholders.

At 20 minutes it shows the plan of Dick's on the tennis court and how he organised the way in which the employees would work in the store, but when he found it wasn't effective enough he was able to change it which proved to be a success as seen in the store which shows the importance of plans being flexible.

Controlling is the final component of management and is about checking current performance against predetermined standards, thereafter, taking corrective action by putting necessary plans and resources in place to rectify deviations form the plan, therefore, allowing the business to achieve its objective.

Leadership is vital as it encourages the workforce to perform accordingly as a leader has the expertise to make people aware of the advantages of pursuing certain actions, thereby, creating a desire to reach towards a common goal. A good leader incorporates the following principles: harmony of objectives (employees and the business achieve their goas), clear communication – the manager should well-inform the employees about the policies and their responsibilities, unity of direction (each employee knows who to report to), direct supervision – the manger should be well-informed about his/her employees to gain an understanding of each member, hence, boost morale when enquiring about their well-being and lastly following up – provide a support structure to assist employees. Therefore, to be a successful manager one should be a leader as well and challenge the status quo and develop new methods to do things.

Autocratic management/ leadership

An autocratic leader is one who rarely allows for team input and would make all decisions. It can be helpful in certain cases where there is a crisis and a decision is needed immediately. However, it is mainly considered a disadvantage as it results in employees feeling undervalued which slows down work progress.

This type of leadership is evident in the twentieth minute when it shows Dick and Mac McDonald's planning and organizing the way in which their business will operate. Dick can be viewed as autocratic as he merely instructs the workers on what to do on the tennis court when trying to come up with the perfect system for the kitchen in their business without asking for input from the workers.

Other types of leaders

A transformational leader is charismatic and motivates members to do their best by helping them understand their purpose and value and makes members realize that teamwork is important. This would then inspire the team to reach their goal. A democratic type of leader would allow for team members to share their opinions and ideas in the decision-making process. This can be advantageous to a business as it gains a wider range of opinions and can aid with business success. It also allows for employees to feel valued which makes them feel motivated to work which speeds up work progress. A transactional is when the manager motivates employees by stating that if the work is done a reward such as a bonus will be given. However, this can be seen as a disadvantage as employees won't always regard the reward as sufficient and will become demotivated and will slow down work progress and unhappy employees as they will keep expecting more.

Therefore, a situational leader incorporates all the other styles. Different types of leadership styles would be developed by a manager in order to effectively deal with a situation. An example of such leader is exhibited by Ray Kroc. During the 27th minute Ray shows traits of a democratic leader when he asks about Dick's vision and idea of McDonald's with regards to the new design which are the golden arches, hence, he tries to be a leader and ask for his ideas and input.

Thereafter, at 35 minutes he displays characteristics of a transformational leader when he tries to motivate the brothers to follow through with opening more stores with the golden arch concept. He also then displays signs of an autocratic leader at 44 minutes when he is working and supervising the store and just instructs the other employees on what to do whilst serving and preparing the food. Therefore, it can be said that based on different situations Ray changed his leadership style in order to achieve his goal in each.

Inadequate Management

A manager should be skilled in all aspects as well as be able to deal correctly with subordinates. For example: addressing customers respectfully. A lack of managerial skills can result in employees feeling unmotivated, unhappy and could even lead to them resigning. If employees resign the business experiences a loss of skills and possibly a high employee turnover which negatively affects business success

The concept of an inadequate manager is introduced at 27 minutes when Dick and Mac speak of one of their stores that had been mismanaged, hence, resulted in a failure which discouraged them which demonstrates how valuable it is for a business to have a good manager.

An entrepreneur is a person who has a unique talent for using one's competencies to pursue an unknown future and is one who combines the factors of production in order to start a new business. An entrepreneur's primary motivation is to build his company, to gain personal gratification and ensure success.

Identify an opportunity

An entrepreneur has the quality of being able to identify an opportunity with potential and then to pursue it even if it may be risky as an entrepreneur needs to be a risk-taker. Therefore, an entrepreneur also needs to understand the target market in order to identify an opportunity and would then need to continuously scan the environments and gather information. The entrepreneur also needs to know the customers and their needs and then be willing to work to develop or change a business plan to satisfy the needs of a customer.

At 15 minutes in, Ray saw an opportunity in the McDonald's store when Mac gave him a tour and explained how it worked. He then acted on instinct and asked the brothers to join him for dinner so that he can gather more information about the store. They proceeded to tell Ray the backstory for the store and Ray was quite impressed and saw more potential in the store. At 25 minutes Ray thought he'd share his thoughts so that he can take advantage of the opportunity and suggested franchising the store.

Ray also sees potential in one of the employees named Fred Turner at 45 minutes when he is the only one doing a good job whilst making he burgers, hence, Ray remembers him and later on in the movie we see Fred as Rays associate.

   

Persistence

This is a quality that Ray exhibits continuously throughout the movie. He displays it at 16 minutes where after given a tour insists on taking them to dinner, then again at 25 minutes when he returns to the store and suggests an idea, he continues at 26 minutes when he enters the office of Dick and Mac and tries to talk them into listening to his idea. Further on, he is still persistent when at 38 minutes when he goes from person to person to pitch the McDonald's idea so that he can get the capital to carry out his plan and takes a risk when he begins developing the company.

Thereafter, from 56 minutes he continuously tries to sell the idea of the franchise to many different people in many different places such as a couple during dinner and bingo who listen to Ray and accept his proposal. He preaches his idea in a synagogue and in front of many other crowds.

Furthermore, in order for an entrepreneur to start a successful business, one needs to work hard, be committed and persevere and also needs to be creative and innovative to get the new business off the ground because being different will give one a competitive edge and will differentiate one from competitors. One also needs to have the ability to prepare and implement a plan in order to achieve goals but at the same time the entrepreneur needs to be realistic and proactive by creating contingency plans to manage possible risks.

Moreover, the entrepreneur has to be able to coordinate resources and lead, convince and motivate people to buy into the plan and follow one to achieve the goals. A good entrepreneur also needs to take initiative and make quick decisions should the need arise. Problem solving is also a crucial quality as problems will definitely arise and the entrepreneur will need to know how to deal with it in order to reach success. Other qualities such as self-confidence and passion are required as a business cannot succeed if the owner has no faith in it, hence, it is vital one is aware of one's shortcomings and to surround oneself with a supportive team to help achieve success.

Problem Solver

At 17 minutes Dick is shown to have solved a problem that was an obstacle to developing their store and a building won't clear so he decides to saw it in half effectively defeating the problem.

Ray also displays this at 1 hour 23 minutes when Ray had decided that he is not letting McDonald's and himself reaching the full potential because of his contract with Dick and Mac and creates a new Franchise Realty corporation as a loophole giving him more control to conduct his plan for the stores.

Concern for Quality

Dick shows his concern during 15th minute when he looks at the fries and deems them unacceptable as they were fried seconds too long making him think people will not enjoy it if it is not perfect. He also shows his concern when Ray asks him about creating more outlets which Dick does not like because he feels as if quality will be lost if there's too many and it will lose its good value and name.

Ray creates this concern within himself at 50 minutes when he angrily approaches an investor and owner of a McDonald's store after seeing the quality of the burger not being up to scratch. Another entrepreneurial quality displayed is his assertiveness he unleashes his anger and beliefs on quality to try and instill the same belief within the other owner.

Hard worker

Ray can be viewed as a hard worker after the effort he put into the McDonald's franchise and approaching investors and bankers for funding as previously mentioned. He also is a hands on hard worker as is evident at 43 minutes when he is actually busy on the land and planning everything with the blueprints. He further displays this at 45 minutes when every one is doing their tasks in the store after it is closed such as cleaning, he does not just sit around but rather also grabs a broom and starts sweeping and cleaning

Marketing can be defined as all the activities that have an impact on the image of the business and the customer's decision either to buy or not buy that which is being sold, based on different experiences offered by the business. It also refers to the activities that the business does in order to reach the target market and developing and maintaining a competitive advantage.

In marketing it is important to consider the following three concepts: the market – the place where goods and services are bought and sold, a product orientated approach – the business concentrates on skills, knowledge and systems needed to produce a specific product and a market orientated approach – the business focuses on satisfying the needs and wants of customers and market research is empahsised.

Marketing Mix

Product - Branding

Moreover, the marketing mix can be looked at as it includes all elements that are combined to ensure that the business's product or service is being marketed effectively.

The first element is the product which includes all characteristics of the product/service (eg. packaging) which is seen as the most essential as without it a business cannot function. When develop a product one should consider branding where unique features are developed that are added to the product to make it easy for the customer to recognize it as, nowadays, manufacturers use retailers as a point of contact with customers where many other products are sold, therefore, in order to get a customer to buy your product without the manufacturer being their personally to tell one the unique qualities of the product, one can use branding to do so. This is also a tactic used in order to create customer loyalty.

The business will portray certain values and if the unique features of the products and the image of the business is combined it is known as a brand. The brand helps distinguish products and it represents the quality which is why it is so persuasive. It also used to gain customer loyalty by creating a status associated with the brand. The overall product should also be differentiated and should satisfy needs and wants.

At 28 minutes in the movie the concept of the golden arches for McDonald's is introduced by Dick which Ray sees as an opportunity to create the perfect brand image that will surely attract customers. This concept becomes more prominent throughout the movie where more and more stores gain this look making it more recognizable to customers, thus, creating loyalty.

Furthermore, at 1 hour 41 minutes Ray reveals the reason he wanted McDonald's and attributes it to the name of the business saying it sounds better and more appealing than if he were to name it after him and call it ‘Krocs' which highlights the importance of branding and how much of an effect it actually has on the customer.

Pricing

The next element is pricing which needs to be set at a level sufficient to recover all costs generated and still make a profit. Price is often seen as an indication of quality meaning a low price gives the idea of low quality. Competitors pricing needs to also be kept in mind so as to outmaneuver competition.

Place

The third element is place as it is important to get the product to the customer, therefore, a distribution channel needs to be considered.

Promotion

The final element is promotion which is about giving the customers necessary information about new and existing products offered by the business. The business will focus on the advantages of the product, the price and the place to convince customers. It is an important tool to create and support a particular brand image for the business. In order to communicate the message to the customers one can use advertising by reaching a mass audience through mediums like television and magazines. One can also use personal selling or sales promotion where things such as free samples are used to entice customers.

Personal sales is evident in the movie at 2 minutes in when Ray is trying to convince a store owner to buy a milkshake mean but was denied. It emphasizes that not every strategy may work and there are many other techniques to use to promote sales.

When developing a new idea it is important to sufficiently inform customers about it. At 23 minutes Dick and Mac did so when their whole idea of a drive in changed to the speedy system where people get out and order and the food is ready in 3o seconds. The people were unaware, hence, Dick and Mac went out and informed customers about what to do and helped them understand the concept by getting them out the car.

Networking is also an important concept as it promotes the business to others and allows for valuable connections to be made. This is evident at 48 minutes when Ray is pitching the McDonald's idea during dinner at a table full of investors. They are intrigued by the ideas and they buy in to the concept and the word spreads about McDonald's.

Ray continues promoting the franchise by personally advertising it to a range of different crowds at 58 minutes. He creates and reaches out to a wider target market and creates a positive image for the business.

with his motivational and persuasive words so much so that many people begin getting involved in the franchise.

In marketing it is also important that one knows how to speak in order to appeal to the crows which is a quality that Ray countlessly shows he has. At 35 minutes he passionately motivates Dick and Mac to accept his proposal which they do. He continuously shows this as mentioned before when he speaks to the crowd and investors who all accept his words and buy into what he is offering.

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